Job creation plans strengthened in August with a net 19% of small businesses planning to create new jobs in the next new months, according to a report by The National Federation of Independent Business, the nation's largest small business advocacy group in Washington, D.C.

"This is a very strong reading," said William Dunkelberg, NFIB's chief economist. "It's within shouting distance of the record reached in 2000."

Even with all the indicators pointing the way, deciding to take a business to the next level is not an easy one.

Leading entrepreneur experts like Steve Strauss assert that small business owners need to take a close look at analyzing their "core competencies" when considering expanding their business. That means understanding what they do best. The nationally recognized lawyer and columnist says you should define your core competency broadly enough to allow for opportunity but narrowly enough that you "don't get distracted chasing leads that can become time consuming, expensive and possibly disastrous."

As one veteran small business owner observed, "You have to have everything in place before you try it."

On a collision course

Consider the following example cited by Fiducial's Al Whitney in Boise, ID. One of his clients who owned a florist shop in Meridian, ID, had an accounting firm working for her and as a result had very little client contact or counseling. After being referred to her by another of his clients, Whitney soon saw that the florist wasn't controlling her costs and "there was way more payroll than she needed."

Before Whitney took over management of her financial data, the florist was on a collision course with bankruptcy.

"She wasn't aware of it," he said. "I believe she would have lasted another year before going under."

But Whitney helped straighten out the florist's financial records. Besides getting a good handle on all the finances, it also paved the way for the future sale of the business.

"The fact that she had good, clean books and records helped her sell it," said Whitney. "Some of the other firms the buyers had looked at had records that weren't good enough to be able to get management information from. She owned the business about seven years and went from a loss to making a substantial profit by controlling her costs and her overhead."

The business recently sold for about $260,000, a nice return on her original investment, thanks to Whitney's expertise. But these are just things he's been doing routinely while assisting clients for 17 years in Idaho's state capital.

"I just pay attention to the basic stuff and make sure that the numbers mean something when you look at them," he said.

By paying attention to detail, Whitney explains that if you're a restaurant owner contemplating expanding your operation that "you need to watch your food and labor costs. If you're in manufacturing, look at the cost of the goods." Above all, he says is if you're doing the job and giving good service "you should generate a decent profit."

Look before leaping

One thing Whitney suggests to entrepreneurs eager to expand is to really look closely at what they have before making that leap.

"People will expand to new locations and they can't handle the management of it," he said. "They end up making less money in one location than in two. You need to look at what you have first and make sure you're maximizing the potential of your current situation before you start going to something else."

Whitney pointed to a business owner in the automotive sector that expanded to three locations but now is losing his shirt. "The owner was a good operator when it was hands-on but he can't handle the multi-manager span of control now," he said.

What separates one owner from another when it comes to expanding to different locales, Whitney says, is having the right kind of personality that allows them to be "a good manager of managers."

Capturing a dream

Bob Blough who operates a Fiducial office in Houston, PA, was instrumental in helping one of his clients realize his dream of going into business for himself. He assisted client Tim Byers, former general manager of a small manufacturing plant, who was buying a small retail grocery store in Claysville, PA. Byers, however, did not have recent retail experience and was a little shy on working capital. Despite those obstacles, Blough was the driving force in enabling Byers to turn his dream into a reality.

"I took him to a bank contact that I had and between me and the banker and the prior owner we were able to get financing," said Blough. "It probably took four months to work out but it all fell together."

Blough drew up progress reports based on what Byers felt he could do with the business. He made suggestions on how the new proprietor could change things such as opening on Sundays and doing some advertising. It was Blough's idea to add a marquis and advertise sales and specials on it each week. And Byers can't thank Blough enough for his efforts.

"Bob's excellent in dealing with people," said Byers. "He's highly intelligent and loaded with good advice. His professional advice has led me in the right direction and he has been 100% right. They're taking good care of us. They take care of our payroll and our taxes. I'm in the middle of learning the complete store operation so that's a big plus because there's a lot going on here for me without having to worry about all those things. That is a relief."

Saturation point

Fiducial's Larry Novick of Holliston, MA, noted that small business owners often think they have reached the saturation point for their operation and sales will always be the same if they expand. But he says they have got to look at crucial areas such as budgets and cash flows before taking the plunge.

Novick always wants to see a strategic plan, five-year plan and mission statement from his clients so they can prove to him that they've given their business future serious thought. Most of these small firms still don't have these plans formulated and "90% don't know what business they're in," he said. Novick asked how they can contemplate growing their business when they can't adequately explain what niche their business serves.

For example, one of his clients operated a heavy hydraulic crane business but could not answer the key question about who his customers were. Once the company focused in on a strategic plan and budget thanks to Novick's counsel, they were eventually able to sell out to an over the counter company for about $20 million.

Providing service

Edward Comer of Fiducial has been playing a consistent tune in his self-described "one-man band" practice since opening his doors 18 years ago in Springfield, OH. He has a game plan and a program that he uses consistently to help small business owners reach the next plateau.

One of Comer's clients owned a drive through convenience store that had a bookkeeper on staff but the owner didn't even understand a basic payroll report.

"They had no clue what was going on," said Comer who then installed an accounting package, trained the staff and now the C-store owner is "completely independent of a bookkeeper."

Comer teaches his clients how the process works so they can understand all the reporting that is involved. "Now they can read the income statements," he said.

Many entrepreneurs resent it when large national chain stores move into the local shopping areas but Comer tells his small business clients that "you've just got to provide the service" that the Wal-Marts of the world can't offer.

Working with start-up businesses is a particular joy for Comer because they are newly hatched and he likes to get them off on the right foot. That starts with how to handle the first business transaction and making sure the financial information is posted in the right way.

"You usually don't have as many transactions at that point so when transactions increase they know what to do," he said. "It's like building a house—you build the foundation and everything else falls together."

STEPHEN PAREZO is the Media Manager for Fiducial.