Publisher's Note: New wave
By Jody Reese
There is an up side to a down economy: more entrepreneurs.
It happens in several ways. Some people who are laid off and can’t find work open their own small business to make ends meet. It’s usually a business with a small need for equipment, such as a cleaning company. Then there are those who want out of the boom-bust cycle of company layoffs and start a business they have long dreamed of running. Still others discover an opening in the market for a good or service and take the plunge. It’s a time of ingenuity and hard work.
For some businesses that are a little more capital-intensive, entrepreneurs need to borrow money. This is where our local banks are so important. It’s not enough to be a solid local bank with a healthy cash reserve. We need you to loan that money out to new businesses. We need you to take a risk on that entrepreneur and our local economy. Many recall the early 1990s when banks wouldn’t even lend to their best customers — and this region languished.
In addition to the need for aggressive entrepreneurs and banks-a-lending we need local government — the folks who regulate most businesses — to lighten up.
In the retail sector one of the biggest challenges to a new business owner is dealing with life safety issues. That’s the rules about exits, sprinklers and anything else that has to do with escaping from a burning building. It’s not so bad if you hire an architect or have opened businesses before, but for the new business owner it’s incredibly daunting. It’s not necessary for these codes to be changed in most cases (though historic buildings should get some special status as they do in New Jersey), but local fire departments must do a better job of helping new business owners through the process. That also goes for other department, such as building, health and planning. There’s no guide to opening a business in New Hampshire communities. The state does a good job of laying out the rules for how to follow its laws, but cities don’t seem so customer-friendly.
Now the really hard part
Too many times, I see new businesses open without proper planning. It’s relatively easy to open a business, but quite hard to keep it open. Ninety percent of businesses fail in five years and 95 percent fail in ten. The biggest mistake I’ve seen entrepreneurs make is hoping their business will work. Hope is great and it’s necessary to be an entrepreneur, but it needs to be backed up with conservative expectations based on data and then making sure you have enough money to get you through the start-up phase (the first three to six months). You’ve got to figure out why people will want what you’re selling. After that, you’ll need to plan how to tell people why they should buy your product. That can include a great location, good signage, networking and advertising. Of course, a little luck never hurts.