This blog post is part of the MAU Talks series, which is held weekly at Millennia Atlantic University, and on this occasion, Haydée Gómez will delve into the landscape of opportunities for small businesses.
The Landscape of Opportunities for Small Businesses: How to Harness Resources and Grow
About the Speaker:
Professor at Millennial Atlantic University teaching small business management and other business courses. Founder and CEO of Gelato Gourmet and Bosco Factory. President of the board of directors of Americas Community Center.
In an ever-evolving business world, it is essential to stay informed about the available options and learn how to effectively harness resources to achieve sustainable growth. Throughout this article, we will focus on how to invest resources, access financing, and benefit from support programs and mentoring to empower the growth of our small businesses.
We will explore the keys to sound financial planning, the fundamental role of small businesses in the economy, access to capital and financing, available support programs and mentoring, as well as strategies for diversification, collaboration, and technology that can make a difference in business success. Additionally, we will delve into the world of effective marketing and building a strong brand identity. Get ready to discover the opportunities that await you and learn how to harness them for the growth and success of your small business.
Introduction:
In the business world, it is common to hear entrepreneurs inquire about opportunities to grow their businesses. Often, we are unaware of the available options in the market and end up not fully capitalizing on them. In this blog post, we will explore some opportunities that are within reach for small businesses and are often overlooked. Join me as we explore how to invest resources, access financing, and benefit from support programs and mentoring.
The Importance of Financial Planning:
When it comes to investing resources, having clear financial planning is essential. Let’s imagine we have been handed a $500 check. How would we invest it in our business? This exercise helps us reflect on our needs and priorities. Now, let’s imagine we receive a much larger check, for example, $500,000. Although it may seem like a significant sum, it is important to specify how that money would be invested. The key is to understand our needs and how to effectively harness resources.
The Role of Small Businesses in the Economy:
Small businesses are the engine of the economy, especially in the United States. They often generate employment and contribute to the growth of the communities where they are established. However, there are specific challenges for certain groups, such as women and minorities. For example, only 21% of businesses are women-owned and generate only 4.3% of total business sales in the United States. It is important to address these inequalities and seek opportunities to overcome them.
Access to Capital and Financing:
One of the main barriers to business success is access to capital. Many business owners face difficulties in obtaining the necessary resources to survive and grow. However, there are programs and organizations that provide financial support and loans to individuals and minority groups. For example, the SBA offers loan programs without the need for collateral. There are also local and federal certifications that can open doors to additional financing. Crowdfunding is another option that allows raising funds through the community and gaining support for innovative projects.
Support Programs and Mentoring:
In addition to financing, there are support programs and mentoring available for entrepreneurs. Some organizations offer free education, mentoring, and resources to boost business growth. Examples of these programs include the Kauffman Foundation, Prospera, and the SBA’s Small Business Innovation Research (SBIR) program. These programs offer opportunities for business development and access to capital that are not typically available through traditional channels.
The Value of Long-Term Planning:
When starting a business, it is important to consider the long-term landscape. Statistics show that many businesses fail to sustain themselves over extended periods. However, it is crucial to look beyond closure rates and consider transformation, selling, or changing ownership as part of a long-term strategy. Proper planning can help ensure business continuity and maximize opportunities as the market evolves.
Diversification and Expansion:
One way to seize opportunities is through diversification and expansion. This involves exploring new markets, expanding the range of products or services offered, or even considering strategic mergers and acquisitions. Diversification can help reduce risk by not relying solely on one market or product, and expansion can generate significant growth for the company.
Collaboration and Strategic Partnerships:
Collaboration and strategic partnerships can be an excellent way to seize opportunities and increase the visibility of a small business. By partnering with other complementary businesses, resources, knowledge, and networks can be shared, opening new doors and creating positive synergies. Additionally, partnerships can provide access to new customers and markets that would otherwise be difficult to reach.
Technology and Digital Transformation:
In the current digital era, harnessing technology and digital transformation is essential for the growth of small businesses. Technology can improve operational efficiency, streamline business processes, and facilitate interaction with customers. Furthermore, adopting digital marketing strategies and online presence can expand the company’s reach and attract new customers.
Marketing and Branding Strategies:
Effective marketing and building a strong brand identity can make a significant difference in the success of a small business. Developing a customer-centric marketing strategy, utilizing social media, content marketing, and other tactics can help increase visibility, generate demand, and build lasting relationships with customers.
Conclusion:
Seizing opportunities for the growth of small businesses requires a combination of strategic planning, access to financial resources, support programs, and mentoring, as well as the willingness to adapt and evolve. By staying attuned to market trends, seeking strategic partnerships, adopting technologies, and developing effective marketing strategies, small businesses can maximize their potential and achieve sustainable growth in an increasingly competitive business environment.
Remember that success does not happen overnight, but with dedication, perseverance, and leveraging the right opportunities, your small business can achieve great accomplishments.
MAU Talk Transcript: Unlocking Small Business Success: Embrace Opportunities, Harness Resources, and Ignite Growth
Thank you to everyone who is here. The most frequent question I receive from entrepreneurs is: “What opportunities do I have to grow my business? What are we going to do to be able to expand our businesses with the free and available opportunities in the market, which many are unaware of? Will they become Amway?” Now I will give you a minute to tell me how you would invest every penny of this check.
How would you invest it? It could be in your business, personally, in an existing venture, or in something you want to start now. Right now, I have just given you $500. How would you invest these $500? What could we do with those $500? Now, let’s continue with the second check, but you will only have 30 seconds to decide how to spend it.
I want you to be very detailed in how you will invest that money. Okay, time’s up. It was harder, wasn’t it? It turns out that we won the Santander Grand Prize and they gave us a much larger amount. But we have to say in 30 seconds how we will invest that money. So we will do with the next check exactly what we just did.
Was it harder to invest those $500,000? Did you invest it all? No, right? How important. Many times we think we need a lot of resources and perhaps, in reality, we don’t need $500,000. And why would I take $500,000 at 8% interest if I don’t need it? Well, in the case of a prize, it’s completely free, but you still have to specify how you are going to invest it and I love that because it really puts the person in a position where we understand how much we need and what we need it for.
Today we will talk about small businesses and how to use those resources efficiently to achieve our goals. Small businesses in the United States are the engine of the country’s economy. Yes, shopping centers generate employment, but the number of people who lose their jobs is huge. Small businesses employ the majority of people and we move the economy and the communities where we establish our businesses.
Personally, I research a lot about women in business, because we are underrepresented. Only 21% of businesses are owned by women and the most alarming thing is that they only generate 4.3% of the sales of all businesses in the United States. Why do women create businesses that generate so little income? The first reason: is that we are not motivated by money. Our main motivation is flexibility to be able to manage our business and attend to our families. The second reason is that we tend to open businesses in low-growth sectors, such as services.
Few women get involved in sectors such as construction, finance, or technology, or even in groups like “Back in the Street”. In addition, among the issues that are studied about why women are not as successful in business as men, is the fact that we face more disadvantages when accessing capital. Personally, I love family businesses, since I come from one and my whole family has had businesses.
Hispanics are the minority that starts the most businesses. Why? For cultural and social reasons, among others. Despite what is said about immigrants, many of them, along with their children, aspire to have their own company. However, the problem is that starting a business involves risks. It is said that the entrepreneur takes risks from the moment they begin to conceive the idea. In the first year, only 21% of businesses survive. However, there are many aspects that people do not analyze about it.
Many of these companies do not close; some are sold, others are transformed or change owners. That’s why I always tell my students that we must look beyond the statistics that indicate that businesses are closing. If we look at 10 years, we will see that more than 50% of businesses no longer exist or, at least, not in the way they started. I show this graph so that they analyze and see that, eventually, 80% of all businesses will cease to exist in 20 years. Therefore, if you are planning to start a business today, think about how you are going to get out of it in 10, 15 or 20 years because it will surely transform into something different, you will close it, sell it or give it to your children, but it will not maintain the same structure, since businesses close.
If you talk to experts, they will tell you that this is because business owners do not have enough experience to manage them. And it makes sense. Many people are unaware of the industry, lack experience, and do not know how to run a business. And these are, in fact, valid reasons. Another important factor is capital.
Then, we have crowdfunding, especially useful for students. If you have an idea that you want to develop but do not have the funds, this is an excellent option to make your project known to many people. It is a website where you can present your idea and prototype, and then try to raise funds through the contribution of other people. It is a very good way to make known the project you want to develop and, at the same time, obtain human resources.
Many people ask me about the benefits of working with small businesses since sometimes they cannot offer the same benefits as large corporations. However, there are certain organizations that can facilitate this process. For example, I work with Art Brouwer and his team. Currently, we have another employee from “Go to Your Business” and we are building a platform in Tijuana.
On the other hand, I want to tell you about a recent FBI program called “Small Business Innovation Research” and “Small Business Technology Transfer”. These programs offer significant funds for the development of prototypes and projects in various industries. Currently, they have 3.2 billion dollars earmarked to invest in this program, and it is an incredible opportunity for startups dedicated to development and research.
In addition, I want to mention the Kauffman Foundation, which offers various opportunities for both mentorship and funding through grants. There is also Prospera, a very accessible option for the Hispanic community, which offers assistance to develop business plans, marketing strategies, and other important resources for entrepreneurs.
In summary, there are many opportunities and resources available for small businesses and entrepreneurs, and it is crucial to explore all these options to find the one that best suits your needs and goals.
Most of the programs require that it be a small business. How do they define a small business? It must have fewer than 500 employees. I think everyone here meets that requirement. Another common requirement of these programs is that the owner be a person from a minority, such as Hispanic, African-American, woman, veteran, or belonging to a deaf or disabled community. Almost all of these programs have specific focuses depending on the stage of the business you are in.
There are programs for those who are in an initial stage and others for businesses already established with more than two years of operation and that employ several people. The reality is that if you do not have an established business, you do not qualify for many of these programs. In addition, location is also an important factor; some programs are limited to certain geographic areas. For example, the Santander program required that you be in Miami, New York, or Texas to be able to apply.
Therefore, depending on the program, there are different requirements. My recommendation is that you take the time to read them and
, even if you do not meet all of them, apply anyway. Now, how can we benefit from this and what do we need to do as business owners to capitalize on this information?
First, we need to know exactly what we need, and that’s why we did the check exercise. If we are not clear about what we need as a business, we will not be able to move forward. For example, if we need capital to buy a specific machine, we must know how much that machine produces and how it will impact our production.
Knowing these details is crucial for any program we want to apply to. In addition, it is essential to tell our story. The only difference between a small business and a large corporation is our story. Knowing our numbers, understanding a balance sheet, and knowing how to present our information professionally are key aspects. All of this is extremely important so that, when presenting our case, people can understand it and support us.
When I participated in the Santander program, they gave me three minutes to present a 50-page project in front of nine jurors, all located in Boston. At that moment, you wonder how it is possible to present 50 pages of work in just three minutes. This is where we, the entrepreneurs, get creative and find a way to communicate our ideas convincingly.
As business owners, a large part of our job consists of sharing our vision and convincing employees, investors, customers, and suppliers to support our idea. That’s why it’s crucial to understand the numbers and know how to present them. Later, we must apply this understanding to take corrective actions. But, why do some people not access these resources?
First, there is a great lack of information about all the programs I mentioned. Maybe some of you know them, but many do not. Although there are numerous sources available, if you are immersed in the daily operations of the business, it can be difficult to find time for this. In addition, language can be a barrier, especially if some programs require knowledge in English or have educational components in this language.
Some people do not even recognize the value of these resources. They think that if the advice is free, it must be a waste of time. Another frequent problem is disorganization in businesses. When they try to apply to these programs or request grants, they are asked for financial documentation from previous years that they do not have at hand or that they have not yet prepared.
So, what is the plan? What should we do? For those who do not yet have a business, it is essential to understand that starting one involves solving a problem or satisfying a need. Creating a business just because you like an idea, without having a deep understanding of the market, can hinder the success of the business. So, the first thing is to clearly identify the problem or need and learn to communicate it. Then, you can proceed to create your business plan, which can be as extensive or brief as you need, using the various tools and formats available.
To establish a business, it is essential to register it; you cannot apply to any program if your business is not formally constituted. Subsequently, it is crucial to seriously dedicate yourself to networking and sharing your business vision. When you have a new idea and are looking for investors, you should talk to at least 100 people daily for three months. Reflect on how many people you are contacting daily to talk about your business.
Then, focus on growing your business using the available resources. Although some were mentioned in this presentation, I am sure there are many more. Continue exploring and applying to different opportunities. These are fundamental bases for everyone, as it is crucial to understand that at some point your business will need to transform, be sold, or pass into other hands.
This fact must be present when presenting your projects and ideas. Here is a tip based on my experience: there are various presentation techniques, but in my case, I used the following structure. First, the “hook” or hook, is something you say to immediately capture your interlocutor’s attention. I remember that in the Santander program they made us record weekly videos following this format.
Then, clearly define the problem you are solving or the need you are satisfying. Explain how you plan to implement your solution or what you need to carry it out. Finally, the “ask” or request: be as clear as possible about what you are requesting. Americans, for example, like clarity in this regard. During the programs, I realized that if you told them exactly what you needed, for example, “I need $15,000 and a presentation with the president of Goldman Sachs,” they responded, “Let’s see what we can do.”
These are things that you must have clear and ready to communicate in 30 seconds. If you meet someone related to what you are looking for, do not hesitate to express your needs clearly. I constantly repeat this because it is fundamental.
There is a phrase that I love: “It’s the small details that make a big difference in running a small business.” With this, I leave you my thanks and best wishes.”