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Q&A - Starting A Business
August 19, 2022

What should I consider about Franchising?

Evaluating franchises requires as much” due diligence” as purchasing an existing business. Franchising is a popular way for entrepreneurs to fast-forward their small business ownership ambitions. A franchise keeps you from having to invent the operational wheel. Check with the International Franchise Association about the businesses available in today’s market. Also, understand that a franchise is not a guarantee against failure.

Can you suggest some ways to get free publicity for my business?

One type of publicity that is available in the Press Release. If you have something interesting to share about your business then a Press Release may be in order. Learn the format and the requirements of a standard Press Release from sites on the Internet. There are prototypes of acceptable styles used in the Newspaper industry. Another free publicity avenue is to offer local charities that are having an event at your place of business as a registration location. The charity or event organizer will include your business’s name and location in their event publicity.

I have a home-based business. Does my homeowner's insurance cover my business?

Generally, your home insurance does not anticipate providing coverage for a business. You may be able to obtain endorsements to cover some business losses, however, a small business package with liability coverage and business interruption coverage, and other important features will probably only cost you between $250.00 and $500.00 per year.

How do I find the norm for business expenses by type of business?

There are several Internet sites that offer this type of data. RMA (formerly Robert Morse Associates),, (this is the Retail Owners Institute). Search the web and you can find significant data sources, however, most of them now have a charge or membership fee.

I want to open a retail store. How and where do I find the amount of traffic that might pass my store?

Most cities of any size have a Transportation Dept. They do traffic counts by location. Often you can see the increase or decrease by reviewing the most current count and previous counts. If they offer online access, enter your street address or the intersecting streets. Many cities also have foot traffic in their downtown area. If you are considering a mall location, ask the leasing agent for the mall demographics.

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.


What do I need to do before hiring my first employee?

It's a good idea to have these items in place:

  1. An employee handbook - This is a set of workplace rules and policies you want your employees to follow. It also explains the company policies regarding paid time off, jury duty pay, disciplinary actions, benefits, and such as well as policies to ensure compliance with laws regarding sexual harassment, drug-free workplace, anti-discrimination, Americans with disabilities, and so forth.
  2. Job descriptions - This outlines the major duties and job-specific expectations. It's a good idea to mention that there is flexibility here...cross-training of staff and other (minor) task assignments may be given.
  3. I-9 forms. You can get these from the Citizenship and Immigration Service at

Also, it's helpful to download the wage and hour rules from your state's Department of Labor. You can also download the required federal and state workplace posters. Most states also have a helpful compliance guide, as well as wage surveys. Useful Oregon sites are and For Washington, visit and For federal labor laws and helpful hiring information, visit and their online "law advisor" at

What accounting system should I use for my new business?

It's hard to give a clear answer without knowing more about your circumstances, but we can offer some general guidance. We believe that you should begin with a computer-based accounting system. The costs are modest, it will save you tremendous time compared to manual systems, and the same computer will be important in your business in many other ways. For small companies, the choices of accounting software are becoming somewhat limited due to the clear dominance in the market that QuickBooks enjoys, although Peachtree is another good alternative. If you expect your business to remain simple, using cash-basis accounting, you should consider Quicken Home & Business as a simple alternative to QuickBooks or Peachtree. SCORE can help you with the choice of software, and we offer courses to help you get started with QuickBooks and Quicken Home & Business.

I just started my new business this year. How do I know how much to pay in quarterly estimated taxes?

This is one of the most vexing issues facing new business owners. It’s very important to prepay the proper amount to avoid penalties and avoid a shocking tax debt at year-end. Avoiding penalties requires that you meet one of two tests by year-end: 1) You must have paid at least as much as the actual tax from the previous year, or 2) You must have paid at least 90% of this year’s actual tax. Remember, this tax is calculated on the profits from your new business, and in combination with all other taxable income from other sources, so you must be able to approximate your business income as you progress through the year. Many businesses will earn modest or no profits in the first year, but you must watch the issue carefully. Typically you should review your profitability and your estimated tax status with your tax advisor before the end of each quarter until your business becomes stable and more predictable.

Where do I register a new business in Oregon? will open the Oregon website for registering your business. This is where you can file the initial registration for a new corporation and LLC or for an Assumed Business Name. The “Business Wizard” is particularly useful to help you register properly with all of the regulatory agencies that affect your business type.

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.

Which business entity structure should I choose for my business: sole proprietor, partnership, corporation, or non-profit?

Sole Proprietorship

  • It is easy to form.
  • You are in full charge of all decision-making.
  • Offers the most flexibility.
  • Simpler taxes.
  • Less bureaucratic restrictions.


  • Has unlimited liability.
  • The business is vulnerable to critical events.
  • Difficult to raise capital and financing.
  • Depends on the singular ability of the owner.
  • Less professional in appearance.


  • Association of two or more persons to carry on a business.
  • Co-ownership of assets.
  • The need for Written Articles of Partnership.
  • Mutual agency: share of management and profits.
  • Easy to form.
  • Direct rewards, combined efforts.
  • Easier to attract capital.
  • Flexible.


  • Unlimited liability of at least one of the partners.
  • Instability, dependence on the other partner.
  • Dependent on the judgment of the partners as an agent.
  • Difficult to dissolve.


  • A distinct legal entity exists on its own.
  • Better image, suggest more professionalism.
  • Offers limited liability.
  • Lower tax rate.
  • Easier to sell stocks.


  • Activities are limited by the charter.
  • Extensive government regulations.
  • Double taxation.
  • More complicated to form, and could require legal assistance.
  • Strict regulations of modes of operation.

"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.

  • The S Corporation must have seventy-five or fewer shareholders.
  • The corporation can have only one class of stock.
  • All shareholders must consent to the election.
  • Cannot have alien, non-resident shareholders.
  • The corporation cannot own more than 80% of another corporation.
  • At least 75% of the receipts must be generated by the business.

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.

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 assurance that they will get their money back. It is good policy to be professional, and have all agreements in writing with clearly defined perimeters, as to the term of the loan, the method of repayment, and possibly an amount of 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.

Will SCORE 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 about 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 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.

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 a lack of sufficient start-up funds.

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 start-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 complement 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.

Do I have what it takes to start and run 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 succeed 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 the 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.

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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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