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Small Businesses in Columbia, S.C., Enjoy Low Costs

May 27, 2015
Small Business
Small Businesses in Columbia, S.C., Enjoy Low Costs
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For most of Andrew Askins’ life, he wanted to get far, far away from Columbia, South Carolina, where he was born and raised. However, Askins ended up staying home for college at the University of South Carolina, which is when he started to fall in love with the city.

“I realized there was a lot of potential here as I got interested in startups and technology —  potential I just hadn’t seen before,” says Askins, 21.

A low cost of living and an abundance of local resources for startups helped Askins create and bootstrap his startup Krit, which builds software tools for freelancers. Askins is also the creator of Made in Soda City, a website that showcases Columbia’s creative community.

“Being a tech startup in Columbia, you’re already a big fish in a small pond, so it’s easier to get attention, find help and get access to resources,” Askins says.

Overview of Columbia

Columbia is South Carolina’s capital and largest city, with a population of about 133,358 as of 2013, according to the U.S. Census Bureau. The city is home to the University of South Carolina, a public university with more than 45,000 students and 350 programs of study, according to its website. Nearby schools include Columbia College, Benedict College and Allen University.

Besides the University of South Carolina, major employers in the city include the U.S. Army’s Fort Jackson, several hospitals, Columbia Correctional Institution and Johnson Food Services, according to data at CareerOneStop.

Visitors can enjoy attractions including the Riverbanks Zoo and Garden, the South Carolina State House, the Columbia Canal and Riverfront Park and the South Carolina State Museum.

Columbia’s unemployment rate was 5.7% as of March 2015, which is slightly higher than the national average of 5.4%, according to the U.S. Bureau of Labor Statistics.

Benefits of owning a small business or startup in Columbia

Less competition: As Askins mentioned, there’s less competition for resources in Columbia than in tech hubs such as Silicon Valley or Austin, Texas.

“If you’re a startup in a place like Silicon Valley, everyone there is trying to do the same thing, so you’re putting yourself up against a lot of competition, whether it’s for resources, office space, or talent,” Askins says.

Traci Broom, a partner with Flock and Rally, a boutique public relations and marketing firm in Columbia, agrees. “It’s just small enough that most movers and shakers know or have heard of each other, but it’s big enough that there’s always a new business launching, a new source of grant monies for fueling nonprofit efforts, or new talent moving here,” Broom says.

Low cost of living: The median rent for a two-bedroom apartment in Columbia is just $734 per month, compared with $3,051 in San Francisco and $3,883 in Manhattan in New York, according to Nerdwallet’s Cost of Living Calculator.“I have friends who are trying to start companies in New York, Boston and out west, and, I mean, my expenses are just a fraction of theirs,” says Trey Gordner, founder of Koios, a browser extension that makes it easier to access public library materials.

“Our burn rate is next to nothing at this point,” Gordner says. “The cost of living is not very high here at all, so that helps a lot.”

Broom adds, “Our friends in New York and California are always shocked at the fact you can buy a gorgeous little house with a yard and great neighbors for $120,000, or rent a live-work loft as your company’s office for $1,250 per month. Yet you can still have cool, big-city perks like a cutting-edge art house cinema, excellent local, organic farms, forward-thinking restaurant chefs, a killer music scene, and more.”

Local resources: Columbia has the state government and its universities and colleges, as well as a number of insurance and manufacturing companies, so there is a diverse set of professionals who bring different ideas and expertise to the city, says Juliana Iarossi, a professor at the Darla Moore School of Business at the University of South Carolina.

Challenges to owning a small business or startup in Columbia

Access to capital: Obtaining financing is a problem for startups and small-business owners nationwide, and it can be a struggle for Columbia’s small-business and tech economy, too.

“We’re a small state, and there are limited [capital] resources here,” Iarossi says. “So we’ve got to focus on the natural strengths of the state. There are certain industries and larger enterprises here that can be strategic partners, so let’s focus on building companies around the core strengths that are already around South Carolina.”

Newcomers looking to come to the city and immediately tap into the capital here may not be very successful, Gordner says.

“I do know several companies that have made it work, but it’s very relational around here,” he says. “Chances of success are much higher if you’re really networking and making those connections.”

Difficulty getting noticed: While some startups in Columbia have been very successful, the city needs to do a better job of broadcasting those successes, Iarossi says.

Askins doesn’t think that problem is specific to Columbia. “Getting noticed is a problem, I think, for any startup anywhere. There’s so many people doing really cool things right now, so fighting through it and catching the user’s attention is always a struggle,” he says.

Finding employees with tech talent: For tech startups like Koios, finding and hiring the best talent remains a challenge, according to Gordner.

“If you are around at events and network, you can find solid talent, but it’s not going to immediately jump out at you on job boards, either,” Gordner says. “I think all the right things are in place to address that. But it’s going to be a year or two before there’s the infrastructure there.”

“The tech community is growing, but there still isn’t a large pool of engineers and designers here, so companies have to be willing to hire remote teams and may also have to travel to raise money,” Askins says.

Difficulty locating resources: While Columbia is a great city for resources, it can be tough to actually locate those resources, Gordner says.

“I think the work that’s being done now, to connect the dots between the city, the state, the university and the different professional organizations, is really important work,” Gordner says. “All the pieces are here, it’s just a matter of putting them together.”

Regardless of these challenges, Askins says his experience as an entrepreneur in Columbia has been very positive.

“The community has been very supportive, and everyone really seems to want us to succeed, which has been really cool,” Askins says. “We’re very young and still just getting started, but already feel like we’ve become a core part of the community.”

Resources for local startups and small businesses

Here are some useful resources for startups and small-business owners in Columbia.

Columbia Chamber of Commerce. The chamber hosts several programs and events throughout the year to support local small-business owners and startups. The chamber is also making efforts to help small minority- and women-owned businesses, says Lee Catoe, Director of Community Affairs and Small Business Engagement.

“The largest problems we have with small minority- and women-owned businesses is undercapitalization and networking ability,” Catoe says. “For them to be able to survive, they need to be able to network, and we try to be a resource to them.”

South Carolina Women’s Business Center (SCWBC). This program offers training workshops, free business counseling and networking opportunities for women. It was founded in October of 2011 by the Center for Women, a non-profit based in Charleston, South Carolina.

In the past, the organization focused solely on startups, but it recently expanded its program to include women who have been in business for a few years, says Jess Huch, SCWBC’s interim project director. The Columbia office is located at Columbia College and is run by Courtney Young, a business counselor.

SCRA Applied Technologies’ SC Launch Program. SCRA is an applied research corporation formed in South Carolina. The company’s SC Launch economic development effort is designed to help technology companies grow and attract jobs to the state. Companies accepted into the program get an investment from SCRA and gain access to networking opportunities, mentoring and consulting, legal advice, and potential funding resources, according to its website.

SOCO. This is a large, open co-working space for Columbia’s freelancers, entrepreneurs and small-business owners. Instead of doing business at home in isolation, work-at-home professionals may prefer to join spaces such as SOCO, where they can work alongside a community in a collaborative environment. The company offers membership on a daily, monthly or flex basis, and provides wireless Internet service and free coffee for members.

FiredUp Startup Accelerator Program. FiredUp provides a six-month, “high-intensity” bootcamp for promising early-stage startups in Columbia. If you qualify, the company provides seed capital of up to $24,000 per team, plus mentoring, training, support and other resources. In exchange, FiredUp gets a 6% equity stake in each company, so FiredUp succeeds only if its startups succeed.

South Carolina Small Business Development Center. This organization provides help for those looking to start a new business or expand an existing one by offering free consulting and programs on financing, marketing, or other challenges of running a small business. South Carolina SBDC has offices at 1225 Laurel St. and 1014 Greene St.

South Carolina Business One Stop. The SCBOS is the official South Carolina government-to-business portal where business owners can file permits, licenses, registrations and pay taxes. The website also contains links to useful business resources, such as how to choose a business structure and incorporate your business.

USC’s Darla Moore School of Business. The school is home to the USC/Columbia technology incubator, which supports local startups by providing training, mentorship and working space. The incubator is currently home to 50 active companies and has created 150 full-time and part-time jobs, according to its website.

For more information about how to start and run a business, visit NerdWallet’s Small Business Guide. For free, personalized answers to questions about starting and financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

Steve Nicastro is a staff writer covering personal finance for NerdWallet. Follow him on Twitter@StevenNicastro and on Google+.

Image of South Carolina State House via iStock.