How not to screw up

“We can explain to the client everything that they need to do to officially get in business,” he says. “But I think the best service we provide is to help you first determine if your business concept is going to be financially feasible.”

Lots of people forget to ask that question. Lack of a sufficient answer is one among the many ways there are to get in financial trouble. The nationally accredited center was established in 1986, one in a statewide business development center network sponsored by the U.S. Small Business Administration and Louisiana Economic Development. It’s a public service unit of Southern University’s business college, which also supports the center financially even though it’s located on Jamestown Avenue near College Drive and Interstate 10 rather than on campus.

The center, where the counseling is confidential, free and by appointment only, covers seven parishes and has assisted around 16,000 clients over the past five years. The clientele breaks down to roughly 58% white and 40% black. LSU also has an SBDC, though its focus is on high-tech business.

Spann’s center, which also gives periodic workshops on various aspects of running a business, caters to clients who want to start restaurants, transmission shops, hardware stores, trucking companies—that kind of thing. Many times he’ll get people full of passion but not much grasp of what’s involved. Spann starts at the beginning.

“Sometimes we have clients who want to go into business but they don’t really have a clue as to what they’re doing, so we’ll pull some research data for them,” he says. “We’ll go through the business plan and outline everything.”

Sometimes the business plan—a rigorous accounting of who, what, where, why and how—is enough by itself to dissuade the weaker prospects. Many times the market is already saturated.

“Basically what we’re trying to do is to help the client with their thought process,” Spann says. “It doesn’t matter what business it is. The question is, is there a market for your products and services and do you have the wherewithal to manage the business.”

Take the auto mechanic who’s tired of working for others and wants to open his own shop. But there’s a lot more to running a car repair shop than repairing cars: finding a location, promotion, theft control, pricing, bookkeeping, etc. Spann never tells a client flat out their idea’s a clunker. He guides them to their own conclusions.

“Basically our mission is to give them the information they need in a very diplomatic way to make an informed decision—so we’re really managing client expectations,” he says.

For ideas that do stand up to scrutiny, the center helps find loans and package applications, whether through a traditional bank or alternative sources. The center has several packages for small-business Seedco loans in the pipeline now.

Chris Ilgenfritz owns Native Landscape and Hardscape, a company that designs and builds entryways for places like subdivisions and golf courses. In 2004, Ilgenfritz decided he wanted to take his one-man operation to the next level, but he knew he needed help. He found it through Spann and the SBDC’s workshops on credit repair, loan application for loans, goal-setting and various aspects of business operation.

When the final workshop was completed, Ilgenfritz had a solid rough draft of a business plan and lots of questions. Spann helped him find the answers, and craft a winning grant application. Ilgenfritz used the infusion of capital to grow his firm, which now employs eight people and is close to winning some big contracts, he says.

Ilgenfritz says the toughest nut to crack was accounting, including income statements, profit and loss, projections, etc. Many businesses—even large companies that should know better—have been known to hand the numbers stuff off to accountants and forget about it. Ilgenfritz didn’t want to do that.

“I wanted to learn not only what the numbers mean but how to do it myself,” Ilgenfritz says. “They gave me 30 hours with a CPA. One of the biggest things is how much does it cost to operate? What does it really take, bottom line, to run and operate your business day to day? Now I can tell you how much it costs to run for an hour.”

Spann says SBDC places a lot of emphasis on improving clients’ financial management skills. No company is immune to fallout from bad bookkeeping. Just ask Enron.

“The thing we want to impress upon the client is you, as the business owner, should know what’s going on in your business,” he says. “Certainly you can forward that information to the accountant for them to prepare financial statements or do your taxes, but on an ongoing basis the key is for you to understand what’s going on.”

Tonga Christy-Redd owns a Prairieville flower shop/wedding consulting business, House of Redds Inc., that she started in 1997 as a part-time home-based business. She turned it into a full-blown business in 2005, with considerable help from SBDC’s Leighton Bryant, who led her through her business plan and loan application, customer service practices to sign and logo design. Christy-Redd says she’s never been one to pass up an opportunity to learn more about business.

“If there’s assistance to be received I search it out, because I don’t think you ever know enough,” she says.

Bryant and Spann have been and remain a godsend, Christy-Redd says.

“They have an answer for me,” she says. “That’s the most important thing for me, even if it’s something they need to check into. They actually give me guidance in making sound decisions. That’s what you actually need to be able to continue forward. They are wonderful.”