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');usat.page.writeString('');usat.page.writeString('');}else{usat.page.writeString('Get Flash')} MEET THE COACHESRhonda Abrams is a nationally syndicated columnist, author and entrepreneur who is president/CEO of The Planning Shop, a publishing company that creates content for small businesses. She writes a weekly column for USATODAY.com called "Strategies." She is the author of Six-Week Start-Up (The Planning Shop, $19.95) and What Business Should I Start? (The Planning Shop, $19.95).Steve Strauss is a lawyer, author and public speaker, whose column "Ask An Expert" is published weekly at USATODAY.com. He has spoken worldwide, and he sits on the board of The World Entrepreneurship Forum. Strauss, whose website is www.mrallbiz.com, is a regular guest on MSNBC's Your Business and has also been on CNN, CNBC and Fox News. Strauss' latest book is the Small Business Bible (Wiley, $19.95).Gladys Edmunds, founder of Edmunds Travel Consultants in Pittsburgh, is an author, motivational speaker and marketing strategist. She received the Avon Women of Enterprise Award, and her firm was recognized as one of the Top 25 Women-Owned Businesses in Pennsylvania. She has been a guest on ABC's Good Morning America and The Oprah Winfrey Show. Her column, "The Entrepreneurial Tightrope," appears weekly at USATODAY.com.Have you always wanted to open your own business? USA TODAY and small business columnist Rhonda Abrams, author of Six-Week Start-Up, will help you get started. Click here for a six-week series on how to open your business that includes articles, tips and worksheets how to turn your idea into a money-making venture.
Just beginning to think about starting a small business. Click here for a step-by-step tutorial that will get your ready to start a successful small business, which includes videos, tips, worksheets, audio and more about how to turn your idea into a money-making venture.
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It's going to be tough for Matthews, who holds down a full-time job as a network engineer. Just the paperwork for a bank application induced pressure.
"It's an overwhelming amount of stuff," he says, adding that "in this climate, it's astoundingly hard to secure financing for anything."
Matthews' wine bar is one of five small businesses that USA TODAY is following for six months. Last fall, USA TODAY published a six-part series about starting a business and asked prospective entrepreneurs to submit their own business concepts for the Small Business Challenge, a six-month series that would track entrepreneurs as they progressed from the idea stage to making the first buck.
Nearly 1,800 budding business owners responded, pitching ideas that displayed ambitiousness, earnestness, smarts and yes, even misguided drive and planning. Five were selected.
These entrepreneurs — and millions like them — are trying to make their mark during the harshest economic climate since the Great Depression. Across the USA, small business owners are struggling to make payroll, pay debts and simply keep businesses running.
Half of small business owners said they had cash-flow issues in the past 90 days, according to Discover Financial Services' Small Business Watch February survey of 750 small businesses. Nearly 40% see conditions for their businesses getting worse in the next six months.
Adding to the stress, 46% of business owners have met their capital needs by slicing their own pay, according to a survey of 1,000 small business owners out in February from the University of Maryland and Web services company Network Solutions.
Individual issues, as well
In addition to the more common money troubles, business owners often must confront issues specific to their industry, individual company or financial and home-life situations.
SMALL BUSINESS CHALLENGE: This week's challenge: Financing WINE BAR: Michael might want to open wine bar early; see VIDEO PEANUT SELLERS: Hughes, Goldberg worry about getting a big order; see VIDEO VACATION RENTALS: Cyclical business means Kathy needs solid budget; see VIDEO HOME INSPECTOR: Faced with start-up costs, Carl needs a budget; see VIDEO BOTOX PROVIDER: Coach suggests Susan open 'and get busy'; see VIDEO
Carl Edmunds, who recently launched home inspection and home energy audit firm NuVision Inspections, spent thousands on business expenses such as training, certification and tools, while he and his wife balanced their mortgage payments and other bills, and supported their 27-year-old autistic son.
He planned for that. He didn't plan on an unexpected and nerve-wracking financial decision that was thrust upon him.
For 25 years, he worked in the printing industry, but about a month ago, he resigned from his full-time post to dedicate himself to his new company. His former firm didn't want him to leave and asked him to stay, at least as a consultant.
"How do I get out from this overwhelmed feeling, or am I going to feel like this forever? Holy smokes!" he said to Steve Strauss, author of The Small Business Bible. Overloaded entrepreneurs nationwide can relate to Edmunds, says Strauss. "Being a small business owner is really challenging."
Edmunds' Small Business Challenge peers are contending with weighty issues, too:
•Wine bar entrepreneur Matthews has invested about $250,000 in the business, while his partner and friend Michael Sawyers has contributed about $20,000. Sawyers has also put forth "sweat equity," but as The Virginia Wine Factory becomes more of a reality, they need to hammer out a partnership agreement that addresses the difference in the monetary commitment.
•Poppa D's Nuts founders Lee Goldberg and Rodney Hughes are working with their partners to run an extremely lean operation. They've invested about $12,000 so far and have kept costs low as they prepare to sell bags of butter-toffee peanuts. Yet, marketing strategist Gladys Edmunds is concerned that Poppa D's is so lean that its owners won't be able to ramp up fast enough if they get a large order. Any lag time in filling an order could potentially turn off customers willing to pay big bucks for their nuts. The Poppa D's Nuts guys have an agreement among all five partners but still lack a formal legal document that outlines their stakes and each of their company duties. Like The Virginia Wine Factory, they also have to factor in a partner putting in "sweat equity."
•Dr. Susan Riegg, founder of The Medical Skin Spa aesthetic services business, initially plans to self-fund her fledgling firm with a budget of $100,000 from her and her husband's savings account. She has spent nearly $20,000 on business expenses such as medical aesthetics training, legal fees and website design, but hasn't yet opened her business for Botox and other aesthetic services sales. (Riegg says she does have a waiting list of clients.) Another challenge: She needs to balance the company demands with the needs of two high-school-age daughters and a 5th-grade son with a learning disability.
•Kathy Standage, founder of Exclusive Vail Rentals vacation rental management firm, has to determine how to budget for her extremely seasonal business venture. She will make much larger commissions in the winter, when rental rates are high. By summer, rates for some Vail rentals drop about 30% to 40%. She also has to factor in times when she will get no business at all.
"I've never woken up at night worrying about business," says Standage, who worked in the broadcast and cable TV industry for more than two decades. But with this new venture, "I'm up at 1 a.m. writing things down."
Advice for all
Strauss says that for most new business owners, the initial stress eventually eases. But it takes work to make that happen.
While the small business coaches doled out specific advice for each Small Business Challenger, they also offered some general tips for all neophyte firms:
•Create a budget: Write a step-by-step budget plan — and stick with it, says Strauss.
"So often, people start a business because they are passionate — they love it — and that is great," he says. "But you also have to be a business person and understand what's coming in and what's coming out (of bank accounts.) You don't want to burn your money too fast."
Think hard before adding any expenses to that budget. If an owner can't see a tangible return on investment, the outlay likely doesn't make sense, says small business adviser Edmunds. "Every time you get ready to make an investment, whether it's your money or your husband's money or a bank's money, always look at the return on that investment. What's going to happen that makes it pay for itself?"
•Bring in the big guns: Many small businesses are hesitant to pay for professional help, but "when you start a business, hiring an accountant and a lawyer makes sense," says Strauss. "In the beginning, when you don't know what you're doing, some good legal advice and some good financial advice from a CPA or business lawyer can go far."
•Be financially creative: Strauss advocates the creation of "multiple profit centers." He gives the example of Starbucks. The company first made its mark selling coffee, then eventually expanded to cold drinks, food and even CDs.
Owners also can be creative when it comes to raising investment capital, Abrams says. For instance, Matthews was concerned that potential investors would want too much of a say in how he ran his business. Abrams suggested that he consider taking on investors who would receive cases of wine or free parties at the bar in exchange for their financial support. "It gives those investors the cachet of saying, 'I'm a part owner in a winery,' " she says.
•Just do it: Entrepreneurs can easily get distracted by the planning phase and have that last longer than needed. Get a plan in place and get going, all three business coaches emphasize.
"Start getting some work done, and all of a sudden, you're starting to make deposits, not just withdrawals," Strauss says.
"Nothing beats revenue as a way to finance a business," Abrams says.
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