SCORE: Is starting a business more difficult than sustaining one?
SCORE, Small Business Development Center, Brainerd Lakes Area Economic Development Corp., the Initiative Foundation and other nonprofits have talented mentors to help business owners with their startups and to keep them going.
In mid-January of this year, I received two very interesting documents. The first was an email that just had this statement.
“You’d agree with me that starting a business is relatively easier compared to growing the business.”
I’m not sure I agree with that. The Small Business Administration reports that statistically, 20% of new businesses fail in the first year and that by year five just shy of 50% fail. Further, the top five reasons the companies failed were:
- Lack of demand for product or service,
- Cash flow problems,
- Problems hiring the right talent,
- Not researching the competition,
- Pricing and cost issues.
Those five items listed above are management issues and a lack of understanding the target market to be served. As a SCORE mentor many of the entrepreneurs with whom I work, that want to start a business, do not have a deep exposure to what it takes to operate a business.
Based on the above statistics, I would state building a sustainable small business is more difficult than growing the business once it is established. I would also suggest many of the small business startups that fail could have been saved, or not started if the entrepreneur had a mentor(s) from their SCORE or other local nonprofits that offer free help. Many SCORE mentors have owned their own business or have spent their careers moving up the organization chart of bigger business and have been exposed to the challenges of operation and growing a company.
The second document I’d like to share with you is a letter (unsolicited) from the head of a company that I have been mentoring for the past five years. I have been a mentor since the company started. There are nine SCORE mentors who have volunteered their time to help this company. Five years ago, the company had two employees. At the end of 2021 there were 30-plus people on the payroll. Sales and profits have grown and have driven the company forward. Here are some of the issues faced and resolved by the company
- A strong management team is in place and working together to maintain the company as a leader in its industry.
- The owner is moving out of the day-to-day operations to be over the process and not in it.
- He’ll tweak the system as necessary.
- An updated strategic plan will be developed in Fiscal Year 2022
Here is the letter. I’ve removed the owner and company name.
January 14, 2022
LETTER FROM XXX, RE SCORE
What a Score mentor is:
A vent when things are going poorly.
A sympathetic ear when personal issues arise.
I’ve heard (it’s lonely at the top).
To have a friend to lean on that understands what you are going through because they have been there themselves in the past.
Experience to draw on when issues arise.
A network of people to reach out to that are experienced in different fields.
People who will help you for no personal gain to themselves.
Things I’ve learned from Score
Patience. Still in progress, but I have come a long way.
How to deal with stress (W.I.P.)
How a business is grown – (no magic wand)
To have faith. Things tend to work themselves out in time.
How to be more sympathetic to others
How important a business plan is
How important projections are
How to recognize my faults and to work on that area
How to give back without just handouts
80/20 – 20% makes 80% of the difference.
Things I need to work on
Try to stop micromanaging
Need to learn to read profit and loss and balance sheet better
Need to learn how to enjoy life.
The above letter is special. SCORE has many many testimonials from other satisfied clients throughout the county. Mentoring does work! Too few start-ups take advantage of the talent that is available.
Growing a business is necessary and not that difficult with a solid base. Small businesses are critical to our economy and a failure rate of 50% hurts us all. How much better would our system work if we could match the mentors from SCORE, Small Business Development Center, Brainerd Lakes Area Economic Development Corp., the Initiative Foundation and other nonprofits with talented mentors to the startups. SCORE is here to help. Give us a call if you are planning to go into business.
Dick Jordan, certified SCORE mentor, can be reached at email@example.com , or 218-251-4413.
As a resource partner of the U.S. Small Business Administration, SCORE - which offers free business mentoring and education -- notes the organization has helped more than 11 million entrepreneurs through mentoring, workshops and educational resources since 1964. The nonprofit SCORE was previously known as the Service Corps of Retired Executives.