One of the many wonderful things about building a career in Washington, DC, is the opportunity to work with nationally and internationally recognized experts in so many fields.
Everett Bellamy is one of those experts. As a lawyer in practice and dean at Georgetown University Law Center from 1980 to 2010, he has taught a course on small business law and entrepreneurship for 27 years. During that time, he has had a hand in creating and supporting many small businesses and startups, including Bellamy Fernandez + Arnold, an all-minority and women-owned company that provides government relations and legal consulting services.
Given our obvious interest in small business, we talked with Everett about his thoughts on starting and running a company in today’s business climate. I especially appreciated his closing advice, which applies to my decision to start DCC: "If you have a passion for something, take that chance. Plan carefully, but go do it."
You are an expert in small business and entrepreneurship. How did you develop this specialty?
Being a dean at a school like Georgetown makes you somewhat of a public figure, particularly since I’m African-American. As a result, I was often contacted by people asking for advice, mainly about how to get into law school, but I also got a lot of questions from small business owners looking for legal counsel. This wasn’t easy at the time, since law schools for decades focused on larger corporations and had given very little attention to small businesses. As more and more people began opening businesses in the 1980s and 1990s and came to me for advice, I thought, “We don’t teach this and we should.” So I developed my own course, and I’ve adjusted it over the years.
What were the major trends in this field over the last 30 years?
One of the major trends that I’ve seen over the last 30 years is technology. It’s not only made it possible for anyone with great ideas to create a business, but it drove down the cost. You can use a laptop or a smartphone to do amazing things with your business, which reduces the need to hire people that you can’t afford.
Also, to find a company that offers its employees a pension now is a rarity. Those days are over, so people began to think, “What’s going to happen to me as I age? I need to start planning for myself.” This gave people incentive to take that bold step and start a business.
What is the current situation for small business owners and startups? Positives? Negatives?
The current climate is positive for small business owners and start-ups in terms of resources on the federal, state and local levels, with the Small Business Administration and other similar government support programs. I think there’s a lot of support now that wasn’t there 30 years ago.
One trend has been this whole crowdfunding development, that is, funding a venture by raising money from a large number of people, which can now be done over the Internet. Congress passed a bill in 2012 to encourage crowdfunding, and the Securities and Exchange Commission now regulates it. But the fear there is fraud. How can we keep fraud to a minimum online, when anyone can raise money for a seemingly legitimate company but run off with the funds without a trace?
However, it’s still hard to get start-up capital or a business loan. Most often, you’re going to still have to put your personal assets on the line when you try and get a loan. Banks are risk-averse because of the recession, so you almost have to prove you don’t need the money in order to get it.
You have a lot of experience with minority-owned start-ups. Could you discuss the particular challenges these businesses face in the current business climate?
Statistics show that the net worth of minorities is much less than the net worth of white people. This makes it much harder to get money and start a business when you attempt to raise capital.
There are programs offered by the federal, state and local governments that make funds available to minority-owned companies. But to be considered you have to have achieved a certain amount of success in terms of customers, revenues, and growth, and you have to demonstrate your ability to compete on a contract if you’re going to bid on it. There’s a great amount of opportunity there, but still a lot of challenges in minority-owned startups.
What is the most important advice you give to entrepreneurs?
Stick to your business plan carefully. Ask yourself or a focus group: Is there a need for what it is you’re going to offer? Would someone buy it? And at what price? Think it through carefully.
Expect the unexpected. Things aren’t going to happen according to your timeline and it’s going to cost more than you originally projected. You need to plan for worst-case scenarios so you’re prepared for when the inevitable happens.
Finally, you have to put things in writing. You don’t need a 40-page business plan, but you need to put something in writing to articulate what it is you want to achieve. Put agreements in writing; handshakes don’t count.
Any final thoughts?
If you have a passion for something, take that chance. Plan carefully, but go do it.
NOTE: This interview was edited for length.