Once you open your business in Arizona, maximizing profits is the goal, and failure is not an option. But, uncontrollable conditions and changes may make the difference between a windfall and a failure. Examples of these conditions can include:
- Economic conditions
- Seasonal advantages and disadvantages
- Political factors
The goal of an entrepreneur is to make money when the conditions are in your favor and when conditions are unfavorable. This article will focus on three tips for aspiring entrepreneurs in Arizona to stay on course no matter the circumstances.
1. Don’t Be Afraid to Ask for Help
Many organizations in Arizona will provide business assistance and counseling if you seek them out. In addition, these organizations have the resources to help you start, operate, and expand your business. Some helpful organizations include:
- Arizona Commerce Authority (ACA)
- Small Business Administration (SBA)
- Arizona Small Business Development Center Network
- Score Arizona
- Microbusiness Advancement Center
These sources can help you find contacts, provide workshops for business education, and help you find financing resources. You can also access mentors — active or retired business people — who offer free business counseling.
2. Grow Your Business by Networking
As an aspiring entrepreneur, you may not know many people who can help grow your business. However, by networking, you can meet potential clients. In addition, you can meet suitable suppliers or vendors who will supply your company with parts or services that will help expand your business.
A great way to find these contacts is to put yourself out there by joining and participating in groups. Some groups you can join are:
- The Chamber of Commerce
- Associations that gather members for the industry you’re in — for example, the American Society of Interior Designers
- Business advocacy organizations like the Arizona Association for Economic Development (AAED)
- Business networking organizations, such as NetworkingPhoenix
3. Know Your Credit Funding Options
Every aspiring entrepreneur will need capital to fund their business. You can use your savings, credit cards, family and friends’ investments, or even a home equity loan. However, you may have to find credit elsewhere if you need more than your resources can offer. This is where small business loans come in.
Let’s explore credit funding options from traditional and non-traditional lenders.
Traditional Lenders or SBA Lenders
Commercial banks that are SBA lenders will offer SBA 7(a) loans and SBAExpress loans for businesses. The SBA 7(a) loan, which you can apply for up to $5 million, will help in the following ways:
- Purchase land, building, equipment, and fixtures
- Use for working capital, inventory, business acquisitions, startups, and refinancing
- Expand, renovate, or build new construction
You can also apply for an SBAExpress loan, for a maximum amount of $350,000. You can use this loan as a revolving working capital line of credit.
However, commercial banks, including SBA lenders, will require substantial collateral, such as real estate, equipment, marketable securities, or home equity. These lenders also need good credit and other safeguards before approving the loan. The lender may even apply to the SBA for a guarantee before approval. The guaranty means that the SBA assures the lender that they will repay the loan if it defaults.
These lenders will take on more risk than banks and, because of this, will charge higher interest rates. They don’t require physical collateral like real estate but will take accounts receivables, customer contracts, and purchase orders as collateral.
Go Forth and Grow Your Business in Good Times and Bad
Knowing that it is possible to grow your business in both favorable and unfavorable conditions should give you the confidence to set your business plans in motion.
Remember, you don’t have to know everything about operating a business. Plenty of free resources can answer any questions, from marketing to funding, which will put you on course to following your dreams as an entrepreneur.