It’s a dreary statistic, but it’s true: Most new small businesses fail within two years. The secret to success? Not just working hard, but understanding how to manage money.
One workshop in southern Dallas is helping startups proceed with financial caution.
Sophie Torres graduated from Texas A&M in 2012 after studying wildlife biology and genetics. She went to work in a commercial lab, and soon figured out, it wasn’t for her. When she had the opportunity to help get a goat farm up and running, she took it.
“So a friend of mine, we were neighbors and then we became roommates, his mom retired to east Texas and she decided to get a couple goats," she says.
That handful of goats quickly expanded to 48 and a small business called Tjernlund Goat Farm, specializing in goat’s milk lotion and soaps.
“So we started selling in farmer’s markets in Austin and it really started taking off," Torres says. "I mean people were all about those soaps. Handmade goat milk soaps.”
Branching Out
Now, Torres is ready to branch out on her own, and start a small business in Oak Cliff. Her idea? A space for glass blowers.
“A gallery space with all the materials provided. Specialty equipment and stuff like that," she says. "Charge a monthly rent type of thing. But also help them build their brand and market themselves.”
She’s done a lot of research and has money saved from her time in that genetics lab. Even so, she knows she’s got a lot to learn.
“So now I need to find a building and find financing," Torres says. "That’s why when I heard about this class, I was like; ‘financing, that’s my next step.’”
A Free Financial Roadmap
The class she’s talking about is a free monthly workshop on financial literacy for current and future small business owners. It’s put on by the Oak Cliff Chamber of Commerce and taught by employees of BB&T bank.
The first lesson is on small business banking, everything from establishing a line of credit to setting up payroll. Bruce Fortner is teaching, and says before you even get that far, remember, your great idea, might only seem great to you.
“That old adage if you build a better mousetrap, people will come? It’s not always true. Everybody’s got mousetraps," says Fortner.
Separating Work From Home
Fortner stresses the importance of proper financial evaluation by an expert before diving into a business plan. And, he says, make sure your personal finances are separate.
“If the business tanks down and you’ve got everything so tied to that business, it tends to bring everything else down also," Fortner says. "How do you build that firewall between the business and your personal stuff so that you’re not really risking everything?”
Sophie Torres says she’s excited about starting and owning a business, and calls it the true American dream.
“It’s not really making money, it’s about being your own boss," she says. "And you can’t really do that if you’re not in control of your own finances.”
While Torres and her dozen classmates are in various stages of business planning, they’ll all be one step closer to launching by the time this series of classes wraps up in September.
