Andy Heintzelman: Welcome to the 2013 News-Item Business Roundtable. This will again be the centerpiece of our annual Business Review edition, and we have a really interesting mix of business people here.

Henry Nyce: I want to thank you for being here; thank you for taking the time. We can't have a local business review without input from you folks, so again thank you very much for taking the time to come in today.

Heintzelman: Two years ago we did a theme of "manufacturing survivors." In searching for a theme this year, we started thinking about the many businesses that start up locally. Some of them make it and some of them don't. For everybody here, you have made it, but you've started a business in a very difficult time. We thought we could help the community understand what it takes to do this, and help other small businesses, by explaining what it takes and where to get help and so forth. That's what brought us together. I'd like to go around the table and have all of you introduce yourselves.

Skip Foulke: I have the Hard Coal Cafe in Mount Carmel.

Gino Sinopoli: My wife and I own GiGi's Gifts and Home Decor.

Maureen Hauck: I'm the assistant director with the Bucknell Small Business Development Center.

Russ Moroz: I own R.S.M. Construction, specializing in kitchen and baths, general in-home projects.

Geno Welsh: I am co-owner of Brewser's SportsGrille in Coal Township.

John Reichard: I am the director of the finance department at SEDA-COG.

Heintzelman: I'm Andy Heintzelman. In addition to Henry, also with us is Justin Strawser, staff writer, and intern Stephanie Geise. She's a student at LCCC and is completing her journalism and media degree. … Tell us briefly when you started your business, and when you had that "a-ha" moment.

Foulke: We are going to be here a year next month, around the 23rd. I always hear about people opening restaurants; probably not one of the best options around. One of my finance guys says a dangerous place to put your money is in a restaurant business (laughter). My wife and I, we took a shot. We bought a building and rebuilt it. I think up here it's all about pricing, food costs.

Heintzelman: Have you been in business before? Did you have any experience?

Foulke: I had a restaurant in Delaware; I was partners with a guy down there.

Heintzelman: How long of a process from the time you bought the building until you opened?

Foulke: About a year and a half, just to remodel the building. Then we went through the flood, lost a lot of stuff; that set us back about three months.

Heintzelman: Were you a native of this area?

Foulke: My father was from up here. Members of my family were all miners, so when the mines closed, they all moved down to Philly. I migrated back. I'm a retired truck driver.

Sinopoli: Next month with be three full years since we opened. It was kind of an idea we had many years before. I have a retail background, so I knew the retail business, but it still presents challenges, depending where you're at and whatnot. I actually worked with Maureen, came to her with a business plan, and we discussed some things. There were some things I was unsure about so I wanted to bounce it off somebody, so she was a great asset in that respect. But it was years in the making, really; probably two to three years before we even opened that we really start thinking about it, and then for sure a year before we opened, when we really put our foot to the pedal. We were so sure we were going to open a business and a gift shop and we thought we could find the right niches and diversify our product line to the point before we even had a building, and knew where we were going to be, I had a basement full of inventory. I mean it turned out good, and if it wouldn't have, I would have had a big ole yard sale (laughter).

Moroz: I'm basically in business now one year. I've been doing it a little bit longer, probably almost two years, but I basically started out with the flood. As it was mentioned before by Andy, my story was in The News-Item because my business grew out of a tragedy. I renovated four or five cottages down along Roaring Creek, right across from Knoebels Grove. Basically I started on mine, and then the neighbors said, "Can you do mine, can you do mine," and that's what happened - it snowballed. That's how I started, and it was basically all them saying, "You're nuts; you should be in business with all you know and all you can do. You're perfect for it." I just sat down one day and the same thing like Gino, I have the knowledge, and I have all the tools; I have everything, that's it.

Heintzelman: You had never been in business before?

Moroz: I was in business years ago with my father, who owned Stan-Wood Products in Kulpmont. He was a custom kitchen cabinet manufacturer for 55 years; my brother owns the business now. I can relate to Paul because I re-did the entire building Hard Coal Café. I put the bar in in the

'70s. When I walked in your place (recently), I was like, wow, totally different from what I left it at in the '70s.

Heintzelman: That's interesting. So you had some business experience; you were around a small business with your parents?

Moroz: I was around a small business when I worked with my father. I also worked 35 years for Fleetwood. I was quality-control inspector, and that helps a lot. When you get into business, quality control, learn as much as you can about that. It's a big help.

Heintzelman: OK, now Geno. I know your story kind of builds off of a family business, but it does take its own turn.

Welsh: I was the first one in my family to move away to college, I studied business, accounting; my passion was accounting, My business partner, Dan, who was going to school to be a teacher - he went to Lourdes, I went to Shamokin - and to make a long story short, I met him at college (King's). (After college) I could either go to a big city, become an accountant, work for a bank, or move back home, because I'm a momma's boy (laughter). I love food (more laughter), so, actually the conversation between me and Dan before we moved back home, wouldn't it be neat to bring, not a big city feel, but something this area has never seen before back to the area? And he was going to come home to be a teacher, and I was doing accounting and sitting at a desk crunching numbers 10 hours a day. I was like, I need interaction; I need to talk to people. I'm a people person. So I called Dan up, and I was like, let's start a business plan, let's go into business. My mom and dad owned the Bonanza and their franchise was running out and I was talking to my dad and he was like, "I don't believe in the brand anymore, I'm probably not going to re-sign my contract, so we are going to have a building." I said all right, I can make this happen, and I called Dan up. Many hours after school and work days, we put the business plan together. Maureen was very instrumental in getting us started. … So we got the business plan developed. We got some financing, but we were under financed because it was a tough time to open up a business. We made it work somehow. Here we are, we are approaching five years now and it's probably taken 10 years off my life already (laughter).

Heintzelman: You (Welsh) may have hinted at it already, but we'll start with you: What was the biggest challenge for you, if you had to single out one area or one thing that sticks out in your mind?

Welsh: The biggest challenge was changing the theme of the restaurant, because the area was so used to a family, all-you-can-eat-type atmosphere. With steak and the way commodity and food was going, the rising price of it, I don't know how that would have lasted. I don't think they would have been around anyway because of the economy. So we developed a model of good food, good service and friendly, family atmosphere, and it seemed to click right away.

Heintzelman: I have to say, there was a lot of concern in the community, "Oh, we're losing Bonanza," and the buffet that everybody liked. A lot of senior citizens were known to go over there for lunch and it was always a busy place. … So it takes some bravery to say, "We're going to try this instead."

Welsh: It was a risk, needless to say. The restaurant industry - I don't wish it upon anybody. Every day you go to work, you deal with something different; that's what I love about it. You can have your day planned out …

Heintzelman: Is that also what you hate about it?

Welsh: Half an hour into your day, that one little old curve gets thrown at you, your whole day is changed.

Heintzelman: So you had the benefit of having an established place, in a sense, but you also had the challenge of putting a whole new face on it?

Welsh: As soon as that orange placard went on the building, when we were getting a liquor license, all the rumors started, "Oh, it's just going to be another bar." Dan and I said we don't want it to be just another bar; we want it to be a place that serves alcohol with your dinner, and that's what we put out there first when we opened. I'll be honest with you, 18 percent of our business is alcohol-related, which is minimal. Our model is working how we wanted it to work.

Nyce: Geno, it seems like you came out of the gate fast, and it stayed that way.

Welsh: Yeah. Being young, you can be more aggressive. I've read many cases in college that, if you want to do something, do it young, because the chances are you can recover if you fail. So we are just keeping that momentum going, keeping it fresh, always marketing,

Nyce: And you do a great job. I was there Tuesday night and it was full. There are places that have a difficult time getting customers in on a Monday or Tuesday night.

Welsh: My key is to not be an absent owner. People respect you more if you are there a majority of the time. You get a lot more work out of (employees), too. If they see me mopping the floor, sweeping the floor - I'm not above that.

Heintzelman: Russ, what was your biggest obstacle or what remains your biggest challenge on operating a new business?

Moroz: When I started, I had a time frame, because all of these cottages that I renovated needed to be completed by the following May, because they all get rented.

Heintzelman: That was money for your customers.

Moroz: Yes. The problem I had was, these people are renting these places, now you really have to watch code, and really be in line with everything because you're actually taking people's safety into account. So you have to make sure you do everything right, and you don't want one of your customers calling you saying, "OK, I have something wrong with the electrical or a problem with the plumbing." That was the big issue, to get them up and running in that time frame. The other thing you have is the weather. You're going in along the creek down there; when it gets snowed in, nobody goes in there. Luckily, we had a mild winter where I could work right through the winter.

Heintzelman: So you start this business, which is a risk and a challenge on its own, but were you forced, then, to hire some people to help you, because of the time frame you were under?

Moroz: I had actually some of the owners of the cottages help. So I'm not going to show you how to do everything, but you can actually help me carry stuff, go here, go there. It's little things like that, and if it got over my head, I know enough people in the construction business to turn around and say, "Look, I'm under the gun here. I need somebody that can put something up for me quick, do the outside work."

Heintzelman: Were you able to complete everything by May?

Moroz: Everything was up and running, In fact, we came down with the very last inspection one week before the renter was due, so we were under the gun. Everything got inspected; everything was OK.

Heintzelman: When you say inspection, you mean township?

Moroz: Township code, mainly.

Heintzelman: So maybe your biggest challenge was regulation. I bet you guys could all tell stories about that.

Welsh: The challenge of the world today is regulations, control.

Heintzelman: So, Gino, you had a basement full of merchandise, but what was the biggest obstacle for you, or what remains your biggest challenge?

Sinopoli: Initially, there was the obstacle of finding the right place. We looked at many places, including in downtown Shamokin, and there were certain advantages and disadvantages. We wanted to be bought into the community with whatever business endeavor we took on, be part of the community. With that respect, we thought downtown might be a good spot. However, as we researched the buildings and what was available, it really became obvious that it wasn't going to work out that way, so we entertained The Plaza at Coal Township. Actually, prior to even looking downtown, we had looked at the plaza just to get a feel for what units were available, what the rates were, and then really after that search, it became evident that that's probably where we should go, based on shopping habits, location. Sure it's a premium when it comes to the price, so that was a challenge initially. Also, in that day and age - you're talking at the end of 2009 - with the economy … you're going to open a retail gift shop? Really, everything you sell - there's nothing that people need, essentially.

Heintzelman: You don't want to make that your slogan (laughter).

Sinopoli: Absolutely not. So, those were challenges. As far as coming up with financing, we ended up really financing it ourselves, creatively. We did some things and it worked out,

Heintzelman: But you were attracted to retail from your past. How about your wife? Were there some interests there, like the crafts?

Sinopoli: She's just a people person. She likes the interaction with the people With my retail background, I felt like I knew that business well enough, even in a challenging area that we are in, to be able to say we can make this work. … Another challenge was, as you develop a business plan, and you talk to people as you're getting geared up, you always heard the same thing: well, it's just going to be another place and it's going to be hard to survive and are you sure you want to do it? And that's all true, and still true to this day, but we were just determined. We had the right plan, determination, dedication. It's an obstacle, but, then again, we have the foundation in place, to survive over the long haul.

Heintzelman: So you probably could have spent a lot less overall for a downtown building compared to monthly lease space at a brand new shopping center that people were wondering if it could survive on its own? That's risky. How did the proximity to Walmart play into your decision?

Sinopoli: You can look at it two different ways. It's good because it drives traffic. Because people are going to Walmart, naturally, they migrate over to the other side of the road. We have found out that a lot of people come to this Walmart from out of the area, and because they end up in our store, we ask how do you get here? We have people coming from Ashland, Shenandoah, Mahanoy City. We ask why would you walk into GiGi's? They're like, well, we come to the Walmart here because we don't like the one that's in Saint Clair. It's the perception it's maybe not as clean or whatever, or they like the layout here better, so they actually come here and do their shopping. We have a lot of customers from Schuylkill County. Walmart is actually benefitting us. The other side of that is, as we develop our products, we have to be very careful what we bring in. Walmart is big; they do much of their own outsourcing. Sometimes we deal with some of the same (companies), so before we do any buying, we have an idea of what we want. I have to do a little research, because, quite honestly, there are times we we've had the same products, and you know they're 40 percent cheaper at Walmart. That's just the way it is, so you learn.

Heintzelman: Does your research actually involve walking down the aisles at Walmart?

Sinopoli: I travel with my full-time job and I'm in a lot of different areas, and I have a lot of evening time, and what else do you do? You go out, you check the local area and check out the stores. But

with Walmart, it's certainly the traffic; I think I would take the traffic over the downside.

Heintzelman: What about the plaza?

Sinopoli: The plaza itself, I think it holds its own. We are fortune enough to be right next to the liquor store. I will tell you that if there's one business that doesn't get hit by a recession as far as I can see it's the liquor business (laughter). People go there to get their wine and spirits and they migrate over (to our store) because they see sports banners in the back, or because it's a woman, she's looking for wine and they tell her we have wine accessories. … You know, the same thing with Walmart, there's the Dollar Tree. Believe it or not, it's amazing what you can get for a dollar, and when you think about that stuff being produced overseas and it's shipped over and transported, and there's still a profit after (charging) a dollar. There are some items like that as well that we have to be careful of; some of our vendors come in and they're selling party goods or whatever, and we can sell that for three bucks, but it's sold for a buck down the street. So there are challenges, certainly, but, again, it's what makes it fun.

Heintzelman: Skip, you've already indicated, you've got to be crazy to get into the restaurant business.

Foulke: Every day is a different challenge. Yesterday I went to work, the first thing I said I'm going to do - I'm going to have a cup of coffee. Needless to say, a hour and 45 minutes later, I got a cup of coffee (laughter). But I'd like to tell you what I like about the everyday business. When we opened up, it was my wife's birthday, so we had a little trial run, and my family was there bartending and we had some food, we had some drinks. The next day we turned the lights on at 6 p.m. and we had 100 people come through the door, until 2 o'clock in the morning. It was amazing, just from people's cell phones and word of mouth. We didn't put any signs out or anything like that. That's what I'm impressed about, so much word of mouth; it really helps the business.

Heintzelman: You guys have a television at every booth and that kind of thing, plus you gutted the place. That's a huge investment.

Foulke: The kitchen was the main investment. That's where all the money is at. It's kind of a shame with the codes and everything. I said to the building inspector, you literally have to spend $50,000 to make french fries or wings. It's not what it use to be.

Heintzelman: You don't get that return on investment easily. That's a lot of potatoes.

Foulke: Geno knows the price of equipment; it's expensive. With the codes, you've got to have it or you can't operate.

Reichard: Do you have to buy new?

Foulke: You can purchase used, but I bought all my stuff new. There are places that sell used equipment, but I wouldn't recommend buying (just anything). If you're going to buy a grill used or something like that, you might be OK.

Heintzelman: While we're on the finance end, maybe, John, you could start out. You've actually worked with some of these folks.

Reichard: Maureen and I collaborate, and I actually had some involvement with Geno's parents and some of their endeavors.

Heintzelman: So what can SEDA-COG do for a small start-up business?

Reichard: I could spend the whole two hours about what SEDA-COG does, but in my department, we are a economic development agency, and we have economic development loan programs for small businesses, including start-ups. We're not a lender of last resort, we're a complementary lender to banks. Where banks may not be able to do everything that small businesses need them to do, we come in and fill some gaps. One impression that people think when they contact SEDA-COG is that there are a lot of grants out there to start businesses. Grants tend to be through the state, and they're very specific on an agenda-driven item, energy efficiency, for example. If you're doing something for that, there may be some grant money, but, in general, there are no grants to start a business. So we can talk about the loan programs. But another main misconception is that we can finance anything. We are still a lender; we have guidelines and regulations that we have to follow like a bank. Now, are we more flexible and lenient on how we lend money? Yes, because the purpose of those funds is to help create jobs, where a bank is making an investment. … I think from an individual looking to start a business, it can be frustrating, because they call up, and they've gone through Maureen and have a business plan and say, "This is what I need." We have to look at that financial projection, and for start-ups, it's hard, because you don't have a baseline to start from. "This is what I think I'm going to do, and I hope to do, but I haven't done it yet," and that's the biggest challenge. So then you have to look at the person's background.

Nyce: When you look at a business plan, is there a disappointment factor that you look at? A pessimistic view of "what if?"

Reichard: Yes, we do some stress-testing on our financials. Well, he thinks he's got the right margin. What happens if (costs are) 10, 20 percent higher? What if the sales come in 25 percent less? Those types of things. If you do a projection and it's already a thin profit margin, then any little slip-up, a delay … We had a company out in Centre County, more of a service type business, catering to tourists, like a bed and breakfast. They were doing renovations to a building, and they had a plan that we're going to open at this time, take advantage of Penn State football. They were delayed by four months and they opened at the worst possible time. They missed the large cash flow for that year and they struggled. … We had a restaurant and we financed it and they were open for a couple months. And we saw firsthand, you have to have the passion for it and be a people person. The woman walked into the bank and said, "Here's the keys. I'm not interested anymore; it's just not for me."

Heintzelman: Maureen, you probably have some stories, too, along those lines. What can your organization do?

Hauck: The Bucknell SBDC is basically an educational resource. Unlike SEDA-COG, we are not a lender, and I'm glad that we are not (laughter). But as an educational resource, we can help people in two different ways. One is with seminars that we run. Those seminars do involve a small charge, but they're a great bargain. The other is the free and confidential, one-on-one consulting that we offer. John and I collaborate a lot; although I can't talk about certain clients with him a lot of times because of our strict confidentiality, if the client says, "OK, SEDA-COG needs information; I'm giving you the permission to talk to them about my financial projection," that's fine. It's up to the client. It's basically that one-on-one work that you do with the client that really helps to educate. What do we need to do with a start-up? What are the things I need to consider when preparing a business plan? And a business plan is just what you said - it's a plan. When you're running particular financial projections, it's anybody's best educated guess. The joy that I had working with Geno - and Gino (laughter) - they did bring a lot experience and background with them. It wasn't that they were jumping into something that they had no idea what they were doing. It was just a lot easier to work with and appreciate the knowledge they brought with them, and practical experience that they brought with them.

Heintzelman: How many businesses does SBDC work with in a year's time?

Hauck: It could be several hundred. In 2012, we helped start probably about 33. Also, we work with existing businesses. Our tag line is, "We help businesses start, grow and prosper." So we don't only work with start-ups, we work with existing businesses that would like to expand. Currently, I can see why there was the lady who says, "Here's the keys." In the last six months, I've been seeing a lot of activity with business executions; somebody has their business up for sale, and the client finds it - "Oh, this is attractive; this is a great deal." Now, if it's a great deal, I'm wondering, why are they closing this business? Why is it up for sale? How did the seller determine the asking price? And it comes down to, he owns a lot of money to the bank, and just wants to pay it off and walk away. Is there real value in that business as far as customer base, as far as hard assets? We understand the bank's position; the bank wants their money back, the lender wants their money back, And they have to have something they can take as collateral.

Nyce: You help them go through their due diligence?

Hauck: As much as we can, but much of the time, we are relying on businesses' tax returns, past performance. We'll sit down with the client and we'll actually say, "OK, we are looking at these past three to five years of tax returns. Do you understand what you're looking at?" We sit down and analyze those and compare those numbers to industry averages. It helps them understand, "Hey, wait; something could be wrong here with the numbers." Some tax returns are good; some are not. You get into creative accounting.

Heintzelman: Do you think it's even tougher to start a business in eastern Northumberland County, or does that lower some of the cost, in fact, to start up a business in this area?

Hauck: Again, working with Geno and Gino, I don't think there was a great advantage for us of costs being cheaper. When we started looking at real estate, I'd say no. Restaurant equipment, when you start looking at (stove) hood costs, and what you have to do for regulations, I'd say no. I'd say there is no clear-cut advantage for that, that it's going to be a whole lot easier to start a business here; maybe even the opposite. What are people looking at for disposable income to go to the restaurant, to go to the gift store? That might just have the opposite effect. I admire people who can start the businesses they do and survive as long as they can.

Reichard: But on the other hand, Skip, to your point about buying patterns and so on, in this area - I grew up in Milton so I'm native, I'm local - and there is that general sense of wanting to support local businesses. Yeah, they will go to the box stores for convenience or sometimes on price, but they still like the mom-and-pop stores, and so I think when they can, they try to support local businesses. Now, again, if they go in and the service is bad, they may not go back, but they at least give it an effort. So I think that maybe one advantage in this area is that local support. I live in Selinsgrove and I still go to Milton to buy my son shoes from a local downtown shoe store, because that's where I went as a kid and I know the owner.

Heintzelman: Do you guys hear stories of that at all?

Sinopoli: I agree that the sentiment is definitely there, the sentiment is there when you talk to people. It's the "buy local," mom and pop. I think more of the reality, though, is, especially in eastern Northumberland County, if the discretionary income isn't there, the intention really isn't there. I meet with a lot of customers, and when I ask them what's important, it's always, service, quality, price. Price is always No. 3 - until your price is 20 or 30 percent different. Then it becomes, price, quality, service. So I agree the sentiment is there, but I think that, in this area, it's more challenging, just because they want to do the right thing by keeping small businesses in business, but it really comes down to price in eastern Northumberland County.

Foulke: I think it's a good place to start a business for a guy with a little bit of cash. What I paid for my building, you can't even buy a liquor license (in New Jersey). For the price you pay for a liquor license, you can buy 20 blocks in Mount Carmel (laughter). For that reason, it's very attractive. Now, with the environment, and finances, it's a little iffy. You've got to have low prices; you're not getting $6 for a beer like you would at the shore; never. So you're going to make less profit for the same effort up here; that's what it amounts to, but you're going to pay less in taxes.

Heintzelman: How many businesses, John, do you help in a year's time, would you say?

Reichard: In any given year, we'll approve 35 to 45 loans. We rely a lot on banks to contact us; probably 75 percent of our business is banks calling attention to us, saying so-and-so stopped in and I met with them and I think the project can benefit from your loan programs. So about 25 are individuals that hear about us either from the SBDC or our website, or the state refers someone, and then we work with them and say, "Do you have a banking relation?" And if not, we give them a group of lenders that we worked with in that area and then it's up to them to make those contacts and then see if any banks are interested.

Heintzelman: You mentioned the examples of helping anything from a rabbit breeding business to a hair salon. Are there any restrictions as to how many people you can help or what business you can't be involved in?

Reichard: The majority of our loan programs are designed for manufacturers, and that was because when those loan programs were set up in the early '80s, the main goal was to get back a manufacturing base in Pennsylvania, to create manufacturing jobs. Obviously, the economy and the types of businesses have changed through the last 30 years, and so we have some that can be used for service and retail beyond manufacturing. Overall, the loans that we've made have been really successful. We don't invest in nonprofits.

Heintzelman: And how about the pot of money? Where does that come from?

Reichard: Three main sources. We have our own revolving loan funds that we got through other economic development agencies, federal agencies to start those revolving loan funds and they've revolved many times over the years. Then there are the state loan programs that we are certified to help small businesses access. And then the third pool of funds comes through the Small Business Administration, the federal small loan program. So it's a combination of local, state and federal, and we can use one or multiple loan programs depending on the need. The other obstacle with us is there's pretty much a minimum loan size that we can get involved in, probably looking at $15,000 to $20,000, and we only play a part of the financing. So if someone calls up and says, "Hey, I need to start a business, I just need to rent or buy office furniture. I need $6,000 to $8,000," it's too small for what we can do. On the other extreme, our one loan program through the SBA can go up to $5 million, so we've been involved in some, maybe not so much in this area, but some $10, $11, $12 million projects. For the SBA, we are statewide, so I'm traveling all over. Tomorrow I'm down in Carlisle, but that was a start-up, ground-up construction hotel, for about $11.5 million. Now this individual has other hotels, so it's not like, "Hey, I want to start this hotel flag." He has multiple hotels; he's very seasoned. So while it's a start-up, he has projections, he has everything down and you know that those projections for that market or demographic area are probably going to be spot-on. I'd say our average loan is probably around $300,000 to $400,000.

Heintzelman: Geno, what did Maureen and SBDC do specifically to help you? How often did you meet and for how long of a period of time? And do you still go to them for advice or are you kind of on your own after that initial part?

Welsh: We went to the bank and I was referred to her, and worked with her and her staff on fine-tuning our business plan.

Heintzelman: The bank referred you to her?

Welsh: Yes. She was very instrumental. We met probably once a week for a good amount of time until we nailed the business plan down, and we finally got it through and approved. To elaborate on what he (Reichard) was saying earlier, being under financed, the first two years of being in business was very stressful, very trying. That's where the 10 years of my life comes in. My mom and dad have been very supportive of me, but I'm the type of independent entrepreneur spirit that wants to do things for myself. I didn't go to my mom and dad and say, "Hey, can you keep writing me a check?" It didn't happen and it won't happen, because my dad said, "You can come work for the business and I'll teach you the ropes, but you wanted to go out on your own. You're going to learn how it is. You're either going to fall on your face and get back up, or you're going to succeed." The first two years, the bank account was tight. Working capital. Our place was always packed, the money was coming in, but there were bills, bills, bills, bills, bills, bills, just to keep up with the inventory. I was right out of college; I didn't have a lot of cash savings. What I was making in my full-time job was going into the business. I was using credit cards to pay my bills at home. Now here we are, four years, almost five years, we have the working capital built up, we have a buffer built up. I'm paying down my credit cards at home. It's common sense. You can't spend more than you bring in.

Heintzelman: With government, you can (laughter).

Welsh: If I kept spending money, I'd be homeless. Nobody's going to write me a blank check. You have to be on top of it every day, every week, every month. I brought "A" in this month, I spend "B," this is what I'm left with, "C." If "C" is negative, I have to make some changes."

Heintzelman: So her advice was focused mostly on the business plan? I guess that's your common help?

Hauck: It's No. 1. A lot of time it occurs because the bank says, "If you're interested in doing this," SEDA-COG says, "Go get a business plan and show us." There's so much a business plan can do. I tell people, "Don't do it for the lender. Do it for yourself." It's the best thing you can do for yourself. Be honest in it. Don't try to feed somebody fluffy phrases.

Reichard: We can read right through it.

Hauck: Yeah. It's got to be for yourself. It is a risk when you're going into business. You've got to honestly take a look at yourself and see if you have the skill-set to make this a successful venture. Do you have the background with education or work history that you can bring to this business and make it successful? Do you understand even what you're selling? I ask people, "Well, what do you sell?" A lot of times, they'll dance around it, and they can't tell me the service or product they're offering. They never put it in words. What do you need for staffing? How are you going to market this? How are you going to let people know you're even in business? It's great that you can start a construction company and renovations, and people found out about it through word of mouth. Same thing with the restaurant. That's fantastic if you can do that, and you have the cash flow, again, to support you. But how are you even going to let people know that you're in business? What's it going to cost you to promote your business? Do you understand your customer base? Do you understand your competition? Yes, of course, you do shop at your competition, Gino would say. I need to know what's out there. I need to know what my customers are willing to pay for. There's a lot of detail that goes into that before we even start to generate numbers. If the written part of the plan is done very well and the research has been compiled, there is at least groundwork to substantiate where those numbers came from. Just as the seasoned hotel owner, you can tell very clearly he does understand what it takes to run a whole operation. You don't need cute things like, "This is my mission statement and I want everyone to be happy to come into my store." You need a good basis for it.

Heintzelman: I would think you (Welsh) went in with a pretty decent plan, just with your background. Were you surprised at the things that were a bit of a reality check when you first sat down with her?

Welsh: I had business planning and business management in college.

Heintzelman: That's what I was thinking. You were probably in pretty good shape.

Welsh: They teach you how to write a business plan, but they don't teach you the real world.

Heintzelman: Plus, the bank recommended you. They felt you maybe needed a better business plan or ...?

Nyce: Tweaking?

Hauck: Some of that tweaking comes because Geno was running around on autopilot and couldn't tell. I see that with a lot of experienced people. They take for granted all their knowledge, and they don't think they need to put down the little details.

Reichard: "It's all up here (pointing to his head)." That's what I get it. "I have it all up here." No, get it down on paper. Think through it. Gino, what you described in starting your business, picking out your location, and all this stuff, pricing your product ... probably before you had any type of business plan, you were doing research. It wasn't just an idea that you wanted to start a business and do this. You carefully looked at location; the pros and cons. More expensive, but maybe more traffic? The type of inventory. It wasn't just gift shops and what you see in a catalogue. "This looks nice, let me just buy this and buy this." You said, "What will sell in this area?" Those types of things, those might have been part of your success, as opposed to others who don't think those small details through.

Heintzelman: In his (Welsh) case, here's a guy coming from a family that operates restaurants, you were re-establishing an established restaurant, if you will, you have a business degree from college. And yet, they still said you need more details in the business plan.

Hauck: He had it all up here. It just needed to be evident on paper.

Welsh: Putting your thoughts and knowledge into words is the challenge. If you know something - not all the best athletes make the best coaches.

Heintzelman: That's a really good analogy.

Welsh: If you don't know how to put into words and teach the people how to become like you, you're just another good athlete.

Reichard: Look at all the athletes. After they retire, they become general managers and their team doesn't do well at all. It's different.

Heintzelman: How about for you (Sinopoli) as far as Bucknell's help with small business development?

Sinopoli: I think it was very beneficial. I don't remember how many times we met. I came in with a business plan and some numbers, and she did a great job in challenging them. Maureen worked in downtown Shamokin in the past (20 years with JC Penney), so she knew. I met with her again before I had a building. I had a business plan and numbers on paper, and we talked about where. That's when she enlightened me to her experience in downtown Shamokin. A lot of the things we talked about, I was feeling. The right one (building) wasn't coming, and we talked about the plaza, and with that is going to come a lot more money. Really, she challenged everything. "Well, why? Did you think it through? You know you're going to have more expenses here." That was great, because, in my mind, I had it all up here. I did have some on paper, but probably not to the detail that was needed.

Heintzelman: You've seen it all from your experience, it sounds like.

Hauck: Probably. I can thank John for a few of those.

Sinopoli: For me, it was a great tool. It was a great resource. From word of mouth through somebody else I talked to who is a proprietor, a friend, they said I should check out Bucknell Small Business Development. That's when I signed up for the First Step workshop.

Heintzelman: The bank didn't refer you in this case.

Sinopoli: Unfortunately for us, we didn't deal with a lot of banking, because, like I said before, when you go to a bank with a business plan, and you tell them it's going to work because you know it's going to work, and they say, "Well, can I have the last three years of tax returns?," I'm not in business. We never even formally really entertained the banks. We talked to different banks in the loan departments, and kind of informally, they said, "This is what you need to have." Especially in 2009, there was no way; I'm not even wasting my time. We got creative on our own. If we're going to make this work, it's going to come from within. We're going to do it ourselves.

Strawser: You were saying creative ways. Can you elaborate?

Sinopoli: Some of it was credit cards, as Geno said. As much as we believed in what we had and what we could do, when you're raising a family and two kids, you're very hesitant on putting up personal collateral. As good as you think your plan is, as bulletproof as it might be, you're still relying on everybody else to come patronize you. Sometimes you can't control that. We did do it that way. It was credit cards. My wife worked a few years in lending, so she built up a small retirement. It was an amount that was the right amount for us, but it wasn't something that, oh boy, if that goes away, we're in trouble 30 years down the round. We basically balanced it out. Is it worth that risk? Will we recover if that went away if we didn't have it? The risk was outweighed. We did find a place on the West Coast via the Internet. They threw in $8,000. That's it.

Heintzelman: That's a risk. Even though you don't necessarily need that (retirement) money down the road, that's a bold step to take a nice chunk of already earned retirement money.

Sinopoli: We weighed it all together, and thought we could succeed. We believed in ourselves to do it. That's why we were able to do it, because we had a couple of other things. It would have been a different story if we would have had to sign our house over. As much as we believed in it, when you have a family, you just have to be careful.

Heintzelman: When did you actually open?

Sinopoli: We opened March 2010.

Heintzelman: After the recession was technically over, but pretty much still in the heart of tough times. How has business been?

Sinopoli: It's been up and down, really. From a personal level, I don't think we're out of the recession, just from what we see. Our most challenging time literally has been the last six months. Overall, generally, I think the plaza does well. There are some days where it's slow, and I'll call my wife and say how's it going, and she tells me this and that, but you go into the parking lot, and there's few cars. It's not anything we're doing. It's in general. Everybody's fighting for the same dollars. In this area, it's a challenge at times. You have to strap it on, and weather the storms, and make sure you're making the right business decisions. You learn. From year one, year two, year three and heading into year four, there are a lot of things I'm doing differently to make sure I compensate for some of those peaks and valleys.

Heintzelman: I wanted to ask each of you if there is a particular mistake you made or really good move you made, something where you said, "Thank God I did it that way" or "I'll never do that again."

Foulke: One of my assets is most of my family works with me. My sister-in-law, my son, my daughter work there.

Heintzelman: That's pretty important to any small business.

Reichard: It doesn't always work out for the best, though. You're lucky. There's been some horror stories of going in with your family.

Foulke: My family's looking out for me, so I get a break from that.

Heintzelman: Do they work full time?

Foulke: Yes.

Heintzelman: And you obviously work there full time. So family helped you out. Russ, anything that strikes you as far as something you would or wouldn't do again?

Moroz: One thing you have to take into consideration is you're in the coal region. With my business, with a specialty of kitchens and bathrooms, you don't walk into somebody's house on Thanksgiving and say, "Hey, I'm going to rip your kitchen apart, and it's going to be apart for about two months." (Buzzer sound.) Red flag. You're out of work. Nobody wants you to do things around holidays. That was the first thing I had to address.

Heintzelman: You think that's specific to the coal region?

Moroz: Most people around here, where do they live? They live in their kitchens. Where does everybody gather? They gather in their kitchens. I could go and rip their living room apart, they probably won't care, but you're not ripping my kitchen table up, this is where we gather.

Heintzelman: Maybe that's like what Gino was describing, the peaks and valleys; you've got to be prepared for that, know that come October, you'll probably slow down.

Moroz: I got to give people a heads-up on that so they know if they're doing a complete kitchen makeover, we're not talking two weeks. It's a month, month and a half down the line. ... My biggest thing is a lot of times I do follow-ups. The very first job that I did, I installed a kitchen counter top, I called the lady to check up. Everything was fine. Two weeks later, she called me back, I was re-doing her bathroom. That was one phone call to ask how everything was (that helped land another job).

Heintzelman: One thing that strikes me, all of these businesses started with somebody's idea, just a moment where you had an idea. "Wow, I can do this." You (Geno) are at college with your friend, and you say, "You know what, we can start a restaurant." At the same time, there's so much more to it, all the details, the business plans, all that. I wanted to ask Maureen, from a business standpoint, people come to you with their ideas - it's really what drives small business and what drives the economy. Everybody has ideas, but ...

Hauck: A lot of times they just don't understand what it takes to run a business. A lot of times, what we'll try to do, first of all, is have them take the time to attend one our First Step Pre-Business workshops, and let them just see in a two-hour session some of the issues they need to start to consider: some of the licenses and regulations, location, take a look at taxes. People who have had the benefit of working for someone else as an employee could take for granted, "I'm getting my health coverage." When that goes away, that's a huge expense they need to incur now for themselves. Many small business owners don't plan for their own retirement, and they just keep going and going and going. There's a trade-off on this. You might get to be your own boss, but there's going to be a trade-off.

Heintzelman: Health care has got to be a huge consideration anymore, just to afford that.

Hauck: It is. We help them think those things through first. To be honest, if we have 20 people in a room attend a pre-business workshop, I may see three come back, because they just did not understand all that was involved. They thought it was pretty simple. I get a place, I get some inventory, I open the door and I'm fine.

Heintzelman: I want to explore the health care situation. Does anyone have a case where you had to give up somebody else paying your health care and, all of a sudden, you were saddled with it?

Moroz: I worked 35 years for Fleetwood, so Fleetwood paid all my health care.

Heintzelman: You didn't pay anything toward it?

Moroz: Toward the end, it was a small contribution. $20 a week. If you're paying $20 a week for health care, that's cheap.

Heintzelman: And now what are you paying what per week, if you care to divulge?

Moroz: Right now, there's a couple zeros added on. It is a big, big step.

Sinopoli: Even today, when I crunch numbers for projections - is there a second location in the future or whatever - I play around with that line item that says health care. If it's coming from somewhere else or if it's coming from us. It's a big number to cover. If your business is sustainable, that's a big number you've got to worry about.

Heintzelman: Russ, you don't employ anybody to the point where you're covering their health care?

Moroz: No. I wouldn't even want to think about that. That's getting into a whole other ballgame.

Heintzelman: John, Maureen or anyone, what else is a big factor when it comes to starting a business?

Reichard: To Maureen's point, and looking back on Gino's experience, the question is, "Why do you want to start your own business?" You have some who may have gone to school, that their education is leading them because they always wanted to own this type of business. Then there are some who maybe went to school for something else, knew of a family business or whatever, and said, "I can put my talents to this type of business." Then you get maybe a third type of category, which I hear from on occasion, especially over the last few years in this economy, is someone got laid off, and can't find a job and they decided, "I'll just start a business." Maybe the same line they were working for, maybe something different. It depends upon the passion of what you want to get involved in. Some of that can be gleaned from a business plan, some just talking to individuals. Are you just looking for alternative employment and since you can't find a job to work for someone, you're going to try starting it on your own? Or do you say, "I've always wanted to do this. I know I can do this. I have the background, the knowledge, the interest to do that. Here's my plan. I thought things through. I'm willing to put the energy and effort into it," as opposed to trying to find an alternative to a monthly paycheck. Starting off on your own, you're going to put in long hours, and you may not get any pay to start off with. To think you're going to start a business so you can get a monthly paycheck, that's not always the right incentive or motivation. It's got to have that - you like what you do, you're good at what you do, and you've done it for a while. You say, "Hey, I'm doing this as a side thing, and people are recommending me. I probably have what it takes to start."

Heintzelman: We also wanted to ask about the impact of technology, whether that's in the equipment you use or social media, or helping track inventory, or whatever it might be. Could someone reflect on how technology has affected your business, good, bad or otherwise?

Sinopoli: From my standpoint, it's not overly technical. However, there are a lot of mom-and-pop shops near the cash register, and that's all they do. I was very adamant with my wife to make sure we have a POS (point of sale) software program in place to track inventory, to build a report of anything we want. We can pull up almost any number we want at any time, try to keep our inventory pretty close to what it is. I think that's important in retail, because I often think back to the days of how it used to be before computers and POS software, and there were more small businesses back in the day, and not having the tools to have your financial position, or inventory position, or what did you sell for that day instead of having a list of prices. Now you have a list of descriptions and everything else.

Heintzelman: You wonder how they managed.

Sinopoli: Yeah. I'm sure they had their own systems, and many were successful at it. From a technology perspective, it's worth its weight in gold to us. As far as the computer and Internet, it does help with advertising and social media.

Reichard: Do you have any online sales from the websites?

Sinopoli: We don't at this point. It's been in progress, or on hold, or whatever you want to call it, for the last two years (laughter). I have some IT things going that I need to figure out; it's how to tie web sales to my POS to make sure my inventory is accurate. I'm notorious for being online late at night and say, "I want that," and I'll go buy it. It's in the middle of the night, and the next morning I get the e-mail saying my order's shipped. We can't do that. If people shop in the middle of the night, and the website inventory is not tied to the POS inventory, and they want this, and they paid for this, and it's in their cart, and then we send them an e-mail the next day, "By the way, we're out of this" (it's not good). It's part of technology that comes with some expenses, because you have to have code created to link those two. That's a big technological challenge for us.

Welsh: Technology has played a huge role in business worldwide, not just here. We have a lot employees and there are a lot of hands in the pot. Technology controls the inventory, like he said, so I can go back there - I haven't been there since this morning - I can go back and see if they sold a bottle of beer, if they sold a hamburger, if they sold a salad. I can pull that up at any time. Growing up back in the day, with my mom and dad's restaurant, they'd take orders by hand. I wouldn't be able to go back there and say, "What'd you sell?"

Heintzelman: If a case of beer went missing (in the old days), you wouldn't necessarily know.

Welsh: And there's so much regulation today, too, for everything like that. You have to have inventory reports monthly if you're paying monthly or quarterly taxes, stuff like that. Technology from the standpoint of a business owner, when it's good, it's good, but when it's not working, it's bad.

Reichard: With a restaurant, you have to deal with the freshness of the food. It's one thing to say you have inventory, but how old is that inventory?

Welsh: All our orders are computerized. It's tied to our inventory.

Sinopoli: The one thing I'll add when he said it's bad, it's bad. Our POS system, two weeks before Thanksgiving, it decided it had enough. I knew it was on the way. I wanted to get through the Christmas holiday, and then deal with it. It didn't work out. We got the new system in place the Wednesday before Thanksgiving. The 10 prior days, was like, wow, we're writing amounts and using a calculator. We had to track it that way for sales tax purposes. When this new system came, it was a nightmare trying to get our inventory tracked. It was much too cumbersome.

Heintzelman: The busiest time of the year.

Sinopoli: Yeah. It's great when it's there and working, but when it fails, woo.

Nyce: I know how you feel (laughter).

Welsh: Our technology has failed, like he said, right around the holidays. I got that blue fatal error on my screen.

Heintzelman: The blue screen of death.

Welsh: Yes. I was like, "Here we go. It's going to be fun tonight."

Heintzelman: That's a perfect lead up. I wanted to wrap up by asking - we talked about a lot of the challenges - but I'm sure each of you have some thoughts on why it's good to be a small businessman today. I'll go around the table. What do you enjoy about having a small business?"

Foulke: I'm so new, maybe I can come back and tell you next year (laughter).

Heintzelman: You haven't found it yet?

Foulke: My family has a job and everybody's working.

Heintzelman: There's something to be said for that. You get to work with them and everybody's employed. Gino?

Sinopoli: It's fun. The people have been great, very supportive. The customers are great. I like it. I like what goes on beyond the scenes. My wife is a people person. She loves the front end of it. But all the things that go into it behind the scenes, I enjoy doing, I thoroughly enjoy. If I could do it full time, I would do it full time.

Heintzelman: Things like you said, tracking the inventory, the business end of it?

Sinopoli: Getting creative. I have the background in retail, so the merchandising part comes naturally. I enjoy that part of it. When we talk about the product mix before, you can find a lot of things on the Internet, and we find a lot of vendors on the Internet. Sometimes you're hesitant to pull the trigger. When I do go overnights for my job, I can put my hands on different things when I'm shopping and looking around. I make notes on every store; they probably wonder what I'm doing. I'm basically making notes and saying I think this product will do well, and I think we can sell it, nobody else has it. So that's fun.

Heintzelman: You go into stores that are like yours, more or less?

Sinopoli: Yeah. Sometimes you never know what you're going to find, even in stores where you wouldn't think. You're looking at merchandise, you're making notes, you go back, and you've seen this online before and wasn't sure, but now when you see it (in person), it presents itself, and it's a good idea. That part's fun. We've had a great time. My wife will tell you she's met an extraordinary amount of people who will come back to talk to her.

Heintzelman: I remember all the attention she created when she put a message on Facebook during the flood, looking for supplies.

Sinopoli: It was a very overwhelming time. It was all good, but I would come in and we would have one aisle filled with cleaning supplies. That was great. It's things like that, we still have a lot of people who come to us, to her mainly, to say I have a need or someone I know has a need, can you put it out? She puts it out. From that standpoint, it's great; it's her platform to do those things.

Moroz: Most of what I do is changing people's minds, because 75 percent of my business, these people have already been to a box store. They have an idea what they want. I walk in and they say about a kitchen, and they bring out the CAD drawing and pieces of paper. I'm so technologically behind. I'll say to them, "What do you want?" They'll say this is what the guy (at the box store) showed me. A lot of men yell at me, because I ask them how they do it. "I can run that microwave." Fantastic, you sit down, I'm talking to your wife (laughter). She'll explain her kitchen, and I'll draw it out on a piece of paper. Maybe completely different than the big box store. They'll look at it and go, "Well, this will work. That won't." I'm changing people's minds every day.

Heintzelman: You might be behind on the technology end, but you're way ahead on the experience and firsthand work you've done.

Moroz: Hands-on experience.

Heintzelman: That's an interesting point - changing people's minds. Geno?

Welsh: One thing I love about being a business owner is living in a small community, the coal region area, the loyalty of the customers. I enjoy interacting with the customers. Seventy-five percent of my customers I know on a first-name basis. I know what they do, I know their family, stuff like that. I made that a point over being in business this many years to not only sell them a product, but learn about them.

Heintzelman: You guys have done a lot of the community, too. And from day one, you put local sports jerseys on your walls, things like that.

Welsh: I wanted it to be a place where everybody felt at home. Come into our restaurant, they're eating, they feel like they belong there, they don't feel uncomfortable. It's a warm atmosphere. They can let the world outside for that time they're eating there. Focus on their family, enjoy a good dinner, friendly people. That's one thing - you have to be friendly to work for me. I don't care if you can make a drink, make a burger or serve a table, if you don't have a personality and you're not outgoing or friendly, it's not the place for you to work. I look for people that are just like me: bubbly, talking to people every day.

Heintzelman: It makes a big difference.

Welsh: Being part of the community and helping out and learning about my customers is the No. 1 thing I enjoy about owning a business.

Heintzelman: John, Maureen, any final thoughts after hearing this?

Hauck: I think it's important to have small businesses all across the nation. They are the job creators. They are the ones that give back to the community. Growing up in this area, I knew what it was like when downtown was so vibrant, when we had manufacturing, so many great people in business. They gave back to the community and they made the community come alive.

Heintzelman: You said you worked at JC Penney, which was a huge downtown business.

Hauck: For more than 20 years. It was a great learning experience. My background was education; I had a degree in secondary education. But at that point, it was an extremely difficult time to a place to go to be a full-time teacher.

Heintzelman: It's an interesting combination for you now, as far as education and business.

Hauck: It is. It's a beautiful blend to me now. I always say it's an answer to prayer to have both of those segments come together at some point so I could teach and let other people know. Most of the people I see in small business love it. They really enjoy doing what they're doing. It's a lifelong dream. That's the fun part, seeing it change people's lives, seeing them happy with what they're doing and achieve that dream. They have a lot of ideas. Sometimes that means you have got to help them focus a little bit and see if it's possible. One final plug I would make, anybody thinking about starting a business, come to a First Step workshop. We also have one right here in Shamokin scheduled for April 3. That one will be from 9 to 11 a.m. Brush Valley Regional Chamber of Commerce is going to host the location, so it's right here in Shamokin. If anybody wants to utilize any of our services, it's free and confidential business consulting services. Just go to our website.

Heintzelman: We're really fortunate to have you guys in this area, to get free advice like that. It's just amazing that it's free.

Hauck: We're not the only SBDC. There are 18 in the state of Pennsylvania; they're all across the country as well. Our service area pretty much covers Northumberland, Montour, Juniata, Perry, Union and Snyder. We cover that six-county territory. If we don't cover you, somebody else does in the state. I hear a lot of small business people say, "Gee, I wish I would have known about you before I started." They may be small, it's a family operation, and maybe it's time to bring on employees. It sounds simple, hiring somebody, but there's so much regulation and so much paperwork involved even to just hire your first employee. Come back, we tell them. Come back when you're ready to make that next move or you're thinking about a second location. Let's run the numbers. Let's see if it's possible. With the vast majority of people who I meet, and we help hundreds throughout the year, a lot of them decide at that point maybe it's not the right timing. "I don't have the skill set that I thought. I need to go out and get a little more history behind me, better education, I need to build up my own cash flow." For many people I work with, the best decision they can make for themselves is "not now." That doesn't mean every business plan is going to get them a loan. And it shouldn't. Not everyone is fit for business. It takes a lot of moxie. It takes a lot of determination to stay there. But it's fun if you can do it, and do it well.

Reichard: I agree with Maureen that small business is the key to the local and national economy. The enjoyment I get out of working with these small businesses is watching their business become successful and grow, and not just getting involved with helping them start up, but expand into the future. One example is out in Centre County, my first borrower, my first loan I made, was somewhat of a technology company dealing with plastics. They were in a small incubator, rental space, maybe 800 square feet. Now we're just wrapping up our fifth project with them and they are in a 60,000-square-foot manufacturing facility. I've been a part of watching that company grow over the years, and they come back and say, "We want some more equipment. We're expanding. We want this other line." "All right, give me some updated information." They've proven themselves with a track record that we've been able to provide more loans for them. A little more locally, there is a case in Union County with an existing bar-restaurant. This individual had the passion that I was talking about. Maybe his direct background didn't have any involvement in a restaurant or food service, but his dream was to own and operate a bar. It wasn't just, "Oh, this will be nice to do." He wanted that customer interaction. He wanted people to come in and be happy. We helped him out, he and his wife, to purchase this restaurant. It's been five years now. You walk in, and he still has a smile on his face. There have been challengers, it's tough, but he still loves what he's doing. We just did a second project for him. They did some internal renovations and added some things and spruced things up. He's really serious about making it a good effort. He just loves what he's doing. It's great to be able to help them out.

Heintzelman: That's kind of a bottom line, isn't it?

Moroz: Have your game face on all day long.

Heintzelman: If you love what you're doing, I guess that's how it works. … Thanks again, everyone, for coming. We wish you continued luck with your businesses. We know what it's like to be in business in this area. It is a challenge, but I think we're in the same vein, we love our jobs, and that's why we're all here. Again, thank you very much.