A New Kind of Business Development Center
Rosalind Resnick's brand of for-profit business advisory centers takes a decidedly different tack when it comes to helping small business.
In her own words, Rosalind Resnick has been around the block afew times. Starting her professional life as a business writer forthe Miami Herald, Resnick became a homebased freelancewriter after the birth of her first daughter, covering business,legal, computer and Internet topics for a variety of publications.Based on her own experiences trying to become Internet-savvy in theearly '90s, in 1993 Resnick wrote Exploring the World of Online Services,a guide for small businesses wanting to use the Internet, andco-wrote The Internet Business Guide: Riding theInformation Superhighway to Profit with Dave Taylor in1994.
By that point, Resnick had become well-known for her onlineexpertise and became a public speaker. She also decided to applythis knowledge to her own Web firm, Netcreations, a company sheco-founded out of her Hollywood, Florida, home in 1995. Firstlaunched as a Web design firm, Netcreations eventually became a NewYork City-based, publicly traded Web marketing company that wasinstrumental in pioneering permission-based e-mail marketing.
After the dotcom bust, Netcreations lost clients, and inSeptember 2000, Resnick realized the company would miss itsnumbers. In February 2001, Netcreations was acquired in an all-cashoffer, and Resnick walked away with $40 million. Not wanting to siton a beach and drink mai tais, she decided to share her expertisewith other small-business owners and founded Axxess Business CentersInc. in 2002.
Axxess Business Centers (ABC), which currently has one locationin New York City and plans to open in nine other major markets by2004, are for-profit storefronts where business owners can meetwith veteran entrepreneurs to get sales, marketing, financing,technology or management advice. Curious to see how ABC comparesto, say, Small Business Development Centers, we spoke with Resnickto learn more about her company.
What happens when a business owner visits an Axxess BusinessCenter?
Rosalind Resnick: You sit down with a counselor who is anexperienced entrepreneur, not a retired executive but somebodywho's still in the game, who can give you the kind ofhand-holding and advice that you really need to start your ownbusiness and take it to the next level. It starts with the initialcounseling session--we charge $49.95 for [that]. We walk themthrough a series of questions to find out about them, to find outabout their business, and ultimately to find out about their goalsand objectives.
The start-ups that come through the door--typically theroadblock they face in getting funding is that they don't havea business plan and they need one. It's interesting becausewhen we opened our doors, I thought, surely, you as an entrepreneurcould go to any number of not-for-profits and mentoring kind ofgroups that assist people with their business plans, but what wefound was that even though you could take a 10-week course, take aworkshop or read a book, none of the not-for-profit organizationswould actually sit down with you and write your plan, andthat's because they didn't have the staff or the funding.One of the first things we found was, people were coming in forcounseling but they were asking us "Can you write my businessplan?"
For the existing small businesses, again it starts when theywalk in the door and sit down for the initial counseling session.The second step is typically for them to come back with theirfinancials so that we can get a handle on their numbers. WhatI've found is, most small-business owners are excellent at whatthey do, whether it's cooking, designing clothes or any numberof different things that our clients do, but when it comes tofinance, typically they really don't know much about it and areeither too busy to learn or it's not their thing or they'refrustrated. So typically we'll sit down with them and puttogether a sales forecast, a cash-flow analysis and a budget, andthen after working with them for a few sessions, various problemsthat they're having with their business will begin toemerge.
Have most of the entrepreneurs coming in already started abusiness, or are they trying to put a business together?
Resnick: I would say it's about 50-50 at this point.We do work with a lot of start-ups, but having said that, a lot ofexisting businesses come in.
What are most business owners concerned with--are they justwanting to get their business started, or do they want to have asbig a business as possible? What are their goals when they'recoming to you?
Resnick: Typically these are people who either have anidea that they want to pursue or, more [commonly], they have somekind of business or hobby or venture that they're alreadypursuing in their spare time and they'd like us to help themturn it into a full-time business.
For the existing business owners, they already have a business,so they've been successful up to a certain level, but now theyneed to find a way to grow their business and take it to the nextlevel. This is where the financial analysis and the financingtypically come in, because a lot of these businesses are survivingas they are, but for them to get to the next level they need a planand they need additional capital, whether it's debt orequity.
What are some of the major concerns of business owners? Arethey worried about the economy? Political situations?
Resnick: I would definitely say the number-one concern iscash flow. Supposedly the recession is over, but the economy isstill pretty weak, so [a lot of clients were] the owner of acompany that was making $200,000 to $300,000 [a few years ago], andtoday their company is barely afloat. Companies like that, theyneed to reduce expenses, obtain additional capital, obtain creditlines, and because these people are not financial people, this issomething that they find difficult to do on their own.
The other big problem is sales and marketing. Again,professional services firms typically get all their business fromreferrals, and a lot of these referral sources have dried up. Theyneed to cultivate new sources of referrals and sales leads in orderto get enough business in the door.
Business owners are always concerned about getting goodemployees. It's certainly a better job market for employersthan it used to be because there's all this talent willing towork for practically nothing, but to get qualified, capable peopleto work for your company is still a challenge. That's whywe've also begun doing some recruiting projects forclients.
Who are the people that you're seeing deciding to go theentrepreneurship route? Are they former CEOs? Formeremployees?
Resnick: Probably part of it is where we're located,because we're three blocks from Ground Zero--we do have anumber of people who come in who used to work on Wall Street. Theyused to work for dotcoms, they've been laid off, downsized,they've gotten severance packages, etc., so they're lookingto [use] that money [and their skills] to start a business. We alsosee people who've built and sold businesses in the past who arenow looking to start new businesses. Other people are serialentrepreneurs, people who, like me, have had a business before,have sold it, and are looking to start something new.
For people who are thinking of starting a business, what kindof advice would you give them about how they should prepthemselves?
Resnick: The business owners who have the highest chanceof success are people who are leveraging skills or experience theyhave already. When I left the Miami Herald, I was a businesswriter but I wanted to stay home with my kids, so one day I was abusiness writer for the Herald, and the next day I was afreelance writer working for me. That was a very successfulone-person homebased business simply because I had the experience,I had the contacts, I just took something that I was doing forsomebody else and I decided to do it for myself.
That's pretty much the no-risk kind of business. A businessowner who comes in and wants to start a restaurant--it's goingto be a lot easier if he spent five or 10 years managing somebodyelse's restaurant, and not only does he know how to cook, buthe also knows the restaurant business and he has people he can hireand he knows what kind of equipment to buy. Somebody like that alsohas a much greater likelihood of getting financing, either from abank or from investors, than somebody who has no prior industryexperience. If you're looking to start your own business andyou've identified which industry you want to go into, if youdon't have the industry experience already--my advice would beto go out and get some ASAP.
The other thing that's critical is, you need to make surethat you have sufficient capital, and most small businesses do not.Most entrepreneurs who have never done this before tend tounderestimate how much money they're going to need, andthat's why after the initial intake session if we determinethat the entrepreneur is pursuing a business idea where he'sgoing to need to raise some serious capital, we always recommendhaving a business plan.
For somebody who is considering starting their own business,what should be their first step?
Resnick: Once they've already decided to take theplunge, I think the first step should be a business plan. It'svery difficult to figure out where you're going if youdon't have a road map to get you there.
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