Insights, tips and resources from a successful entrepreneur and business adviser…
(Michelle Somes-Booher is the director of the University of Wisconsin-Madison Small Business Development Center. She has a master’s degree in business administration and is a successful entrepreneur.)
QUESTION: Would you please tell me a bit about your business background and what led you to open a pottery store?
MICHELLE SOMES-BOOHER: I come from a background where almost everyone in my family — my father, my grandfather, my great-grandfather — have all owned their own businesses. So entrepreneurship is what they do. And so it was never a scary feeling for me, where a lot of people who go into it for the first time are really nervous about the aspect of being your own boss.
A friend of mine had invited me to go shopping with her in the Detroit area. I lived in mid-Michigan. So I got to her house and she said, “OK. We’re going to go paint pottery first.” And I thought to myself, “What? You know, like, I thought we were going to go to Nordstrom.” So we went, and it was just very fascinating to me. I enjoyed it. I felt very relaxed. I felt very creative, you know, in ways that I hadn’t been able to feel creative. And I came away from that experience — I didn’t create anything that looked that great, by the way — but I just really enjoyed the experience. And I thought to myself, “Hmm, if I enjoy this experience, I wonder if other people would, too?”
(Somes-Booher then developed a business plan, talked it out with her husband, and they agreed to self-fund a pottery business. She maintained another job during the first year her store was open, then ultimately was able to run her business full-time.)
“It was a very interesting turn of events, but a lot of it was precipitated by the fact that I had my son at home, and he was in kindergarten or first grade when we started it. So I set up the structure of my business so I could take him to school every day and pick him up every day. He really had no idea how much I worked. In summer, I didn’t put myself on the schedule. I’d either have to pay child care or I’d pay, you know, an employee. So I just paid an employee so I could be home.
QUESTION: So what struck me with that is your entrepreneurial mindset, which is you saw something and thought, “Maybe I could do that.” How difficult is that mindset to teach?
SOMES-BOOHER: There’s a kind of ongoing argument of whether you’re a born entrepreneur or whether you can be taught to be entrepreneurial. I think it comes down to your tolerance for risk. So if we take out the sort of business aspect of it and just kind of frame it in terms, ‘Are you OK and comfortable with risk?” Because if you have a higher tolerance for risk then your tolerance for entrepreneurship is going to be much greater. Even if you don’t have a natural bend toward it. … Even if it’s not natural but you’re kind of willing to take a risk, I think you can learn a lot of the skills around it. Also, just because you’re comfortable starting a business doesn’t mean you have the skills set to start a business. There is definitely a learning component.
QUESTION: How important is it to have an educational background in business?
SOMES-BOOHER: I think it’s important to the extent that you have to understand that you don’t know everything and then seek out assistance. So what that assistance looks like can be different for everyone.
For somebody that doesn’t have an educational background in business, just knowing, “Hmm, I don’t really know anything about accounting. What can I do about that? OK, maybe I take a seminar. Make I take a lynda.com class. Maybe I just hire a bookkeeper and learn through that person.”
Problems don’t go away because you ignore them. So if you don’t set your business up correctly because you just ignored all this stuff (that you don’t know), those issues that are there aren’t going to go away. As a matter of fact, they usually become magnified.
QUESTION: What is the environment like in Madison if you want to be an entrepreneur but you’re just starting out?
SOMES-BOOHER: Madison has a really good ecosystem right now, with the university especially. Small business development centers are a national program, and they’re located in every state. In the state of Wisconsin, we’re located at most of the four-year universities.
The center here at UW-Madison, we offer three things.
The first is the answer line, which is a toll-free line that anyone can call in the state and get kind of quick answers to business (questions). So that’s sort of your first place to go.
The second thing we do here in our office is we have non-credit courses for business owners and business people in Madison. So we offer everything from start-up to financial management to QuickBooks, social media, human resources. We have leadership development courses. We kind of run the gamut of what we offer. Most classes are either half day or full day. They might be a series of two or three classes. They’re priced reasonably for business owners.
The third thing is this one-on-one consultation piece. … particularly funded by the SBA (Small Business Administration), and their position is that if they can provide assistance to businesses when they’re in the early stages, the first few years, they’re most likely to grow and impact our economy. They want us to be working with people who are going to be job creators and kind of expand beyond themselves.
QUESTION: So working with business owners and entrepreneurs, do you see themes come out?
SOMES-BOOHER: First of all, they trend with the economy, too, so with issues with the economy. So right now I’m talking every single day about trying to find employees. This is a huge issue because our unemployment rate is so low. So that often happens.
Business owners in particular, time management is a big issue: “How do I juggle everything that I have to juggle? How do I know when I can …. when I should be out selling, when I should be out working on my business? How much time should I allocate for this task or chore?” … And then how to prioritize it.
The other thing is the self-discipline to do what needs to be done is difficult. That’s why working with someone like me is helpful because I can say, “OK, here’s the 10 things you’re interested in doing. We’re going to do three for this next period of time. And you’re going to work on things and bring them back, and I expect to see them done.”
QUESTION: For people just starting out with their own business, where do they get stuck?
SOMES-BOOHER: There’s a couple of places that they can get stuck. One is that understanding that just because you have an idea doesn’t mean that the idea solves a problem somebody has. Understanding the market to see “What’s the problem and am I solving something?” So sometimes people will say, “Oh, I have this great idea. It’s X, Y, Z.” And I’ll say, “That, that’s interesting. Who’s going to buy it from you?” “Oh, well, people.” “What people? Where? Who? How many?”
Just because you have an idea that’s interesting to you or maybe to you and a couple of friends doesn’t mean the market (supports it). So it’s kind of getting that proof of, “OK, where can I go and study the market and get the research that says that there’s a better shot that I can sell this,” testing the marketplace. And then understanding that if, “I’m not right with my original idea, I can make changes to my original idea and still move the business forward.” Because sometimes people get stuck in their idea.
And the money’s always an issue because people will come and say, “Well, isn’t there a grant available?” And there really isn’t. So it’s understanding how much money it’s going to take to start the business, but (also) how much it takes to operate the business and sort of setting the realistic expectations for people.
QUESTION: Do you think you need to have X amount of money to start a business?
SOMES-BOOHER: I would say a lot of people that want to start a small business who aren’t building a building or buying a lot of equipment are somewhere between $25,000 and $50,000.
If you want to do an online business, much cheaper, right? But also, what’s the barrier to entry? Pretty low, right? So lots of people can enter. So it may not cost you as much to start the business, but you’re going to have a lot of competition.
QUESTION: Say you want to start a business, where do you start?
SOMES-BOOHER: I’d Google the idea. Who’s doing it? Do a little background research on your own first. That’s the first thing I would do, I would just get myself as familiar with that industry so that I can see, is this just a wild idea that I had, that I woke up and had, or are lots of people doing this and it’s probably not going to work? So do that first. And then once you do that, it comes down to that more formalized process, so then I would seek out the resources that are available to help.
There’s a big debate over whether you write a business plan or not for a new business, but (I suggest taking) a business planning course of some sort, whether it’s online or in person, and choose which way you learn best. Because if you know that you don’t have the self discipline to sit and do an online course, then force yourself to go someplace. Or if you need to hear and bounce ideas off of other people, that’s a great idea. Even if you don’t necessarily end up writing (a full business) plan, the fact of the matter is if you sit through a planning class, you’ll know what you need to learn.
The problem with planning a business is it’s not sequential. It’s not, “Do this and then do this and then do this.” It’s several parallel tracks at the same time. So it’s a lot of work so you just need to sort of figure out the lay of the land.
*Q&A’s may be edited slightly for clarity and length.