Starting Your Business Right: How to Open a Successful Business
Getting from Outstanding Idea to Opening Day
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Joseph McCoy: And if you cannot go the SBA route, the bank is going to look for a lien on your home, personal-cash collateral, personal assets that you can pledge that are going to give the bank a certain level of comfort.
Jeanne Goulet: That is a tough row to hoe—to pledge your house or whatever—seeing how many fail.
Joseph McCoy: ‘How many fail’ is also why the bank is looking to take those kind of assets.
Louis Scamardella: I also think it is very important to discuss with entrepreneurs that, you know, a lot of businesses don’t start with a two-million-dollar loan from a bank. Be realistic.
Robert Schork: Let’s say Harry keeps plugging along for many months and is not yet profitable. He is still in the red. He is draining his savings or he is using his line of credit. At what point does he conclude that it is time to throw in the towel and cut his losses?
Robert Wyker: I would say that the most important thing you can do is get somebody that you respect to take a look at your numbers and plans and tell you what they think. You’re so into it that you’re likely to be looking through rose-colored glasses, and it never looks like you’re not going to make it. So get somebody who you really respect—who is going to keep whatever information you give them totally confidential—to look and see if you could sell them that this is still a viable business. If you can’t, it is perhaps time to fold your tent.
Jeanne Goulet: It’s important that you collect the necessary metrics on your business. That will help you create a dashboard that will help you to see where you are going, how fast, how much traction you have, how much customer acquisition.
Ben Brody: In an alternate universe, Harry has successfully gotten through his first year. What would you tell him about the switch from start-up to growth?
Robert Wyker: Is there a [customer-] continuity concept? The classic example is a frequent-flyer program. You want to figure a way to have people come back again and again. It is a lot easier to keep a customer, generally, than it is to go out and get a new one. Know the ‘Eighty-Twenty Rule’: Eighty percent of your profits come from twenty percent of your customers. And you better know who those twenty are and you better see to it that the service that you give to them is superb.
Susan Corcoran: You have to make sure that your employees, likewise, feel that they are valuable.