Small Business Development Center

Q: What types of business issues do you help with?

A:  The SBDC helps with a variety of business issues from basic start-up questions to assisting with financing issues, preparing business plans and marketing assistance. We do not provide specific legal or tax advice, but we can provide you with information to help you make an informed decision or provide referral sources if further help is required.

Q: Are your services free?

A:  Yes. Absolutely. Really.

Q: I am interested starting a new business, but I’m not sure what steps I should take. What would you suggest?

A:  We recommend that you first attend an Orientation to Starting a Business in Minnesota workshop. These frequent workshops are offered at no cost and cover all the basic start-up issues like forms of ownership, business plans, resources and financing options.

From there we will work with you to chart out a course of education that is appropriate for your situation.  Planning a business is very important, and the business plan is the outcome of the planning process. No one can plan your business for you – but we can help you learn the skills necessary to ask the right questions.

Q: I heard there is grant money available for start-up/women/minority/etc. businesses. How do I get this?

A:  As a general rule, grant dollars are not available to help start a small business. We often tell people that if your business plan requires you to get free capital, it probably isn’t much of a business plan. While there are many grant programs across the country, most are not targeted toward for-profit businesses. Careful research may reveal small, isolated opportunities in specific markets. We have worked with local foundations (Southern Minnesota Initiative Foundation is a great place to start) and area Economic Development Authorities to find and utilize grant dollars as part of business growth.  Visit the federal website for grant programs, www.grants.gov, or visit your local library for a copy of The Grants Guide.

Q: I saw an advertisement for an upcoming event that’s going to give me all the information and names of the grants available to me. The charge is over $300. Is it worth it?

A:  Most of the materials we have reviewed that folks purchased for $300-$500 contain nothing more than contact lists, forms and documents already available for free on the SBA’s website (www.sba.gov). Be wary of these seminars and remember, if it seems too good to be true, it probably is.

Q: How do I finance my start-up business?

A:  Most businesses are financed out of a combination of owner’s equity (owner’s investment) and a commercial loan. If an entrepreneur were seeking a commercial loan, a lending bank typically expects at least 10 – 20 percent of the needed dollars to come from the entrepreneur.

Attractive incentives are currently being offered by the SBA and USDA in the form of loan guarantees and waived fees. For more information, please contact us.

Q: How can I get an SBA loan?

A:  The US Small Business Administration (SBA) programs are designed to encourage commercial lenders to make loans directly to business owners and entrepreneurs — the SBA does not make direct loans. Contact us for assistance. Our staff of highly-trained business advisors offer FREE counseling to help you make the right decision.

Q: How important is my credit score when I am seeking a commercial loan?

A:  A borrower’s credit score is critical to the approval of a commercial loan. While there are occasional exceptions, most lenders want a credit score of 650 or better for a commercial loan. In addition, a recent bankruptcy (last seven years) is almost always a stumbling block.

Q: Do I have to have experience in the business I am considering in order to have a reasonable chance of success?

A:  Not to dwell on negatives, but there is a high failure rate for start-up businesses. Your odds of success are going to be much greater if you are taking on risks that you understand as opposed to risks you do not understand. If you are going to need a loan to get your business started, most lenders will strongly prefer that you are experienced in the new business.

Q: Who are the most important key advisers for my business?

A:  Key advisers should be knowledgeable about small business issues in general and about your specific type of business in particular. Over the long haul, you will benefit the most from a good accountant, a good attorney, a good insurance agent and a good banker. You should also include one of our SBDC counselors.

Q: If there is one item I should focus on to make my odds of success the greatest, what should it be?

A:  Business owners and entrepreneurs who understand and are dedicated to good planning are usually among the most successful. Be prepared to dedicate many hours to build the success of your business. Your business plan should be your guide along the journey to success.