Keith Bowers is the director of the SBDC (Small Business Development Center) at Florida A&M University (FAMU). The SBDC has been providing consulting services to startups and local businesses all over Florida for almost 40 years. The FAMU SBDC specifically has helped out some of Tallahassee’s most successful startups. Keep reading to learn more about the SBDC and to hear what Bowers, a man who has met with many entrepreneurs and business owners, has to say about Tallahassee technology and startups.
Tell me a bit about yourself and the Small Business Development Center.
The SBDC provides consulting services and technical assistance to small business owners and entrepreneurs. Our services include helping identify working capital, vetting business ideas, reviewing business plans, helping with market research, and financial analysis. We also offer loan packaging and a number of other services geared towards both startups and existing business.
I’ve been serving as regional director for little over 6 years; my background is in banking and finance, I did that prior to starting with the SBDC. One of my jobs was as a commercial loan officer, so I always tend to look at our clients as loan applicants, because all small businesses need money. I know how to pinpoint those areas that bankers are trained to look at on applications and financial statements, so I try to bring that experience to each one of our clients, especially if they’re looking for funding.
Even if they’re not looking for funding, I try to help them focus on how they can maintain profitability.
What kinds of companies generally come to the SBDC?
We cover an eight county region, and we serve the entire population within that area. All of our services are provided at no cost to the client. We’re funded by the Small Business Administration of Florida and by FAMU, so these are all taxpayer dollars at work here.
What type of companies have been through here?
Quite a few small businesses have been a part of the program. Mark Powell with HWind, All About Smiles (a local dentist), Vale Foods Co, Earley’s Kitchen on South Monroe, Haute Headz Salon – we pretty much cover a great cross section of different industries and types of businesses.
What are some of the bigger challenges that you hear about?
The most common challenge is finding capital – figuring out where to get money. The second most common concern is knowing how to market or communicate a product or service to the public. Those are primarily what we see as issues number one and number two.
From what I understand, access to capital in Tallahassee is tricky.
It can be. When we talk about access to capital, there are a few different routes. There’s equity, which is when a business owner invests his own funds or collects investment from friends and family – that’s one common method. The second method is venture capital. Venture capital is now just getting a bit more stabilized in this market; we have some folks like the Florida Angel Nexus becoming active. They’re rolling up their sleeves and doing more work with small business and entrepreneurs in the area.
Then there’s debt, which is applying for a loan from vendors both inside and outside of the market. There are also unconventional methods like crowdfunding, Kickstarter campaigns, and other things of that nature. We’ve seen some success with these things with some of our clients – they were able to get the funds that they needed for certain stages of their business.
In Tallahassee, the biggest challenge is building a more robust network of venture capital. We lag a little bit behind other markets. As far as debt from banks and other lenders, we’re starting to see a lot more activity. A lot of banks are taking advantage of the SBA Guaranteed Loan Program; we have a lot of participating vendors getting into that space.
Then you have credit unions who are participating with the SBA programs. There are also some community development programs here in this market that are sort of non-profit lending entities that receive funding from the state and local government and in turn try to get it in the hands of small business owners.
For an entrepreneur, what advice would you give for acquiring funding?
I think Domi is doing a really good job of trying to marshal some of those resources. The universities are also really trying to step up their efforts with SBIR (Small Business Innovation Research) grants, and different programs coming out of all three institutions of higher learning are trying to commercialize institutional research. We’re starting to see a lot more activity with SBIR Grants and Tech grants and different ways of trying to help support entrepreneurs.
With VC (venture capital), I think that there is a natural progression. Once investors start to see some success stories here in this market, like HWind and other companies, I think that it builds on itself. That’s what I’ve observed in other Florida markets. At UCF, it started with a few different companies hitting the mark and making it big, and now there’s a lot of interest in other spinoffs and technology that comes out of there.
For that part, it’s just going to be a matter of time. To bridge that gap, I would say just make sure you know your numbers, because that’s something that a lot of entrepreneurs struggle with. They’ll have a great idea and a great business plan, but sometimes they don’t do a great job of connecting the dots to how that connects to a financial statement and a bottom line. I would say make sure you understand your numbers, make sure you’re prepared when you go to a bank or an investor, make sure you understand your market, understand how your returns on investment will be, and what your costs are. It’s funny because I watch Shark Tank all the time and the first question they ask is,
“What are your sales, what is your overhead, and what is your profit margin?”
Entrepreneurs should really focus on that because it’s important not only for attracting investors but also from an internal management standpoint. You really need to understand that when you get up in the morning you should know how much you owe, who owes you, and how much you made yesterday. Having an intimate knowledge of that information is critical.
What do you think investors in Tallahassee are looking for?
I think they’re mainly looking for success. We’ve even had clients who were horse ranchers who were able to get funds for their venture, and that was a pretty significant investment. But mainly, investors are looking for something that is scalable, maybe it starts and Tallahassee but grows and expands or is replicated elsewhere.
Oftentimes investors are looking at the entrepreneur more than anything. They’re looking at him or her to gauge their level of commitment, their knowledge of the industry, how hard they’re willing to work, and if they’re persistent. Because you’re going to hear “no” many more times than they’re going to hear “yes.” They’re looking to see what type of character this person has.
At the end of the day, they’re looking at their return on investment. Is this business realistic? Have you considered the worst case scenario? Based on what I’ve seen in this marketplace, those are the more common themes.
Mark Powell with HWind mentioned that the most difficult thing for him was figuring out how to turn his idea into a marketable product. What advice would you have in that area?
Entrepreneurs and business owners solve problems. If you can, look at your product or service as a solution and work backwards and ask “how am I solving this problem for you?”
That’s what entrepreneurs are, they get paid to solve problems. So, what type of value should you attach to being able to solve this problem? In terms of the marketplace, you always have to look at your competition and what they’re doing. Also look at your unique selling proposition, what are your advantages over the competition? How do you plan to position yourself against your competition? In trying to productize any product or service, you have to look at your competition, know what the market can bear, and look at your target market.
Do your research. If you’re selling to business or to government, who are they currently buying from? If you’re targeting consumers, how well do you know your customers and what are their demographics, income level, and purchasing habits? All of these things can help you narrow down your go-to-market strategy.
Another thing too that we see a lot of times with entrepreneurs is they become very one dimensional, and they think that they have to do everything. They want to wear every hat in the company, when they might be better served as the innovator person. The innovator person might not be the person who necessarily scales this business and takes it to different markets. Typically the innovator is not that person.
Even on the sales side, the innovator is not necessarily the one who can go out there and close that deal, because they’re focused on the product itself. They don’t necessarily have the bandwidth to switch hats. I think building the right team is key. You may have to give something up to build that team, whether it’s a percent of ownership or a percent of profits. But it’s important to not see yourself as the company.
You want to do what’s best for the product or service and what’s best for the company. If that means you’ve got to step back and play a lesser role in one of the phases of growing that company, it’s got to make sense to do that.
How do we begin to tell these local success stories?
I think a lot of entrepreneurs hold their cards close to the vest, so we have these success stories but they don’t really like to draw attention to themselves. We need to cultivate an environment where it’s okay to be successful, where it’s okay to say “I made it.” We also need to be able to talk about mistakes and let people share what they learned on the way to success, areas where they failed as a company.
I think it’s important that we’re able to share these stories, because that’s one of the things that keeps so many people on the sideline – fear of failure. You’re not going to get it right the first time, and if you do you’re very lucky. We need to demystify some of these doubts or myths about entrepreneurship.
We have a lot of college students out there right now saying “I’m going to be the next Mark Zuckerberg,” and that’s not really realistic, but you could be the next Sunny Alias (founder of Vale Foods Co), where you have a concept that’s gaining a lot of traction in the marketplace.
But we do have to start to celebrate those success stories and get our entrepreneurs talking among themselves in real time. There are some programs that definitely try to focus on that; there’s the Entrepreneurial Excellence Program that brings people in and helps them on their business model, but it also brings in local successful business owners who share their stories, and they do a mini Shark Tank with those folks. I see these things starting to pop up.
We’re starting to broaden our thinking as a community around entrepreneurship, but for us to really embrace it, there has to be a way to create a safe space for entrepreneurs where it’s okay to fail, and it’s actually expected that you’re going to fail. In Silicon Valley, failure is like a badge. You can say, “Yeah I failed, but I learned from it and moved on to the next one.”
The positives in this community are that you have a lot of different organizations focusing on entrepreneurial development. More entities are starting to pay attention. We call it “the entrepreneurial ecosystem,” and I think we’ve come a long way since I started here six years ago. Domi, and a lot of the different things that we see now – app challenges and shark tanks – last year Junior Achievement had a “Shark Bowl” for Leon County schools, and they had over 1,500 students participate in that.
I think there’s a lot of entrepreneurial spirit that exists in this community, and it’s good to see that folks are harnessing that.
What’s the next step towards solidifying our “entrepreneurial ecosystem” and making sure that it’s sustainable?
I think we need more incubators. Domi is great and they’ve done a great job, but we need to help out those businesses or entrepreneurs who may not be focusing squarely on technology, but who may have a service to provide or a food service idea. Artists as well – we could imagine some type of co-working space or incubator for budding artists that would have studio space and also a storefront. Then your day-to-day service industry, a barbershop or salon or someone that wants to open a bookkeeping company but doesn’t have the resources to invest in an office or the know-how to get into the space. I think that there should be more incubators that speak to the different industries out there.
In building an entrepreneurial ecosystem, support organizations like the SBDC can be a big help to tech startups and budding businesses of all kinds. If you own a small business or are thinking about starting a business, make sure to take advantage of this great, free resource. Once you get there, make sure to thank Keith Bowers for being an advocate, educator, and supporter of local and small business.