Cash flow 101 board game

MISTY MCELROY HAPPENED UPON HER business idea by accident--it started Out as a school project but snowballed into a business venture. Called The Rock 'n' Roll Camp for Girls, the annual event aims to teach music to girls in a fun way. To date, McElroy has found some success--this year's camp accepted 25 more campers than the previous year. And with workshops led by stars such as Erykah Badu's drummer, Gaye Lynn McKinney, and punk rock band Sleater-Kinney, demand is skyrocketing. The only real snag in the plan is financing.

Because she charges just $50 per camper, McElroy's Rock 'n' Roll Camp, which was formed as a nonprofit (501C-3) corporation, needs a steady stream of capital to keep running. Other issues: securing the right facility to host the yearly camp and finding a way to start a new after-school program. Says McElroy, 33, "It is a logistical nightmare to come into a space and make it work for us." The first camp was held at Portland State University in Oregon; the second took place in a Portland ballroom.

We had a few experts weigh the situation, and here's what they had to say:

* Peggy Outon, founding executive director of the Bayer Center for Non-Profit Management at Robert Morris University in Pittsburgh: "If you can attract people to your [board of directors] who are well-respected and well-known in the community, they help open the door to funding sources." Outon also suggests trying to land contracts from the local Department of Health and Human Services because it will often pay for summer camps, especially those that focus on low-income kids.

"Build relationships with program officers at foundations that are interested in the development of girls, because it's a get-to-know-you kind of a game," says Outon. "There are 1.5 million nonprofits in the United States, so [McElroy is] going into a very crowded and highly competitive field. She's got to work to distinguish [her nonprofit from others]." For instance, she could recruit high-profile celebrities to write a letter of support, perform a benefit concert, or donate some of the proceeds from their concerts.

* Ken Goldberg, assistant professor of management of the Center for Entrepreneurship at National University in La Jolla, California: "An active and viable board of directors is critical in maintaining sustainability and getting funding. As far as getting [a facility], the big issue is networking and [making] contacts in her local area" How could McElroy get a property for free or an inexpensive lease? Goldberg suggests networking in the Portland area and contacting local public agencies. Nearby cities and counties might have some land or office space to donate, and she may be able to sign a lease for a minimal investment.

"[McElroy also] needs to diversify her funding sources," he says. That means approaching corporate donors, individual donors, government agencies and other potential sources. Goldberg also recommends checking out the Alliance for Nonprofit Management (www.allianceonline.org), where she can conduct a geographical search online and get answers to specific questions, such as how to fund the operational costs of a nonprofit.

What does McElroy think of all this advice? "I have pretty much followed [Outon's advice]," she says. "I've gotten some fairly big rockers to spread the word at their concerts, and I try to [have an information table at] as many big shows here in Portland as I can," explains McElroy. "And yes, the board is more crucial than I ever realized. It's becoming more active--we've already [had more meetings] in the past two weeks than we've had in months."

She also plans to look into a government subsidy and contact public agencies. And how about that Web site? "[I know] it will be very helpful," McElroy says. "I'll share [the idea] with the board at our next meeting."

Words to the Wise

GLEAN PEARLS OF WISDOM FROM THIS ENTREPRENEUR'S EXPERIENCE.

DALE BATHUM, 38-YEAR-OLD FOUNDER of Bite Golf, a golf shoe manufacturer and retailer in Preston, Washington, knows a thing or two about running a successful business. A 2000 Entrepreneur young millionaire, he expects year-end sales to hit $8 million. Here, he reflects on his smartest start-up move--and biggest blunder:

What was your biggest start-up success?

Bathum: I put a lot of effort into [building] a strong team early on. That's what carried us through--if it was just me and I didn't have a strong team, I don't think we would have survived. So [I would recommend] putting together a really strong team [internally] and [externally] of accountants and lawyers and a board of advisors.

What was your biggest start-up failure?

Bathum: Not having enough upfront funding at the beginning, so we needed to go out and raise money when the business was just getting underway. The second [biggest mistake] was inventory mismanagement. We buy and sell shoes--we overproduced some shoes that didn't sell [very well]. So we had to discount them, and that really killed our profits.

Have a Little Class

SMALL-BUSINESS NEWBIES CAN LEARN THE ROPES ONLINE.

NEED A CRASH COURSE IN ENTREPREneurship? Check out the online classroom at the SBA Web site (www.sba.gov/classroom), where you can learn all about the ins and outs of starting and running your own business. According to James O'Connor, director of the Office of e-Small Business at the SBA, "The [class] is comprehensive and easy to use."

This free, interactive class offers specific sections ranging from basic start-up information--such as deciding what kind of business to launch--to detailed lessons on accounting and cash flow. More than just a series of articles, the class reads like an interesting textbook--complete with charts and quizzes at the end of each section.

O'Connor also notes that the class has already received rave reviews from organizations such as SCORE and small-business schools across the nation. Formed as a joint effort with My Own Business Inc. (www.myownbusiness.org), a nonprofit entrepreneurial education organization in Los Angeles, the 12-session class will soon feature chat auditoriums and interaction between students and business experts.

This online class is pioneering what O'Connor hopes will be a big step forward for entrepreneurial education at the SBA. "We hope to create an [entire] e-learning portal," he says. For more information, call (800) U-ASK-SBA.

COPYRIGHT 2002 Entrepreneur Media, Inc.
COPYRIGHT 2003 Gale Group