Frequently
Asked Questions
Starting Your Business
 Do
I have what it takes to own/manage a small business?
What
is a business plan and why do I need one?
What legal
aspects do I need to consider?
What
other financial responsibilities do I have for employees?
How
much money do I need to get started?
What do
I have to do to get a loan?
What
should I know about accounting and bookkeeping?
What
does marketing involve?
Does SBA
offer grants for small business startup?
Managing/Expanding Your Business
My
business has been established for some time. How can the
SBDC help me?
How much
does it cost to discuss my business questions with an SBDC
counselor?
What
qualifications do the SBDC counselors have?
How
about confidentiality? I don't want the world to know everything
I discuss, especially if I provide financial or proprietary
information about my business.
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Q.
Do I have what it takes to own/manage a small business?
You
will be your own most important employee, so an objective
appraisal of your strengths and weaknesses is essential. Some
questions to ask yourself are:
- 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?
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Q. What is a business
plan and why do I need one?
A business plan precisely
defines your business, identifies your goals and serves as
your firm's resume. Its basic components include a current
and pro forma balance sheet, an income statement and a cash
flow analysis. It helps you allocate resources properly, handle
unforeseen complications, and make the right decisions. Because
it provides specific and organized information about your
company and how you will repay borrowed money, a good business
plan is a crucial part of any loan package. Additionally,
it can tell your sales personnel, suppliers and others about
your operations and goals.
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Q. What legal aspects
do I need to consider?
Licenses required, zoning
laws and other regulations vary from business to business
and from state to state. You also must decide about your form
of organization (corporation, partnership or sole proprietorship)
or tax status (e.g., should you opt for a Subchapter S status?).
You should consider contacting your attorney and/or accountant
for assistance in properly formalizing your business.
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Q. What other financial
responsibilities do I have for employees?
You must withhold federal
and state income taxes, contribute to unemployment and workers
compensation systems, and match Social Security holdings.
You may also wish to inquire about key employee life or disability
insurance.
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Q. How much money do
I need to get started?
Once you have taken care
of your building and equipment needs you also must have enough
money on hand to cover operating expenses. These expenses
include your salary as the owner and money to repay your loans.
One of the leading causes of business failure is insufficient
start-up capital. Consequently, you should work closely with
your accountant to estimate your cash flow needs.
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Q. What do I have to
do to get a loan?
Initially, the lender
will ask three questions:
- How will you use the
loan?
- How much do you need
to borrow?
- How will you repay
the loan?
When you apply for the
loan, you must provide projected financial statements and
a cohesive, clear business plan which supplies the name of
the firm, location, production facilities, legal structure
and business goals. A clear description of your experience
and management capabilities, as well as the expertise of other
key personnel, will also be needed.
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Q.
What should I know about accounting and bookkeeping?
The importance of keeping
adequate records cannot be stressed too much. Without records,
you cannot see how well your business is doing and where it
is going. At a minimum, records are needed to substantiate:
- Your tax returns under
Federal and State laws, including income tax and Social
Security laws;
- Your request for credit
from vendors or a loan from a bank;
- Your claims about the
business, should you wish to sell it.
But most important, you
need them to run your business successfully and to increase
your profits.
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Q. What does marketing
involve?
Marketing is your most
important organizing tool. There are four basic aspects of
marketing, often called the "four P's":
- Product: The item or
service you sell.
- Price: The amount you
charge for your product or service.
- Promote: The ways you
inform your market as to who, what and where you are.
- Provide: The channels
you use to take the product to the customer.
As you can see, marketing
encompasses much more than just advertising or selling. For
example, a major part of marketing involves researching your
customers: What do they want? What can they afford? What do
they think? Your understanding and application of the answers
to such questions play a major role in the success or failure
of your business.
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Q. Does SBA offer grants
for small business startup?
SBA's limited grant offers
are generally designed to expand and enhance an existing small
business technical assistance.
SBA's grant programs generally
support non-profit organizations, intermediary lending institutions,
and state and local governments in an effort to expand and
enhance small business technical and financial assistance.
(Visit SBA's Grant Resources website.)
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Q. My business has
been established for some time. How can the SBDC help me?
The SBDC provides an array
of services to established businesses including counseling
in business planning; marketing and promotion; financial analysis;
and accounting. In addition, the SBDC offers:
- Procurement assistance
program for companies that want to bid on federal, state,
or local government contracts
- International trade
program for firms that want to enter into or expand in the
global marketplace
- Educational services
designed to sharpen the skills of management teams, boards
of directors, and or employees
- Technology development
and commercialization personnel to help businesses commercialize
innovative new technologies
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Q. How much does it
cost to discuss my business questions with an SBDC counselor?
Nothing! The information,
management counseling, and technical assistance services of
the SBDC professional staff are provided at no charge. A nominal
fee may be charged for training workshops.
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Q.
What qualifications do the SBDC counselors have?
The professional staff
members of each local service center are highly skilled individuals,
each of whom has significant experience in the private sector.
Many also have extensive management and financial consulting
backgrounds. In addition to permanent staff, the SBDC also
utilizes business owners, corporate executives, business school
faculty, business school students, and other volunteers.
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Q. How about confidentiality?
I don't want the world to know everything I discuss, especially
if I provide financial or proprietary information about my
business.
All client information
discussed by the client with SBDC personnel is confidential.
SBDC consultants are required to sign confidentiality statements
and cannot discuss proprietary information about your business
with anyone other than SBDC personnel or persons you so designate.
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