SCORE

Entrepreneurs tally big results

SCORE, or Service Corps of Retired Executives, is West Austin's well-kept secret between entrepreneurs seeking advice on starting a business and established business owners looking to expand, said Carleton L. Smith, chair of Austin SCORE Chapter 249.

Smith began volunteering with SCORE eight years ago after he retired as a vice president of worldwide sales and marketing for a company in the electronics industry. He started out in the nonprofit group as a provisional counselor, becoming acquainted with the program and its business workshops. Eventually Smith took on larger roles, but he said he still enjoys the one-on-one mentoring the program provides.

Smith said about 80 percent of SCORE clients in the Austin office are entrepreneurs and most have never owned a business.

"They want to know where to start," Smith said. "We walk them through the steps to take—small business 101."

The initial meeting between client and counselor allows the pair to ascertain whether the prospective entrepreneur has a viable business, Smith said. Counselors are generally retired accountants, attorneys, engineers and executives who have spent years in corporate management. A bond is formed between client and volunteer, and the confidential relationship often spans years, he said.

Smith said that he has a client whom he estimates has consulted him more than 100 times during the past five years.

"When he came to see me for the first time, his business was doing $1.5 million in sales, but he had lost $500,000 a year for the previous six years," Smith said. "As of last year, he had more than $4 million in sales and made $750,000 after taxes. [Prior to that] people owed him money, his prices were not high enough and his expenses were too high. He worked his way through it, but it took almost two years to get on his feet."

A tough economy

Once the economic downturn hit Austin, Smith said that many people who were laid off chose to start their own business.

"In late 2009, early 2010, we had an influx of people [in our office]," Smith said. He said the problem they faced was getting financing in a tough economy.

Smith said that SCORE reached out to Austin's microlenders—companies that make loans of less than $100,000—for aid. Lenders granted loans to startup businesses that had good credit and a business plan, Smith said.

"The interest rates [from microlenders] are higher, but you're not borrowing astronomical sums," Smith said. "They may be the only place you can get a small amount of money to start a business."

Smith said that recent improvements in the economy have brought more people to SCORE who want to expand a business. He advises them to look at sales trends and forecasts before branching out.

SCORE receives $10,000 yearly from the U.S. Small Business Administration, funds it uses for rent, Smith said. The remainder of the rent is paid by grants, and all staffers are volunteers. The confidential counseling service SCORE provides is free for clients, but some workshops have a small fee, which helps pay expenses.

SCORE and the local scene

Smith said that the Austin area provides many opportunities for entrepreneurs who have a plan.

"Austin has an entrepreneurial spirit," Smith said. "People in the city are pretty growth-oriented—it's a dynamic business environment."