Small business launches usually start with one or more of these things: a great idea, a hole in the market and a skillset that (hopefully) will be valued in the community.
So how does an aspiring entrepreneur take those kernels and turn them into a profitable venture?
We took that question and more to Helen Ruth Harwell, a Charlotte-based attorney who helps small businesses and who is co-president of SCORE Charlotte, a network of experienced business professionals who volunteer their time to help small businesses get off the ground or expand.
The past year has been a big one for entrepreneurship, both nationally and locally. Score’s Charlotte chapter saw a big jump in inquiries in 2020, with 2,088 potential client requests — an increase of 40% over 2019.
Harwell talked with The Ledger’s Cristina Bolling about how to transform that brilliant concept into a legitimate business — and what mistakes she sees small business owners make. Comments have been edited for clarity and brevity.
Q: First things first. How do you know if you have a good business idea?
The first thing would be to research and do a lot of planning ahead of time, mainly so you can flesh out two things: What it is that you want to do, and will it be profitable?
That includes figuring out: Do people want this product? Is this a good location? Do I need to comply with legalities, or what’s the best way for the company to be formed? What are the tax implications? How many employees do you need in order to accomplish it? What are the costs and expenses involved? A lot of what we do is helping people consider additional expenses that they haven’t thought of.
You need to figure out who the competition is and figure out if the competition is successful. One thing we tell people to consider is that you might not want to call the competition here in Charlotte, but you could probably call somebody in another state, and they might be willing to share information with you about what their expenses are, how they deal with their employees and what the compensation for the employees is.
Q: Each industry is different, but what are some common first steps to starting a business?
Some people go in sort of a test mode versus going full out. Especially if they have that option and don’t need a location, or it’s not highly intensive on expenses. Others will run out and rent a space and hire 20 people. It just depends on what kind of business it is.
Then, you need to build the professional team. We consider the team to be the banker, the insurance professional, the CPA, the attorney and then your SCORE mentor. And of course you need to work on the actual general plan.
Q: What are some of the most common mistakes people make when starting a new business?
The first mistake we see is people running ahead and not planning for the expenses. How are you going to pay for things? Another mistake is not having a plan for getting customers, because you have to have customers or clients in order to sell your product or service. It’s important to know who your client is going to be so you can target that marketing effort.
A lot of people are like, “Everyone in the world wants my product,” but in reality, their ideal market may be people ages 20 to 25 who own pets and have disposable income.
Q: What resources are available to first-time entrepreneurs?
We would love people to go through the SCORE workshop series, and then we assign them a mentor who they can call on a regular basis as they’re ramping up and need assistance. All of that mentoring is free. Also, the libraries around here are great resources both in Union County and Charlotte. They help with the market research.
[Here is an interview with Mimi Curlee, a Charlotte Mecklenburg librarian, about great library resources for small business owners.]
If you have a library card, you can get a lot of the market research on your phone through the library’s apps. And they have librarians who will actually help you do some of the market research.
Local chambers of commerce can also be resources, and local entrepreneurs groups.
Q: There have been lots of stories about entrepreneurship booming during this year of Covid. What has SCORE seen?
The changing economics (during Covid) has made people start looking into opening businesses. Our call volume increased significantly, both with people wanting to start new businesses and current business owners having issues with Covid. We had to respond to a lot of questions regarding PPP loans. In today’s world, people are asking questions like, “What if I give up my office?” Talking through things with a mentor helps because you’re getting a different perspective.