Editor's note: Since 1964, business-management counselors at nonprofit organization Score have given free advice to small-business clients spanning every industry. They currently serve nearly 400,000 entrepreneurs nationwide each year -- check in every week for their prudent advice.
Though I don't own a business, I found myself hanging on every word of the small-business owners who got up to speak at Score NYC's monthly meeting last week. The triumphant atmosphere of shared success stories was sobered by words of caution punctuated by empathetic nods from seasoned members of the audience. Through tales of soul-searching, struggles and hard-won triumph, I received the uncut version of the small-business world, and not all of it was pretty. No matter what their specialty, every speaker had learned from a blunder (or several). They hope other entrepreneurs will read, remember and don't repeat!
Eking Out a Space Isn't Easy
Lori Mason and Daniel Angerer, owners of Klee Brasserie in Manhattan, made sure to rent an existing restaurant to avoid spending money on the installation and licensing of new items. Their engineers and contractors assured them that certain features, like the kitchen floor, were solid. But as the work progressed, surprises popped up -- "every time you turned around," says Mason. Slowly but surely, their expenses crept up. Score stepped in and helped them build a flexible budget, which their loaning bank wouldn't question when they needed to increase it. It included reservoir categories and various safety outlets. To avoid a skyrocketing construction budget from the start, talk to a business owner in the neighborhood with a similar business to yours and use their contactor or engineer, advises Mason. And save every receipt and written estimate to avoid subcontractor payment disputes, she adds. And get creative to avoid high rent costs in the first place. Monika Werner, business director of Joschi Body Bodega in Manhattan, rents out space on the fifth floor as opposed to the pricey first floor storefront.