Advice given to prospective small business owners

Lisa Becher of the Small Business Development Center at Northwest State Community College went over first steps to consider, including which legal structure to apply for and how to approach lenders.

“When you guys go see a lender, I want you to be well prepared because you usually have one shot, and with that one shot you want to have a good business plan, you want to have those financial projections,” Becher said.

The legal structure will dictate how the business is set up, and each one has a fee and affects taxes differently. Becher pointed out a sole proprietorship has to be renewed every five years. Other structures include limited liability corporation (LLC), corporation or partnership.

She also explained amount of liability associated with each one. For instance, if someone with a sole proprietorship or partnership gets sued, their personal assets can be included, whereas that is not the case in a LLC or corporation.

The legal structure needs to be filed with the Ohio Secretary of State.

“We can do that together,” Becher said. “I can’t do it for you, but we can do it together.”

She added this is a free service of the small business development center, while it could cost $200 or $300 to have a lawyer help.

Becher also said a possible new owner needs to register an Employer Identification Number (EIN) number for the business, which is a tax identification number. That can also be done for free through the Internal Revenue Service.

“It’s important to first register your business with the Secretary of State,” Becher said. “You have to get your state approval before you get your EIN.”

She said approval from the state could happen in as little as a few hours, or two to five business days.

“It depends on their traffic, but I would say a week would be the longest you’d have to wait,” Becher said.

She also can help prospective business owners with marketing research.

“We’re just trying to help and to make sure that everyone’s on the right pathway in getting their business started,” Becher said.

Danielle Fowler, small business lending officer for Premier Bank, went over what she and others would look for when considering a loan for a small business.

She said the bank would like to see a business in operation for at least two years before considering a small business loan for it. If not, a commercial loan likely would be considered.

For those businesses that have not yet been around for two years, projections for the first year will be required, as will monthly projections.

Businesses that have been established a bit may qualify for a loan through the bank with help from the Small Business Administration.

“Basically, we’re going to have the Small Business Administration come in and say, ‘If you do this loan Premier Bank, we’re going to do a 50% to 75% guarantee,’ which makes me feel a lot better as a lender taking a chance on a business that’s not been open or maybe not around long,” Fowler said.

Kim Maag, owner of Reflections hair salon in Eden, and Dr. Mark Miller, owner of Wellness Huddle of Edon, also went over their experiences starting a new business and hurdles they faced.

Maag talked about buying the salon from the previous owner, and then purchasing the building next door eventually in case she wanted to expand.

She added she is a sole proprietorship for the salon, but the newer building is under an LLC.

Maag said there are some stresses to running your own business, but she wouldn’t trade it for anything.

“I’d do it all over again,” Maag said. “Anybody that wants to start a small business, I’m all for it. I love it every day.”

Miller, a chiropractor, explained he started in a small building then bought a former grocery store in order to expand.

However, that building was more space than he really needed for the chiropractic business, so he is considering other services to add.

“My practice is more focused on health and wellness,” Miller said.

He said he is looking into partnering with local farmers to provide food, as well as a grow house area.

Miller stressed the need to consider the community the business is located in, and what it needs or wants.

“What can we do do facilitate growth in demand, what can we do in order to bring people back into town?” Miller said.

He also said it can be important to rely on the team around you as an owner, and to have people that will make you stretch and grow as well.

“Finding somebody that might have a kind of a little bit of a different opinion or maybe push you in a direction that you might not think of is always a good thing,” Miller said.

Epling said the seminar was the first in a series of events WEDCO will be hosting. Other events include Professional Headshot Day on July 26; Lunch and Learn on Aug. 16; and Master Class on social media marketing on Sept. 13.