5-Minute MBA is a new Sounds Good segment that will answer questions on finances, staffing, marketing, pricing, prioritizing, and more. In the first installment of 5-Minute MBA, Asia Burnett speaks to Chris Wooldridge, director of Economic and Entrepreneurial Development at Murray State University, and Wesley Bolin, owner of Bolin Books, about the basic building blocks of starting a new small business.
"When we work with our clients, we always like to start with a business plan," Wooldridge begins. "In a business plan, you're laying out your operational manual. What is it you sell, your products and services? Who your competitors are, where, exactly, your location is going to be, and how can you get your product or service to market? We talk about who the customers are from a demographic, psychographic, and geographic standpoint. All those things change the way a business owner may approach their business. How are they going to advertise to who they've identified? What motivates those folks to buy a product or service?"
Bolin explains that he started his business plan by looking at pre-existing businesses in the Murray community. "When I was trying to think if our community could sustain a bookstore like this, I realized there was already an example. We have sustained an incredible community record store, Terrapin Station, for 40 years. So, if we're the type of community where people will wait in line, 70 people at 5 a.m., for Record Store Day, they are also going to be people who would patronize a community bookstore."
"I looked for people who loved books," Bolin continues. "I looked for members of my family and my friend group that already cared about these things and then asked them advice. I asked them what they thought a store like this could look like, what they would want it to serve, what kind of hours it would have. We put out a survey to people following us on social media and asked about their favorite authors and genres and when they would need it to be open and then used all that information for our plan."
Next, Wooldridge says, it's time to look at the operations. "How do we generate revenue?" He says. "How do we track inventory? How do we manage people? Management and personnel — who are the folks that are helping the business owner manage that from a banking, law, accounting, or risk standpoint? Finding who those teams are — mentors and advisors and folks that are going to help that business run — and the personnel who are going to be involved in the day-to-day taking orders, meeting the public, returning calls. Having the right people around the table is so important because the education, experience, and skillsets of those individuals that are helping to run that business are super critical. Sometimes not having the right people in the business or having the wrong people in the business can really determine how that business is from a success standpoint."
For Bolin, he turned to his wife, Whitney Bolin. "She set up our LLC, found us a CPA, and she took care of a lot of those detailed driven things that are very tough for me sometimes. It's really important to have both people because I can't imagine what it'd be like to only have one kind or the other kind."
Wooldridge agrees, saying it's helpful to compartmentalize the business in the planning stages. "For a small business owner, typically what we find is that the business owner does what they do really well, whether it's banking or doing haircuts. It's the second part of the business that needs a little attention. How do I operate that? How do I do what I do very well on a commercial level or on a level that generates me revenue? How do I manage the revenue, the people, demands of operating that business — the business side as opposed to the trade side or product/service delivery side. It's so important to marry those up."
"Who buys my stuff? The basic question," Wooldridge continues. "Who do I see in my shop? Does it sell morning pastries, and I'm kind of a morning shop, and by the end of the day, I'm done, or do I sell throughout the day because, as a bakery, I make breads, lunches, dinners, maybe I have coffee on the side. Depending on what products and services are sold, we start working through who's actually going to come in and give you money for this. And as basic as that sounds, sometimes it's, 'I sell to everybody.' Very few businesses sell to everybody. Some businesses sell for very small sectors of the population, some are very broad. Some sell to different sectors during different parts of the day. Really having the client think through, 'who's going to give me money for my product or service,' is the starting point."
"If you have a passion to make something happen, if you feel like there's a need, then you should probably go for it," Bolin concludes. "Now, I went for it after 12 years of selling books online, working at a public and university library, being a high school teacher, and reading about 100 books a year for 30 years. So, don't skimp on the research, the planning. Talk to people who you care about and who care about you. If there's something you want to exist that no one else has done, maybe you should be the one to do it."
