Start a Small Business the Innovative Way

Release Date: 
Monday, March 19, 2018
Release Number: 
18-0319KY
Contact: 
Lola.kress@sba.gov

By Ashley D. Bell, SBA Region IV Administrator

It is not surprising that starting a new business can be challenging and intimidating. You have to know where to start; learn the industry rules, regulations, and licensing requirements; and navigate numerous online resources.

There are many reasons why more Americans don’t follow their entrepreneurial dreams, yet they should. Fortunately, there are creative ways to start a new venture with the help of the SBA and the resources that the SBA provides, without breaking the bank. Below are options to consider before owning your own small business.

Purchase an Existing Business:

Perhaps you should consider buying an existing business. Currently, many owners are selling their companies. This creates opportunities for individuals with available capital to purchase existing companies. An established venture is move-in ready the day you buy it. Assets and equipment can be included in the sales price. Along with the business, you buy an established client base, and customers are familiar with your brand. Lenders are often motivated to provide financing to an existing business. You may also have a loyal and experienced team.

Seek Equity:

Another option is to exchange salary for an equity position in a business. Most existing businesses are hungry to hire experienced, driven employees. Growing, cash-strapped businesses may need new talent and could consider an equity or stock position in the company in lieu of traditional salary and benefits. This new equity position could eventually provide you with an ownership opportunity. Consider working part-time while maintaining your regular job to learn the business and make an offer to purchase the firm or a portion of the firm later.

Shared Work Space:

Virtual office and shared creative work spaces are alternatives to traditional office or retail spaces. Many small firms market and sell their products and services on the internet. Working from home and using shared office services are other options to minimize cost. Virtual offices and large, creative work spaces where tenants share open spaces and small private offices are other ways to reduce the cost of your operation.

Innovative Capital Search:

Use creative means to secure capital. An undercapitalized business may be more receptive to new ownership. Obtain capital by bolstering your personal savings, and have a discussion with friends and family about investment in your business in exchange for stock or an equity position. If you’re open to taking on new debt, try starting your business slowly by using internally generated cash flow for expenses and growth. The less debt you incur today, the better position your business will be in when you do apply for a business loan.

It’s Okay to Ask for Help:

Seek outside counseling before starting your new business. Now’s the time to make an appointment with an SBA resource partner, including Small Business Development Centers, SCORE, Women’s Business Centers and Veteran’s Business Outreach Centers. The counselors at these organizations can help you develop a well-defined and comprehensive business plan, realistic financial statements and extensive marketing strategies. Studies show that entrepreneurs who put a minimum of one year of planning into their new ventures have a better chance of succeeding in the long run. The SBA is always a resource for assistance as well.

Owning and operating your own business may be the most gratifying move you make in your life. Creating innovative strategies for owning a business can help you follow, and exceed, your entrepreneurial dreams. For more information on SBA programs and services, visit www.sba.gov  or your local SBA district office.

Mr. Ashley D. Bell serves as the SBA’s Region IV Administrator and is based in Atlanta.  He oversees the agency’s programs and services in Alabama, Georgia, Florida, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee.