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The Honolulu Advertiser
Posted on: Sunday, August 5, 2007

Start a business from scratch with free kokua

By Curtis Lum
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Flight attendant Phyllis Moore-Shelby got advice from the Hawai'i Women's Business Center in starting her part-time Shelby's Sweets bakery, selling items such as this wedding cake through her Web site.

Photos by REBECCA BREYER | The Honolulu Advertiser

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Hawaii news photo - The Honolulu Advertiser

Moore-Shelby makes pineapple coconut raisin scones. She had gotten culinary training but not business expertise before starting her baking enterprise.

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Hawaii news photo - The Honolulu Advertiser

Phyllis Moore-Shelby got some help from husband, Stephen Shelby, as she made scones Thursday in a commercial kitchen in Kalihi. She sells primarily online (www.shelbyssweetshawaii.com).

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HERE TO HELP

Some agencies that can help a new or existing business:

  • U.S. Small Business Administration in Honolulu: sba.gov

  • Hawai'i Small Business Development Center Network: hawaii-sbdc.org

  • Hawai'i Department of Commerce and Consumer Affairs: hawaii.gov

  • Hawai'i Department of Business, Economic Development and Tourism: hawaii.gov

  • Hawai'i Women's Business Center: hwbc.org

  • Honolulu Minority Business Development Center: honolulu_mbdc.org

  • National Federation of Independent Business: nfib.com

  • SCORE Hawai'i: hawaii.scorechapter.org

  • Small Business Hawai'i: smallbusinesshawaii.com

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    Business plans. Fees. Tax forms. Financing. Licenses. Lease agreements. Worker's comp. Limited liability company, partnership or corporation?

    It's hard enough to survive as a small-business owner, but just getting started can be an adventure in frustration.

    There are, however, many government and private business advocacy groups available to answer the many questions on how to start a business. With all of the legal, financial and technical requirements needed to form a business, the heads of business advocacy groups can't stress enough the importance of seeking help before getting started.

    "Because small businesses and small-business owners have to take on so much and really be the responsible decision maker, we always recommend that they seek out these programs and get the information to help them operate their business better," said Jane Sawyer, U.S. Small Business Administration spokeswoman.

    "They're really doing themselves a favor by making that minor investment of time or sometimes a little bit of money to get into appropriate training," Sawyer added. "It may not be an MBA program that they need, but it's definitely up-to-date information that can help them to succeed."

    Sawyer said two factors often lead to business failures. The first is being under-capitalized and the other is a lack of experience in managing a small business. Agencies such as the SBA are able to help prospective entrepreneurs develop a business plan so they'll know where to go and how to get there, she said.

    Phyllis Moore-Shelby is a prime example of a businesswoman who needed help getting started.

    Moore-Shelby has been baking since she was a little girl, helping her mother in the family's kitchen in Houston. Moore-Shelby said she always wanted to start a bakery, but didn't have the time or means to do it.

    But following the Sept. 11, 2001, terrorist attacks, Moore-Shelby took a year furlough from being a flight attendant and enrolled in culinary school at Kapi'olani Community College. She also took her sister's advice to start selling her baked goods and began to look into how to expand her modest operations.

    Moore-Shelby said, however, that she didn't know the first thing about forming a business.

    "I knew I had an idea and I knew people liked what I was baking, but I didn't know how to take my idea and transform that into a business," she said. "I didn't know what starting a business entailed. I could just say that I was a 'business,' but that wouldn't be legitimate and I wanted to be a legitimate business."

    HOLDING YOUR HAND

    Moore-Shelby was referred to the Hawai'i Women's Business Center, a nonprofit agency that provides entrepreneurial counseling and training to women at any stage of owning a small business. The HWBC is partially funded by the U.S. Small Business Administration's Office of Women's Business Ownership.

    With the help of the HWBC, Moore-Shelby registered her Shelby's Sweets name in 2003 and got a general excise license. The 43-year-old also received other vital information free of charge that helped her get started.

    "Whenever I got overwhelmed I could always call and go, 'I'm pulling out my hair! I have a question!' " she said. "They never rushed me or made me feel that my questions were too small or that my little business wasn't a priority to them. They really took the time to hold my hand."

    Today, Moore-Shelby is still a flight attendant, but she plans to eventually turn Shelby's Sweets into a full-time business. Most of her sales are done through the Internet, but she has moved out of her own kitchen and into a commercial one in Kalihi.

    The HWBC sees close to a thousand women —and some men — each year through counseling sessions or workshops. Cherylle Morrow, acting executive director and HWBC co-founder, said her agency has a pool of business experts who can help people like Moore-Shelby.

    "The main thing is to choose a business that really motivates you, that you're passionate about and that makes such a great difference," Morrow said. "We have a strong core background and we can relate to many of the industries that our clients are talking about, either personally or through people that we know or who we've helped in the past."

    Mark Andrade tried to go out on his own as a draftsman after working in architectural offices for years, but his attempts at being a sole proprietor didn't work out.

    Andrade, 48, had an idea of what he needed to do and decided last year to give it another shot. So he sought the advice of the Hawai'i Small Business Development Center Network, which is affiliated with the SBA and receives funding from the state Legislature.

    AVOID PITFALLS

    The SBDC helped Andrade draw up a business plan and reinforced information that he already knew. Andrade and his wife, Betty, formed the partnership Hawai'i CAD LLC this past March.

    "I tried to go out on my own before as an independent sole proprietor, but it was real hit and miss," Andrade said. "This time I wanted to do it right. I wanted to buy the right equipment, I wanted to get the right loan and put the right financing in place, so that's why I went to the small-business folks."

    There was no charge for any of the SBDC service and Andrade said he'd recommend that anybody thinking about starting a business visit an agency such as the SBDC first.

    "I kind of knew the ropes and it probably wasn't necessary, but I still liked it and I have no complaints about it," he said. "If I didn't have it I probably would have survived, but I'm glad they were there and I'm very grateful for the advice and the time they spent with me."

    But success isn't always measured by a business getting off the ground. In some cases, business advocacy agencies will advise a person on whether it's a good idea to go into business at all.

    Darryl Mleynek, state director of the Small Business Development Center Network, said it's sometimes better to stop a person from starting a business than see that person run into financial problems.

    "When people come to us and they're thinking about starting a business, one of the very first things that we do is we look at the feasibility of that and we try to help them arrive at a decision as to whether or not the risk is sufficiently low and if they feel that the potential return is sufficient," Mleynek said. "In some cases, we help people arrive at a decision not to go into business and we consider that a definite success."

    FIND YOUR PASSION

    Mleynek's agency handles about 1,000 people annually statewide, but he said his office is limited because of a shortage in resources. Mleynek said the SBDC also is available to existing business owners who want to expand or have questions and issues that affect their operations.

    Morrow agreed that sometimes bad news can be good news if a person isn't prepared to start a business.

    "If we can help somebody discover what their true passion is and save them from making mistakes, to me that's all positive," she said.

    Despite the obstacles, people are encouraged to pursue their dreams of owning a business.

    A recent report by the U.S. Small Business Administration Office of Advocacy said that small-business "births" are the most important factor in propelling growth in gross state product, personal income and state employment. Because of this, Mleynek said, it's important for government agencies to create an environment that makes running a small business as painless as possible.

    "The conclusions (from the report) above all are impressive in that there is no other strategy that a state government can pursue that is better than supporting small businesses in terms of sustainable economic development," he said.

    In Hawai'i, 3,763 new employer businesses formed in 2005, a 1.8 percent increase from the previous year, according to the latest figures from the SBA. The 263,673 small-business employees made up 96.8 percent of all jobs in the state, and there were 24,578 firms with fewer than 500 employees, according to the SBA.

    Sam Slom, president of Small Business Hawai'i, said the state has improved the way it helps business owners. He singled out the Department of Commerce and Consumer Affairs and its user-friendly Web site that offers a variety of services, including online business registration and license renewals.

    "The department ... has gone from one of the most unfriendly business organizations that you had to deal with to the premier example of what government should be doing and what it can be doing," Slom said.

    The DCCA also operates Business Action Centers to assist business owners with the forms required to start a business.

    Reach Curtis Lum at culum@honoluluadvertiser.com.