Founded in 1964, the Service Corps of Retired Executives today has 11,500 counselors nationwide providing free business advice from one of 389 local chapters. This agency of the federal government's Small Business Administration last year helped approximately 300,000 people looking to start or improve their business.
In Tucson, the SCORE program has an annual budget of only $13,000 and is headquartered in downtown office space graciously donated by the City of Tucson. Forty-five counselors with expertise in fields ranging from accounting to wholesaling freely give of their time. In the first three months of this year they talked to over 1,400 people either individually or in workshops.
Retired IBM employee Walter Schaffer, chair of the Tucson chapter, says the major purpose of SCORE is "to help people who are in business if they are having trouble, or trying to prevent those going into business from having trouble."
Schaffer indicates that some people believe they can operate a successful small business simply because they have experience in the field. "So many think that if they can cook well at home they can run a restaurant, but it doesn't work that way," he says.
In dealing with clients, Schaffer lists a number of issues he concentrates on. The first is the type of business organization the person wants to establish. "I encourage either a corporation or a limited liability company instead of a sole proprietorship or partnership because they give some protection from lawsuits," he says.
Schaffer wants those he is helping to think about how much it will cost to start a business and to keep it running. Then he suggests they write up a business plan to determine where the money will come from.
"Most people don't have any money [to start a business]," he says, "and banks won't loan you money if you don't have any." So he asks people to estimate their costs and revenues on a flow chart, and then goes over it with them to determine how realistic the projections are.
These figures can be daunting for someone with a business dream, Schaffer says, but they have to be considered. Plus, he adds, "the clients must make their own decisions. We just try to have people understand what they are getting into."
The local SCORE chair says it is gratifying when he can help others on their way to successfully running a small business or prevent people who decide it's not for them from losing money.
While some clients have already made up their minds about what they are going to do before talking to a counselor, Schaffer says "if people work with us, they will definitely increase the possibility of being successful."
That is a very important advantage since within two years of starting, 50 percent of small businesses close. By the end of five years less than 20 percent remain open.
One of those who has made it so far is Danny Chan.
Last October, Chan along with his wife opened Orthopedic Lab in a space on East Broadway Boulevard. Having worked in the field of manufacturing orthopedic appliances from arch supports to neck braces for over two decades, Chan decided to go into business for himself.
"There were a million things that needed to be done," he says, "and I didn't know where to start." So he phoned SCORE in July; they returned his call within an hour; and he met with Schaffer several times to discuss licensing, accounting and marketing issues.
"He was accommodating, knowledgeable and offered very helpful advice," Chan says of the local chapter chair, "and he didn't expect anything in return for his time. He did ask me, however, 'Are you sure you want to go into business?'"
Chan was certain, and adds of his relationship with Schaffer, "I needed somebody to hang on to, somebody to hold my hand for awhile as I made the decisions."
After meeting almost a dozen times with Schaffer over a nine-month period, Chan is now on his own. He says orders so far are beyond his original expectations and that the business is building toward profitability. Referring to the taxes he pays, though, Chan laughs and says, "For now, everybody is making money [on my business] but SCORE and me."
Chan doesn't regret his decision to open the business. "It was time to do it," he says. "You must hang in there. The longer you stay in business, the better it will be."
To accomplish that goal, Chan highly recommends that others considering opening a new business consult with the local chapter of SCORE. "They have everything to gain and nothing to lose," he emphasizes.