The Ms. CEO Show

Hello Felicia,

I wanted to thank you for your show.  It’s such a blessing to have access to people like you.  I know you are focusing on how to trim costs during this time.  I’ve also heard that during hard times is the best time to start a business.  With the interest rates being generally low, do you recommend new entrepreneurs look for standard loans from the SBA or seek angel investing if the initial investment is less than $200,000?

D. Johnson
USA
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Dear D,

Thanks for the questions!  It’s a blessing to make a difference in the lives of my fellow entrepreneurs so thanks for this opportunity! 

You are correct.  Now is the very best time to start a business.  For a ton of reasons.  Here are three: First: You’ll be more focused.  Everyone is so fearful and cautious these days that this will force you to be crystal clear about your business purpose and communicating that to your potential customers because nobody is spending money these days unless they understand what you are selling and how it benefits them. 

Two: Everything is cheap (or cheaper)!  This includes all the supplies you’ll need, labor, advertising, equipment and money!  Retailers, bankers and businesses are hurting and they are more willing to make a deal with someone with a clear business plan and the willingness to buy. 

Three, and perhaps most important for an entrepreneur with the heart, mind and strategy of a champion: Your competition is running scared.  Fear (the opposite of greed, which is what got us into all of this mess) is paralyzing alot of people.  Be calculated.  Be cautious.  But be bold because the run to the end zone of entrepreneurial success is wide open with so many people running for cover!

With regard to the second part of your question about whether to seek money from the SBA or an angel investor, do both.  In fact, get money from every source that you can (cheap money only—there is no reason to pay ridiculous interest rates right now).  Use the money wisely.  Don’t blow it on all the pretty stuff that people think they need when starting a business, that really are money and time wasters (like a flashy website and brochures).  Use the money to market your business aggressively and sell more of whatever you are selling so that you can bring in more money.  Your goal should be to have every dollar spent bring you 3 or more dollars back.  Sit on as much of the money as you can so that you always have enough to keep moving forward but don’t skimp on marketing.  Once you have your business plan, a basic website, cards and a business phone number, build, build, build your business and never look back! (Caution: If appealing to angel investors becomes a full-time job and you have other money to get started, go ahead and launch your business and drive hard everyday at bringing in revenue. Investors are more impressed if you come to the table with more accomplished than simply a hat in hand and a request for money.)

Check back in if you have more questions and best to you in the New Year!

Successfully Yours,
Felicia Joy