PhillyInc: Wharton Small Business Development Center's advice? Be clever

In the eight years that Therese Flaherty has been running the Wharton Small Business Development Center, she's seen boom and bust.

The center's client base has remained pretty consistent at about 600 businesses annually, but their questions and challenges have changed since the brutal recession.

Money, of course, is on the minds of nearly every businessperson, Flaherty said. When they hear that the SBDC has no money to lend to them, that ends the conversation for some of them.

That's because in the go-go days of the previous decade, it was quite common for nearly any "bankable" business to receive three or four loan offers from area banks in the space of an afternoon, she said.

Now, fewer small businesses are bankable, and it takes longer to get a loan approval for those that are.

Clients are getting loan offers, she said. But where once the offers were very similar, now they often contain very different terms and rates.

Small-business loans are simply riskier for any bank to make, Flaherty said. Many business owners have seen their credit scores get cut. Sales are not increasing for many small businesses, and their balance sheets aren't as strong as they were three years ago.

So Flaherty and her team encourage entrepreneurs to do what comes naturally for many of them: Be clever. "Can you get credit from suppliers or customers? Can you buy the used piece of equipment instead of the shiny new one?" she said.

During the current lean times, she said she had seen a lot more bootstrapping going on. And some businesses are growing just fine, especially if they have products that can cut costs for their customers. Cost-cutting never goes out of style, it seems.

Many entrepreneurs who find their way to the SBDC say they're committed to pushing their business to a higher level. Perhaps dazzled by the Wharton name, they want Flaherty and her staff to tell them how to do it.

"We can't," she said. "What we can do is help you ask the right questions and act as a sounding board so you will feel more confident in your decisions."

If that doesn't sound valuable, consider one thing that hasn't changed through good times and bad: It's lonely being an entrepreneur. With so much creativity, stubbornness, and commitment going into starting a business from scratch, it's quite easy to get off track.