Following a 25-year career in banking and independent consulting, Lucretia Freeman-Buster joined the Washington DC SBDC April 2014 as the Associate Director. Lucretia is currently wearing two hats, also serving as the Acting Executive Director. The experience she brings to the SBDC as a successful commercial banker is helping DC-area entrepreneurs turn innovative business ideas into successful businesses by offering counseling and training in strategic planning, financial planning, and management best practices shared by other successful small business owners.
The DC SBDC has many success stories under its belt including successful restaurants, professional services providers, and other small business owners who want to pursue greater access to commercial and government contracts.
I recently spoke with Lucretia about her work at the DC SBDC:
Ty Kiisel: Do you have any advice for small business owners just starting their businesses?
Lucretia Freeman-Buster: For starters, it’s important to really understand the market you want to jump into. Ask yourself, “Is there a niche or market for my product?”
Is there an underserved market you can serve? Do you know what your potential customers are likely looking for? You need to make sure you understand the industry and have a good idea of whether or not you can expect to be successful. Unfortunately, some new businesses never really get off the ground because their founders haven’t asked themselves some of these very important questions and further, they may not be properly prepared to address the answers.
Ty: With a background in finance and commercial banking, do you think many early-stage startup CEOs know enough about that side of the business?
Lucretia: No, I don’t think they do. Many people don’t start a business because they’re really excited about the financial side of running a company, but to be successful, they need to be more engaged and have an understanding in that part of the business. It’s every bit as important, sometimes even more important, to have a complete understanding of the business financials—particularly when you need capital and are sitting down in front of a loan officer looking for a loan.
Ty: What do you do to help business owners get better acquainted with this part of running a business?
Lucretia: We offer counseling and no or low-cost training and information about basic accounting practices—how to create, read, and understand some of the basic financial reports and teach our clients how to interpret what those reports say about a business. It’s not a reasonable expectation to assume that everyone understands this stuff without training. We see many business owners, some which have even owned a business for several years, still managing their receipts out of a shoebox. They don’t realize how much this handicaps their ability to build a healthy and sustainable business.
Ty: Would your advice be different for a company that has a few years under their belt?
Lucretia: Maybe a little, but I would definitely include much of the advice I’ve shared above.
Ty: What would be different?
Lucretia: Many of the businesses you are asking about come to us because they want to take their businesses to the next level. They are anticipating growth, so I feel like our job in those instances is to help them understand what that means. Wanting to grow and having the capacity to grow don’t automatically fit hand-in-hand. Sometimes successful companies want to take a bigger bite out of the market, but don’t have the resources they need to sustain the level of growth it could require.
For example, do they have the capital to grow? Do they have access to capital to facilitate growth if they don’t? Do they have the people, or the manpower, to accommodate their growth ambitions?
Looking at the answers to these questions will help them create a growth strategy that will help them achieve their goals without throwing them into a negative cash flow tailspin. It will also help them determine whether or not it makes sense to borrow to facilitate growth. While most business owners expect their businesses to grow, it doesn’t just happen.