United States Department of Agriculture 4Rural Information Center

Starting a Small Business

Contents

Image: Quilt Business

The source for the image on the right is a USDA photo by Ken Hammond. Online: http://www.usda.gov/oc/photo/96cs2245.htm

Introduction

Starting a small business offers rewards and challenges that attract thousands of new entrepreneurs each year. Owning a business for many entrepreneurs is the American dream that allows them the opportunity to be their own boss, earn money for themselves, work flexible hours, work at home, and work at something they enjoy. However, with the rewards, come the challenges and more than 50 percent of all new businesses fail in the first five years of existence. Most businessmen and bankers agree that the main reasons for the high failure rate is the lack of experience, business and financial planning, and management skills. Those taking on a new business venture must begin by developing sound business and marketing plans to guide them through the initial start-up years. They must possess and display strong management skills and have the ability to convince potential lenders to finance their business venture. They will need to research the type of business they intend to start, the feasibility of starting the business, the best locations to ensure a successful outcome, and more.

This resource guide contains links to full-text resources and guides about issues to consider before starting a business, how to start a business and develop business and marketing plans. It also contains information on funding sources, training resources, local technical assistance contacts and business information, and more.

The Rural Information Center has additional resources for small businesses:

  • Business Resources Page, http://ric.nal.usda.gov/nal_display/index.php?info_center=5&tax_level=2&tax_subject=211&topic_id=1152
  • Promoting Tourism in Rural America: http://www.nal.usda.gov/ric/ricpubs/tourism.html
  • Small Farm Funding Resources: http://www.nal.usda.gov/ric/ricpubs/small_farm_funding.htm
  • Starting a Child Care Center: http://www.nal.usda.gov/ric/ricpubs/rural_child_care.htm

    This resource guide was prepared by Patricia LaCaille John, December 2005.
    Last Modified December, 2009

    Issues to Consider Before Starting a Business

    l. Check-List for Going into Business. Washington, DC: U.S. Small Business Administration, n.d. 22 p. http://www.sba.gov/idc/groups/public/documents/sba_homepage/pub_mp12.pdf

    2. “Considering Self-Employment: What to Think About Before Starting a Business.” George Silvestri. Occupational Outlook Quarterly, 43, no. 2 (1999): 15-23. http://www.bls.gov/opub/ooq/1999/summer/contents.htm

    3. Evaluating a Rural Enterprise: Marketing and Business Guide. Preston Sullivan, Lane Greer. Fayetteville, AR, ATTRA, 2002. 12 p. http://attra.ncat.org/attra-pub/evalrural.html

    4. Financial Difficulties of Small Businesses and Reasons for Their Failure. Teresa A. Sullivan, Elizabeth Warren, Jay Westbrook. SBA-95-0403. Austin, University of Texas, 1998. 44 p. http://www.sba.gov/ADVO/research/rs188tot.pdf

    5. Home-Based Business... Is It For Me? Kathleen Tweeten, Dale Zetocha. EB-44. Fargo, North Dakota State University Extension Service. 1999. 12 p. http://www.ext.nodak.edu/extpubs/yf/leaddev/eb44w.htm

    6. Home-Based Business... Is It For Me? (continued). EB-44. Fargo, North Dakota State University Extension Service, 1999. 14 p. http://www.ext.nodak.edu/extpubs/yf/leaddev/eb44-3.htm

    7. Preparation for Planning a Business Venture. Carter McNamara. Minneapolis, MN: Free Management Library, 1999. 9 p. http://www.managementhelp.org/strt_org/prep.htm

    8. “Providing a Home for Start-Ups.” Carl Hoffman. Appalachia (January–April 2001): 4 p. http://www.arc.gov/index.do?nodeId=600

    9. Starting a Business in Your Home: Weighing the Pros and Cons. Jim McConnon. Bulletin 4190. Orono, University of Maine Cooperative Extension, n.d., 4 p. http://www.umext.maine.edu/onlinepubs/htmpubs/4190.htm

    10. Starting a Home Business. Bulletin 3007. Orono, University of Maine Cooperative Extension, n.d. 6 p. http://www.umext.maine.edu/onlinepubs/htmpubs/3007.htm

    11. Ten Frequently Asked Questions for Micro and Home-Based Business Start-Up. Glenn Muskie. T-9005. Stillwater, OK: Oklahoma State University Cooperative Extension, n.d., 4 p. http://pods.dasnr.okstate.edu/docushare/dsweb/Get/Document-2496/T-9005web.pdf

    12. Thinking About Going Into Business? Little Rock: Arkansas Small Business Development Center, n.d., 12 p. http://asbdc.ualr.edu/bizfacts/1001.asp

    Business Startup Planning Guides and Toolkits

    1. Business Development Toolkit. Kalispell, MT: Flathead Regional Business Center. Ml http://wsd.dli.mt.gov/local/kalispell/bdkv7/index.html

    2. Business Toolbox. Washington, DC: SCORE Association. http://www.score.org/business_toolbox.html

    3. The Facts About . . .Starting a Small Business. Washington, DC: U.S. Small Business Administration, 2002. 16 p. http://www.sba.gov/idc/groups/public/documents/tx_lubbock/sba_023416.pdf

    4. Frequently Asked Advertising Questions: A Guide for Small Business. Washington, DC: Federal Trade Commission. http://www.ftc.gov/bcp/edu/pubs/business/adv/bus35.shtm

    5. Information for Small Businesses. Washington, DC: U.S. Securities and Exchange Commission. http://www.sec.gov/info/smallbus.shtml

    6. Information for the Self Employed. Baltimore, MD: Social Security Administration. http://www.socialsecurity.gov/selfemployed.htm

    7. Rural Entrepreneurship and Business Development Resources. Overton: Texas Center for Rural Entrepreneurship. http://www.tcre.org/Default.aspx?tabid=130

    8. Small Business and Self-Employed One-Stop Resource. Washington, DC: Internal Revenue Service. http://www.irs.gov/businesses/small

    9. Small Business Resources and Toolkit. San Antonio, TX: SBDCNET National Information Clearinghouse. http://sbdcnet.org/tools.php

    10. The Small Business Start-Up Guide. 3rd Rev. Ed. Robert Sullivan. Great Falls, VA: Information International, 2000. 361 p. http://www.isquare.com/prologue.cfm

    11. Small Business Startup Guide. Washington, DC: U.S. Small Business Administration. http://www.sba.gov/starting_business/startup/guide.html

    12. Small Business Toolkits. Washington, DC: U.S. Chamber of Commerce Small Business Center. http://www.uschamber.com/sb/toolkits.htm

    13. Starting. Washington, DC: U.S. Department of Commerce, Minority Business Development Agency. http://www.mbda.gov/?section_id=5

    14. Starting a Business: What New Business Owners Need to Know About Federal Taxes. Washington, DC: Internal Revenue Service. http://www.irs.gov/businesses/small/article/0,,id=99336,00.html

    15. Starting and Managing a Business From Your Home. Lynne Waymon. Starting and Managing Series, vol. 102. Washington, DC: U.S. Small Business Administration, 1986. http://www.work-at-home.org/sreport/home-based-businesses/20.htm

    16. Startup Basics. Washington, DC: U.S. Small Business Administration. http://www.sba.gov/smallbusinessplanner/index.html

    17. Steps to Starting a Small Business. Clemson, SC: Frank L. Roddey Small Business Development Center of South Carolina, 2002. 18 p. http://business.clemson.edu/sbdc/steps%20to%20starting%2007012002.pdf

    18. Templates for Your Business. Washington, DC: SCORE Association. http://www.score.org/template_gallery.html

    Developing Business Plans

    1. Business Plan Basics. Washington, DC: U.S. Small Business Administration. http://www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/index.html

    2. The Business Plan for Home-Based Business. Little Rock: Arkansas Small Business Development Center. http://asbdc.ualr.edu/bizfacts/7022.asp

    3. Business Plan Outline. Little Rock: Arkansas Small Business Development Center. http://asbdc.ualr.edu/business-information/1004-business-plan-outline.asp

    4. Business Plan Outline. Catherine A. Brown, Marilyn White. Rev. Missoula: Montana Community Development Corporation, 1997. 19 p. http://www.mtcdc.org/images/stories/documents/business_plan_outline.pdf

    5. Business Plan Preparation: Tools for Writing Business Plans. Stephen Lawrence, Frank Moyes. Boulder, CO: University of Colorado Leeds School of Business. http://leeds-faculty.colorado.edu/moyes/bplan/

    6. Business Plans. San Antonio, TX: SBDCNET National Information Clearinghouse. http://www.sbdcnet.org/SBIC/businessplans.php

    7. Essential Elements of a Good Business Plan. Washington, DC: U.S. Small Business Administration. http://www.sba.gov/managing/strategicplan/guide.html

    8. Plan for Success. Waterloo, IA: University of Northern Iowa Regional Business Center. http://www.uni.edu/rbc/basics/plan.html

    Marketing Strategies and Plans

    1. Advertising and Marketing: Sample Marketing Plans. San Antonio, TX: SBDCNET National Information Clearinghouse. http://sbdcnet.org/SBIC/marketing.php

    2. Home-Based Business -- Market Your Product. Linda Benedict. MP596. Columbia, University of Missouri Extension, 1993. 4 p. http://muextension.missouri.edu/explore/miscpubs/mp0596.htm

    3. How to Create a Marketing Plan. Kalispell, Montana Department of Labor and Industry, Flathead Regional Business Center, 2000? 15 p. http://wsd.dli.mt.gov/local/kalispell/bdkv7/pdf/createmp.pdf

    4. Market and Sell. Washington, DC: U.S. Small Business Administration http://www.sba.gov/smallbusinessplanner/manage/MarketandSell/index.html

    5. Marketing Basics. Washington, DC: U.S. Small Business Administration. http://www.sba.gov/smallbusinessplanner/manage/marketandprice/SERV_MARKBASICS.html

    6. Marketing Plans. Washington, DC: Business.gov. http://www.sba.gov/smallbusinessplanner/manage/marketandprice/SERV_MARKETINGPLANS.html

    Examples of Small Business Startups

    1. The Art of Creating a Goat Cheese Business: A North Central Initiative Small Farm Profitability Case Study. Carol Doeden, Marilyn Schlake. Lincoln, UNL Center for Applied Rural Innovation, 2001. 12 p. http://agmarketing.extension.psu.edu/begfrmrs/OptStratSmlFrms/FrmDivstrat/Goatcheese10_05.pdf

    2. Beginning a Bed and Breakfast in Virginia. Charlotte A. Reed, and others. Publication 310-002. Blacksburg, Virginia Tech Cooperative Extension, 1998. 34 p. http://srdc.msstate.edu/02value/entrepreneurship/va/bedandbreakfast.pdf

    3. Business Issues for People in the Arts and Crafts. Managing Your Finances. Austin K. Pryor. Ann Arbor, MI: The Entrepreneur Network, n.d. 4 p. http://tenonline.org/sref/pdf/ap06.pdf

    4. The Cooperative Approach to Crafts. R. Wade Binion, Gerald Ely. Cooperative Information Report, 33. Washington, DC: U.S. Department of Agriculture, Rural Business-Cooperative Service, 2000. 35 p. http://www.rurdev.usda.gov/rbs/pub/cir33.pdf

    5. Developing a New Co-Owned Agricultural Business: How Do We Start a Value-Added Firm? David M. Saxowsky, David G. Kraenzel. EC-1137. Fargo, North Dakota State University Extension Service, 1997. 13 p. http://www.ext.nodak.edu/extpubs/agecon/market/ec1137w.htm

    6. Food Business in New Mexico. Nancy C. Flores, Jay Lillywhite. Guide E-510. Las Cruces, New Mexico State University Cooperative Extension, 2005. 12 p. http://cahe.nmsu.edu/pubs/_e/E-510.pdf

    7. How to Start a Quality Child Care Business. MP-29. Washington, DC: U.S. Small Business Administration, 1987? 69 p. http://www.sba.gov/idc/groups/public/documents/sba_homepage/pub_mp29.pdf

    8. Starting a Food Business. P.H. Schmutz, and others. HGIC 3861. Clemson, SC: Clemson University Extension, 2000. 7 p. http://www.clemson.edu/extension/hgic/food/food_safety/business/hgic3861.html

    9. Starting A Food Processing Business? What You Should Know Before You Get Started. Jean Olds Weese, Tim Roberts, Ronald Dawsey. HE-753. Auburn, Alabama Cooperative Extension System, 1998. 8 p. http://www.aces.edu/pubs/docs/H/HE-0753/

    10. Starting a Greenhouse Business. Revised. Paul A. Thomas, William A. Thomas. Athens: University of Georgia Cooperative Extension Service, 1999. 24 p. http://pubs.caes.uga.edu/caespubs/pubs/PDF/b1134.pdf

    11. Starting a Greenhouse Business—A Commercial Growers Guide. Alan B. Stevens, and others. MF 1157. Manhattan, Kansas State University Cooperative Extension Service, 1994. 19 p. http://www.ksre.ksu.edu/library/hort2/mf1157.pdf

    12. Starting Your Own Wine Business. W.C. Morris. Second Version. PB1688. Knoxville, University of Tennessee Agricultural Extension Service, 2004. 50 p. http://www.utextension.utk.edu/publications/pbfiles/PB1688.pdf

    Business Finance Guides

    1. The Credit Process: A Guide for Small Business Owners. New York: Federal Reserve Bank of New York, n.d. 18 p. http://www.newyorkfed.org/education/addpub/credit.html

    2. Financing for the Small Business. FM-14. Washington, DC: U.S. Small Business Administration, n.d. 31 p. http://www.sba.gov/idc/groups/public/documents/sba_homepage/pub_fm14.pdf

    3. A Venture Capital Primer for Small Business. LaRue Tone Hosmer. FM-5. Washington, DC: U.S. Small Business Administration, n.d. 12 p. http://www.sba.gov/idc/groups/public/documents/sba_homepage/pub_fm5.pdf

    4. What Do Lenders Really Need To Grant Small-Business Loans? Little Rock: Arkansas Small Business Development Center. http://asbdc.ualr.edu/bizfacts/509.asp

    Funding and Program Assistance

    Local Resources

    Federal-State-Private Partnership: According to the U.S. Small Business Administration (SBA) banks, firm owners, and finance companies provide most of the credit sources to small businesses nationwide. Banks provide more than 80 percent of lending in the credit line market and more than 50 percent in other markets, such as commercial mortgages and equipment. Through the SBA and U.S. Department of Agriculture (USDA), programs have been set up at the state and local level to assist in getting new businesses started and expanding existing ones.

    While the SBA provides numerous loan programs for small businesses, it does not offer grants to start or expand small businesses. There are very few federal or state grants available to assist small businesses. The grants SBA offers are generally for organizations that provide small business management, technical, or financial assistance. For more information see:

  • Federal Grant Resources. Washington, DC: U.S. Small Business Administration. http://www.sba.gov/services/financialassistance/grants/index.html
  • "Free Money" Isn't Free: Explore All Options for Business Funding. Washington, DC: SCORE. http://www.score.org/newsroom_2005_funding.html
  • Funny Money: Claims of "Free" Government Funding for Entrepreneurs are No Laughing Matter: Washington, DC: SCORE, http://www.score.org/free_money.html

    SBA and USDA Authorized Commercial Lenders: Both SBA and USDA offer loan programs to assist small businesses in rural areas; however, they act primarily as guarantors of loans made to small businesses by authorized commercial lenders such as banks and financial institutions, community development organizations, and micro-lending institutions. Therefore, start your funding search by contacting the local bank and the closest SBA and USDA Rural Development offices (SBA and USDA contact information in the Federal Resources section below) for information and assistance.

    Locate Local Lenders, by State: Small Business and Micro Business Lending in the United States (annual reports), see Part Two: Directory of Top-ranking U.S. Small and Micro Business Lenders -- (identify the top lenders in each stat using both the Call Report and CRA Data): http://www.sba.gov/advo/research/lending.html

    Venture Capital Resources

    1. Active Capital: http://activecapital.org/ assists local businesses connect with private capital, 877-264-3579, Locate Private Capital Sources, by State http://activecapital.org/nation

    2. Community Development Venture Capital Alliance: http://www.cdvca.org/

    3. National Association of Investment Companies: http://www.naicvc.com/

    4. National Association of Seed and Venture Capital Funds: http://www.nasvf.org/

    State Resources

    Most states have business programs to assist and promote small business development within the state. State development agencies may offer direct small business grants and other types of financial assistance designed to encourage and assist entrepreneurs in starting or expand a small business. Most states have developed state specific business startup guides. If you cannot locate a specific state guide, see SBA guides for each state, Small Business Resource for Starting and Expanding Entrepreneurs (some are available in Spanish): http://www.sbaguides.com/ Locate the state resources by checking the state economic development agency web sites or state home page.

  • State Economic Development and Commerce Departments Home Pages: http://www.eda.gov/Resources/StateLinks.xml - National Association of State Development Agencies
  • State Home Pages: http://www.dph.state.ct.us/DPH_Main/Health_Links/states.htm

    Federal Resources

    Business.gov
    Business.gov is the U.S. Government's official website for small businesses. Business.gov provides access to Federal, state, and local information that helps business owners successfully start and operate while staying compliant with laws and regulations. Business.gov is managed as a partnership among 22 Federal government agencies. This partnership, known as Business Gateway, began as an e-government initiative in 2004 to help small businesses comply with government regulations, and discover government programs that help them start and manage their operations. http://www.business.gov/

    The U.S. Small Business Administration (SBA) is the largest source of long-term small business financing in the nation. The U.S. Department of Agriculture (USDA) is responsible for rural development nationwide and is committed to helping improve the economy of rural America. Both USDA and SBA promote economic development by guaranteeing loans that banks and other community financial institutions make to small businesses. Most SBA and USDA loan proceeds may be used for working capital, machinery and equipment, furniture and fixtures, land and buildings, leasehold improvements, and certain types of debt refinancing.

    USDA and SBA finance jointly many projects to promote economic development and job creation in rural areas through investment and venture capital programs. One such example is the joint USDA-SBA program, the Rural Business Investment Program (RBIP). USDA funds RBIP and SBA are authorized to enable venture capital companies to offer access to capital for rural enterprises. RBIP allows newly formed venture capital investment companies to leverage private capital funds with government financial assistance: http://www.sba.gov/aboutsba/sbaprograms/inv/inv_new_rural_business_program.html

    Use SBA’s RBIP Mapping Tool to determine if your business location qualifies as rural: http://map20.sba.gov/RBIP/init.asp

  • U.S. Department of Agriculture Rural Business-Cooperative Services (RBS) http://www.rurdev.usda.gov/rbs/
    USDA works in partnership with the private sector and the community-based organizations to provide financial assistance and business planning. The financial resources are often leveraged with those of other public and private credit source lenders to meet business and credit needs in under-served areas. Depending on the program, recipients may include individuals, corporations, partnerships, cooperatives, public bodies, nonprofit corporations, Indian tribes, and private companies.
  • U.S. Small Business Administration, http://www.sba.gov/
    SBA exists to aid, counsel, assist, and protect the interest of small business. Through the SBA, many programs have been set up at the state and local level to assist in getting new businesses started and expanding existing ones. SBA offers numerous loan programs to assist small businesses in its capacity as a guarantor of loans made by authorized commercial lenders such as banks and financial institutions, community development organizations, and micro-lending institutions.
    For program information, business advice, technical assistance, and loan assistance, contact the following:

    Financing Your Business: The Basics: http://www.sba.gov/services/financialassistance/basics/index.html

    SBA Major Business Loan Programs. http://www.sba.gov/services/financialassistance/sbaloantopics/index.html

  • Basic 7(a) Loan Program. http://www.sba.gov/services/financialassistance/7alenderprograms/index.html -- SBA's most used business loan program
    • Locate Local Lenders, by State: Small Business and Micro Business Lending in the United States (annual reports), see Part Two: Directory of Top-ranking U.S. Small and Micro Business Lenders (identify the top lenders in each stat using both the Call Report and CRA Data) http://www.sba.gov/advo/research/lending.html
  • National Association of Government Guaranteed Lenders: http://www.naggl.org/ source of technical information for SBA 7(a) program
  • Micro-Loans: http://www.sba.gov/services/financialassistance/sbaloantopics/microloans/index.html -- provides short-term loans of up to $35,000
  • Locate SBA Services, by State: http://www.sba.gov/localresources/index.html
  • Certified Development Company (CDC) 504 Loan Program: http://www.sba.gov/services/financialassistance/sbaloantopics/cdc504/index.html -- provides long-term, fixed-rate financing to acquire real estate or machinery or equipment for expansion or modernization. A CDC is a nonprofit corporation set up to contribute to the economic development of the community. CDCs work with the SBA and private-sector lenders to provide financing to small businesses. There are about 270 CDCs nationwide.
  • Prequalification Loan Program: http://www.sba.gov/services/financialassistance/sbaloantopics/prequalification/index.html -- uses intermediary organizations to assist prospective borrowers in developing viable loan application packages and securing loans. This program targets low income borrowers, disabled business owners, new and emerging businesses, veterans, exporters, rural and specialized industries.

  • Small Business Investment Companies (SBICs) provide venture capital to small independent businesses, both new and already established with their own capital and with funds borrowed at favorable rates through the Federal Government
  • SBA 8(a) Business Development. http://www.sba.gov/8abd/-- offers a broad scope of assistance to socially and economically disadvantaged firms including access to government contracting.
  • Small Business Innovative Research and Small Business Technology Transfer Programs
    The Small Business Innovative Research (SBIR) and the Small Business Technology Transfer (STTR) Programs were set up to meet business research and development needs.. Currently twelve federal agencies offer financial or technical assistance through these programs for inventors with a new idea they want to produce and market. The agencies include the U.S. Department of Agriculture, U. S. Department of Commerce, U.S. Department of Defense, U.S. Department of Education, U.S. Department of Energy, U.S. Department of Health and Human Services, U.S. Department of Homeland Security, U.S. Department of Transportation, U.S. Environmental Protection Agency, U.S. Small Business Administration, National Aeronautics and Space Administration, and the National Science Foundation. For more information on these SBIR programs check the SBIR Gateway Agency links below and use the department program that best fits the new idea or product (e.g. U.S. Department of Agriculture for agricultural related ideas, U.S. Department of Energy for energy related ideas, etc.)

    Technical Assistance and Training

    Technical Assistance

    Business Incubators, by State: http://www.nbia.org/links_to_member_incubators/, National Business Incubator Association

    Buying a Franchise, SBA: http://www.sba.gov/smallbusinessplanner/start/buyafranchise/index.html

    Franchising.Org: http://www.franchising.org/

    Microenterprise Associations, by State: http://www.microenterpriseworks.org/index.asp?bid=282

    Minority and Native American Business Development Centers, by Region (Minority Business Development Agency): http://www.mbda.gov/?section_id=2&bucket_id=151&content_id=2264

    Native American Resources, SBA: http://www.sba.gov/naa/

    SBA Online Library: http://www.sba.gov/tools/resourcelibrary/index.html

    SCORE Learning Center: http://www.score.org/learning_center.html

    Small Business Development Center National Information Clearinghouse (SBDCNET): http://www.sbdcnet.org/

    Small Business Guide to FDA: http://www.fda.gov/ora/fed_state/Small_Business/sb_guide/default.htm

    Trade Information Center, 1-800-USA-TRADE, U.S. Department of Commerce: http://www.export.gov/exportbasics/eg_main_017483.asp

    Veterans Business Resources, SBA: http://www.sba.gov/vets/

    Women Business Resources, SBA: http://www.sba.gov/services/specialaudiences/women/index.html

    U.S. Internal Revenue Service Local Offices, by State: http://www.irs.gov/localcontacts/index.html

    U.S. Department of Labor, State Small Business Offices, by State: http://www.dol.gov/osbp/statemap.htm

    Training

    SBA’s Free Online Courses: http://www.sba.gov/training/courses.html

    Local Business Information

    Business.gov http://www.business.gov/

    EconomicIndicators.Gov: http://www.economicindicators.gov/

    Small Business Advisor’s State Specific Information, Information International: http://www.isquare.com/states/states.cfm

    Small Business Resource for Starting and Expanding Entrepreneurs (business guides for each state from the U.S. Small Business Administration; some available in Spanish): http://www.sbaguides.com/

    State Economic Profiles: http://www.sba.gov/advo/research/profiles

    U.S. Census Bureau State and County QuickFacts: http://quickfacts.census.gov/qfd

    U.S. Chamber of Commerce State Resources: http://www.uschamber.com/issues/state/default

    USDA, Rural Information Center
    National Agricultural Library
    10301 Baltimore Ave., Room 132
    Beltsville, MD 20705-2351
    ric@ars.usda.gov
    1-800-633-7701