The Secret Behind One Small Business’s Success—Hint: It’s Free!
By Gerri Detweiler
Shane and Melissa Nichols’ five-year-old business, Arkansas-based Medex Waste, is on track to bring in $1 million in revenue, thanks in large part to the free help they received from the Arkansas Small Business and Technology Development Center. “I don’t think we could have made it without them,” says Shane. “Without them there to answer questions and to lead us in the right direction, it would have taken us a lot longer and cost us a lot more money.”
The idea for the Nichols’ business, a firm that transports medical waste for disposal, started percolating after Melissa lost her sales job with a large national medical waste disposal firm when her office closed. As a top salesperson, Melissa often found herself frustrated when some of her clients were unhappy with the services they received from the firm. Initially, she took the layoff as an opportunity to go back to school, but then decided to take a job with another firm in the same industry. When the new company tried to shortchange her on her commission, she decided with her husband to start their own business.
At first the Nichols tried to land a small business grant, but were unsuccessful. Instead, they received something that perhaps proved to be more valuable in the long run: a referral to their local SBTDC. Advisors there helped them create a business plan, navigate small business financing options, and even provided sales leads. The SBTDC gave the Nichols answers to “all types of business questions,” says Shane, and “it was all free!”
Help for Entrepreneurs
“The Arkansas Small Business and Technology Development Center is a university-based economic development program that assists entrepreneurs, both new and seasoned,” explains center director Laura Miller. “We help with every aspect of business creation, management, and operation. Through our seven offices around the state, ASBTDC works with all types of for-profit businesses, providing one-to-one confidential consulting, and cutting-edge market research at no charge and affordable training.”
The Nichols aren’t the only ones who have benefited from free help through their local small business development center (SBDC) or small business development and technology center (SBTDC). More than one million current and aspiring entrepreneurs each year get help from an SBDC, and that help often propels many to success. The annual sales growth for companies that get help from an SBDC is 16.8 percent, which is four times the national average, according to a 2013-2014 study by Professor James J. Chrisman of Mississippi State University.
“ASBTDC business consultant Robert Bahn worked closely with Shane in nearly all areas of the business operation,” says Miller. “In addition to providing industry data and market research, Bahn has served as a sounding board and information source for the growing business.”
Another source of advice for the Nichols was a student project in which Arkansas State University MBA students worked closely with the business to develop a five-year strategic plan. It was a win-win for both the students, who gained real-world experience, as well as the business.
Growing Pains Lead to Growth
Initially, Shane continued working full-time in another job and his paycheck paid Medex Waste’s employees. He sold a house and put the proceeds toward the business, and when he retired from his full-time job, his retirement helped fund the business. Medex Waste was also able to secure a $150,000 SBA small business loan.
The business continued to grow and do well, and after three years, needed additional financing. Shane says the company’s QuickBooks’ accounts weren’t set up “quite right” so the Nichols brought in a consultant through Communities Unlimited, a nonprofit organization that “provides technical assistance to help small rural communities solve water and wastewater problems.” That consultant continues to work with the Nichols, and Shane says the cost is a fraction of what they would pay an accountant.
Tom Corley, author of Rich Habits – The Daily Success Habits of Wealthy Individuals, has studied the habits of the wealthy and says mentors make a big difference in how quickly millionaires achieve success. He notes:
The 177 self-made millionaires in my Rich Habits study who found a mentor cut their path to becoming rich down from 32 years to 12 years. And, even more important, they accumulated nearly two times the average wealth ($7.4 million vs. $3.4 million) of other self-made millionaires in my study who had no mentor in life.”
Finding mentors can sometimes be challenging, however. SBDCs can fill the gap, giving small business owners and would-be entrepreneurs free and low-cost access to experienced professionals.
At Nav, where I work, we encourage small business owners to seek out their local business assistance center, and we launched the Nav Small Business Advisor Program to train these agencies on how to help clients build strong business and personal credit. No business should go under because it didn’t get advice that may have turned things around.
Next up for the Nichols: they have already launched a second business providing transportation services for Medicaid patients. And they plan to continue learning, and to grow both ventures with help from their SBTDC. They say they are going to work with the SBTDC in the near future to develop a social media plan, and when their advisor tells them they should do something to improve their business, they will do it.
“Change is hard for some people,” Shane warns. “If (an SBTDC) gives you advice, you should take it.”
About the Author – As a nationally recognized credit expert, Gerri Detweiler has been helping individuals leverage credit to their advantage for more than twenty years. She is currently Head of Market Education at Nav, which provides small business owners with free tools–including personal and business credit scores–and helps them find the best business credit cards and best business loans. She has written five books, including her newest, “Finance Your Own Business: Get on the Financing Fast Track” and has been interviewed in more than 3,000 news interviews.