5 things experts say you need to know

While businesses across the country struggled to keep their doors open amid the economic impacts of COVID-19, Brian Roberts was doing something different.

He had an idea to open a business selling products made by Black creators. Last November, he opened The Black Pantry, then a pop-up shop run out of a trailer. Shifting pandemic regulations thwarted his plan of opening a permanent location right away, but he started the business out of the trailer anyway.

“I think for me to be resilient and still figure out a way, that was intriguing to a lot of people,” Roberts said, “that despite the pandemic I was going to find a way to make this happen.”

In 2020, Kansas City issued 3,031 new business licenses — a 16{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} decrease from 3,618 the year before, according to data provided by the city. But the number of business licenses issued in Jackson and Johnson counties increased 23{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} and 10{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} respectively in 2020, according to the Census Bureau’s Business Formation Statistics.

Local resources for small businesses saw a surge in calls, indicating that more people were searching out professional help. From April to October, the University of Missouri-Kansas City Innovation Center’s entrepreneur hotline had a 176{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} increase in calls asking for assistance, according to the UMKC Innovation Center Impact Report. Of those calls, the center reported a 367{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} increase in the number of people who reported starting a business.

There were plenty of reasons to start a business during the pandemic. Mass layoffs and unemployment meant people were looking for jobs; time stuck at home meant more opportunities to plan; economic uncertainty meant some people began looking for ways to monetize hobbies and side hustles.

For Cori Smith, she knew it was time to start her business, BLK + BRWN bookstore, when her day job began discussing a return-to-work plan and she wanted more flexibility than working from the office allowed.

“A number of people that are coming to us are saying things like they really want to make sure that they’ve got a good side gig, they’ve always wanted to start their own business and they realize that maybe the job market is uncertain,” said Karen Feolsch, chair of local business mentoring resource SCORE Kansas City. “I personally haven’t heard them say they’re tired of the corporate rat race or anything like that, but I’ve heard people say things like they want to be able to control their own destiny.”

Cori Smith sat in her new bookstore, BLK + BRWN, back in June. “I always was surrounded by Black and brown literature. And so I always was just very interested in Black books, Black authors, stories about people that look like me,” she said.

For those looking to do the same, Smith and Roberts have similar advice: Be practical and be cautious, but also be creative with your ideas and take the chances you think will work.

“Always have an extremely big vision, but also make sure you’re taking the smallest, smartest steps as quickly as possible,” Roberts said. “I think a lot of people bite off a little bit more than what they’re ready for.”

So, what are the steps to take in starting a business?

Do the research, have a plan

Every business starts the same way: with an idea. The question is whether or not it’s a feasible one.

“How do you know if your idea is a good business opportunity? If people are willing to buy it,” reads KCSourceLink’s website. “Before you bet the ranch on your idea, take the time to research who will buy your product or service and what competition you will face.”

Research is essential in determining key aspects of the business, from prices to sourcing to location. While it can be easy to get swept up in a grand plan, it’s important to start with the basics.

“We tend to kind of go into things. . . very passionate, but make sure that you’re also taking care of that business side so that your passion has a foundation that will help move you forward and help your business survive,” said Sarah Mote, marketing director for KCSourceLink.

What an entrepreneur learns from this research can then help formulate a business plan. Details can vary from this original plan, like Roberts beginning with a pop-up shop instead of a brick-and-mortar store, but it can act as a guide throughout the process.

Getting registered

If the original idea still holds up, it’s time to establish the business through registration, licenses and permits.

This process involves more specific questions about the structure of the business. How many people are running it? What protections does it need? What sort of taxes will it require? Is it a sole proprietorship, a partnership, an LLC or something else?

Once those questions are answered, the business must be registered with either the Missouri or Kansas secretary of state.

Specifics will depend on the business. There are more forms to fill out in order to hire employees, and there may be certain permits required by the city or county. Some businesses may also need additional permits, like food or liquor licenses.

The pandemic made registering a business and keeping good records more important than ever. Paycheck Protection Program loans and other grants that helped keep businesses afloat during the pandemic often required detailed documents.

“A lot of folks, they didn’t know what business ownership was. A lot of folks didn’t understand what that really meant,” said Daniel Smith, co-founder of The Porter House KC. “And then, when PPP came around and they saw folks are going out here and getting dollars to sustain and keep their doors open, they sort of understood, ‘OK, that’s what it means, this is a big part of what I should be doing.’”

Location, location, location

Finding the right location for BLK + BRWN was almost an accident for Cori Smith. She happened to drive past a space for rent that checked all the boxes for her: size, neighborhood, general aesthetic.

It’s not always that easy, though. When Roberts decided to open a more permanent location for The Black Pantry, he had to make tough decisions on where it should be.

“I think for me the challenge, especially having a Black business, is where do I open up? Do I go into the community where the Black population is? Or do I do what is best for business and go to where the money is?” Roberts said. “So, it’s like, where do I choose to put my business?”

He and Cori Smith both found their “sweet spots,” where they’re near both Black communities and commerce.

But if location is an issue, Foelsch suggested considering other options such as starting all-virtual. In Roberts’ case, the pop-up shop helped him find his place in the community first.

“I definitely tell people — I just had this conversation yesterday — don’t start with the idea of buying a building,” Foelsch said. “Boy, is that a big investment, and you really need to be established and be sure you’ve got the right location.”

Finding customers

One of the first things Cori Smith did when starting BLK + BRWN was reserve Twitter and Instagram handles that would be easy to find.

“I don’t think people realize how important that is,” she said.

Social media can be essential marketing in driving customers to a shop. It has become even more important in the wake of the pandemic.

“You saw these businesses really struggle to get online and be able to offer services in some type of virtual capacity,” Mote said. “And so now we’re seeing startups who are making that part of their business model out of the gate, saying, ‘OK, if I’m going to start this, I also need to have some type of online component.’”

‘Enjoy it’

If all of that seems a little overwhelming, there’s no shame in getting help. Many local resources offer classes and mentoring services. Connections in the business community can also help guide a new business owner.

“Entrepreneurship is tough. Business ownership is tough,” Daniel Smith said. “And organizations like ours and those others are out here to assist in kind of mitigating the challenges.”

Even then, he said, failure of some sort is inevitable.

“Failure is going to happen. People want to avoid failure as much as possible, and I understand. It doesn’t feel good to fail, right?” he said. “But as an entrepreneur, as a small business owner, you have to get into a space where you understand that failures are gonna happen, and you have to try and live in it.”

But Cori Smith said what surprised her most about starting her business was how much easier it was than she anticipated. And, above all, she said it’s important to care about the business.

“Enjoy it. Enjoy whatever it is,” she said. “Money is going to come, but it can’t be the thing that dictates your business necessarily, because without the passion, you’re not able to really contribute and create a vision for your business that you would really hold to, and that’s where you connect with people.”

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