October 11, 2004
PART 2 of 2 Incubator Without Walls: The urge for going | After Incubator Without Walls ends, it's time to start a business
By Mike Woelflein
I was sitting in the ninth and final session of my Incubator Without Walls class on Sept. 29, prepared to deliver a short presentation. I was ready to talk about Maine Media, the startup publishing and editorial solutions company I'm hoping to start with a former colleague. The speech was simple enough, maybe five minutes or so, covering what the company will do, my reasons for wanting to start a business and my strengths and weaknesses as a prospective small-business owner.
I opened with a joke about how public speaking sits at the top of my list of weaknesses, and told them about my idea, paraphrasing a paragraph from our work-in-progress business plan: We plan to offer editorial content solutions to Maine businesses, publishers and organizations, meaning that we'll do anything from copywriting or editing right on up to start-to-finish project management of a publication. Brian Fiske and I are doing it because we've both been freelancing since we lost our jobs as editors of Maine Times in January, and we're hoping to expand into something more local, more fulfilling and hopefully ˆ someday, at least ˆ as lucrative as the projects we do now, mostly for out-of-state publications.
I tell the class that we're trying to start a business so that we can continue to live here and be part of the community. (In my life as a freelancer, I often feel disconnected, chained to a desk, staring at a computer screen, when much of my career has been spent out talking with sources and story subjects.) I tell them about the talented group of fellow freelancers we've got at our disposal, about our range of experience and our ability to engage readers. I tell them we don't have a lot of sales experience or a lot of startup funds, and I open the forum up to what I've been waiting for, their feedback. Most of them are the small-business owners we're hoping to target in order to get the company going. "You are all potential clients," I conclude, "and I'd love to hear your input." Hey, I warned them I wasn't much of a speaker.
These "business showcase" sessions, as the presentations are called, may be the best tool in the Incubator Without Walls toolbox. In the first part of this story ("Hatching a plan," Sept. 13), I wrote about how networking is a key part of the program, but that time constraints often limit our ability to connect with one another. But the presentation opens up the channels. Two people with existing businesses ask me about potential projects we might handle for them. Another owner of a startup says he wants to talk to me after class. Others offer suggestions of ideas we might not have considered, or just tell me about their own companies' needs in communicating with customers. As I left, with my IWW certificate tucked into the big folder of materials I've collected over the last nine weeks, I felt like I'm getting somewhere, at last.
The goal of the program is to test a business idea, largely by putting together a complete and realistic business plan. Long-term, IWW aims to create micro-business owners out of mostly lower income or recently unemployed people, and to build rural economies through entrepreneurship. My goals coming in were to expand my freelance writing and editing business, to learn how to break away from the day-to-day tasks and focus on longer-range goals and long-term growth, and become more of an entrepreneur. Also ˆ because the focus of much of my writing is business ˆ I wanted an up-close view of the challenges small-business owners face at startup.
A financier's tough talk
The class certainly gave me a look inside the world of the startup micro-business owner, across the spectrum. These people have serious concerns about health insurance, and some planned to apply for the Dirigo Health plan early this month. They worry about setting up the structure of their businesses, and they received advice from both a lawyer and an accountant. And they worry about financing. IWW, a free program, provides an array of experts in those areas, each of whom gives a presentation and takes questions from the class.
Over the last four weeks, we heard from guest speakers on health insurance, accounting, financing and business succession/insurance. Kathy McKelway of MaineStream Finance, a nonprofit subsidiary of Penquis Community Action Program that helps small businesses find money to start or grow, was one of the best. Like the IWW, MaineStream focuses on lower-income micro-business owners ˆ people who aren't likely to get a bank loan. I wondered whether McKelway would make finding money sound easier than it is, but like most of the speakers, she pulled no punches. And as a former banker and loan officer, she spoke with authority.
Lenders, she said, want a good credit history, proven steady income, collateral and the knowledge that the owner has a financial stake in the success of the business. If one or more of those items are weak, it's a tough market, she said. She spiced the talk with anecdotes of past clients, such as a man in Camden, N.J., who wanted to open a high-end bakery near a hospital. Visiting the site, McKelway saw boarded-up buildings and a four-lane, divided highway between the hospital and the site, making access a nightmare. She turned down the loan.
But she also told the class to never give up. The customer was angry about the rejection, but he returned with another location ˆ pedestrian friendly and filled with residential housing ˆ and got his loan. Throughout her talk, McKelway repeatedly pointed out that bankers won't be as optimistic as a business owner, that they'll review everything with a cautious eye and that getting a loan is a serious challenge.
She wrapped up with a sample cash flow sheet, showing the numbers of a typical startup. It was another eye-opener, a glance into just how difficult starting a business can be, filled with up-and-down months covering the first year. "As a banker, I'm looking at the month in which you lose the most," she said. "Do you have enough money to get through that month and get to the months where you'll be profitable? If you're doing projections, make the most aggressive but reasonable guess you can, and be ready to explain how you got there. You've got to do the work, because the bank will."
At least at the start, Brian and I won't be looking for financing, which is a relief. And we're each covered by our spouse's insurance. But I'm still struggling with projections, which are a key part of my unfinished business plan. Pricing, guessing how much business we'll be able to bring in and pinpointing our competition are all tough issues.
Moving on
My business plan isn't finished yet, which calls into question whether I've achieved my goal of improving my time management skills and focusing on the big picture. I suppose I haven't yet. The good news is that I've been busy, with a lot of work for a company that produces financial copy and another that publishes a magazine for military veteran business owners. The bad news is I haven't had the time to work on that plan, because the deadlines keep coming, hard and fast. But I'm making progress, scheduling my day into segments for different projects, and learning how to stick to the schedule. Along with other time management tips, the idea, which seems simple enough, came from "Business Plan Basics," the curriculum IWW provides.
For me, keeping to a schedule at home has been much more difficult than it was in an office setting. When you're home, it's the little things that can distract you: the dogs begging for a lunchtime walk, or the phone calls that just keep coming, with no receptionist to take a message. Sometimes the calls come from other freelancers, turned chatty when they're as desperate as I sometimes get for some human contact. This year, with the cool, wet summer, even the lawn has gotten into the act. It seems to grow by the hour. As I write, up against deadline on this and two other projects, it's still green, still growing and way too long.
My business is growing, too, but it's mostly because of increased work from my current clients. Our Maine Media business model has merit, and it's holding up well to the business-plan test. We're hearing good things from potential clients, inside and outside the class, and honing in on what people want from us as well as how much they're willing to pay for our services ˆ not, of course, as much as we'd like. In the coming weeks, I'll finish the plan, meet with our first client (a local real estate agent who wants to customize and localize a quarterly newsletter she now buys from a national firm), and get this thing moving. We're also holding one more IWW meeting, to finish up the business showcases we didn't get to during our regular meetings.
So, was the IWW worth it? I think so. The best answer may have come from a classmate who just celebrated her first anniversary as a retail business owner. Rosalita Feero owns Cotton Petals, a fabric and quilt shop in Alton. She took the course, she said, because she made so many mistakes in starting her business and wanted to sort of start over. The weekly classes have also provided her with a set time to think about larger issues, the ones she can't get to during her 72- to 80-hour work weeks.
"How was the first year?" she asked the class rhetorically as she finished her business showcase on that last day. "It's been great. It's been horrible. I'm glad to see all of you here before you start your business.
"If I had any advice," she continued, "I'd say to have a better business plan than you ever thought you would need. Find out all you can about all the little things. Know who's going to do the accounting, and how. Know all of the tax laws, and about all the licenses you need. All those things can nickel and dime you to death."
If you can trust her advice ˆ and her organization, thoughtfulness and smarts were constantly in evidence throughout the class ˆ then the IWW is a good program. Through the guest speakers and the helpfulness of the people from the sponsoring organization (Penquis CAP, in our case), knowing all those things before you start becomes possible. If they can't provide the answers, they know where to look.
I even got a dose of inspiration from the program. On Sept. 14, Penquis CAP held a reunion of IWW graduates, which drew former participants dating back to the first class, in 1999. I talked to artists, to a man who's running a pest management company, to a successful DJ, and to several others who once found themselves in my spot. There weren't any nascent L.L. Beans or Microsofts in the crowd, but there were a lot of people who found a comfortable level of success, expressed justifiable pride in their accomplishments and praised the IWW program.
I met Wayne Danforth, who along with two other former Dexter Shoe workers has built PHD Consulting, the Newport-based Web design and hosting company behind www.downtownme.com. We talked about ways we might work together, and after I heard his tale, I asked if the company had been profiled by Mainebiz. It had, so that potential revenue stream dried up then and there.
Since the demise of Maine Times, I've often said that we editors aren't much different from shoe workers, in that there aren't any other jobs in this area like the ones we had. It's a stretch, I know, having talked to a lot of those workers for stories in the past. Still, frustration builds when you lose a job, and sometimes it's hard to keep that feeling from lingering much longer than it should. I left that night feeling as I do now, after completing this class: There are a lot of possibilities out there, and it's time to go chase them down.
I opened with a joke about how public speaking sits at the top of my list of weaknesses, and told them about my idea, paraphrasing a paragraph from our work-in-progress business plan: We plan to offer editorial content solutions to Maine businesses, publishers and organizations, meaning that we'll do anything from copywriting or editing right on up to start-to-finish project management of a publication. Brian Fiske and I are doing it because we've both been freelancing since we lost our jobs as editors of Maine Times in January, and we're hoping to expand into something more local, more fulfilling and hopefully ˆ someday, at least ˆ as lucrative as the projects we do now, mostly for out-of-state publications.
I tell the class that we're trying to start a business so that we can continue to live here and be part of the community. (In my life as a freelancer, I often feel disconnected, chained to a desk, staring at a computer screen, when much of my career has been spent out talking with sources and story subjects.) I tell them about the talented group of fellow freelancers we've got at our disposal, about our range of experience and our ability to engage readers. I tell them we don't have a lot of sales experience or a lot of startup funds, and I open the forum up to what I've been waiting for, their feedback. Most of them are the small-business owners we're hoping to target in order to get the company going. "You are all potential clients," I conclude, "and I'd love to hear your input." Hey, I warned them I wasn't much of a speaker.
These "business showcase" sessions, as the presentations are called, may be the best tool in the Incubator Without Walls toolbox. In the first part of this story ("Hatching a plan," Sept. 13), I wrote about how networking is a key part of the program, but that time constraints often limit our ability to connect with one another. But the presentation opens up the channels. Two people with existing businesses ask me about potential projects we might handle for them. Another owner of a startup says he wants to talk to me after class. Others offer suggestions of ideas we might not have considered, or just tell me about their own companies' needs in communicating with customers. As I left, with my IWW certificate tucked into the big folder of materials I've collected over the last nine weeks, I felt like I'm getting somewhere, at last.
The goal of the program is to test a business idea, largely by putting together a complete and realistic business plan. Long-term, IWW aims to create micro-business owners out of mostly lower income or recently unemployed people, and to build rural economies through entrepreneurship. My goals coming in were to expand my freelance writing and editing business, to learn how to break away from the day-to-day tasks and focus on longer-range goals and long-term growth, and become more of an entrepreneur. Also ˆ because the focus of much of my writing is business ˆ I wanted an up-close view of the challenges small-business owners face at startup.
A financier's tough talk
The class certainly gave me a look inside the world of the startup micro-business owner, across the spectrum. These people have serious concerns about health insurance, and some planned to apply for the Dirigo Health plan early this month. They worry about setting up the structure of their businesses, and they received advice from both a lawyer and an accountant. And they worry about financing. IWW, a free program, provides an array of experts in those areas, each of whom gives a presentation and takes questions from the class.
Over the last four weeks, we heard from guest speakers on health insurance, accounting, financing and business succession/insurance. Kathy McKelway of MaineStream Finance, a nonprofit subsidiary of Penquis Community Action Program that helps small businesses find money to start or grow, was one of the best. Like the IWW, MaineStream focuses on lower-income micro-business owners ˆ people who aren't likely to get a bank loan. I wondered whether McKelway would make finding money sound easier than it is, but like most of the speakers, she pulled no punches. And as a former banker and loan officer, she spoke with authority.
Lenders, she said, want a good credit history, proven steady income, collateral and the knowledge that the owner has a financial stake in the success of the business. If one or more of those items are weak, it's a tough market, she said. She spiced the talk with anecdotes of past clients, such as a man in Camden, N.J., who wanted to open a high-end bakery near a hospital. Visiting the site, McKelway saw boarded-up buildings and a four-lane, divided highway between the hospital and the site, making access a nightmare. She turned down the loan.
But she also told the class to never give up. The customer was angry about the rejection, but he returned with another location ˆ pedestrian friendly and filled with residential housing ˆ and got his loan. Throughout her talk, McKelway repeatedly pointed out that bankers won't be as optimistic as a business owner, that they'll review everything with a cautious eye and that getting a loan is a serious challenge.
She wrapped up with a sample cash flow sheet, showing the numbers of a typical startup. It was another eye-opener, a glance into just how difficult starting a business can be, filled with up-and-down months covering the first year. "As a banker, I'm looking at the month in which you lose the most," she said. "Do you have enough money to get through that month and get to the months where you'll be profitable? If you're doing projections, make the most aggressive but reasonable guess you can, and be ready to explain how you got there. You've got to do the work, because the bank will."
At least at the start, Brian and I won't be looking for financing, which is a relief. And we're each covered by our spouse's insurance. But I'm still struggling with projections, which are a key part of my unfinished business plan. Pricing, guessing how much business we'll be able to bring in and pinpointing our competition are all tough issues.
Moving on
My business plan isn't finished yet, which calls into question whether I've achieved my goal of improving my time management skills and focusing on the big picture. I suppose I haven't yet. The good news is that I've been busy, with a lot of work for a company that produces financial copy and another that publishes a magazine for military veteran business owners. The bad news is I haven't had the time to work on that plan, because the deadlines keep coming, hard and fast. But I'm making progress, scheduling my day into segments for different projects, and learning how to stick to the schedule. Along with other time management tips, the idea, which seems simple enough, came from "Business Plan Basics," the curriculum IWW provides.
For me, keeping to a schedule at home has been much more difficult than it was in an office setting. When you're home, it's the little things that can distract you: the dogs begging for a lunchtime walk, or the phone calls that just keep coming, with no receptionist to take a message. Sometimes the calls come from other freelancers, turned chatty when they're as desperate as I sometimes get for some human contact. This year, with the cool, wet summer, even the lawn has gotten into the act. It seems to grow by the hour. As I write, up against deadline on this and two other projects, it's still green, still growing and way too long.
My business is growing, too, but it's mostly because of increased work from my current clients. Our Maine Media business model has merit, and it's holding up well to the business-plan test. We're hearing good things from potential clients, inside and outside the class, and honing in on what people want from us as well as how much they're willing to pay for our services ˆ not, of course, as much as we'd like. In the coming weeks, I'll finish the plan, meet with our first client (a local real estate agent who wants to customize and localize a quarterly newsletter she now buys from a national firm), and get this thing moving. We're also holding one more IWW meeting, to finish up the business showcases we didn't get to during our regular meetings.
So, was the IWW worth it? I think so. The best answer may have come from a classmate who just celebrated her first anniversary as a retail business owner. Rosalita Feero owns Cotton Petals, a fabric and quilt shop in Alton. She took the course, she said, because she made so many mistakes in starting her business and wanted to sort of start over. The weekly classes have also provided her with a set time to think about larger issues, the ones she can't get to during her 72- to 80-hour work weeks.
"How was the first year?" she asked the class rhetorically as she finished her business showcase on that last day. "It's been great. It's been horrible. I'm glad to see all of you here before you start your business.
"If I had any advice," she continued, "I'd say to have a better business plan than you ever thought you would need. Find out all you can about all the little things. Know who's going to do the accounting, and how. Know all of the tax laws, and about all the licenses you need. All those things can nickel and dime you to death."
If you can trust her advice ˆ and her organization, thoughtfulness and smarts were constantly in evidence throughout the class ˆ then the IWW is a good program. Through the guest speakers and the helpfulness of the people from the sponsoring organization (Penquis CAP, in our case), knowing all those things before you start becomes possible. If they can't provide the answers, they know where to look.
I even got a dose of inspiration from the program. On Sept. 14, Penquis CAP held a reunion of IWW graduates, which drew former participants dating back to the first class, in 1999. I talked to artists, to a man who's running a pest management company, to a successful DJ, and to several others who once found themselves in my spot. There weren't any nascent L.L. Beans or Microsofts in the crowd, but there were a lot of people who found a comfortable level of success, expressed justifiable pride in their accomplishments and praised the IWW program.
I met Wayne Danforth, who along with two other former Dexter Shoe workers has built PHD Consulting, the Newport-based Web design and hosting company behind www.downtownme.com. We talked about ways we might work together, and after I heard his tale, I asked if the company had been profiled by Mainebiz. It had, so that potential revenue stream dried up then and there.
Since the demise of Maine Times, I've often said that we editors aren't much different from shoe workers, in that there aren't any other jobs in this area like the ones we had. It's a stretch, I know, having talked to a lot of those workers for stories in the past. Still, frustration builds when you lose a job, and sometimes it's hard to keep that feeling from lingering much longer than it should. I left that night feeling as I do now, after completing this class: There are a lot of possibilities out there, and it's time to go chase them down.
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