Small-business Q&A: First step is deciding what decision to make

Many of the decisions made as a small-business owner can be difficult and stressful. As you gain experience making decisions, you'll be better able to tackle the inevitable choices that are more complex, or must be made quickly.
Here are some tips for making thoughtful, well-informed decisions:
Define clearly what the decision is that needs to be made. Is this really your decision or someone else's and do you really need to make a decision at all? If you do not have at least two options, you have no decision to make.
Brainstorm the alternatives. Draw on all available knowledge resources to learn as much as you can about the implications of each option. Identify contributing factors that potentially can be changed to improve a particular alternative, and those that must be accepted as they are.
Weigh costs versus benefits. The time-tested exercise of listing pros and cons on opposite sides of a piece of paper still works. Try to match up direct causes and effects as much as possible, but also consider intangible influences and outcomes.
Balance your information inputs. Seek out as many perspectives as possible, but remember that many opinions, even those of "experts," are subjective and potentially based on incomplete information. Also, avoid blindly accepting an opinion because it's exactly what you want to hear.
Trust your instincts. Intuition can be your ally, especially if what appears to be a good choice just doesn't feel right. Think about the reasons for the uncertainty and look for further evidence that counters or justifies your concern.
Recognize your limitations. We all have likes and dislikes that can bias our thinking in a certain direction. If you lean toward an alternative simply because "it's always worked," you may be overlooking something.
Divert your attention. Take a break from your decision-making and do something as unrelated as possible. The decision factors may not change in the interim, but a fresh look is sure to make a positive difference in how you evaluate them.
Just do it. Once you have made your decision, get moving on it. Don't agonize about "what ifs" or wonder what someone else might have done. If it turns out that another option was better, so be it. Learn from your mistakes and move on.

Small-business Q&A: Federal agency can help with loans

Starting or expanding a small business takes time, hard work and money. Depending on your type of business and present financial situation, you may need to reach to outside sources for funding. 

One resource you can turn to for assistance in obtaining a loan to start or grow your business is the U.S. Small Business Administration. While the SBA does not directly lend money to small businesses, it can facilitate loans with third-party lenders. Various banks, credit unions, community development organizations and micro lending institutions throughout the U.S. partner with the SBA to provide funding to small businesses without access to other financing options, with reasonable terms.

The agency sets specific guidelines for loans, which are made by its partners, and it guarantees that they'll be repaid by the borrowers. This benefits small business owners by giving them access to much-needed funding, and it eliminates some of the risk to the lending partners.

Points in favor

Among the advantages of SBA loans over conventional loans are lower down payments and longer repayment terms. To qualify for an SBA loan, your business must meet certain criteria regarding business size, financial standing, and others. You must also meet the credit qualifications of the lender.

The SBA 7(a) loan program arranges for loans that may be used to establish a new business or to assist in the acquisition, operation or expansion of an existing business. These loans can be used for various purposes, such as, satisfying short-term or long-term working capital needs; purchasing equipment, machinery and supplies; buying real estate; refinancing existing debt; and more.

The SBA Microloan program provides loans up to $50,000 to help businesses with lower dollar financing needs. You can use microloans for working capital and purchasing inventory, supplies, furniture, equipment, machinery, etc.

For information about SBA loan programs, visit

Seminar ahead

Also, learn more about SBA financing by attending the seminar "Business Plans to Launch and Grow & Funding to Make It So," hosted by the Houston Community College and SCORE. This seminar will be held 12:30-3:30 p.m. Jan. 15 at the HCC-Spring Branch campus.

The following senior officials will speak: Tim Jeffcoat, director, SBA Houston District; Nasrullah Khan, chief lending officer of Wallis State Bank, a leading SBA lender; Richard Gianni, regional vice president of LiftFund, a micro lender; and Jeff Jones, president of Advanced Business Brokers and SCORE volunteer.

To learn more about this seminar and register, visit workshops.

Business plans are worth the work

A business plan is not only important for starting your business, it's also an indispensable tool for helping you manage and grow your business.

Your business plan is your road map for operating your company, and it's essential if you intend to seek funding from outside sources.

A plan spells out specific details related to your business concept, marketplace, and financials. The length of your business plan can depend on the complexity and scale of your business. Even short one-page business plans have purpose and can affect success.

If you are intimidated by the thought of writing, know that the benefits are well worth the effort. The value of a business plan isn't so much in the document you create, but the discovery process you embark upon to create it. As you work on the plan, you answer key questions about your business that you may not otherwise have considered. That can help you recognize risks and opportunities - and better position you for success.

There are several ways to make writing your business plan less intimidating. First, don't try to do it all at once. If you tackle it in smaller bits and pieces, the project will be more manageable.
Schedule time to work on it. You'll feel less stressed if you reserve time for it on your calendar.

Get feedback along the way. As you work on the different sections of your business plan, ask a SCORE mentor or other unbiased business professional to review it and provide suggestions for improvement and clarity. SCORE mentors are experienced and provide free and confidential mentoring.

Even though writing a business plan will require effort, it doesn't have to be a harrowing experience. With a business plan, you'll be better able to move your business in the right direction from the start and navigate changes more easily in the future.

Crowdfunding - An Alterantive Source of Capital

Over the last several years crowdfunding has become an increasingly popular option for both entrepreneurs and investors trying to raise capital—and public awareness—when launching or growing a small business.

Rather than approaching a single lender to make a significant loan to your business (which you will most likely need to personally guaranty), crowdfunding platforms give you a way to leverage your network of friends, family, social media connections, and the public at large to obtain significant capital in small increments.

It’s a collective online effort that can expand your professional network and introduce your business to potential customers. 

Crowdfunding for businesses presently comes in three primary forms:

·         Rewards-based crowdfunding (such as via Kickstarter and Indiegogo)
·         Equity crowdfunding (such as via CircleUp)
·         Peer-to-peer lending (such as via Lending Club)

With rewards-based crowdfunding, you are only promising your backers some sort of token incentive and the risks are more limited. Whereas with equity crowdfunding, you are giving up equity and the risks can be substantial. With peer-to-peer lending, the business is taking on debt that it is legally obligated to pay back.

Equity crowdfunding and peer-to-peer lending are governed by a complicated web of federal and state securities laws, while rewards-based crowdfunding is generally exempt from those laws.

According to SCORE mentor and Houston entrepreneur Nick Tarte, rewards-based crowdfunding has rapidly become an accepted way to raise capital for small businesses.

“Traditionally, companies raised capital by issuing debt or equity,” says Tarte. “Rewards-based crowdfunding introduced a completely new alternative. The model has shown that the public is willing to contribute capital to worthy projects without any expectation of future profit, which is quite revolutionary.” But be sure to pick the right platform for your rewards-based campaign. Remember, crowdfunding is a form of marketing, and you want to be where your customers are.

Tarte advises to make sure you follow through on your promises. Watchdog groups and state and federal consumer protection bureaus have begun to shift their attention to deceptive crowdfunding campaigns.

Don’t forget about taxes. Proceeds raised from rewards-based crowdfunding campaigns are usually treated as taxable income to the business. For this reason, Tarte advises businesses to consult with their tax advisors before embarking on a crowdfunding campaign.

Nick Tarte will present the details of this increasingly popular but often misunderstood funding option at the SCORE workshop “Crowdfunding – An Alternative Source of Funding” on December 5. To learn more and register for this workshop, go to
____________________________________________________________________________ SCORE is a nonprofit association whose volunteers help start and improve small businesses. Send questions or volunteer inquiries to

How to Leave Work at Work

Q: I’m burning out and it’s effecting my business. Any suggestions?

A: Running a small business can be the most exciting, challenging, and perhaps even exhilarating experience of one’s life. Amid all the headaches, deadlines, and responsibilities that only you can fulfill, there’s something satisfying about knowing that, at the end of the workday, you did a lot of good work.

That is assuming, of course, your workday ends at all.

Small business owners can and should take their enterprises seriously, leaving no detail to chance or simply assuming something will get done, especially when there’s a deadline involved.

But one can also be over-committed to a small business, to the point of obsession that can damage one’s physical and even mental health, family relationships, and the business itself. It’s one thing to burn the midnight oil when necessary. But done too often, the only thing that gets burned is you.

What an entrepreneur needs is balance—the ability to give 100 percent to the business, and then leave it to give 100 percent to his or her personal life. That’s not always easy to do, especially when you’re starting out or tackling a huge workload. But it can be done. And more importantly, it has to be done.

Here are some tips for leaving work at work—literally and figuratively:

Plan your workday. Make a weekly to-do list of administrative, routine, and project-specific tasks, and prioritize them accordingly on a day-to-day basis. Make sure there’s some flexibility for unexpected calls or emails. When you’ve done everything on your list, consider yourself done for the day.

Plan your away time. Set aside several evenings, weekends or brief “mini-vacations” for family or personal activities, and give them your full attention. Make this time sacred; stow the cellphone, and keep away from email. It’s OK to be responsive to customers, but not at their beck and call.

Share the load. Delegate responsibilities to employees, even when the workload is relatively normal. If you’re a one-person shop, identify qualified colleagues for outsourcing extra work. You may miss out on some revenue, but you won’t be compromising the quality you’ve promised your customers.

Cultivate an outside interest. Do something that’s fun—a hobby, sport, community activity, a favorite book or TV series. You’ll feel and think better and you’ll be refreshed to return to the work side of your life.

Firing worker requires honesty, documentation

October 4, 2015

Q: What do I need to know about how to go about firing an employee?

A: Among the many enjoyable aspects of running a small business, there are some less desirable responsibilities. Most owners probably would agree that having to fire an employee ranks among the most difficult.

Many things may justify termination - poor performance, abusive or disruptive behavior, excessive tardiness and absences, among others. While a warning, coaching or change in responsibilities may solve the problem, an owner can't always afford to take a wait-and-see approach. Employees who don't measure up to expectations can be a drain on the business's growth, reputation and working environment.

In most states including Texas, an employee may be fired at any time for any reason, or no reason at all, but there are limits. For example, federal law prohibits employees from being terminated for reasons of age, race, gender, religion or disability. It's also illegal to fire employees for complaining about illegal activities, health and safety violations, or discrimination and harassment in the workplace. Employees also have the right to take family or medical leave, military leave and time off to vote or serve jury duty.

Should you have legal grounds to fire an employee, be sure to document all the reasons and when they occurred, plus any disciplinary measures taken and the results (or lack of them). Along with justifying your action to the employee, this will help protect you against any subsequent claims that the firing was discriminatory.

Now for the tough part - actually firing the employee. You should do this in a private setting, with another person present to witness how the conversation unfolds. If you're concerned that the employee may become violent, it may be helpful to have security personnel close by.

Be open and honest with the employee, explaining from the outset the reason for the meeting, including measures taken to correct problems and their outcome. Give the employee some time to collect any personal belongings, but also make sure he or she is promptly escorted off the premises.

You are required by law to notify the employee about eligibility for unemployment insurance, and any benefits such as a continuation of health insurance, if applicable. This can be done at the meeting or in a follow-up letter.

The employee also may be entitled to receive accrued vacation pay or sick leave in the final paycheck, as well as commissions, bonuses and unfulfilled company expenses.

Consider hiring lawyer to look over lease

September 20, 2015

Q: I have found space to lease for my new washateria, and the landlord has given me her standard lease contract. Should I just sign it?

A: Before you sign anything, make sure you understand and agree with all the terms of the contract.

"There is no such thing as a 'standard lease,' and landlords almost always negotiate," says Benjamin Miller, a Houston real estate attorney with Sponsel Miller Greenberg. "Don't lose sight of the fact that the 'Standard Form Lease' represents the landlord's wish list and, if not appropriately modified, may not serve your interests when issues arise."

A lease is much like any business agreement in that it sets out the parameters of a business relationship. You cannot easily break or change a commercial lease. It is a legally binding contract, and a good deal of money is usually at stake.

Hiccups in relationship

When everything goes as planned, most any lease will serve the parties well. The true test occurs when there are hiccups in the relationship. If the lease has not been drafted carefully, a hiccup can become a major problem without a clear solution.

There are, in general, three types of commercial leases. With a gross lease, the renter pays the landlord a fixed monthly rent. It is then up to the landlord to pay all the expenses of operating the building. In a triple net, or NNN, lease, the tenant not only pays base rent, but also part of the building's operating costs. These costs include property taxes, insurance and common area maintenance. Hybrid leases have features of both gross and triple net leases.

Triple net costs are shared according to the percentage of the tenant's square footage to the building's total square footage. So, Miller advises, "Pay attention to what is included in NNN costs and get the right to audit the landlord's cost records."

Maintain the areas

Common area maintenance is generally the amount of additional rent charged to the tenant to maintain the areas of the property shared by all the tenants and from which all tenants benefit. These include repairs, cleaning, janitorial and trash services, as well as personnel costs associated with the property. Most often, common area maintenance doesn't include capital improvements, tenant build-out expenses, legal fees, costs for services to other tenants, commissions to brokers, or costs arising from a landlord's negligence.

You should seriously consider having your lease contract reviewed by an experienced attorney.