SHERIDAN — The dream of starting a business entices many — and for good reasons. You can be your own boss and meet community needs with your service or product.
A successful start-up, however, requires more than dreams. The U.S. Small Business Administration has found that nearly half of all new business establishments fail within five years.
Whatever the reasons for failure, many can be avoided — or anticipated, at least— with mentoring from someone more experienced. That is the purpose of a program like SCORE, the nation’s largest network of volunteer business mentors. A resource partner of the SBA, SCORE has helped more than 10 million entrepreneurs through its mentoring and educational programs since 1964.
“Business ownership is lonely,” local SCORE mentor and president of Kennon Products Ron Kensey said. “It’s good to have somebody who’s objective so we can talk about troubles with employees, and troubles with partners and troubles with the market and share our experiences in that way.”
SCORE volunteers offer free mentoring to entrepreneurs on topics ranging from how to write a business plan to finding funding and clients, managing cash flow and developing marketing strategies. Aspiring or current business owners can connect with SCORE mentors face-to-face or via email mentoring services.
SCORE also offers free and low-cost workshops and educational resources on its website, www.score.org.
“I’m here to offer SCORE, whether it be me or somebody clear across the country,” Kensey said. “I think it’s a great value because it’s free. And I think it’s safe because we’re screened. We are interviewed, we are background checked, we pledge to do work unselfishly mainly because we like business. We want to give something back because it’s been useful in our lives.”
Kensey is affiliated with the Billings SCORE chapter but works with clients around the nation. He said each SCORE mentor has a profile that includes strengths and areas of expertise — government contracting and employee stock ownership plans are two of Kensey’s. Entrepreneurs can meet with a local mentor or request someone more remote.
Tom Johnson, chief performance officer for the Wyoming Business Council, believes business mentorship is crucial.
“That’s because starting a business is one of the most complex things one can do in life. There are just too many variables and situations for one individual to consider,” Johnson said in an email to The Sheridan Press.
Johnson said while there isn’t absolute proof, it is believed the survival rate of start-ups jumps from 50 percent to 65-70 percent for entrepreneurs who receive mentorship.
“While that doesn’t seem like a huge jump, that’s twenty extra businesses per every hundred businesses who are still around after five years. It’s a significant improvement,” Johnson said.
Kensey has seen several common hurdles to successful start-ups. These include not knowing how to start, failing to do adequate market research, having too many ideas, lacking funding and even being too eager.
“They’re darned and determined that this is what they’re going to build their fortune on,” Kensey said.
That drive is good; it just needs direction.
One of the biggest things Kensey addresses with clients is getting plans, forecasted budgets and assumptions onto paper, then testing those ideas and assumptions.
“I think one of the hardest problems new start-ups have is they get excited, they want to rearrange the furniture in the room, and they’re really excited about that part of it, but the more practical side says let’s put it on paper, put numbers on paper and see what you’re going to get.”
Drilling into details is crucial to a smart launch, and those details are what volunteers with business experience can bring to the surface.
They can help with market research, approaching the process in a logical order and even helping an entrepreneur judge the viability of an idea.
“The number one thing is you need to objectively test your concept and assumptions,” Kensey said. “I have to help you do that by first suspending judgment. I cannot tell you that this sucks. I can help you find out that it sucks.”
Hopefully, though, the idea is a good one that will lead to success. Kensey said if you can pay yourself, pay the people who work for you, generate profit and get to the point where you are setting aside at least 10 percent of your profit into a rainy-day account, you are doing well.
The success of start-ups is crucial to Wyoming’s economy, Johnson said: “For every project we recruit to Wyoming, there are dozens and dozens of companies who are creating jobs each year. So it’s equally or more important that we foster the growth of these companies.”