This is a short sample from the SaveYour.Town video “Refilling Your Business Pipeline” featuring Deb Brown and me.

Small towns and rural communities will need new business startups to revitalize their local economies, but not many people have the resources today to do a startup the way it’s traditionally been done.

Part of what holds your potential new entrepreneurs back is thinking that going into business has to be a big and difficult and long project.

Imagine all the work that “everyone knows” is part of starting a new business:

If you decided to open a retail store, you have decide on your specialty and what kind of merchandise to carry, deciding or guessing whether your town will support it, finding a location and remodeling it or even bringing it up to code, decorating, finding suppliers and getting started with them, getting your local banking established, securing financing, hiring staff, advertising and marketing, and all that before you even know whether your initial concept is actually sound.

In small towns, those problems can be magnified where you may face a shortage of usable buildings, long distances to suppliers who don’t pay attention to small accounts like yours, few local banks, no chance of local financing, few choices for potential workers, and a smaller potential market. It seems like it takes a lot of time, money and work just to get into business.

You have to get all your ducks in a row.

What if I told you there was a much easier way to get into business?

Just get one duck and go from there. 

Imagine building some steps in between. If you could buy just a few products and test them by running a temporary business inside another business for a month or two, you’d learn a lot about what sells in your local market right now. If that works, maybe you could rent a small booth in a shared retail building. If something doesn’t work, you can fix it and try again.

From there, jumping up to starting a traditional store doesn’t seem as hard. You’ve learned what people want to buy. You’ve established relationships with suppliers. You’ve gained a loyal following. All those smaller steps lift you up closer to jumping over that hurdle of starting a traditional business. And if you miss a jump at a smaller step, it’s easier to recover and try something new.

Why this works

That’s the purpose of the innovative rural business models. They put people in a much better position to succeed, or to fail in a manageable way. It cuts time and money off the process of getting into business. 

For economic developers, these give you an easy way to add entrepreneurship promotion to existing projects and activities. It’s not about starting new things from scratch. It’s about finding and building on the small steps that already exist in your area.

Get the full video

The entire 30 minute is available for purchase at SaveYour.Town: Refilling Your Business Pipeline.

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The first vision board presented by the design:SD team to the community of Webster, South Dakota, on Sept. 27, 2014, stated the following phrase in bold lettering:  GATHERING THE DOERS.  There were approximately 50 people in the room that day and surprisingly none of them got up and ran out in fear upon seeing the design:SD team’s first request to the community!  Usually when someone asks for volunteers the room goes quiet, everyone looks at the floor, people go to the back of the room for more coffee, and the seconds tick by on the clock.  But this group of Webster residents did something unusual.  They listened, they participated, they were engaged, and they felt empowered to become invested in a process that was created for them to improve their hometown. Five years later this community is still engaged in the process of vision for their community in order to make big and small things happen.

I thoroughly enjoyed my three days in Webster as part of the design:SD team and realized that I have also been empowered by the phrase, “Gathering the Doers”.  Those words excite me! I think about the powerful potential that can be ignited in our communities because of the passions residing inside me and others around me.  Our passions are those things that we care deeply about and are motivated to put into action for the betterment of others and ourselves.  Living in small communities we see passionate Doers nearly every day and they are making things happen all around us.  Doers are moved to become involved in something bigger than themselves in order to liven up community spirit; to celebrate our successes; to learn from our failures; to share history; to get together when support is needed, to support our youth, to raise our kids, to raise money; to strengthen our faith; to be encouragers; to lead; to meet a need; and the list goes on.

Typically, we (the community) tend to believe that creating a call to action for Gathering the Doers requires a formal structure; a request for volunteers; a community-wide understanding of a common need, mission or objective; and the permission from someone of authority to start a project. In reality the process of creating a culture of Doers in the community is really quite simple…

STEP 1:  Give yourself permission to start something that you are passionate about.

A small group of entrepreneurs from Brookings, South Dakota, gave themselves permission to declare their hometown the “Creative Capital of the World”.  They turned their passion into action and created business, activities, conversations, and opportunities to revolve solely around their public declaration that Brookings was indeed the Creative Capital of the World.  They did not ask for anyone else’s permission. They just implemented their ideas (some successful and some failures), printed some t-shirts, created a website, and became the individual Doers that this community needed to carry out the self-proclamation.  Because of their passion, others now believe in this grassroots movement and are becoming the Doers that are changing the culture of their community.

You don’t need special skills or resources to Gather the Doers, just give yourself permission, take the leap, put your passion to work, and keep participating…keep investing…keep inviting…keep listening…keep empowering!  Your community will love you and others will be empowered to become a Doer too. #Iamrural

Could a simple backroom tour be better for supporting startups than a full 14 week course? Photo of Bonnieheath Estate Lavender & Winery backroom tour, Ontario, by Becky McCray.

Because I’ve been an entrepreneur since junior high school, I’ve been asked to help with all kinds of entrepreneur support over the decades. I’ve taught entrepreneur classes, I’ve been part of day-long entrepreneur events, I’ve taught workshops and I’ve been a mentor in formal and informal ways. And I’ve been thinking lately about what works and what doesn’t work that well for people in small towns.

Not everyone learns best from the usual kind of formal trainings in a classroom with a lecture from an expert. 

And it’s not easy for would-be entrepreneurs to get to the classes because of timing and conflicts and they’re busy.

And the topics we had to cover in the trainings I was involved in, often focused on things that weren’t necessarily helpful for entrepreneurs. Or weren’t what they most needed to know.

In fact, I just got an email from an educational institution that they’re doing a six week entrepreneur training. When I looked at their list of topics, it struck me as exactly what is wrong with our traditional entrepreneur training:

It’s focused on writing out business plans and legal entity formation, and even the outline is full of jargon like “owner’s equity” and “Calculating Revenue to Break-Even.”

I’m convinced that training curriculum is not the right way to get more entrepreneurs actually doing business in a small town.

In small towns, we have a lot of potential entrepreneurs. They just don’t all fit into the “traditional startup business” model that Old Way courses assume. Think about all the people in your town who could be non-traditional entrepreneurs.

• People doing side hustles already
• Students making things in school classes or organizations
• People with talents they aren’t using in their jobs
• People who want to go into business some day
• People who have a business started but need some help
• People who have been in business before but want to try a different business
• People who are thinking of starting a retirement business

Old Way traditional entrepreneur trainings take all these different kinds of people and assume they all need the same 14 lessons. They assume they’ll all get everything written out and perfectly planned, before they go into business. This is that “traditional startup” model that was assumed a long time ago.

In this Old Way model, startups need to have all their ducks in a row in order to go into business. Everyone needs to have great credit, deep pockets, good connections, be clean and sober, have strong business skills, and a solid support network. Think about your town, there aren’t really that many people who have all those qualifications.

There is an Idea Friendly alternative, one that gives you practical steps to get your entrepreneurs to train each other in a way that is self-sustaining: 

Learn more in our latest video at SaveYour.Town.

Photo (CC) by Malin Andreassen, on Flickr

“If only” is a statement I hear often from small-business owners.

Sometimes the wishes are big and grandiose. But most of the time, the wishes are just what one might expect such as more customers, a big order, more space or more money to work with or in the bank at the end of the month.

Yes, often the wishes are just dreaming, yet I have also seen a them come true.

It is great when that happens but, when asked, business owners often reflect that this great positive showed weaknesses in their planning and preparation.

Issues that these owners have faced include: keeping customers happy once they start coming; getting and training an adequate level of staff, needing more space and equipment, finding where to get more raw materials, and, of course, needing more money. Even when things are going good and money is starting to come in, the demand for access to even more cash grows as well.

Business owners comment that they were looking at much larger loans or at new challenges as they considered raising equity capital or working with an angel or venture capitalists.

So should you, as the owner, give up on your wishes? Not at all. For most people, the wishing stage just gets us started thinking about the future. And those thoughts form the start of what all business owners should do, planning.

Wishing is a good lead for the next step, the “what if” statements. How might your business be impacted if a wish does happen? Are you ready to respond?

Being ready to respond will make achieving your wish feel so much better. It also may help direct what you wish for. For example, many people enjoy the creative process. If demand should skyrocket, he or she becomes a manager and loses any hands-on role. It’s something to think about and plan for to ensure that your small business continues to fulfill your dreams and desires.

Wishing or dreaming or whatever you want to call it is a huge motivator. It keeps us motivated. And that will build your business.

As Eleanor Roosevelt said, “The future belongs to those who believe in the beauty of their dreams.” The key to this story is do not let your wishes be the end of your dreams.

Want to start your own business? Start by experimenting with borrowed space inside an existing business. Photo by Becky McCray

In a recent conference call by the Orton Family Foundation, one of the listeners asked a great practical question:

What are 3 actions most effective at starting a local company? —Jay B., KS

My answer was:

Try 3 small scale tests.

That’s how you’ll build knowledge of what works, build an initial following in the market, and build assets toward your next, bigger step.

What can you do to test a business idea?

• Try something temporary: pop-up for a day, a week or a season
• Try something tiny: look for just a few hundred square feet to set up in
• Try something together: set up your business inside an existing business, coworking space, maker space, shared art studio, or shared commercial kitchen
• Try a truck or trailer: use more than one town to gather enough customers

Those are four of the Innovative Rural Business Models. They are the best way to build up to bigger future business successes. (Watch for a more in-depth article on this updated version of the Innovative Rural Business Models, coming soon.)

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Capital City Public Market, taken by Melissa Nodzu, used with permission. Brett “Buzz” Davis of Long Valley Coffee.

Admit it. You want to own your own business.

Saying this is OK. Many people feel the same as you do. Owning a business is a goal many of us have, just like we want to own our own house.

Yet turning that wish into reality is the hurdle where many people stop. It’s scary. Besides knowing exactly what type of business they should start, the idea of giving up that sure thing, their paycheck and associated benefits, stops them from reaching for the dream.

Some families make the leap by having one of the partners keep his or her job. Yet even that is not always possible because we tend to have set our spending at a level where we need two incomes. So we stall out.

This hurdle, though, need not stop us. Many business startup guides encourage people to start the business on the side.

Starting a side business is a win-win tactic. You get to keep your day job and the security of the paycheck and benefits package while you explore your business idea. And keeping that paycheck will help limit the amount of outside funding you might need. You can put more of your own resources into starting the business and need little or no funding just to pay for daily living expenses.

So how does one do it? It starts with hustle or, what some might say, burning the candle at both ends. It means perhaps having to let go of some favorite recreational pastime, as least in the short term. And it also may mean less family time and/or sleep.

Just these changes alone mean you need to have a good talk with yourself; now might be a time to bring in a mentor. You also need to have a conversation with your spouse or partner, along with any children or parents who you might be assisting.

You may well want to reach out to other business owners and find out who else started this way. Ask them how for tips on how they did it.

A second issue is what business model to use. You’ve probably heard that you can’t open a storefront if you aren’t there. That’s true but only if you are thinking of a typical storefront. What about a pop-up business, a short-term, perhaps seasonal effort? This may take your vacation time. But isn’t the end goal worth it?

Or maybe you can run the business on nights and weekends only. You can start many businesses at this level just to explore the market.

You also can talk with your current employer. Maybe you can work out a modified work schedule or take some time off without pay.

Starting a business is a dream of many. Beginning your business on the side might be the way to make it happen.

Photo (CC) Chris Potter, on Flickr via stockmonkeys.com

Going into business for yourself is always a scary idea, especially for the first-time business owner.

You seem to have so much to do and so little time to get it done. The first-time business owner faces even more uncertainty because every step is a completely new experience.

Running a business is a daunting task. Here are some tips to help you get and stay focused on your goal. Post this list of tips as a daily reminder.

• Focus. Focus. Focus – Getting off track and pursuing non-priority is easy to have happen. Even multitasking limits your effectiveness. Pick the key task, focus on it, get it done and move on to the next task.
• Do what you know. Do what you love – The time and effort put into developing a business is incredible. Starting a business based on something you enjoy makes it easier to keep going and may eliminate wasted startup time.
• Have your pitch – Every day, you will have the opportunity to tell others about your business. Have a short, concise statement of 30 seconds or less that tells what your business does. Practice it and use it every chance you get.
• Remember, you don’t know everything: Learn where you need help and where to go to get it. Many services are available to help the business owner from Extension to the Small Business Administration to state and local offices.
• Have your financial resources – It’s a myth, in most cases, that there is free money to start a business. You need to be prepared to us some of your own resources. And if you are looking for a loan, make sure your own credit record is clean.
• Find a mentor – A key for many start-ups. This person is your sounding board, helps answers questions, and is there just to listen.

Owning your own business brings great opportunities. Use these tips to maximize your chances of success.

Photo (CC 2.0) by GotCredit, on Flickr

One of the most common requests I get is to help people access “free money” to help them start their business.

Regretfully, my response is there is little, if any, free money available. Instead business owners need to depend on their own personal funds, family and friends, or good bootstrapping.

At some point though, most small businesses need to access additional funds and that will usually come in the form of a loan.

While the reason for the loan may vary, from needing more raw materials to buying additional equipment to buying inventory to hiring more people to a cash flow issue, the early sources of business financing, bootstrapping or personal savings, just cannot cover the need.

So the next step typically is to get a small-business loan.

People are often concerned about their ability to get a loan. It really is not very different from getting a personal loan. The bank wants to know your credit history, what you have for collateral and your ability to repay the loan.

And when your business is new, the banker will want not only this information about the business but also from you, the owner.

There are several common mistakes small-business owners may make when applying for a loan:

• Having an incomplete or inaccurate application
• Not providing information in a timely manner
• Lack of a clear explanation of how much money they need and how the funds will be used
• Withholding personal guarantees (this is especially true for startups and smaller businesses)
• Not knowing their personal and business credit rating
• Not showing efforts to improve their credit ratings
• Not having a solid business plan with reasonable projections

Bankers understand that businesses often operate in cycles, with ups and downs. They also know the difficult in starting a business. So make your projections as accurate as possible and don’t hide any information. What the bankers want is realism and a clear path for building the business.

It is also important that the business owner do his or her homework in finding a bank for your loan. Find a bank and banker who understand small-business finance. Like finding other professionals such as your certified public accountant and attorney, it is important to research the bank you hope to use.

Finally, once you get your loan, stay in regular contact with your banker. He or she can provide reliable guidance and possible solutions to challenges that occur. They don’t like surprises. They are willing to work with you as you need to make adjustments.

Business loans are crucial in your growth. Learn early they work and on, what you hope to be a long-term relationship, with your banker.

Photo (CC) Diana Parkhouse, on Flickr

Buying a business can be a great way to get started. You already know if the business can make it, plus you already have an existing market base who know you exist.

Before going too far into examining the business, you, as the prospective owner, need to consider what is prompting this decision to buy.

•   – Is the business in an area where you have a passion or some special talents?
•   – What is your current financial situation?
•   – How well do you tolerate risk?

If your answers are positive and you still want to go ahead, it is time to dig deeper. Everything may not be going as well as it seems on the outside.

Digging deeper means doing due diligence. As the future owner, you want to assure yourself that everything is as promised or listed and that you won’t find any surprises. Areas you need to examine include the business’s financial performance, the list of its current clientele and work that has been promised or is under way.

Also, you need to examine the legal and regulatory aspects of the company. Are all necessary permits and licenses in place, and has all the required paperwork been completed? You also must examine if the sale of the business triggers any new rules or regulations or negates any situations in which the business had been “grandfathered in” but the sale opens news requirements.

Don’t forget: If the business includes a physical space, that inspection of the building becomes part of your due diligence. Include contracts or leases that you will be assuming. Make sure you can assume these contractual obligations or whether they will need to be renegotiated.

In addition to contracts and leases, you need to see all financial records for the last three to five years, at a minimum. These records should include tax returns, proof that no tax or other liens exist against the business or the property, and a list of key employees and all partners/shareholders in the business.

As you work through the process, you probably will need to generate other documents, such as a letter of intent, confidentiality agreement and sales agreement. Make sure your agreement is detailed and includes everything.

Buying a business is a difficult task. For your protection, you need to consider building a team who includes a certified public accountant, attorney and mentor. A mentor can help you make sure you ask the right questions. The mentor also can be the person who keeps you focused on asking the tough questions.

Owning a business can be rewarding. Buying an existing business can offer some real advantages. Doing it right from the beginning is the first key.

Could your bread-baking hobby turn into a side business? Glenn Muske tells you how to think it through. Photo by Becky McCray.

Opening and operating a business on the side occurs for lots of reasons.

Some side businesses are operated by individuals who already own one business. Yet for others it means starting a business while working another job.

A third category are people who have an idea for a business. They may not have another job; however, they do have other commitments, but they have a desire to start a side business. Some may consider this a part-time business, but it is much like the sideline business.

Common in each of these scenarios is a desire to develop another income source. It also brings experience before one takes the plunge completely.

Key in the owner’s decision should be filling the consumer’s need, solving a problem or improving the quality of life. If the owner is serious about generating income, he or she must know what the audience wants and what customers are willing to pay.

The owner also must have done some homework to know if the pricing structure will indeed provide a profit and pay for the time involved.

In addition to generating additional income, starting a sideline business has other advantages.

First, it allows people to try out a new idea while minimizing risk.

Second, the sideline business might be a nice complement to the existing business or it may fit into what is a quiet time in the business cycle. Think of the lawn mowing business that starts a winter snow removal business, a spring cleanup business and a fall leaf-removal business. These are complementary businesses that fit together into services that can be sold individually or in a package.

However, sideline businesses can be completely unrelated to what else the person does. That’s the banker who bakes bread on the weekends.

A third advantage is the owner, when setting prices, has some flexibility in what he or she must charge for his or her labor. Discounting is possible for these additional hours spent on the new business. But this must be done carefully after thinking about long-term ramifications. Setting prices too low creates unrealistic expectations among customers. Think how difficult it would be to raise prices if you should make this your full time effort.

Starting out as a sideline business also allows you to do more testing than what you might otherwise do if you are depending on the business as your primary income source. Not only can you test product and services, you also can test the mix of the two, along with pricing structures, packaging and many other aspects.

In addition, a sideline business allows you to test yourself to determine if you have what it takes to start a business or if you need to look for some additional expertise, such as an employee or a consultant, or maybe just a mentor.

Finally, opening first as a sideline business allows you to work out the kinks. Thus when, and if, you decide to take the opportunity further, you have made some of the basic mistakes already.

No matter what your situation is, opening a business on the side is a great way to get started. It increases your odds of success and manages your risk.

Glenn Muske is the Rural and Agribusiness Enterprise Development Specialist at the North Dakota State University Extension Service – Center for Community Vitality. Follow Glenn on Twitter: @gmuske