Small businesses — defined as companies with 500 employees or less — make up 99 percent of all firms in the United States.
Of those, nearly half have four employees or fewer.
Dan Lara is state director of the Kansas Small Business Development Center, which is based out of Fort Hays State University. It’s funded in part by the U.S. Small Business Administration and the Kansas Department of Commerce.
Brandy Willett runs a regional small business center at Wichita State University, which serves 10 counties in south-central Kansas.
The centers help small businesses in a variety of ways, from training to helping write a business plan to accessing capital. And most of their services are free.
Lara and Willett talked with The Range about the impact of small businesses, the surge of business startups during the pandemic and why anyone would want the stress and long hours associated with starting a business.
The interview was edited for length and clarity.
Tom Shine: So, I'm going to start a business. I'm maybe not going to get a salary. I'm going to work a million hours a week getting this thing going. Why am I doing that?
Brandy Willett: It’s kind of like having a child, right? It's your dream … I talk to small business owners about that all the time. It's like a child. It's going to run your life for several years. You're going to put way more into it initially than you get out of it.
But these are people who really want to control their own destiny. And that's what small businesses do, and that's great for people.
Dan Lara: I can remember when my parents started their small business (Sound Electronics in Augusta). They just wanted the freedom to be able to contribute to the community, provide a service and have control over their own schedule and not answer to a bigger boss.
What are the common pitfalls you see for people who are thinking of opening a business?
Dan Lara: I think just knowing exactly what to do, and that's why the SBDC is here … to help guide them through, thinking about how to start; what skill sets they bring; what challenges they might specifically have in a business; if they have the financial backing, and if they don't where to get that through capital access, loans and other ways.
Brandy Willett: I think a lot of it is … all in their head. They haven't written it down, so they don't know what they're missing. So, a lot of times, just working through that business plan, doing those projections, figuring out what do we need to tweak and what do you have right is easy to miss when it's just an idea.
For people opening a new business, is there a particular field or service that has seen growth over the last few years?
Dan Lara: We see a lot of manufacturing. That's a new focus of the SBA (Small Business Administration) now is to obviously … reshore manufacturing, so we see a lot of that. As Brandy said, health care is a big area. Agriculture, obviously Kansas is a big ag state. Retail and service businesses, those kind of Main Street businesses that you see a lot of in rural towns like Hill City, Norton. The whole gamut.
During the pandemic, we saw a surge of new businesses opening … Has that pace slowed at all, or people continue to open businesses?
Dan Lara: There was that peak of activity when the pandemic started because a lot of people were at home, couldn't work regular jobs, and so they're thinking, “Hey, I've got all this talent and knowledge and passion, so start a small business.” I think it's leveled off a little bit, but it's still maintained more than pre-pandemic levels.
Is the person who decides to open a small business different than an entrepreneur, or are they the same person?
Brandy Willett: I think they're the same person, but not always does a small business owner know they're an entrepreneur. They're thinking about it in a different way a lot of times and don't appreciate the real value that they're putting out there in the world.
“You try to tell someone who's starting a cleaning business with … two of her best friends that, “Yeah, you're an entrepreneur, you're taking a risk.” And she doesn't always appreciate that. But they need to be reminded, I think.
You not only offer training for new businesses, but also for businesses that have been around for a number of years. When those businesses come to you, what are they looking for?
Dan Lara: They could be looking for a variety of things, including business planning and strategy, financial forecasting. They could be looking for loan advising and access to capital. They could be looking for strategies to help market their businesses. It just really could cover a wide gamut of services.
Brandy Willett: Sometimes … they just need someone to bounce ideas off of. I think people don't appreciate how lonely it can be being a business owner, even if people work for you. It's not the same as it was when you were in a job. So, I think a lot of times people come to us just because they feel a little frozen. What can we do? Where can we go?
The overall economy right now is a bit unsteady, given some of the uncertainty over economic policy. Has that slowed interest among people wanting to open a small business?
Brandy Willett: I don’t know that it slowed interest in starting as much as people who were thinking about transitioning to a brick and mortar or building … are maybe holding back a little bit more.
And why do you think that is?
Brandy Willett: You know, they're scared. They're already in it, so they know how difficult it is. And they know how much that growth … you have to be careful.
Do some people sometimes underestimate the power of small business?
Dan Lara: I think so … I think sometimes you get up and go to the convenience store, you go to the grocery store, not realizing those are actually small businesses that you're supporting. I think it's more prominent, more visible, in rural communities because they're smaller. So, you know, if that grocery store goes away, it's really going to impact that community. And so those small businesses are so much more important.
