Tips for success with @SmallBizLady, Melinda Emerson

Pictured above: Melinda Emerson, founder & CEO of Quintessence Media, an award winning strategic communication & video production company. Nationally known as the SmallBizLady, Melinda has reached more than 3 million entrepreneurs through her website, #smallbizchat on Twitter, consulting and speaking engagements, and top-rated book for startups, Become Your Own Boss in 12 Months: A Month-by-Month Guide to a Business That Works. Her next book is scheduled for release in September 2017 and will address issues faced by existing businesses.

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I’ve been dreaming about starting a business. I have a great idea, but I’m not sure how to begin…
I quit my job and launched a business with my savings. I’ve hit a rough patch. Now what do I do?
I always heard, ‘If you build it, they will come’. But that’s not working for me.

If you are among the 28 million small business owners in America or the millions more thinking about starting a business, chances are you’ve asked yourself some of these questions. Starting and running a business can be filled with rewards like exiting the company rat-race and creating an original product or service. Planning ahead is critical. Otherwise, instead of owning a small business, your small business may end up owning you. You don’t have to go it alone! Entrepreneur and small business expert, Melinda Emerson has your back. The keys to small business success start with the basics:

• Creating well-thought-out life and business plans,

• Developing a network,

• And determining where and how to obtain funding.

Check out our Q&A with Melinda Emerson below as she digs into these keys to success, and pick up some tips and strategies along the way!

Live your dreams … with a plan.

Kiva: What’s some advice you give potential small business entrepreneurs?
Melinda:

• Create a life plan. It’s important to figure out what you want and why you want it.

• Figure out how you’re going to get funding for this business. Most people think they will just go to a bank and get a loan. But most banks won’t talk to you until you’ve been in business for at least three years and have positive cash flow along with a great business plan, credit, and collateral. As a result, most entrepreneurs have to start with their own savings. I recommend that prospective entrepreneurs save 20-40% of every paycheck for the 12 months prior to starting a business. A Kiva loan is a great way to augment personal capital.

• Get clear about what skills you have and what skills you need. One way to find out if you have the right skills or gain these skills is to go work part-time in a business like the one you want to start.

• Determine if you have enough potential customers to justify starting your business. Do your homework.
   

My mission is to end small business failure.

Kiva: What are the main reasons why small businesses fail?
Melinda: Most people don’t have any idea how hard it is to operate a small business. For the first few years, your business owns you! Here are the top 5 reasons why new small business entrepreneurs fail:

1. They quit their paying jobs prematurely without having a plan.

2. They don’t have a network and don’t know how to establish one. 90% of small businesses get business from their network. It’s more valuable than money.

3. They spend too much time chasing new customers instead of nurturing existing ones. It’s much cheaper to keep an existing customer than to acquire a new one.

4. They think anybody can and will buy their product or service. You need to be a niche player. Smart entrepreneurs “make their riches in niches”!

5. They don’t manage their business with a budget and up to date financials. It’s amazing how many people let their fear of math get in the way or they don’t call an accountant until tax time. You need to know every month how your business is doing. You should not be making purchases that aren’t in your budget.
    

The biggest challenge is not having and using cash flow statements.

Kiva: What do you see as the biggest cash flow challenges faced by small businesses?
Melinda: Businesses that don’t have cash flow statements don’t know where their cash strengths and weaknesses are. It’s a challenge to get your customers to pay on time, especially if you are doing any business with Corporate America which often have payable terms as far out as 60-90 days. The bigger the company, the slower they pay, making a line of credit to cover working capital an essential financing tool.

It takes time to build and nurture a network.

Kiva: What advice can you give entrepreneurs about building and maintaining a network?
Melinda: Your first funding is going to come from family and friends. If you can’t get family and friends to buy-in, nobody else is going to. You need to manage your relationships carefully. Don’t just call people when you need them. Be in touch with members of your network regularly whether or not you need their help. It’s going to take you 12 months to build out a solid network. My advice is to attend industry events whenever possible and get into places where people who can help your business can get to know you.

Money is the key to growth. You have to have a plan for that.

Kiva: What thoughts do you have for established businesses?
Melinda: I’m excited to release my next book which is going to be about growing an established business. I think small businesses often aren’t niche-focused enough. They think they can sell to everyone. Also, many small businesses don’t borrow enough to fund new growth and, as a result, they end up where they started. Last, never let a customer down. When you go the extra mile for a customer, your customer will go that extra mile for you. (More on this last tip here!) Here are the four main elements to consider:

1. People: Who do you have and who do you need to achieve growth?

2. Processes Do you have a scalable product or service?

3. Profit Margins: Are you actively promoting and selling your most profitable profitable product or service?

4. Funding: How much money do you need to pay for additional employees, inventory, marketing?
    

Kiva: Besides your amazing resources, are there any other sources you recommend to assist entrepreneurs?
Melinda: I love SCORE (Senior Corps of Retired Executives) as a great place to find a business mentor. I also recommend smallbiztrends.com.

You never lose in business. You either win or learn.

To learn more about how to start and grow your small business:

• Check out Melinda’s website and blog where you will find thousands of articles guiding entrepreneurs to success.

• Participate in the weekly LIVE talk show, #smallbizchat, on Twitter every Wednesday at 8-9pm ET

• Find her on Facebook!