Making low-cost start-ups pay off - includes a list of books and other resources for small businesses - B.E. Special Report on Small Business - Cover Story

Black Enterprise, Nov, 1992 by Caryne Brown

Services to consumers or businesses are a logical option for entrepreneurs who can't afford retail inventory or massive machinery, but can travel to client locations or operate from a home office. For example, desktop publishing, medical transcription or professional billing are all services that can be provided using little more than a personal computer (which unlike other products, has dropped in price in recent years) and the right software. Personal fitness training, errand services, house-sitting, grocery shopping, sales of any kind--these are all businesses that require no special facilities, no inventory, little traditional advertising, few if any employees, and in most cases, less than $10,000 to start. "More than 50% of all service businesses," says Arnold S. Goldstein, consultant and author of Starting On A Shoestring: Building A Business Without A Bankroll (John Wiley & Sons Inc., New York),"offer services that only recently came into demand."

In the shakiest of economies, self-employment confers a sense of control over your own destiny. And America's uncertain employment picture--what with corporate downsizing on one hand and vanishing public-sector jobs on the other--is pushing more and more African-Americans toward self-employment. Between 1982 and 1987, the last years for which figures are available, the number of black-owned firms grew by nearly 38%, while the total number of U.S. businesses grew by just over 26%. "All of our members have about the same scenario, that they started with little or nothing," says Carl Dickerson, president of the Black Business Association of Los Angeles. "Some used credit cards to get started. But their real investment was their own energy."

Energy alone, of course, won't help you if you jump into the wrong kind of business. It takes research and planning to make a realistic match between the business you want to start and the amount of money you have available. Think ahead, not only about what your business is, does, and can bring to the market, but also about how it is likely to perform over the long haul. Even if you're just beginning to save money for your start-up, start thinking of yourself not just as a self-employed person but as a business owner. The difference in thinking can affect the way you make business decisions.

When money isn't readily available, every available dollar and every ounce of energy and determination have to count. "Nobody is going to knock on your door, lead you by the hand, and do it for you," says Goldstein. "Nobody is going to give you the push to get started today."

One of Sherrie Maurer's first stops was the SBA, which required her to go through a series of business seminars before it would consider her loan application. "They eventually decided that I didn't have a marketable product," she recalls. "So they didn't back me." The SBA banker took a second look when she raised $5,000 from her family. "He loaned me another $1,500, figuring that if the business failed I could pay it back." She repaid it within a year.