Prish Moran knows what it's like to see an investment in Buffalo's West Side pay off.
The Sweet_Ness 7 Cafe owner has watched her investment in a dilapidated building on Grant Street almost quadruple in value since she purchased the property in 2007.
"It really is perception," she says, explaining why more entrepreneurs haven't bought into potential business investments in the surrounding neighborhood."Some people need to see things as they could be, I really think that's it." she says. "A month doesn't go by that some rich developer doesn't try to buy my building from me."
Key provisions in the stimulus package are designed to spur entrepreneurs like Moran and their investments. The Small Business Administration, for example, is now able to guarantee 90 percent of a loan given by a bank to a small business. Depending on the amount of a loan this is a 5 percent to 15 percent change from the existing levels, according to the American Reinvestment and Recovery Act of 2009.
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This move is expected to thaw out the frozen credit market for small businesses by having the federal government back the loans given to businesses almost in full.
Help from the federal government is not enough when starting a small business. A sound business plan is always needed no matter the economic climate, according to Susan McCartney, director of the Small Business Development Center at Buffalo State College.
“It’s always a good time to start a small business, all you got to do is get the formula straight. Until the bomb goes off or its Armageddon, people will need products and services,” she said.
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People can and have started a business with no money to their name, as long as they have a completely matured strategy in print that they can sell to investors they can start a business, McCartney said.
“Long-term success has nothing to do with luck,” she said.
Moran consulted with McCartney and her office before starting her business, outlining the strategy that an entrepreneur needs to be successful.
Many people believe that if they find a concept that matches a need in the market place that their business will take off with no questions asked. This is a major misunderstanding. If a small business owner does not have a written down, spelled out strategy for the long-term then that business is destined to fail, she said.
There are four elements that every small business strategy must have in order to be successful, McCartney said.
First the owner must set quantifiable objectives. The entrepreneur must know what the start date of the business will be, how many employees and customers they will have along with how many locations they plan on opening, she said.
These objects help frame the business in way that allows the owner to have concrete numbers they must meet before getting the business off the ground, she said.
The next step for an entrepreneur is marketing.
Owners are often well versed in the communication aspect of marketing; they are well aware of the media around them and are willing to work to hard to get the word out about their new business, McCartney said.
However many owners fall victim to the analysis portion of marketing, she said.
Many entrepreneurs feel that their product or service is meant for the entire market and they don’t feel they should target a specific market because they will be leaving potential customers out, she said.
This type of attitude often leads to businesses failing because they end up wasting money on marketing that targets people who will not buy their product or use their service, she said.
The third element in the strategy is human resources. This involves putting together a team that will help the owner create and run a successful business.
“The greatest challenge entrepreneurs have is effectively hiring, managing and compensating employees,” McCartney said.
In order for a small business to be successful it must hire intelligent and motivated workers who are trained properly otherwise the business will not be able to compete with larger businesses and franchises that put a major onus on human resources, she said.
A financial analysis is the last step in the business plan. There are three standard accounting charts that are followed by all small businesses, a cash flow projection, a balance sheet and a projected income statement.
These charts let the owner know how well they did on the first three elements of the strategy and whether they need to go back and make adjustments, she said.
A business like Sweet_ness 7 just wouldn’t get off the ground if they didn’t follow this strategy, McCartney said.
There is a lot more activity brewing on Grant Street than just inside of Sweet_Ness 7, Moran said.
"There's a lot going on," she says, as a barista blasts hot steam into cold milk, stirring up a cauldron of activity. "Maura Crawford, who's a very successful restaurant owner, is opening a restaurant in my (building). Across the street, Dolce from Elmwood is opening. Someone bought the church around the corner and is opening another artist community. So, it's good, it's all good."