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Frequently Asked Questions on Business Topics
How can we help?
Find the answers to the most commonly asked business questions below.
How can we help you?
Find the answers to the most commonly asked business questions below!
Business PlanBusiness Plan TemplatesSole ProprietorshipBusiness StructureSmall Business OpportunitiesHow to Start a BusinessBusiness Finance
Business Plan
Yes, a SCORE mentor has access to several business plan
templates. You can also find
them under “Browse the Library”
If you are looking for a business plan example for a
specific industry, SCORE mentors
can often locate one by leveraging other SCORE mentors. Just ask!
The best business plan should take a lot of time and
thought. It should guide you
through each stage of starting, managing and financing a business. It’s a
roadmap of how to structure, run
and grow new business.
At their core, business plans have 5 elements: a description
of your business, an
analysis of your competitive environment, a marketing plan, a section on HR
(people requirements) and key
financial information.
Business Plan Template
You can find a business plan template PDF on our site under
“Browse the Library.” Look
for a special section in blue called “Free Business Plan.”. A SCORE mentor
can also provide one.
Yes. In fact, more than just providing a free business plan
template, SCORE provides
free and confidential one-on-one business counseling by phone, email, and
in-person in North Texas
Metroplex.
Sole Proprietorship
A sole proprietorship is the most basic business structure
where one individual owns and
manages the whole business in their own name. You do not have to take any
formal action to form a sole
proprietorship.
SCORE can provide a sole proprietorship business plan
template, but you should speak
with a SCORE mentor first to be sure this is the right kind of business for
you.
Yes, a sole proprietorship can hire as many employees as it
needs. A sole proprietor
must get an EIN and is responsible for filing taxes and proper
administration for these hires.
A sole proprietorship is an unincorporated business owned
and run by one individual. The
sole proprietor owner is entitled to all profits and is responsible for all
debts, losses and liabilities.
A sole proprietor is taxed at the individual tax rate, just
like the owner was before
starting the business. They report their income and expenses on their
personal income tax returns, not on a
separate business tax return.
An LLC is a business entity formed under state law that
limits an owner’s responsibility
for debts to the amount of equity committed to the entity. An LLC cannot
issue stock.
The biggest advantage of a sole proprietorship in Texas vs
an LLC is its simplicity and
cost. The biggest disadvantage of a sole proprietorship is that there is no
liability protection between you
and your business.
Forming an LLC allows you to protect personal assets, gain
access to unique tax breaks,
and establish a centralized structure for your enterprise. LLCs can be a
good choice for business owners
with significant personal assets to protect.
Partnerships are designed for two or more people to own a
business. There are limited
partnerships (LP) and limited liability partnerships (LLP). Limited
partnerships have one general partner
with unlimited liability; all other partners have limited liability.
A corporation is a legal entity separate from its owners.
Corporations can make a profit
(and pay income tax on those profits), and can be held legally liable.
The five main types of corporations in Texas are an C-Corp,
an S-Corp, a Limited
liability company (LLC), a non-profit corporation or a B-Corp.
For sole proprietorships, most lenders require a minimum
score of at least 600. Business
credit scores range from zero to 100 and most small business lenders require
a minimum business credit score
of 75.
Business Structure
A business structure defines who legally owns a business and
how the business
distributes profits. The type of structure you choose can affect your daily
operations, taxes, liability and
ability to raise funds.
Here are the five most common business structure types to
consider when starting a
business:
- Sole proprietorship
- Partnership
- Corporation
- S Corporation
- Limited liability company (LLC)
A SCORE mentor can help you decide which business structure
to choose. In general, sole
proprietorships can be a better business structure for small businesses;
partnerships and corporations often
are better for larger businesses. It depends upon your business.
A SCORE mentor can help decide which business structure is
best for tax purposes. Sole
proprietorship and LLC owners pay personal income taxes. Partners pay
personal taxes on profits.
Corporations pay taxes on profits, but have more tax options.
Most business structures need a business plan because the
information in the business
plan is what’s needed to make the best decision about which business
structure to choose. A SCORE mentor can
help you.
Small Business Opportunities
The most successful small businesses to start are those with
low startup costs, where
you have knowledge and can differentiate from competitors. The most
profitable small businesses have enough
cash, efficient operations, and sales-oriented owners.
There are good small business opportunities in every field,
from services to making and
selling goods. A SCORE business mentor can discuss business ideas with you.
Business in high demand include medical, services for
seniors, social media, personal
services, accounting and bookkeeping, IT support, auto repair, hairdresser,
and tutoring. A SCORE mentor can
help you focus on the right area for you.
SCORE works best for entrepreneurs who already have a
business idea and want to develop
it into a successful business. You bring the idea and your mentor
collaborates with you to help you succeed.
Yes! Many successful small businesses start at home. It’s
one way to keep your costs
down while building a customer base.
A SWOT analysis is just a fancy way of identifying your
small business opportunities and
threats, strengths and weaknesses. A SCORE mentor can definitely help you!
How to Start a Business
The best way to start a business is to have an idea, conduct
market research, write a
business plan, get funding, pick a business structure and a business name,
register your business and get
started. A SCORE mentor can help.
If you want to start a business as a beginner, you may want
to consider a service
business that requires less startup funding. You can also start your
business as a side hustle while staying
employed.
Many people start a business with money by staying employed
and doing the business as a
side hustle. Staying clear of higher expenses like rent, manufacturing and
salaries can also be helpful.
One of the main benefits of starting a business in Texas is
the low tax burden. Texas
also has a favorable regulatory environment.
Business Finance
Financing a business can come from savings, friends and
family, bank financing, credit
unions, government-backed financing, private investment, crowdfunding and
alternative lenders. The Small
Business Administration lends to many small businesses.
The types of business financing typically available depend
on your business and its
structure, but many entrepreneurs have started by using their savings and
calling on family and friends. The
Small Business Administration can also be a great resource.
Financing is the process of providing funds for business
activities, making purchases,
or investing. The less debt you can take on, the better your odds of
success. But it’s also important to
have enough working capital (cash).
The best type of financing for a small business is typically
funding with the lowest
interest rate. For many entrepreneurs that means savings. To get a loan, a
minimum personal credit score is
typically around 600.
