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Welcome to the eleventh edition of our online newsletter! We hope that you enjoy reading about our exciting happenings this year, and we hope to see you soon! |
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GCSBDC announces a new website
coming soon
In the very near future, our website will change. The new website will be: www.GalvestonCounty.sbdcnetwork.net. This new website will feature on-line registration and payment processing for all our classes and events. You will also be able to access back issues of our newsletter. You will be able to access on-line courses offered through the University of Houston Center, and you will have direct links to our specialty centers like PTAC (Procurement technical assistance center) and the HRAC (Hurricane recovery assistance center).
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Dee Dee's Diet Delight
Success Story
Deidre (Dee Dee) Perez came to the GCSBDC requesting assistance with planning and launching her business, D'Lite Full Fit Foods, three years ago. Dee Dee's business provides carefully controlled proportions of freshly prepared meals, according to the client's needs. Dee Dee believes that all foods are healthful (except fatty fried foods) if consumed in moderation. The key is portion control. Dee Dee started this business as an offshoot of sharing the recipes and eating techniques that helped her compete in figure competitions and streamline from 30% body fat to 12% in just four months. Dee Dee worked with a local trainer to provide nutritional advice to the trainer's clients and business started to boom before she even had a menu, a plan or a commercial kitchen. Dee Dee needed help from her brother, Larry Gonzales, who had many years of restaurant management experience, and is a trained chef. Together they found a commercial kitchen that was centrally located near I-45, which was fortunate, because their clients come from as far away as Tomball, the Woodlands, and Bellaire. Perez tailors the meals to meet each client's objectives. Some clients are working on specific health issues like diabetes, or cholesterol management, while others want to lose weight or improve their body fat index. "We help people see that they don't have to give up taste and flavor to eat healthy meals." Ms. Perez's business capitalizes on market trend toward more healthful eating.
More recently, she has been working with consultant, Carolann Peters, to manage the growth of her business, setting up procedures and systems to enable her to meet the growing demand for her products. Ms. Perez was recently featured in the Lifestyle pages of the Galveston County Daily News, and business has increased rather dramatically as a result of that publicity. Ms. Peters is expert in developing procedures, checklists for quality control and productivity, and management aids that enable businesses to deliver on their promise. Many businesses experience growing pains in their third to fifth year of business, and this is a good time to renew your working relationship with your SBDC consultant. Ms. Perez is a great example of a business that has overcome its start-up challenges and is now working on the new challenges presented by growth. Congratulations to Dee Dee, her brother, and her SBDC consultant. For more information on D'Lite Full Fit Foods, you may contact: Dee Dee Perez by phone at 409-935-4500 or deidreperez@sbcglobal.net. |
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AND NOW, A WORD FROM OUR DIRECTOR...
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Carroll Cobb
This month begins a series of eight short articles, each one based on a chapter from my book, Advice from the Lemonade Stand, a Back to Basics Book for Business, first published in 1990. I am currently working on a second edition, especially updating the chapter on marketing because marketing has changed so much with the rising effectiveness of internet marketing and social media marketing. As amazing as it might seem, Facebook™ did not exist in 1990. Now it represents a universe of contacts, and a search engine as powerful as Google. ™
Eight rules for business success. My book sets out 8 rules that I think separate the successful from the unsuccessful business. The first rule is "Own your Own Financial Capital." I believe it is critically important to be in control of your business capital. This is best accomplished by accumulating your own capital the old fashioned way, by working and saving until you have enough to start your business. I believe that most service businesses should have not only enough capital to cover their initial start-up costs, but also enough to cover 6-8 months of living expenses for the owners. In these days of tight credit, this is a practical necessity because most banks will not lend to start-up businesses unless the owner is prepared to invest his or her own cash. You may be able to cover living expenses through the earnings of a spouse or partner, but you should be able to start your business in confidence that you can cover your overhead for several months without withdrawing any money from the business.
But, shouldn't I borrow other people's money? I know that this goes against the common wisdom that a business should use OPM (other people's money); but I do not believe that the OPM notion applies to start-ups. First of all, other people, neither banks nor private investor/lenders are unlikely to give money to a start-up business. If they do decide to invest, they will certainly require that the owner have a substantial investment (usually 20-30%), be able to show sustainability, and have sufficient knowledge of the industry to demonstrate a likelihood of success. This requires that you own your own financial capital, at least to the extent necessary to attract funding partners. It is naïve to think that you can start on a shoestring and succeed. It may happen once in a while, but it is not the best plan for success. The second reason I favor owning your own capital is that you are less likely to become bankrupt using your own capital. You will be more conservative and budget conscious when spending your own money than when spending "other people's money." The worst that will happen is that you will run out of money and have to close your doors. But you will not be in debt, and if you have your living expenses covered, you should be able to go back to work with no lasting harm done to your credit rating. Remember, a loan is not capital. It does not increase your wealth; indeed, it increases your liability and therefore, your risk.
But, what if I don't have cash to invest? Frankly, if you have not managed your life in such a way that you have savings, you probably lack the self discipline that it takes to succeed in business. Savings, in our personal lives, are the equivalent of "profits" and "retained earnings" in the business world. If you have not managed your personal life to show a profit, how do you expect to manage a business to show a profit? Cash is the life blood of business. Without it, your business will starve. The cash necessary to sustain operations for the first several months after opening will have to come from you, the owner. If you do not have it, you will need to get it. Get it through working and saving, perhaps taking a second job and saving the earnings from the job or tightening the budget and banking the difference; or get it by freeing up the equity in your home; or get it by growing it through sound investments; or raise it through convincing others to share the financial risk with you. Any of these methods will work to allow you to own your own capital. Entrepreneurship necessarily involves risk, risk of capital being the first and primary risk. When you own your own capital, you are in charge of evaluating the risk and making decisions about whether to invest in a business or continue in savings mode.
There is no better investment that a well calculated investment in your own business, a business that you are able to manage in an industry that you know well through your own experience. It is the single most likely route to increasing your wealth. But an unsuccessful business venture can also result in financial ruin. At the Small Business Development Center, we are focused on improving your chances for building your wealth, while reducing the odds of financial failure.
Next month we will discuss Rule 2-Own your Own Intellectual Capital |
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We welcome any suggestions you may have for our newsletter. We invite your comments and we look forward to hearing from you soon.
Sincerely,
Carroll Cobb
Director
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UNIVERSITY OF HOUSTON SMALL BUSINESS DEVELOPMENT CENTER NETWORK
The Galveston County SBDC is a business consulting and training center of the University of Houston Small Business Development Center Network. The UH SBDC Network serves 32 counties in Southeast Texas and is funded in part through a cooperative agreement with the U.S. Small Business Administration.
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Free Consultation
The success of your business is our only priority. Call to meet a Senior Consultant in your area today.
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Galveston County Small Business Development Center
8419 E.F. Lowry Expressway
Texas City, TX 77591
(409) 933-1414
(409) 933-3365 fax
info@gcsbdc.com
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