Overcoming Obstacles: Small Business Development Center helping aspiring entrepreneurs start, sustain new businesses

Makayla Hawkins knows how to train dogs to sit, lay down, heel and obey a variety of other commands, but when it came to entrepreneurial skills, she wasn’t quite sure how to start a business and keep it from rolling over and playing dead.

“It was always a dream of mine, since I was a child, to own some sort of animal sanctuary,” Hawkins said.

That dream eventually turned into a hobby, and then side-line dog boarding, before she went all in with the idea to start a small business — a dog training, boarding and grooming shop — in uptown Jackson called Paw Talk.

Hawkins didn’t worry about appealing to her furry customers [and their owners] but she had concerns in the beginning about how to open Paw Talk – and keep it open.

Based on national statistics, she had good reason to be concerned.

According to the U.S. Small Business Administration, a third of all small businesses established between 1994 and 2020 failed within two years. Just over half (51.1%) shut their doors during the first five years. The 10-year survival rate was 33.7% and only one in four businesses lasted long enough to celebrate their 15-year anniversary.

Hawkins, who worked in a sales position before starting Paw Talk, admits she had some trepidation as she leaped from a “home business” that generated some extra cash on the side to a full-time business venture.

“I was always hopeful, but I’m a skeptical person, and I was just kind of waiting for the other shoe to drop and [thinking] that I’d have to go back and get a ‘regular job’ working for someone else,” she said.

Indeed, the business landscape is full of potential landmines that can spell disaster for would-be entrepreneurs. Tripping any one of them could doom their fledgling businesses. Some of the most common reasons why new businesses are often prone to failure include poor planning, inadequate funding, mismanagement and a lack of market research, to name just a few.

Hawkins’ interest in pet-related services got a boost a few years ago during the COVID-19 pandemic. “When that happened, I had a nice opportunity to try to make extra money on the side and do more pet sitting and it just kind of very quickly evolved,” she said.

But she wasn’t sure how to turn her side business into a bona fide one.

“Just figuring out how to do things legitimately and legally, that was a big challenge,” she explained, adding that “you don’t realize how many boxes there are to check” to open a business and ensure its success.

“I felt that one of the big obstacles for me, especially in the beginning, was the lack of resources in the community for would-be small business owners getting started,” she said. “It’s kind of like you either know or you don’t know.”

Hawkins quickly discovered she didn’t know what she didn’t know, especially when it came to paperwork and details such as incorporation, business insurance, licensing and bookkeeping.

“I got educated on that very quickly. It was eye-opening, and I think a lot of people, unfortunately, learn the hard way when things aren’t done correctly,” she said. “I’m very big on education; I want to research everything before I do something and I’m big on digging into all the corners of what I need to know so I can make educated decisions.”

A Google search led her to the Small Business Development Center [SBDC] at Southeast Missouri State University [SEMO]. The SBDC is a free, confidential business coaching service that provides business advice and support to small businesses which, according to SBDC director Jakob Pallesen, applies to the vast majority of the nation’s businesses.

The U.S. Small Business Administration defines a “small business” as firms that have fewer than 500 employees. “To me – and to most people – that’s a big small business,” Pallesen told B Magazine. “I say if you feel like you’re a small business, you probably are.”

The SBDC at SEMO is part of the university’s division of Economic and Workforce Development and serves a 19-county region of Southeast Missouri. It’s part of a statewide network through the University of Missouri Extension Business Development Program [BDP] designed to help entrepreneurs succeed and grow their businesses by providing advice, business education and other resources. The local SBDC service has been honored as a “Most Innovative SBDC Center” and its online programs were recently recognized among the nation’s best by U.S. News & World Report for 2024.

Originally from Denmark, Pallesen earned a bachelor’s degree in business administration, majoring in integrated marketing communications, followed by an MBA degree, both at Southeast. He holds several business advising and education certifications and was named SBDC director in 2018. He briefly stepped away from the position in 2023 but was reappointed to the post earlier this year.

Hawkins credits Pallesen and the SBDC with helping her create a realistic, achievable plan for Paw Talk. “Jakob has been able to rein me in when I get a little fuzzy with my ideas,” she explained. “I would say ‘Let’s build this and do that’ and he’s like ‘Why don’t we just start a little slower?’”

While it may not be the perfect prescription for all small businesses, the “slow and gradual growth” approach has worked well for Paw Talk, which marked its fourth anniversary in July. Hawkins hired her first full-time employee in March and added another staff member a few weeks ago.

Not only has the payroll grown from one employee (Hawkins) to three, but so has Paw Talk’s need for more space. The business will be moving from South High Street in Jackson to a larger location later this year.

“We’re purchasing an existing building a little bit north of Jackson and completely renovating it into a luxury boarding facility where we’ll be doing boarding, daycare and training all in one location and Jakob has helped me tremendously in the planning and execution of our plans,” she said, crediting the SBDC with helping sharpen her business focus.

Having a clear vision, Pallesen said, is one of the keys to success for entrepreneurs who want to start or grow their business. “It comes down to knowing what your definition of success is,” he said and explained that entrepreneurs should think “honestly and realistically” about their business ideas and how they fill an existing customer need, “which can be incredibly hard.”

Asked what he sees as the biggest mistakes entrepreneurs make that doom their business to failure, Pallesen said there’s no simple answer. “I wish I had a Magic 8 Ball answer to that so we could resolve it easily,” he said.

“Sometimes the small business owner doesn’t have the right network around them [such as] mentors, coaches and other professional resources aren’t there in a way that they might have been,” Pallesen said. “Sometimes it’s a lack of research or not knowing the market. Sometimes it’s in the product category [and] some businesses fail because of the financials.”

And then some businesses fail due to factors beyond their control. Case in point, Pallesen said, was a small business owner “who was on the right track and then out of the blue something unexpected happened and that put them in a crunch. Could we have predicted it? No, not really. Could they have been more conservative with their cash? Yes, but then, maybe the unexpected thing would not have happened, and everybody would have said ‘Well, why didn’t you invest more in the first place?’”

The bottom line, according to Pallesen, is that there’s no way to eliminate all risk, but there are things an entrepreneur considering a new business venture can do to help mitigate the risk and prepare for some of the things that can go wrong.

“Normally, what I do is sit down with the individual [who wants to start a business] and the first questions I have are ‘Why do you want to start this business, what do you want to get out of it, and how does it fit into your world and your future plans?’” Pallesen said. “I ask those questions because it helps me get a sense of what this person is thinking. I also need to know if the client wants to make it a full-time job and make a living on the business or if it’s going to be a side business.”

Depending on the specifics of the business, Pallesen said he and the prospective business owner/operator develop a game plan to open the business and give it the best chance to succeed. “We try to narrow down what we can help with the most and what’s going to move the needle in the right direction,” he explained.

So is this a good time to start a small business?

“That’s a good question,” according to Pallesen. “The simple answer is, it depends. It depends on what type of business. It depends on the person and, in particular, it often depends on that person’s situation – their plans for the future, their wants and needs out of life, both in the near future and the long term, as well as their mindset to dive into a business startup.”

Economic conditions in today’s business environment also pose a challenge.

“If you’re starting something that requires more capital upfront, interest rates are still high, so we also discuss upfront costs which, for obvious reasons, have gotten more expensive and that barrier makes it a little harder for many would-be entrepreneurs because some banks are certainly a little more conservative in their lending practices,” Pallesen pointed out.

Although he’s highly trained and has years of business development experience, Pallesen says he doesn’t “have all the answers” and that if anyone did “they would probably be very wealthy.” On those occasions when a client needs additional expertise, Pallesen can collaborate with other business advisors throughout the statewide business development network. He also works closely with SBDC counselor Julie Estes who works out of the Farmington Chamber of Commerce office.

In addition to one-on-one client counseling, the SBDC at SEMO hosts a variety of free workshops and seminars throughout the year which are open to anyone interested in sharpening their business acumen. More information about those programs and the SBDC, in general, can be found at semo.edu/economic-workforce/business-development or by emailing Pallesen, at [email protected].

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