SBA’s Service Corps of Retired Execs makes the case: Business should help other business | Business
The number of new businesses entering the market has increased each year between 2015 and 2022. The U.S. Census Bureau recorded 5.4 million new business applications in 2021, the highest number on record.
Aiken County alone had 2,469 new business applications in 2021. That’s 700 more than in 2020 and a near doubling in applications from the 1,298 in 2019.
It’s easy to start a new business, at least in name only – to obtain the federal tax I.D. and set up the LLC, but “that’s just the shell,” said Cynthia Rhodes, marketing chair for SCORE’s Greater Aiken chapter. “You have to operate that business and bring in revenue, and that’s where most of them have the most trouble.”
SCORE (Service Corps of Retired Executives) is funded by Congress, and its more than 200 local chapters are run by the Small Business Administration. Its purpose is to help businesses – emerging, transitioning, struggling businesses – get a footing.
And maintain it: established businesses also tap this well of expertise.
“We don’t lack for clients,” said Gordon Magee, advisor to SCORE’s Southeast Regional vice president.
Magee and Southeast regional VP Catherine Walton made their case to members of North Augusta Chamber of Commerce on Feb. 9 that many of these members hold valuable knowledge that, if they chose, could be donated to others.
Also making the case Thursday was Joe Knick, business counselor and chapter chair for Greater Aiken.
“When they find out how hard it really is – they think they’re going to start a business, they think they’ll make money so they don’t have to work… we explain to them that that’s not necessarily the way it is,” he said. “It’s hard to start a business and then to keep it going.”
The Small Business Administration reports that about two-thirds of small businesses will make it through their first two years. By year five, this drops to half. By year ten, just one-third of these businesses will still be around.
Private equity company CB Insights published research in 2021 that shows nearly three-quarters of small business failures are due to a lack of capital, a lack of market need or both. According to that research, falling short in the competition game was responsible for just 20% of small business failures.
As employees, business relationships aren’t given the same weight as they are in the entrepreneurial arena, where these same relationships are paramount to business success, said Greater Aiken’s Rhodes.
Someone starting a business is likely to first call the Small Business Administration, get some funding, maybe hire an accountant and an attorney and apply for insurance, “but then what? This is where the networking comes in, this is where the friendships come in,” said Rhodes.
Since October of last year, the Greater Aiken chapter of SCORE has worked with 180 clients. But these clients are relying on just 31 mentors.
SCORE’s business counselors are volunteers; they’re people who’ve “been there, done that” and can give a real-world perspective to others just starting out or trying to fix a lagging area in an otherwise successful business.
The business advice these counselors give their clients is free. But attorneys and marketing executives, bankers and tech experts aren’t usually accustomed to giving free advice, are they? And in the free market, doesn’t competition pull the strings?
“It’s not for everybody,” Magee admits.
Magee is a chemical engineer by education. When he retired, he’d been at the head of a specialty chemical company. “So, I really do know stuff – but I didn’t know about a lot of other businesses,” he said.
SCORE’s counselors volunteer because, like Magee, they find it rewarding and might learn something themselves.
“I’ve learned how to open a barbecue restaurant. I’ve learned how to self-publish books at Amazon for handicapped children. I’ve learned how to make moonshine.” Magee pauses. Then adds, with a laugh, “Legally.”
There’s learning business generally, and then there’s learning a business specifically. Business as a process versus the unique aspects that define book publishing as opposed to, say, a moonshine enterprise.
In the general sense, business counselors who volunteer their time with SCORE “understand the box, the path, and what it takes to move forward toward success,” said Greater Aiken’s Rhodes. “You have the knowledge, and they want to be able to work with people who actually have done that business or that has been in their shoes because you give them a real-life situation.”
Much of the advice sought – and the subjects of many SCORE workshops – is for laying the groundwork of new business. Writing business plans, securing venture capital, insurance, legal considerations, staffing. Nail these and your business is halfway to success, according to the data from CB Insights.
Business success leads to other business success. That’s a key point in overall economic development that Western SC’s Will Williams has iterated frequently, and it’s a point that Rhodes, too, made this week.
The “minute things,” the skill sets of businesses, “bring us together and build our economy and send people to the next company for resources,” said Rhodes. “We need you and they need you.”
Which is why she and others with SCORE are asking for more people to volunteer their advice. Because in the 16 counties served by the Greater Aiken chapter, the number of clients asking for help from other business has increased significantly in just the past four months.
Thirtythree businesses sought help in October and 31 in November. But in December, this rose to 50, and in January of this year, 76 joined the pool. In just the first week of February, Rhodes said that 34 clients have already requested mentors.
Apart from the numerical difference in clients and volunteers, the Greater Aiken chapter also has a locational imbalance in its client-to-counselor ratio. Two-thirds of the chapter’s counselors are in South Carolina, but just over 70% of the clients are in Georgia.
The collective message from Rhodes, Knick, Magee and Walton was this: volunteer. It’s rewarding. But also, reminded Magee, “Who’d have ever thought I’d learn how to make moonshine?”