The selection of a business entity (form) will affect your exposure to personal liability, how you draw profits and pay taxes, your ability to raise capital, how you run your business, and how difficult it is for business reporting.
Generally, all businesses fall into one of these broad categories: Sole Proprietorship, Partnership, Limited Liability Corporation, or Corporation.
A sole proprietorship is an unincorporated business owned by one individual. A partnership is a legal entity existing between two or more persons who join to carry on a trade or business.
Liberty Naud of SMaRT Education worked with SCORE volunteers Roy Breneman, Andy Lorenz and Marvin Schurgin in setting up and moving forward with her non-profit dedicated to inspiring our next generation of leaders and innovators by providing exciting hands-on exploration of science and technology to the students and young adults of the Coachella Valley. She teaches kids how to build and program robots and assist them to participate on a competitive platform to build self-confidence, communication, and leadership.
37-623 Waveney Street
Liberty Naud of SMaRT Education As the founder of a small business in May of this year I knew that I was going to encounter challenges ahead of me due to the current economic climate and the fact that I had never, ever, started my own company before. I took a list of my strengths and weaknesses and those of my staff and support group. What I discovered was that despite the extremely talented pool of individuals surrounding me, not a single one of us had a background in business or public relations. So I set about to find mentors – those whose paths I had crossed before that had left a real impact on me and who could help me shore up those weak spots in my experience.
Then I discovered this incredible organization, SCORE, and could not believe my luck. Right here was a group of retired professionals dedicated to one purpose: to assist the small business owner. Well, needless to say I was tickled pink and made an appointment right away. I knew that if I was going to succeed that I had to build a solid foundation for my company to grow on, and the SCORE representatives had that knowledge to make it happen.
How SCORE Helped
My SCORE mentors, Mr. Roy Breneman and Mr. Andy Lorenz were taken aback at first because I already had a business plan, a marketing plan, incorporation letter and business license. I had already piloted my program in various places with incredible results. At first we were unsure how to proceed, but they quickly identified three items that I did need help with: 1. My business plan did not have an executive summary and was not succinct. 2. My elevator speech was more like a slow walk-aroundthe- block speech, and 3. I needed assistance finding financial support.
Then I threw them a curve ball: SMaRT Education (Science Math and Robotic Technology Education), my newly formed small business, is a non-profit corporation. I explained that my entire operation is dedicated to inspiring our next generation of leaders and innovators by providing exciting hands-on exploration of science and technology to the students and young adults of the Coachella Valley. In a pinch – I teach kids how to build and program robots and then assist them to participate on a competitive platform to build self-confidence, communication, and leadership.
While helping me to find traditional means of financing through the SBA was not possible, these two worked tirelessly to put me in touch with foundations, organizations, and programs that we could gain support from. I have been able to make so many of those much needed connections that non-profits rely on for support, to include partnerships with other local non-profit organizations dedicated to youth programs. They also helped to open the doors to the La Quinta Rotary Club and First Tee of Coachella Valley.
Through other SCORE members, like Mr. Marvin Schurgin, we have been able to make the connections to The Living Desert, where we may soon feature interactive robotics camps in their Discovery Center. He was able to put us in touch with Integrated Wealth Management’s coordinator for the Kraft Nabisco LPGA tournament’s “Tickets for Charities” program that will generate some much-needed revenue for us.
What is wonderful is that I was able to take such inspiration from Roy, Andy, and Marvin. I realize that I am not their typical client, but that didn’t stop them and I am not only realizing my dream but hundreds of children are getting the opportunity to realize their own dreams…that at 9-years-old they CAN build and program a robot That they too can be somebody. And it just keeps going. Without SCORE, my once fledgling non-profit would not be the incredible growing enterprise that it is today. In a very short period of time SCORE has helped me gain the validation and business practices needed to thrive. And when we ask of the children of Coachella Valley, “Have you built a robot today?” I have no doubt that in the next five-years every student will have had the opportunity to say, “YES!”
Shannon and Fred Converse came from different business experiences to start a successful new company. Shannon has an education background and continues to teach students with multiple and severe disabilities at the Therapeutic Learning Center at Ox Ridge Elementary in Darien, CT. Fred, meanwhile, boasts business expertise from working for Viacom for many years, then later for a Denver-based media dot-com.
The couple decided that instead of only answering to others, they would become entrepreneurs. They shared a passion for children and education, so it seemed a natural fit.
Shannon and Fred Converse
Neither had owned a business before, so Fred first began looking into franchise opportunities. When they couldn’t find exactly what they wanted, they decided to start their own business—My Tutor and Me, LLC, which offers private, in-home tutoring for public and private school students, from kindergarten through high school, in Southern Connecticut and Westchester County. State-certified and professional teachers are carefully selected from among the brightest in their fields, including highly qualified reading specialists and special education teachers.
“We’re getting a healthy mix of new customers and repeat clients as children get older,” Fred says. “For instance, they may have previously come to us for a math tutor, and now they need help with SATs.” Fred and Shannon know their SCORE mentor is always there to help.
Five years later, the business is still growing. Last year, My Tutor and Me doubled its profits.
What's Great About My Mentor?
While doing start-up business research, Fred found information about SCORE, and the couple began face-to-face mentoring at the local office in Norwalk. They began meeting monthly with SCORE Mentor Ray Wolfe. “Ray talked about the basics of creating a business plan, and also provided competitive research advice,” Shannon says. “He became sort of a cheerleader for us, encouraging us on our marketing. He also referred us to other counselors for legal and accounting advice.”
“Ray keeps in touch to find out how the business is going,” Shannon says. “It’s not just us calling SCORE. He also stops by our home office for mentoring sessions. It’s been a very personal and rewarding experience.”
How SCORE Helped
Fred adds, “In our first year, we needed to keep our expenses low. It’s great getting all of this advice for free from SCORE.”
In her 30-year career as a teacher and trainer, Gail Greenbaum discovered that the best way to help kids learn and achieve goals is to present information through clear concepts that they can relate to their daily lives. She also knew that in order to be more engaged in learning, young people needed encouragement to develop better eating, sleeping and exercise habits. The best way to do that, she felt, was for teachers to set the example. In addition, by drawing analogies of these habits from the stories, teachers could teach more compelling lessons.
Gail, who spent most of her profession teaching English at a very high performing school, put her ideas to the test when she spent her final year as a teacher in a low-performing New York City school. Pass rates improved dramatically. “I realized that I had the centerpiece of a training program that could benefit all types of schools, and help re-ignite teachers’ passion by showing them the power of improving their own healthy habits,” Gail says. “Since all of my experience was as a teacher, however, and I knew nothing about marketing or how to create a viable business, I knew I needed help.”
Schools that are using Gail’s training are getting some equally incredible results. One saw its students’ math scores increase by 31 percent. The school is now applying T.E.AM. to its English classes.
What's Great About My Mentor?
At a friend’s recommendation, Gail contacted New York City SCORE and outlined her training program idea to a volunteer mentor. The mentor immediately realized that Gail’s then-business partner was actually a liability. He recommended an attorney for her to consult. “He left a lasting legacy,” Gail says. ”The lawyer he recommended has become an invaluable advisor.”
Gail has similar praise for her current SCORE mentor, Elliott Merberg. “He’s simply terrific,” Gail says, noting that one of the first things Merberg recommended was renaming her program “T.E.AM.” for Transforming Education in AMerica. “This defined exactly what I wanted to do,” she says. “That clarity made me even more motivated to make this idea work.”
Elliott also worked with Gail as she developed a sales presentation for schools. He accompanied her to the first appointment, and offered some follow-up ideas for improvement. “Within a couple of days, I had sold the program to three schools, which was exactly what I felt I could handle starting out,” Gail says. “The effectiveness of Elliott’s advice and support was incredible.”
Elliott is now helping Gail think about how to expand T.E.AM. from a one-woman effort into a successful business. Among the issues they’re discussing are investing in a dedicated marketer and creating a structure to hire and compensate a team of trainers who can bring the program’s benefits to many schools.
“Elliott is always expanding my awareness, and making me think about the next step,” Gail says. “I’m very appreciative to him and SCORE for helping me learn how to make this a viable and sustainable business.”
How SCORE Helped
Gail says that the experience of working with SCORE itself is a valuable lesson for entrepreneurs of any age. “The outer world is changing so rapidly that young people don’t always realize the value of experience since many basic elements of human nature never change,” she says. “It’s wonderful to have a program like SCORE that honors experienced people.”
During Jay McChord’s 10 years in the financial services industry, he noticed that the older executives he worked with had trouble managing and motivating the demographic group he belonged to—Generation X. He recognized that generations not only differ in age, they bring to the workplace a distinct approach to doing their jobs. Jay saw an opportunity to serve as a generational bridge-builder.
When Jay’s employer experienced troubled times and he was laid off, he made the decision to start a business focused on breaking down generational barriers and educating different age groups on each other’s different styles and traits. Jay’s Lexington, KY business, Workplace Buzz, was born in the fall of 2000.
Today, Jay is on a mission to see more Gen Xers benefit from SCORE mentoring. He says, “People in my age group aren’t learning what we need to know in our formal education. Generation Xers need and want to be mentored, but he have a lot of pride and don’t always ask for help. We look for mentors who will teach and share experiences.”
Jay explains that while Generation Xers appear to have a skeptical outlook on work and their loyalty centers around individuals rather than organization and companies, they possess entrepreneurial qualities. Gen Xers are flexible, action-oriented, independent, self-directed, technically competent and comfortable with the constantly changing nature of work today. Jay thinks that with long-term guidance and support from SCORE mentors, more Generation Xers can survive and thrive as small business owners.
What's Great About My Mentor?
Excited by the vision of becoming “the spokesperson for Generation X,” Jay went to SCORE for some marketing advice. He met SCORE Mentor Mark Halleck, a former advertising agency business owner. Part instructor, part advocate—Mark turned out to be an ideal coach for Jay. Meeting with Mark each week, Jay has experienced first-hand how two generations can work effectively together.
Jay continues to meet with Mark each week, and Workplace Buzz continues to grow. Jay tours the country speaking to business people on the mindset of Generation Xers and how understanding the viewpoints, desires and motivations of this age group can affect their bottom line. Last December, at the SCORE District Directors Conference in San Diego, CA, Jay spoke to district directors (DDs) on how to attract and form long-term mentoring relationships with Gen X clients.
How SCORE Helped
“The future of small business relies on Gen X entrepreneurs taking up the torch passed on from a retiring generation of small business owners. Older people want to leave a legacy beyond their bank account and building. SCORE allows these folks to leave a legacy by investing in people,” says Jay.
A list of suggested service providers for SCORE Clients
Data sources of marketing and demographic data for client use, primarily for Business Plans
School teacher Audrey Menard did her best every day to generate an appreciation and understanding of mathematics. But at the end of every class, she was overwhelmed by the number of students that asked her for extra help. She spent most of her spare time working with them one-on-one. There was such a strong demand for tutoring that she would have to tutor full time in order to reach them all.
Then the idea hit her: Why not create a business to meet student demand for extra assistance? But she was a teacher, not a business person. She knew about education and believed in the importance of individualized tutoring, but she didn't know the first thing about starting and managing a business. Following a friend's advice, Menard began business counseling with SCORE Mentor John MacDonald and regularly attended SCORE workshops.
Champion Tutoring opened its doors with four to five tutors who offered math, English, special education and reading tutoring primarily to junior high school students. MacDonald helped Menard to market Champion Tutoring to students and parents and to recruit tutors. She used direct mailings and radio and newspaper ads, but her presentations to Charlottesville schools proved to be the most effective. She visited Charlottesville's guidance counselors, teachers and principals and presented Champion Tutoring. The schools were very receptive and soon let parents and students know where to turn for extra help.
Champion Tutoring has grown substantially in just four years. Menard now employs around 30 tutors that offer tutoring in a full range of subjects including, math, English, reading, special education, science, social studies, GRE prep, SAT prep and foreign languages. Word has traveled so quickly about the quality of Champion Tutoring that advertising is no longer necessary; nearly all clients come from referrals. Between 1996 and 1997, revenues increased by $35,000 and in the last year, profits increased by another $34,000.
UPDATE: Champion Tutoring has since been sold to new owner, Anna C. Patchias. Patchias has worked to transform Champion Tutoring and give the company a new fun filled spin on education. Patchias has worked with SCORE since 2004 and uses the advice her mentors have given her to give Champion Tutoring an edge.
What's Great About My Mentor?
John MacDonald helped Menard transform her business idea into reality. He provided Audrey with assistance in all aspects of developing the business, including creating a business plan, developing a marketing and sales strategy and managing cash flow. MacDonald's mentoring and Menard's diligence soon paid off. What once seemed like a far-fetched idea became a profitable business.
How SCORE Helped
“I wouldn’t have the success I do today without my SCORE mentor. He helped me with EVERY business aspect and got me where I am today.” says Audrey.
How to really start your business