What’s the #1 question small businesses are asking? A business advisor tells all
Small businesses are the backbone of America. Although many agree with this sentiment, few are as dedicated to supporting up-and-coming enterprises than the American Small Business Development Centers (SBDC), a nationwide organization created to support American small businesses through training, counseling, and other resources at free or affordable costs with nearly 1,000 locations across the country.
Virendra Chhikara is the Director of the SBDC at the University of Louisiana Monroe and he’s been an advisor to small businesses for over ten years. “I got into the small business game just as the economy was tanking at a different time, 2009,” Chhikara said. With the onset of COVID-19, we are at yet another crossroads in society, but Chhikara continues to be a valuable resource to small business owners.
Here’s what he had to say about what business owners should be focused on right now and how SBDCs can help.
The most common question small business owners ask
The goal of SBDC locations across the US “is not just to start the business,” Chhikara told us. “Our aim is to feed that capital into the local economy and generate jobs.”
Part of the job of an SBDC advisor is to “speak a different language” to small business owners looking for guidance; an outside opinion that friends and family may not be able to provide. “[We] ask some tough questions,” Chhikara says, such as:
“Do you really know your cash flow? Do you really know your sales? Do you really know your clientele? Do you really know how your clients are thinking?”
In his tenure with the SBDC, Chhikara says that the most common question he receives is, “Will my business be a success? Will I be making money?” But it’s not the one he wishes they would ask.
“One of the most important aspects of running a business is knowing your cash flow.” This is the topic he thinks more business owners should be concerned with. And he would like to see more people taking advantage of the resources SBDCs offer around creating a business plan, which goes hand-in-hand with good cash flow management.
The myth about business plans
Although many people just starting a business may be looking for validation that their idea is a good one or for someone to ensure that they will make money, that’s not what entrepreneurs should be concerned with, according to Chhikara.
“Cash flow usually comes through a business plan. And when people think about business plans, they are thinking about many pages of writing. This is a myth.”
According to Chhikara, one of the most under-utilized services from the SBDC is their cash flow resources. “That stuff is actually provided by SBDC at no cost, but still not a lot of people are utilizing that resource. If you don’t have a business plan that means you don’t know your numbers. It’s the same thing for Fortune 500 companies. If they do not know their earnings for each quarter, they don’t know what’s coming. That defines the future of the company.”
To entrepreneurs who haven’t considered their cash flow nor made a business plan, Chhikara encourages them to question whether “they’re really understanding as a small business owner what they need to do next.”
What does market research have to do with it?
Another under-utilized resource from the SBDC, Chhikara says, is the tools they offer to create a sales strategy
“If you do not have a plan to increase that customer base, that means you’re ready for a disaster. So I wish there was more involvement on the market research aspect as well because that defines how the customer is thinking and the future of the business is based on the changes happening around you. So definitely cash flow analysis, sales strategy, and market research are a little underserved.”
What should small businesses ‘do next?’
Since the start of COVID-19, Chhikara has seen business owners’ focus shifting. “The questions are more around what to do next. And that’s what we’re also asking the community – what to do next.”
Chhikara recommends finding a way to move your business online, if possible, or safely reopen. “For some businesses, it will make sense if you open again. They can set up appointments and act more like a boutique.”
If a business chooses to go the ecommerce route, “they can do a demo video via Facebook live or any other online web application that will show their inventory.”
However, Chhikara places the most value on focusing on your bottom line and making a short-term plan. “What is the bottom number you are trying to achieve to survive the next three months? Always focus on quarter to quarter in these situations. This is not a long-term planning stage, this is a short-term planning stage because things are changing every single day. Laws are being changed every day, new information is floating every single day. So that is why our suggestion as consultants is to focus on those small goals.”
Innovation even during crises
“Every time there is a downturn there is always an opportunity for innovation,” says Chhikara. “Small businesses should be asking SBDCs for help transforming their business to adapt according to the new norms of the small business world post-pandemic.”
Chhikara is an advocate for finding ways to lean into the changes happening around small business owners and even using it as a way to improve. “Existing businesses should be looking into expanding a new segment of the business that can generate revenue. New businesses should always be looking into how to carefully start their business and they should be talking to SBDC no matter what.”
“And again, these services are at no cost. We can give you that recommendation or piece of advice that will help you make a decision or change a decision.”
The American SBDC is offering many new resources for small businesses right now. Check out their COVID-19 Small Business Resources page for more info.
An inventor finds success with help from LSBDC
A big win for the University of Louisiana’s SBDC was when a budding entrepreneur named Lee Mallahan III knocked on their door. He told them about his invention, the Tadpole Tape Cutter, which he had come up with while painting his own home. It was taking him hours just to apply the painters tape around the front door of his home. “Then I got fortunate” Mallahan said, “by putting a knife on the back of the tape and cutting it and it went from an hour-long process to do one side to fifteen minutes on the other using this method. I knew then I had to make this.”
Mallahan went straight to LSBDC to get advice from an advisor on how to start his business. Now Mallahan’s invention is in Walmart, Amazon, Ace Hardware, and many more stores.
He attributes much of his success to the help he got at LSBDC saying, “You can go to college twice and still not get the knowledge I’ve gotten from them.”
For more more answers to your business questions and tips to succeed, check out our Grow Your Business page.