Results of a new study released by Wells Fargo & Company, through the Wells Fargo/Gallup Small Business Index, revealed that the average small business startup cost is around $10,000.
Money May Not Buy Happiness… but That Doesn’t Mean We Don’t Want MORE!
The survey also evaluated other small business financing statistics, including how entrepreneurs are funding their small business startups. According to the study, 73% of small business owners finance their startup predominantly with their own personal savings, 37% obtained loans or a line of credit (some of them are also included in the group “primarily” using their own personal funding), and 53% of respondents said they felt they would have had an easier time with their new business venture if they would have started with greater funding. Well, we’d all love more money available for our next business idea, now wouldn’t we?
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Business Plans are for Wimps! (… and for me.)
Perhaps the most shocking (ok, not “shocking” because I think most of us know this deep down… so let’s say “disturbing”) fact exposed with the results of this study is that only 31% of the surveyed entrepreneurs actually started their business ventures with a business plan in hand. Small businesses seem like an epidemic these days, don’t they? Everyone has ideas. Most people would love to work for themselves. And anyone can start a business inexpensively, especially in the online business sector. So the trend (not just speaking from the results of this study, but from my regular interaction with other small business owners; especially young entrepreneurs) seems to be that you should just jump in and “do it.” I shouldn’t be one to talk. I started my own firm half on a whim.
Even so, I did take the time to at least write up a business plan. I can’t imagine doing it again without one, and I preach regularly enough about the benefits. It makes me curious, and perhaps a little bit sad, that so many people these days (and I’m not as old as that makes me sound) just don’t seem to understand the value of a solid plan, or want to put the time in.
Well Who Woulda Thunk it?
Now, not surprisingly, nearly half of the survey participants said starting a small business would have been easier on them if they had “asked for more advice from experienced business owners.” Well, yeah… sounds like a plan. Oh wait. This is probably the group that doesn’t believe in business planning. In that case, I can’t sympathize, but I will give them a golden piece of advice that they likely would have gotten from those “experienced business owners” – WRITE A BUSINESS PLAN!!! What can I say? I’m in a “sharing” mood today.
So, what have we learned today?
- Starting a small business doesn’t have to have an astronomical pricetag attached.
- You don’t need outside financing to start and run a profitable business.
- Spend your time learning about business and finances, so you can write a solid business plan to guide you along the way.
‘X’ Marks the Spot
The Web is an absolute treasure chest of valuable information for potential entrepreneurs. So if you’re considering starting a small business of your own, or if you already own a small business but never put in adequate research and planning, here are two of the best resources on the Web. Be sure to put them to good use.
- US Small Business Administration Free Online Courses – There are free courses on a variety of business subjects that would be a good match for most entrepreneurs, but pay particular attention to the business planning courses / resources towards the top right of the page.
- SCORE (Service Corp. of Retired Executives) – I bet those survey respondents who said they wished they would have learned more from experienced entrepreneurs could kick themselves for not taking full advantage of this worthy resource. Retired business executives volunteer to make themselves available for free to you to give you advice and answer your questions. Now what’s better than a mentor to give you a push in the right direction? You can contact SCORE members either online or through your nearest local office.