The Quandry of Start Up Funding

On Friday, I attended a business administration advisory committee meeting.  The advisory committee is a diverse group of business people from the service area who come together twice a year to provide input to the technical college about programs, new technologies and processes being used in their businesses,  and student interns or graduates’ (employees) skills (strengths and weaknesses). 

During the discussion of programs, I mentioned that the entrepreneurial programs are a concern because the placement rate (percentage of completers employed) is lower than preferred.  Despite the fact that many entrepreneurial students have a business idea and develop a business plan during their curriculum, they often do not have the funds and lack the credit to borrow money to start the business. 

One of the committee members suggested that the college develop a student incubation program where students could work on their business with support from the faculty and the college.  It was also discussed that students from these programs have excellent skills that apply to any business so regardless of where they may be employed, it could be said that they are employed in their field.  Both suggestions were good, actionable points. 

Along this vein, it also made me think about how individuals fund their new businesses.  Some people are fortunate enough to have savings that they can tap, they have something of value they can sell, or they are confident enough in their idea to refinance their home and use the equity.  Others borrow from family members.  While not advisable, some risk takers use credit card debt to finance their start-up.  Starting a new venture part-time while working another job also works for some people or taking on a partner.

Some people get more inventive such as restaurateurs sell naming rights to chairs, wear t-shirts advertising different businesses for a fee, pre-selling services and providing a coupon to the buyer, etc. 

Small business administration loans are also an option.  Venture capitalists or angel investors may be interested if you can demonstrate a sound business plan with high growth potential.

 

Learning about Coworking

Yesterday a colleague and I went to visit two sites in Charlotte, NC, as part of our research for starting an incubator and cowork space in Rock Hill, SC.  Our first stop was at Packard Place.  It is a very upscale, artsy, collaborative, and relaxed environment in which entrepreneurs and freelancers work. The website indicates Packard Place is an innovation hub. Adam Hill, Packard Place director, gave us a tour and shared information.

My education began with a new term - "hot desking" which indicates a workstation or desk that is designed to be shared by workers.  The workstation is not assigned to any one person or group.  It's available on a first come, first served basis by clients of the collaborative space.  Users bring their laptops and work wherever they can find an open space.

Desk share was another new term, for me, indicating that the desk was "assigned" to two or more people who worked varying schedules.  Packard Place has varying levels of space available for entrepreneurs, whether start-ups or existing innovative companies, in a multi-level building.

Our second visit was to Industry.  Industry is truly a coworking space and has been operating previously as LightBulb. Owner Tyler Ford just re-located the business to an old building on W. Morehead. While clients, or members, were at desks working, it was apparent that upgrades to the space are still going on.  A live, still-bound Christmas tree lying in the floor in preparation for the Tree Trimming Event for the members.  The space included an open area with desks facing each other in the middle and another row of desks lining one wall.  There were also a few private offices in varying sizes available.

Tyler was also very open to sharing information about the operation of the cowork space.  He stressed the importance of building community among the members with activities such as "Hump-Day" lunches and events. 

Even though the two sites were extremely different, they both provide collaborative work environments for independent contractors, entrepreneurs, and others who need or want a place to work outside of their home. 

I came away pretty excited about the prospect of starting such a place in our hometown.

Double Start-up

You know that feeling you get when you are getting ready to leave on a great vacation?  You have great expectations about the fun and adventure of the days ahead. You are in a good frame of mind, happy, and ready to go. Starting a new company seems similar to that feeling, at least based on my observation of the owners of two new start-ups that I am working with right now.  Their enthusiasm is almost touchable.

The funny thing is that I can relate because I am involved in starting an incubator and cowork space to support these start-ups.  The whole venture is exhilerating as we work through the details, conduct interest sessions, talk with potential start-ups, and share the news with others.  We are building mutual enthusiasm as we talk.  We all know that there's a risk involved.  We know that no matter how carefully we plan, it is very likely that the reality may be a bit different from what we anticipate, but we are ok with that.  We can adapt. 

The beauty of this initiative is that we are partnering with Rock Hill Economic Development Corporation and some private companies to put together these support structures for new businesses.  It's an exciting time in Old Town, South Carolina.