What do you do at SCORE?
Starting a New Business
Building a Business Plan
Financing Your Business
What can I expect a bank to require if they are to lend me money?
General Business Questions
How should I structure my business: sole proprietor, partnership or corporation?
SCORE "Counselors to America’s Small Business" is a nonprofit association comprised of 11,500 and growing volunteer business counselors throughout the U.S. and its territories. There are about 400 SCORE chapters in urban, suburban and rural communities. SCORE members are trained to serve as counselors, advisors and mentors to aspiring entrepreneurs and business owners. These services are offered at no fee, as a community service. Individual sessions generally last approximately one hour. SCORE was formed in 1964 and nearly 6 million Americans have utilized SCORE services.
How can I contact SCORE for assistance?
You can contact Fort Worth SCORE a number of ways. You can call us at 817-871-6002 and make an appointment for face-to-face counseling. You can also Click Here to email us. In addition, you can use Find SCORE to locate a chapter near you, complete with address, phone number and a map you can print right now.
What kind of counseling does SCORE provide?
SCORE’s experienced business experts provide general business advice on everything from how to write a business plan, to cash flow management, to developing a small business advisory board. Assistance for aspiring entrepreneurs may involve investigating the market potential for a product or service and assessing the capital needs to start a business. Counselors can provide insight into how to start a business, operate a business, buy a business or franchise and sell a business.
How much does it cost?
There is no cost for individual counseling. Workshops or seminars have a small fee.
Am I entitled to only one individual session?
You can come back for as many sessions as you wish. Each session will last for approximately one hour. SCORE counselors will remain interested in your progress and will follow up to see how you are progressing.
What qualifies SCORE volunteers to give business advice?
The key qualification SCORE counselors bring the table is real-world experience. SCORE volunteers have specific industry and general business expertise. Counselors may be retired business owners, business executives or operations managers. Some volunteers work full-time.
Are my business secrets safe with SCORE?
Yes. All SCORE counselors honor the client’s right to proprietary and confidential information. That information remains confidential as provided by SCORE’s Code of Ethics. Counselors reaffirm their commitment for the association’s Code of Ethics each year.
Does SCORE offer other services?
Yes. SCORE offers low-cost workshops and seminars. Workshop fees generally range from $20 - $95 depending upon the program. Workshop topics have included: Developing Your Business Plan, Starting and Operating Your Own Business, Getting Financing For Your Business, and Basic Marketing.
How can SCORE help me in a changing economy such as now?
In times of economic change, you must be diligent in preparing your plans. Begin developing a business plan with realistic sales projections and a plan to hold the line on costs. SCORE can provide advice to help you develop or update your plan. Our counselors can also assist in analyzing your current results. Clients tell us some of the best ideas for their business flowed from discussion with a SCORE counselor.
What is email counseling?
Email counseling is an email exchange between you a soon-to-be entrepreneur or small business owner and a volunteer, SCORE business counselor. Email counseling gives you the opportunity to send email questions about small business to a SCORE counselor anywhere in the country. Just Get Email Counseling to get business advice. Send a question and your SCORE counselor will reply with his or her answer. Keep the dialog going as long as you have questions for your business counselor
Do I have what it takes to own and manage a small business?
You will be your most important asset so an objective appraisal of your particular strengths and weaknesses is an essential element in starting a business. To determine if you have what it takes to success ask yourself some of the following questions and be brutally honest with your answers. Am I a self-starter? How well do I get along with a variety of personalities? How good am I at making decisions? Do I have the physical and emotional stamina to run a business? How well do I plan and organize? Are my attitudes and drive strong enough to maintain motivation? How will the business affect my family?
When you have answered those questions, ask someone who knows you well and will provide honest replies to answer those questions about you – and then compare results. If the answers differ, re-consider your decision. Few people start a business with all of these bases covered. Honestly assess your own experience and capabilities and then look for partners or key employees who can provide abilities that you don’t have or in which you are not strong.
Would having a partner make it easier to be successful?
Having a business partner will not guarantee success. However, if you require additional management skills or star-up capital, engaging a partner may be your best decision. The ultimate success of a partnership depends upon the personality and character of the partners. Successful partnerships usually result when partners compliment each other so that a weakness in one is a strength in the other. If you decide to have a partner, make sure that each of you has a clear understanding, in writing, of the responsibilities and rights of each partner.
How much money do I need to get started?
One of the leading causes of business failure is insufficient start-up capital. After you have determined how much you need for equipment, stocks and facilities, make sure you have enough money set aside to cover your operating expenses (fixed and variable) for at least one year. Be sure to include sufficient funds to repay any loans you may have taken out and your salary as an owner. Successful businesses have started with less, but many more have failed for lack of sufficient start-up funds.
What is a business plan?
A business plan is a written summary of what you hope to accomplish by being in business and how you plan to organize your resources to meet your goals. It is a vehicle to describe your business and your product or services and is a road map for operating your business and measuring progress along the way. The plan describes in writing, the market, the industry, customers and competitors, your products/services, your marketing plans and your operations along with sales and cash flow forecasts. The business plan is a document that should change as your business grows.
Why do I need one?
If you are seeking financing for your business, it is absolutely essential. The lending institution or prospective investor will want to see your plan in order to assess your financing proposal and to assess you as a business manager. If you are not seeking financing for your business, it is still essential since it serves as a guide for you in the management of the business and provides milestones to gauge your success along the way.
Do I really need a business plan?
Absolutely. A pilot does not fly a risky mission without a detailed, well-researched flight plan. Trying to operate a business without a well-researched business plan is no less a hazard for you and your family than flying a mission in a small plane. By committing your plans to paper, your overall ability to manage the business will improve. You will be able to concentrate your efforts on the deviations from plan before conditions become critical. You will also have time to look ahead and avoid problems before they arise.
How can I get help in preparing one?
SCORE has outlines available for you to follow and can walk you through them. SCORE also conducts low cost workshops on developing and writing a business plan. Also, there are numerous business plan instructional web sites on the Internet. Search for Business Plans and you can find all the information you need to prepare one.
Will you help me write and complete my business plan?
We will take you through the steps outlining the procedures to prepare the plan. However, it is important that you put your own thoughts in detail on paper of how you plan to structure and operate your business. This will help you walk through your thoughts and ideas about your business. When you have completed your draft, we can then go over it with you to "fine tune" it if it is necessary.
What can I expect a bank to require if they are to lend me money?
There are various ways to seek start up financing through conventional loans from banks. Banks will need to look at a great deal of financial information about your business; operating statements, tax returns and many other financial documents. They will want heavy collateral in hard assets. They might loan against inventory and receivables, but they are usually concerned that those assets will go first if the business runs into difficulties. Although banks prefer to have hard assets as collateral (real estate, equipment, motor vehicles), they hope that the borrower will be able to take care of his obligations without the bank having to resort to taking possession of the collateral. The bank will require having all your banking done at that bank.
Are there Personal Loans available and if so, from where?
Loans from relatives or friends are a source of financing. Many people are reluctant to approach a friend or relative, not wanting to risk the relationship. But if other alternatives are not available, by all means, talk to your friends. They might be glad to help, but they want some kind of an assurance that they will get their money back. It is good policy to be professional, have all agreements in writing with clearly defined perimeters, as to the term of the loan, the method of repayment and possibly an amount or interest paid for the money. You will need to demonstrate why you need the money, how you will repay it and what the interest rate, if any, would be for the loan. The more professional you can be, the more likely that the relationship can be preserved intact. But be prepared that your friends will develop a sudden interest in your business and offer unsolicited advice.
What is Lease Financing?
A good way to obtain business equipment is to find a company who will buy the equipment needed and lease it to you, with the provision that after a period of time, usually after the end of the lease period, they will sell it to you (or extend the lease for an other mutually agreed period). You will pay a premium, but you will have the means of production and can earn the money in profits to acquire the equipment.
Should I consider a Home Equity Loan?
If you have a sizable equity in your home, you might borrow against the equity and use the proceeds to operate your business. You must indicate on the loan application that you intend to use the money for financing your own business. Failing to do so could be considered misleading and might result in charges of fraud.
Is Venture Capital a source of funding?
Venture capital is the most expensive and demanding in conditions. One must be in a particular segment of the economy, able to show great earning capabilities and a relatively short period (around five years) of projected repay. Venture capitalists want to see a capable management team, and the promise that in a few years the company will be successful enough either to go public or be taken over by a larger company. They risk a lot and they want to be compensated for taking that risk.
What is an SBA Loan?
The SBA no longer makes direct loans, but it does provide a guarantee of a major percentage of the loan to the lending bank. The amount of guarantee varies; presently it is around 75 percent.
Where do I get an SBA Loan? (An SBA guaranteed loan).
One should start out with the bank they intend to borrow from. Banks usually have all the necessary forms to originate a loan. You can also attend a free briefing at the local SBA office to learn more about the qualifications and process www.sba.gov/wa/seattle.
How can I get the Government to give me a loan without going through the bank?
There is a "Microloan Program" designed for smaller borrowings, from $100 to $25,000. These loans are available though local non-profit agencies, a list of which appears on the SBA web site at www.sba.gov/financing.
How should I structure my business: sole proprietor, partnership or corporation?
"S" Corporation The S Corporation is a corporation, for which an election has been made with the Internal Revenue Service for the income to pass through and be taxed directly to the stockholders on a pro-rata basis, avoiding double taxation on profits and dividends. It allows the stockholders to offset business losses against their personal income according to certain IRS regulations.
Limited Liability Companies (L.L.C.)
It is a combination between corporation and partnership. Has the limited liability advantages of a corporation, but operates with the flexibility and tax obligations of a partnership, a corporation or a sole proprietorship.
Should I consider buying a business and how much should I pay for it?
Remember that a business is worth only whatever someone is willing to pay for it. Generally, you should start the valuation process by estimating the net positive cash flow for the next 3 to 5 years, after subtracting an appropriate salary for yourself. Then determine the appropriate multiple of earnings to use to arrive at a fair valuation. Most small businesses sell for a price in the range of 2-5 times earnings before interest and tax expenses are deducted. Always keep in mind that a business buyer is really buying a stream of earnings; without an earnings stream, the business essentially has no value.
How can I get a seller of a business to show me their books?
Ask them. If they are really interested in selling, they will show you their books. In reviewing the books, you should carefully consider all information presented during a detailed due diligence process. Keep in mind that most businesses have some negative features that the seller is reluctant to talk about and these will only come out as you begin analyzing the business (due diligence). If you approach the purchase of a business with a good healthy dose of "prove it to me", it will be difficult for you to get burned.
How can I find out what my competitors are making in profits and how successful they are?
It will be difficult to find out exactly what the competition’s profits are. However, talking to prospective customers and competitor’s employees will give you some information on how successful they are. Talking to competitive businesses that are located in a different area than where you are or will locate often produces more information because your business will not be a threat to them. Industry trade associations or your accounting firm can refer you to companies in your industry and market that may be willing to share information with you.
Where can I get information regarding my competition?
You can get a wide base of information at the library in publications such as Robert Morris Associates and Dun and Bradstreet. The business section librarian can help. Major accounting firms also publish operating numbers for various industries; your accountant may be able to help you get to the right accounting firm. The library should also have a list of all trade associations catalogued and they print operating statistics. Talking to competitor’s former employees, customers and suppliers can also help.
What is an (EIN) number?
An Employer Identification Number (EIN) is a nine-digit number that the IRS assigns in the following format: 00-0000000. The IRS uses the number to identify taxpayers who are required to file various business tax returns. EIN’s are used by employers, sole proprietors, corporations, partnerships, nonprofit associations, trusts, estates of decedents, government agencies, certain individuals, and other business entities.
As a sole proprietor, do I need an employer identification number (EIN)?
A sole proprietorship that has no employees and files no excise or pension tax returns is the only business that does not need an employer identification number. In this instance, the sole proprietor uses his or her social security number as the taxpayer identification number. A sole proprietor would need to obtain an EIN only if either of the following applies: (1) you pay wages to one or more employees or (2) you file pension or excise tax returns.
Are my workers contractors or employees?
This important question has significant financial implications to small business owners. IRS Publication 15-A states "The general rule is that an individual is an independent contractor if you, the payer, have the right to control or direct only the result of the work and not the means and methods of accomplishing the result." Based upon decided cases, the consideration of whether a worker is an employee or a contractor falls into three main categories: do you control the worker’s behavior, do you control his financial situation and the relationship between you and your worker.
What is a Patent?
Patents protect intellectual properties, such as inventions, designs and a wide range of creations. Patents need to be applied for in the country one intends to use it, within a year of the first commercial use of the product.
What is a Copyright?
Copyright is a protection of books, magazines, software, music, movies, recordings and artwork. Concepts, ideas, titles, names and brands are not protected by copyright. Copyright protection automatically extends to any appropriate material, whether it was applied for or not. However the small fee of ($20) is well worth the cost to register the copyright and increase the legal protection from infringement. The copyright notice should be highly visible and contain the word (or symbol): "COPYRIGHT", ( © ), the year it was first issued to the public.
What is a Trademark?
Unlike copyrights and patents, trademarks affect all businesses. When you sell a product or service using a brand name, you are using that brand name as a trademark. A trademark or service mark may consist of letters, words, graphics, or any combination of these elements. You have automatically some protection for your trademark if you were the first person to use that trademark in commerce, even if you did not register your trademark. However you should hire an attorney who is experienced in trademark issues and have him make trademark search and file for registering you trademark. The registration will not necessarily give you protection nationwide, let alone internationally, but at least you are going to be protected regionally.
How do I apply for a Patent or a Copyright?
Copyright forms are readily available at Federal Centers or can be ordered from the COPYRIGHT OFFICE, Library of Congress, Washington D.C. 20559. Applying for a patent is more complicated and a patent attorney’s services should be sought. Their names are listed either in the telephone book or at the "Attorney’s Referral Service". Trademarks are protected by the Federal Government; again an attorney’s services should be procured.