×

Bill Auxter shares information on starting a business

Bill Auxter estimates he has provided confidential, one-on-one business counseling to more than 2,500 people over the past 22 years — very likely more.

He said an average of 125-150 people interested in starting or expanding a business pass through his office doors each year at the Small Business Development Center at Terra State Community College, Fremont.

“Some I might meet with once and others might see 20 times,” he said.

In addition, 300-500 people each year attend his monthly Small Business Basics seminar that alternates among the four counties he serves — Seneca, Sandusky, Ottawa and Erie — and sometimes from other counties.

“Our mission is simply to help people to get in business, stay in business or grow their business,” Auxter said. “We work with any business, regardless of where they are in their business life cycle.”

He said 20% of the people he advises are starting new businesses, and 80% already are in business. Often, business owners are referred to him by banks, accountants, attorneys or other professionals who service small businesses. For example, if a business approaches a banker about a business loan for an expansion, the banker might refer the person to Auxter for help with planning the expansion.

“We’re a training and advising service,” he said. “The best thing about our services is they’re free of charge.”

The centers — which were founded in 1980 and have been at Terra since 1988 — are funded by a combination of federal and state money.

“The services that we offer to small business or prospective small business owners are courtesy of their tax dollars,” Auxter said. “I work for my clients and they’re paying for my services through taxes.”

On the other end of the spectrum, Auxter said he tracks his training and advising services to show federal and state officials the economic impact of the center.

“We can show the federal government, for every dollar they invest in the SBDC network, they get $2 back,” he said. The government investment is returned through an increase in taxes generated by business sales.

At the state level, he said the return is even better.

“For every dollar they invest, they get $3 back,” he said.

Although there are many parts of planning a business and he can point people the directions they need to go, he said financial projections usually are the most difficult.

“I help with the financial aspect of funding a business,” he said. “Whether they want to start or expand.”

He can assist an owner or potential owner with creating a three-year financial projection, which helps him or her get financing from a bank if needed. He also can help with documents such as income statements and a cash flow analyses.

SBDC subscribes to services that provide income standards for a wide variety of businesses — which means he can tell a prospective owner how much other business owners in the same field actually are making.

However, before he meets one on one with a person, he or she is required to attend one of Auxter’s Small Business Basics seminars, where he reviews general information common to all businesses such as writing a business plan, marketing basics, where to find information online and general financial requirements.

“The first and foremost reason for doing a business plan is to determine the feasibility of the business idea,” he said during a recent seminar. “We want to make sure your business plan performa is going to be feasible and credible.”

And Auxter backs his own credibility with more than 50 years of experience.

He started his career by studying business education, and then started teaching business classes at Terra.

“I always knew I wanted to go into business for myself,” he said. “After eight years teaching small business management, I decided to practice what I was teaching and I opened a printing business.

“I always felt I could make more money working for myself than working for someone else,” he said. “And that proved to be the case.”

On his 25th anniversary of being in business, Auxter retired from printing and sold the assets.

“While I was still overseeing the business, I had the opportunity to come back to Terra in the capacity I am now,” he said. “Collectively, I have 30-plus years at Terra, whether as an instructor or business adviser and trainer. I always tell people 55 years is a lot of experience.

“Does that make me an expert in small business?” he said. “It doesn’t make me an expert. It makes me old, but it doesn’t make me an expert.”

Auxter said he’s learned a few things during those years.

“You can’t do it by yourself,” he said. “There are certain gaps in all small business owners’ expertise.”

He said he always recommends hiring people who have the skills the owner lacks; for example, bookkeeping, taxes, legal concerns and human resources issues.

“There’s nearly always a gap there, and I would advise you fill in the gap with your local resources,” he said. “If you concentrate on the business and the sales end, you’ll be able to pay for their services.”

Auxter said operating a small business has challenges a person doesn’t experience while working for someone else.

“When you’re in business for yourself, when you know you have to make payroll at the end of the week, or pay your debt service, you know you have to be able to generate a profit,” he said. “The incentive and challenge of being in business makes you more resourceful.”

One ingredient for success is to network with other small business owners, he suggested.

Another is passion.

“You gotta have passion for your business,” he said. “You can’t wait to get in the next day to move ahead or fix what needs to be fixed.

“That’s what gets you up in the morning,” he said. “It’s the desire to do what you’re doing. Money is the maintenance factor. Without money, you can’t continue.

“Passion is the incentive and making money from it is the maintenance factor that keeps you there,” he said.

One of the main challenges faced by business owners is the legal system, he said.

“We live in a time today that people will sue you at the drop of a hat,” he said. “As a small business owner, you’re very much exposed to that.”

However, he said there are ways to protect personal finances.

“You can still take risks in business,” he said. “There are some things you can do it mitigate risk.”

Auxter suggested creating a business as limited liability company – or LLC – or changing to that business model. There also is risk management insurance and business liability insurance available.

Another risk factor is lack of cash flow, he said.

“I think a lot of small businesses don’t realize how important it is to have access to capital,” he said. “They go in under-capitalized and run out of money. The next thing you know you’re out of money and out of business.”

He said line of credit at a financial institution can help with cash flow issues when needed.

“It provides working capital to keep you afloat until the business can support itself,” he said. “Sometimes it can make you or break you.”

The amount of working capital varies by business at the outset.

“There should be three to six months worth of money on hand to cover operating expenses,” he said.

Another challenge faced by new small business owners is marketing – choosing where and how to advertise to get the attention of the business’s target market.

“A lot of people don’t understand it’s not an exact science,” he said. “There’s trial and error.”

And, he said marketing today is different that it used to be.

Social media is an option today, as well as traditional advertising.

“It all depends on the type of business and the target market,” he said.

Another important aspect of running a business is hiring good employees, he said.

“You want to treat your employees fairly, and you want to make sure they can make a sustainable income,” he said.

Benefits such as health insurance are important to people, and he said incentives encourage top performance.

“Sometimes you have to share the wealth,” he said.

And, of course, customer service is important.

“It’s a lot less expensive to maintain a current customer than it is to go and find a new customer,” he said.

Auxter said he is happy to meet with people who would like direction with a new business idea or expansion of a current business – after they attend a beginning seminar.

For more information or to find the Small Business Basics seminar schedule, visit terra.edu/community/kern_center/small_business_development_center.php.

COMMENTS