Michael Hinkelman: Startup suggestions from Wharton Center leader

Therese Flaherty leads the Wharton Small Business Development Center.
Therese Flaherty leads the Wharton Small Business Development Center. (Michael Hinkelman / Daily News Staff)
Posted: November 21, 2012

T HERESE FLAHERTY, 62, of Center City, a former professor at Stanford and at Harvard, has led the University of Pennsylvania's Wharton Small Business Development Center for 10 years. The center is one of 18 in Pennsylvania that provide free consulting services to entrepreneurs starting for-profit ventures and educational workshops that charge a nominal fee. These centers are funded by both the state and federal governments.

Q: What does the WSBDC do?

A: We help businesses start, grow and prosper. We work with more than 800 businesses a year, about half of which are in the city.

Q: Do some businesses have a better shot at becoming successful than others?

A: Some businesses are harder to do than others, so we'll work with everybody-manufacturers, retailers, information technology people, biotech. Success is whatever the owner's goals are. As long as you're able to support your lifestyle and not feeling bad and nervous about it all the time, it's a good business.

Q: What factors distinguish successful start-ups from those that don't succeed?

A: The businesses that ultimately succeed never succeed in the form in which [the owners] thought they would. They have to adapt. We've looked at people who started businesses and were still in business five years later. One-third were still in business, but those that got help from SBDC had a 75- to 80-percent success ratio.

Q: Do some businesses adjust better than others?

A: Most likely to fail are restaurants. They need consulting more than anybody. If you're in services or consulting, if somebody didn't buy your service yesterday, you change it today. But if you're in a restaurant, and you put a lot of money into your venue, you can't move.

Q: Is access to capital a problem for entrepreneurs here?

A: It's a different story with venture capital than with bank capital. We usually say looking for financing is Step 5, not Step 1.

Q: You mentioned access to venture and bank capital. Is one easier to get than the other?

A: It depends on the kind of business you're in. And we usually say don't take money you don't need. The best money is money you don't have to borrow or equity you don't have to sell. There are ways to bootstrap.

Q: What are the trends you're seeing here with start-ups?

A: We probably get 40 to 50 new entrepreneurs every month at our first-step workshops. These are people who have a business idea. There is something in them that says, "I want to start a business." Most are at the stage of exploring their personal commitment. We can't tell who will make it.

Email: hinkelm@phillynews.com

" @MHinkelman


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