The U.S. is undergoing a small business boom, the likes of which have never been seen. According to the Small Business Administration (SBA), the U.S. saw 30,000 more small business startups in 2005 than in 2004. Those 672,000 new companies amounted to the largest number of new small business startups ever recorded in the U.S.
Mississippi is participating in the trend towards growth in small businesses, including those launched thus far in 2007.
“The Mississippi District and branch offices have experienced a significant increase in small business start-up inquiries as of January 1,” said Gary Reed with the SBA.
The climate in Mississippi for small business is one of the best in the country, according to a recent article in Money magazine. Reed said that Mississippi ranks seventh in the nation under the magazine’s rankings “Which states love small business best?” The state ranked sixth nationally for being a friendly state with regard to small business taxes.
“Based upon the constant flurry of activity we experience here at SBA in Mississippi, it seems that all year round much interest centers around people wanting to start their own businesses,” said Janita R. Stewart, Mississippi district manager for the SBA. “But at the beginning of the new year, people seem to be taking an even closer look at the prospect of becoming their own boss. From October 1, 2006, through January 31, 2007, we’ve already had 14,128 hits to our SBA Mississippi Web site. During the entire year (last federal fiscal year) we tracked 73,955 hits.
“On the entrepreneurial development side, through the end of January, we’ve trained and counseled 1,465 individuals in comparison to 1,247 this time last year. We’ve conducted workshops, provided small business start-up kits, spoken with people at trade fairs/expos, and met with walk-in visitors to the SBA district and branch offices seeking information on SBA programs that totaled just under 1,900.”
Stewart said without a doubt, the activity and interest in Mississippi in starting a new business or expanding an existing one is absolutely there. Loan production through February 2 shows SBA approved 218 loans through its 7(a) Guaranty Program for more than $34 million, up 7% over last year. On the Certified Development Company 504 Loan Program side, production is more than double last year with 12 loans approved for approximately $11 million in comparison to only five loans this time last year.”
Mississippi’s Small Business Development Centers (SBDC) have seen a dramatic increase in the number of folks interested in starting their own business. But the number of those actually starting one is about the same, said Michael Vanderlip, associate state director of the SBDCs.
“Entrepreneurship has become a career option more folks find at least worth exploring,” Vanderlip said. “However, the barriers to successfully launching a business remain high.”
Jason Pope, a business counselor with the Small Business Development Center at Hinds Community College, said he is seeing tremendous interest and growth in the startup small business sector.
“I get several calls a day from people wanting information on the steps to starting their own small business,” Pope said. “Some of these people are currently unemployed and trying to figure out a way to make a living, while others have worked in industry for years and just want to do something different. Many of these clients come in to discuss their business idea and we give them advice regarding what they need to do, depending on their particular idea and circumstances. I was just discussing with someone at the business expo the other day about how swamped I have been with clients so far this year, which is great!”
Pope said the SBDC has seen numerous business startups in 2006 and word of mouth has definitely increased the volume of clients coming to the Hinds Community College SBDC. He said the quality of the services offered and the fact that everything the SBDC does for its clients is free means that it’s a no-lose situation for anyone wanting more information on how they can start their own business.
“This past year many bankers around the metro area recognized this and started sending their clients to us,” Pope said. “If we do our research and send them back, the banker usually takes the deal seriously and many times the business gets up and going.”
Pope sees a wide variety of business ideas every day. He has heard clients discuss residential solar energy, sporting goods retail shops, daycares and different types of government contracting work. Some of the recent startup businesses have been home furnishing stores, bath and beauty shops, yard maintenance, gift shops, deli’s, coffee shops, book stores, consulting businesses, martial arts studios and Internet-based sales businesses.
“A client of mine had a grand opening in Madison the other day, Bath Therapy,” Pope said. “The owner is the perfect example of someone who came to us with their idea and just needed some direction about what they needed to do next. After going through the business planning process, the store is open and doing well.”
Pope tries to help people be realistic about the challenges of opening a small business. Many people have the misconception that opening their own business will give them the freedom to work their own hours, be their own boss and have unlimited profits.
“We try to inform our clients that owning your own business is not a bed of roses and it usually leads to longer hours and less pay in the beginning, but many of them are still excited about doing it because it gives them the opportunity to achieve many of their dreams,” Pope said. “Most of my clients have worked for someone else their entire lives and ‘made their employer rich.’ These clients complain of not being rewarded for their efforts and they want to reap the benefits of their hard work.
“Another prevalent reason I hear involves layoffs and businesses being bought out or going under. The fear factor of losing their job causes many people to consider starting a small business on the side, until they can replace their full-time salary with their employer. I have several clients that make more money with their own part-time businesses than they make at their full-time jobs, the only reason they stay with their employer is for the benefits.”
Some people dream of turning their hobby into a business. Pope said this is usually a bad idea, but they try to work our clients and explain the expenses involved. He said after they run some numbers, they normally decide that it is not in their best financial interests to turn their hobby into a career.
“The Delta State University (DSU) Small Business Development Center is seeing a healthy desire for growth in new business start-ups,” said Christie D. Sledge, director of the SBDC at DSU in Cleveland.
“According to the ‘SBA Resource Guide,’ statistics show that small businesses account for approximately 98% of all business ventures in Mississippi today,” Sledge said. “When entrepreneurs open a business, they believe their life will be much happier and fulfilled by doing something they love. They also dream of being independent and being their own boss. Entrepreneurs believe their skills and talents will benefit the community in which they serve.”
Most people who dream of opening their own business are suffering from “under” employment, said Jeff Waller, director of the Copiah-Lincoln Community College SBDC.
“Or, they feel that they can do better financially by owning their own business instead of working for someone else,” Waller said. “The other people who are interested in starting their own business are looking for a change in life and just desire to be their own boss. “
Waller isn’t seeing an increase in small business startups in his area at this particular time.
“The reality of it is that this part of Mississippi, from my perspective, is actually slowing down in attempted startups,” Waller said. “I am doing a considerable amount of long-term counseling, but the startups are just not as numerous as they have been in the past.”
Most of the start-up businesses being seen are service related such as adult daycare and janitorial, in the trucking industry, and numerous types of retail stores.
Contact MBJ contributing writer Becky Gillette at email@example.com.