As COVID-19 continued to spread beyond 2020, so did the entrepreneurial spirit. According to the U.S. Census Bureau, Florida led the country in new business formations between January 2021 and January 2022, accounting for nearly 12% of them.

“People had time to think about the aspect of starting their own business,” says William “Bill” Robertson, chair of SCORE Southwest Florida, a nonprofit organization fostering small business success through mentoring and education. “They had time to do the due diligence and realize if it was something they could move forward with.”

Some new ventures only moved forward so far. In Florida, the three-year survival rate for companies that started in 2020 and 2021 was the fourth worst in the country, according to a study by Capital on Tap.

The lingering effects of the pandemic and Hurricane Ian could be considered culprits, but area business experts see a bright future for startups today. “People find a way to succeed here in Florida. The rate of survival is increasing right now,” says Luis Vargas, business consultant at the Florida Small Business Development Center at Florida Gulf Coast University. “People are willing to take more risks.”

The better acquainted entrepreneurs are with today’s business challenges, the more chance they have to succeed.

Finding Funding

“Money is always an issue, always,” Vargas says. New businesses may be competing with established businesses still managing the effects of the hurricane.

“The money that is available has been pretty well drawn off on reconstruction. It’s not that new money isn’t there but, basically, [banks] want to see a two-year history and financials because they don’t know you,” Robertson says.

Financial institutions are also responding to economic fluctuations. “They’re looking in two different directions: inflation and recession,” Robertson says. “It’s not an easy decision for them, so they’re a little more cautious right now.”

He suggests considering credit unions. “If it’s a community bank you’ve done business with, you might find a more friendly approach in regard to answering your questions and feasibility of what you’re about to do,” he says.

But entrepreneurs need to come prepared if asking for money. “Most banks—for whatever dollar amount you may be looking for—look for you to have not less than 20% of the money,” Robertson says. “They want a fairly decent credit rating, to know you’re in good standing as far as the IRS is concerned and [have] paid all your back taxes.”

And they’ll want to know precisely how the borrower intends to use the money. That’s where a thorough business plan comes in.

Mapping It Out

“To start a business, you need to have a dream,” Vargas says, “and [entrepreneurs] have to have a business plan because that’s part of the dream.”

A thorough business plan explains the venture and how it will operate and grow. “If you have a plan, you know where you’re going. If you know what the details are and if you know what the costs are, it doesn’t matter what you build on top of it, but that’s where it all starts,” Robertson says.

Other Considerations

Korrie O’Donnell, electrician and owner of Sound Electric in St. James City, used SCORE’s help to craft a business plan and opened her business in May 2022 with no outside funding.

“The biggest hurdle for me was getting licensed here in the state of Florida,” she says, adding that information was hard to come by. “If you need something, the biggest piece of advice I could say [to entrepreneurs] is don’t forget to reach out to all kinds of different avenues. First, try to come up with the answers on your own, but if you’re hung up on something, don’t be embarrassed to ask the question.”

O’Donnell suggests ways to find answers are plentiful, and they include mentorships and networking opportunities. “I feel like there’s so much growth here in Southwest Florida. If you have a dream, this is the place to watch it be executed.”

Questions to answer in your business plan

■ What is the cost of the operation space? Is it a rental or a house?

■ What does inventory look like?

■ How much inventory will be carried regularly?

■ Are employees needed?

■ Who is doing the books?

■ What other costs are factored in? (Examples: quarterly Florida sales and business tax)

“You need to know what you’re talking about” when seeking funding, Robertson says. “Pare it down to bullet points as the elevator pitch—what’s really important, what they’re going to glean from this that really helps them answer the question of, ‘Does this make sense?’”