Woman; 410; How To Start Your Own Business. Part 2

Why. And good evening and welcome to woman. Tonight we continue our discussion on how to start your own business. With me is Ann Smith. Ann is founder and owner of Annie's firehouse soup kitchen incorporated in New Haven Connecticut.

Also with me is Eva Sterne. Eva is founder editor and publisher of Artemis for enterprising women. Artemus is the only national publication for women business owners. Eva is currently president of the New York Association of Women Business Owners. One of the things we talked about last week with Jeanie chips and Claudia Jessops was the risks that you take when you start your own business and how they affect women and what people generally think about that. And then you both started your own businesses. Talk a little bit about the risks. The initial risk yes. The initial wrists. And they mostly psychological at that point do you think. Yes everything you want to talk through I always like to to tell people about the fact that. The Declaration of Independence was printed by a woman printer and the word independence there means a lot to me as well as the connotation of communications because independence as my brother once told

me is independence and business. You are depending on yourself and there is one day when you wake up and realize nobody out there is going to do it for me its me. And in business particularly every day and thats 14 hours a day you are depending on you only you can define what you want to do in order to be able to direct those other professionals who later become your right on to take it's tougher for women to take the risk than it is for men. Well I don't know how you feel but I am. I know that once my sister came to me and when she knew what I was doing and I had already had a publishing company for three years when I started this newsletter and. She was all upset how are you going to do this. It's such a risk. And she was about to have a second child which to me is terribly frightening. So I think it really depends on I mean to me a baby is a very big risk because that's the rest of your life where as a business it is an awfully big risk but you have

doubts and you can change it. Do things with it possibly sell it. So therefore I think it depends on your own views on things. What kind of a risk that is. And you started your restaurant not terribly long ago about a year and a half ago but before that you were teaching what happened what made you make the jump. How well I was teaching in Westport and I had a million dollar referendum in June and they voted the school out of existence and I was an art teacher. And it's very difficult to get a job as an art teacher to begin with never mind getting one in June for the following September. That's when I decided to do something about the idea that in the back of my mind for a long time which was to open a restaurant. And I was angry in this sense that this job had been pulled out from underneath me and it was a guaranteed good salary every year and we're dependent upon my salary. And it was. I'm not sure that I would have started the restaurant had I not been had

that little push of losing the job. Anger anger. Right. Now it's a very important point because anger is very often what does motivate women to do something about their situation. And that's that extra something that pushes you there because I think a lot of women have in the back of their minds ideas that they would like to try and I'm sure that they watch other people and I think I could do that and I could do that maybe even better. And they don't do it because that is that little extra something that doesn't push them into doing things to me and one of the problems is lack of information I mean there are other people to communicate with. There are sources to go to. I mean I know you're going to say right now there are more sources than ever before. But the fact is it still is a problem somewhat Is it not. It's getting much much much better. I have to I have to say that we have it now because as slightly as two years ago we didn't have it. In fact that was the reason I started Artemis were enterprising women and named it automates after the goddess of the hunt because it was a hunt tracking

down women business owners. And then of course the Association of Women Business Owners in Washington was structured primarily for that person to pull people together to form a network on which we could rely. And it is growing. What will both of those things what will Artemis do for women and what will be Association for Women Business Owners too. Well what almost does basically you serve as a vehicle communication so that when we interview women in business for themselves and when we give pages on legal advice or financial tips they can write in and read about personal experiences women have had as well as that information which they might not be able to get or. It would be too complicated in the form it's now it's otherwise written. The association of course brings women together and provides programs information so that we are setting up chapters in various localities so that it's a very interesting thing that happens when women in business actually come together discuss their

problems and are able to refer each other and make contacts in the business world for each other. That's really where it all begins so that the National Association for Women Business Owners is a place that anyone could write and and get information. Absolutely any kind of information. Well information relating to entrepreneurship and not specializing not just retail not just oh no he certainly I will say you know there are a variety of there's a lot of our variety of types of businesses. I think we should probably mention the address. All right. The New York Association of Women Business Owners can be contacted at 4:55 West End Avenue New York City 1 0 0 2 4 and the Washington Association have a look. This is the headquarters of the National Association of 2 9 2 0 0 0 M as in Mary Street Northwest Washington D.C. 2 0 0 0 7.

One of the things that when I talked to you earlier about coming up to talk about your business and Tony and the things you've experienced one of the things you talked about with the isolation but you also talked about the fact that you have to get a huge commitment from the people around you your family and so on. Talk a little bit about that. Well I think that that many men are brought up with the idea that they're going to go into business of some sort whether it's working for someone else or starting their own business. And that that's going to be their commitment and that their family is a supportive unit to back them up and doing that. And women have special problems when when they then go out and do that themselves and especially if their husband is also working. And it's from the school that believes that you know he needs a supportive unit. And so you have to learn how does if you're part of a family which I am you have to learn how to support each other without anyone using the other one. And I'm very lucky that my my husband and my family are extremely supportive of

what I'm doing and cognizant of the commitment that it takes I mean there's all kinds of time that I used to have for my family. That I don't have now. And all kinds of ways that I need support the way he's needed support for a number of years. And I think that works well for you or it doesn't. But I think it's very difficult to run a business and not and have negative support of that kind if you don't have the support it's better not to have anybody then to worry about whether you're catering to other people's needs properly. One of the things that I wasn't quite satisfied with the discussion last week that it was a very good discussion was I felt that I wanted more information. Specifically how do you go about getting money. What do you do if you don't have it in your savings account. Then what. Well I would like Ann to talk is when we interview women who are starting out we we interview them how did you start and I can't speak to

how to go to a bag and why it's important to establish a relationship with a banker because he or she eventually is going to be responsible for knowing the progress of your business at that point but seed money starting out money very rarely comes from a bank it does come from family. It does come from. And I think research proves from others. And you can once you have been refused by a bank go to the SBA the Small Business Administration which is becoming a little more supportive of women but N's experience from step one and how she did her prospectus I think is is very important for people to want to share that was her first thing I did was find a place. I had very little money of my own and some money in the savings account which I initially used and I used it. Basically I had not ran into place I wasn't sure whether it would work or it wouldn't work so I hired a market research consultant from the Cohen areas to

do for America and Hyde Park and he told me yes I think this will work and at that point I wanted to rent the space I had the go ahead I had to find the money. I went to the bank and I think he said. They were not willing to lend me money. At that point until you have a track record until I have a track record right. So I hired a professional photographer I had some pictures of the prospective place taken. I wrote a little bit about myself and where I was coming from and what I wanted to do. I wrote about the restaurant the menu what I wanted to have how many my staff would be what kinds of salaries they would be getting. I had the restaurant consultant to help me with a financial perspective. Which is really basically listing money that you hope to get and where it's going to go and how much profit it could expect to show within a certain given amount of time. And I put all of that together and had a professionally printed and put it together in a little pamphlet. At that

point I had to start tracking down people and it was literally using my friends who would say look I ran into someone at a cocktail party that's night and he sounds as if you might be interested. It was knocking on people's doors. It was a lot of phone calls. It was giving people a copy of the prospectus and waiting to hear back from them. And. It took a while and my own family also my own family became stockholders. I formed a corporation. And it took a while to get the money but it did. It did come that way. Then did you ultimately go to a bank to get more money. No I didn't. I have had since to go to a bank to get a loan but based on my track record. That was then possible but I started the business with approximately $20000 and I raised all that from from individual people. Are you making a profit yet.

I had two quarters that I made a profit but only one person so you. Have a nice accent but. A person there but I'm not making a profit yet. It's we do it each quarter and figure out whether we've made a profit or not. Did you underestimate the amount of money that you would need initially. Yes I think I did. I mean I know that I did now I feel that I'm under finance now but. With all the expert quote unquote opinions that was we could do it on that. But it turned out to be a rather elegant quality restaurant where you can't skimp on services so that my over both my overhead and. My payroll. Has to be at a certain percentage so it gets it involved in balancing financial bounds. What about what can women depend on in the way of help from the government agencies like the FBI I mean you can only go to them and after a long process maybe get funding. I mean do they give advice also.

Yes they do offer technical assistance. I think as I said they are becoming better. The Association of Women Business Owners is of course a place where women can meet each other and get help that way. Government contracting is becoming more of a feasibility for women business owners although usually to get a government contract. You know you were in competition with large corporations who have staffs that do nothing but write proposals for contracts. When I was a small business owner may be out $6000 in labor just to write a proposal but these things are all in the works as a as or contracting possibilities with large corporations because they're realizing that while women can't be considered a minority. At this time they may be able to set aside as they did for minority business owners special funds for procurement purposes and funding purposes. You were a little less a little more cautious than Jeannie and Claudia were last week in encouraging people to do this.

I want to be as encouraging as possible with that caution because I what I would hate to see happen is OK if we triple the number of women who go into business for themselves and but three years from now the failure rate is 85 percent what does that do for us. Nothing. And now that we have these resources I would like to see women attend conferences that are now becoming available for starting your own business I would like to see them subscribing to or buying the publications that are available in this area and joining the association. Getting the groundwork laid for the future. I would like to see more courses in colleges on starting your own business as an option as a career option so that you can plan toward it. Know what the elements are because we're starting at a disadvantage here. I mean men are trained almost through childhood to understand the rudiments of business and women often wake up to it very late in life and to elevate women's role in the economy which is what all of this I think is all about. We really have to have a lot to catch up on. You gave me

three. Three things that that most often cause failure. One was communication. Yeah I found that very interesting way to expand on that. Well I just want to mention that the others are under capitalization. Poor management. Bad bookkeeping is often a cause communications I think is an internal as well as an external thing we have not in the past had communication network among women. Now that's what we are now developing the communication internally is the sudden dealing with 10 or 20 or 30 employees delegating responsibility realizing that people don't read your mind that you have to tell them what you want and you have to have it in your mind very clear what you want to get it done. I think you just ran a couple of bells Yeah. And when you first started hiring people you know what was going through your head what were your problems.

How how to get them to make the same commitment you did for me. Yeah yeah I had to pull them in on my dream really because I think that when you are your own business it's your own dream somehow and you want people to read your mind and somehow know what that is and that that's difficult because they don't and you have to make sure that that what they do is consistent with what your dream is somehow and that they carry that out. I didn't really have any trouble hiring people. It's then after they're hired dealing with them and hoping that your judgment was right. Learning how to. Sharpen up your judgment about people. I really it was a tremendous learning experience to me the first three months for people I was sure that were really wonderful people. And some of them weren't. I mean some of them were not what I thought. I mean you just get used to doing things by the seat of your pants but you can't do it the same way. You know you have to

you have to learn also to rely on other people's judgment. If somebody says hey I don't think that person is going to work out and here's why. You have to also incorporate that within your own judgment. I mean there's usually a reason for that. What about delegating authority was that a problem. Yeah. Still as many women often go into business with friends for example or their clients or friends and suddenly they find that they don't expect to pay for the services the friends that is. And that's you know that can be a problem you could draw very clear lines I think. I mean business. And when you when you listed the three reasons most most common reasons for failure and you said bad management. You didn't necessarily mean just bad management of money did too. No I think management has an overall when we talk about personnel problems when we talk about money all of that goes into IT organization all goes into management how your time is managed how your money is managed.

All of these things your management and I would when we were talking on the telephone about the possibility of your coming here to do this and you talked about the second stage almost being worse than the first stage and the risk of being having more impact on you. Yeah. It is it's it's another kind of commitment. Your first commitment your first risk is. A little bit naive for many women. And for many men too for that matter but you're also very excited it's a new venture you're you're making something out of nothing which is an important thing to do. Then you have something. And the second stage comes when you re-evaluate that trying decide where you're going to go what's going to happen to that thing that you've. You you've made. And not having very many people to turn to to to ask the kinds of questions that you need to ask. Makes it lonely. You also have more to risk in the beginning you had everything to

risk which is the same almost as having nothing to risk. But now you have something. And. And the risk appears much greater. And yet you get less understanding from other people because as far as they're concerned you already have a success why are you. You know what are you concerned about now. And I think that's where some real hard thinking goes in that second phase and then it's maybe a little bit more isolated a little bit less exciting and scarier and maybe a just a continuation of the really hard work how many hours a day do you work. It varies it can vary from 14 in my normal day in the restaurant when there are days from 7 to 5. And I'm tired just listening. David you think it's important for people who are starting their own business to keep a sense of the whole. By that I mean it's very easy to get involved in the day to day problems and you don't see yourself in terms of other business owners and you don't see yourself in terms of your community.

It's very important as a matter of fact that if a person is starting a business because she likes to make hats and eventually ends up having no time to make the hats because she's too busy delegating the business and that's a problem that has to be realized at the outset you're not often going to be doing that particular thing that that you would be freelancing if you like to. But I when we talk about failure if I felt a little gap there I think always that that failure is such a pejorative term because when they do these statistics that most businesses are 50 percent of businesses fail one. I think that failure has to be considered as a learning experience to begin with. In business particularly you might be able to sell out and gain something there you might be able to develop the knowledge that you've learned in this particular way which you couldn't have learned any other way and take it with that grain of salt. It's also possible to start again right.

Yes it is. It certainly is using the experience that you have so hardly learned. We keep hearing the term market research all the time. What did that mean in terms of what you were doing starting the restaurant. Literally Yeah. It meant that a man came and stood in the corner and counted cars to get by. I don't care to people that were walking by in the area and actually there were two other restaurants in the area that I eventually went into which as I said was outside of downtown New Haven and not attracting walk in trade they would have to drive. If it hadn't been for the two other restaurants in that area we probably would have not decided to go there but they were already bringing a number of cars and those are the kind of things that he ascertained simply by counting. And there is much more complex market research than that but basically that's that's what went into to my own market research. So you didn't walk in cold I mean you just you really did know do a lot of ground work first.

I think you have to one way or another you have to do some ground work. What about PR that's the thing with that I'm told gets left on the on the bottom of the list a lot the people don't leave enough money in the budget and they don't pay enough attention to what would you do about that. I have very little I left $500 in the budget for year but I didn't do much PR we opened quietly which is that which is a technique that restaurants will do. Open the doors let people walk and see what happens. Hopefully you'll be able to work out the kinks before you're crowded. That didn't happen with us because a lot of people knew. And came and we didn't have time to work out the kinks before it got crowded. But then I put some ads in the paper. And I got some free publicity which is very nice as well writing newspaper stories. I got a radio review on the restaurant. And some very nice things happened that way but it's true in each business has its own particular PR requirements. Now is the

time. I think that I need to put some more money into. I've not been to advertising and often times because you haven't a lot of that money initially. You're caught without that financial edge when you need it. What's going to be. I don't know. That's part of this one working. I'm not worried about the rest. I thank you both very much for. Thank you. This program was produced by W. and he is solely responsible for the

company. Make your funding was provided by public television stations. Additional support was provided by unrestricted general program grants from the Corporation for Public Broadcasting and the Ford Foundation. Do you.