Planning, research aid small business start-ups

As in chess, a successful small business begins with the right opening moves, according to "First Steps: How to Start a Small Business," part of the Small Business Adminis-tration's Small Business Start-up Kit.

Opening moves include deciding exactly why you want to go into business, what business is right for you, what niche your business will fill and what legal form your business will take. Then you need to create a well-researched business plan.

A recipe for success

"The essential ingredients for successfully launching a small business and keeping it successful are to have adequate capital, management ability and a strong commitment," said Janice Bowman, economic development specialist at the SBA's Springfield branch office.

Adequate capital equals a solid foundation for a small business, Bowman said. Adequate capital means there is enough cash to cover expenses during the time period before the business starts making money.

Management ability includes "being able to prepare and plan ahead for future growth," Bowman said.

"A strong commitment is very important, as the amount of personal energy expended is great," she added. "Needed is the commitment to work long hours, solve persistent problems, deal with slow days and setbacks and to have patience to see your long-term goals pay off."

Making it work

Two small business startups in the area that are putting that advice, as well as their own knowledge and experience, to work are and Show-Me Software Ozark Mountain Steel.

Show-Me Software is a partnership between Mark Stiles and Jim O'Neal. "At Show-Me Software we write software for transportation companies," Stiles said. The software is for all facets of the trucking industry, from the dispatching side to the accounting side. Today the company has 85 customers scattered across the continental United States.

Ozark Mountain Steel is a family-owned business. Patti Ash is president and husband Merle Ash is the vice president. The couple's daughters also work there.

Ozark Mountain Steel is a steel service center where steel is sold in various sizes and shapes from tubing to beams and from one piece to several thousand pounds. "We do things like limo kits," Patti Ash said. "We do the part that is in between; where they cut the automobile."

Founders of both businesses had knowledge of their industries before getting started.

Stiles and his partner already knew about trucking and software. Stiles wrote software at a trucking company O'Neal owns.

Patti and Merle Ash had been in the steel industry for years and at one time owned another steel business which they sold to a larger company.

Show-Me Software was incorporated about three years ago, but it didn't start marketing products until January 1998. Ozark Mountain Steel started two years ago.

Challenges

According to Ash, in the start-up phase, the red tape was the most challenging part of going into business. "It seems like it takes forever when you're in a hurry," she said. And the Ashes were in a hurry because former customers were calling them up, wanting them go to back into business so they could buy from them.

Now the biggest challenge for Ozark Mountain Steel is space. The Ashes plan an addition to their building and plan to get another overhead crane.

Stiles said there are two main challenges in running Show-Me Software: Keeping up with the constantly developing new technology in the trucking industry and keeping customers happy. "Every company is different and everyone has their own wants and needs in software. We try to incorporate the different ideas that would help everyone," Stiles said. "Our main focus is customer service."

At Show-Me Software, Stiles wants to "keep things going the way they are." He added, "If we keep going like this, I'll have to get a new office and expand our horizons."

Taking the advantage

Both businesses had advantages starting out.

The factor that has been most effective in helping the Ashes make their businesses successful is "my husband; he's well-known in this industry," Patti Ash said, adding that reputation and high-quality employees are also key.

Plus, "We already knew where to buy steel and who to sell it towe knew our market," Ash said.

"Show-Me Software was lucky because we didn't have to go out and get any capital. In '98 we had a marketing guy and myself and I was still more or less part-time. We grew enough to get an office on Battlefield in '99 and we started hiring a few people then. We've got seven people now," Stiles said.

He cited the Internet as a key element in the firm's success. "We get most of our hits off of our Web page," at www.show mesoft.com.

Advice for entrepreneurs

The owners of both businesses had recommendations for a solid start. Avoid debt and have a cushion, Stiles said. "It's a real plus to stay out of debt as much as possible. There will come times with any business that you'll have a dry run. Don't go deeper than you can afford."

Check out the marketplace, Patti Ash said. Know what type of customers are there. Do an in-depth study of the area to see if it can handle the product you are selling. Check for market saturation.

SBA's Bowman added, "The most important piece of advice for a person starting a small business is to have a plan. The success or failure of a business will depend largely on the ability to set realistic goals and time frames for achieving those goals and having a method for analyzing the results."