THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, September 30, 1994 TAG: 9409290179
SECTION: VIRGINIA BEACH BEACON PAGE: 16 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY PAM STARR, STAFF WRITER
LENGTH: Long : 181 lines
BOB RIVERA IS BUSY making steaming mugs of espresso and cappuccino from dark, fragrant coffee grounds that pleasantly waft through his tiny cafe, a place barely larger than a dorm room.
Customers at the popular Dancing Goat Cafe, on the second floor of Portsmouth Naval Hospital, don't seem to care about waiting, even though the line often stretches out the door. They just want a cup of cappuccino or a deli sandwich before heading back to their shifts.
Two years ago Rivera's cafe was merely an unfinished thought. Rivera, a former Navy pilot, was wondering if he could make a living out of his profound love for gourmet coffee. He researched the market, flew to Seattle (the coffee capital of the world, he says) and decided to pursue the American dream.
But before taking the plunge, Rivera used a little-known service available to potential and existing small business owners - free business counseling.
Rivera, 35, went to the Service Corps of Retired Executives for counseling, a move, he says, that saved him money and trouble. SCORE is a non-profit organization made up of volunteers and partially funded by the U.S. Small Business Administration.
``I brought my business plan into them and they said that my projected figures were way too low,'' recalls Rivera, a resident of Salem Woods. ``They gave me advice on my plan and guidance and a lot of support. If I hadn't gone to SCORE I would've had a lot of trial by error.''
Rivera is one of the lucky ones - he's making a profit. Out of the thousands of Americans who start their own businesses, more than 50 percent fail within the first two years, said Dratin Hill, district director of the Virginia Small Business Administration, and 90 percent fail within five years. Hill believes that more prospective business owners should talk with the volunteers at SCORE and ``exhaust all avenues of advice'' beforehand.
``Careful, upfront planning is the biggest factor in whether or not a business succeeds,'' he said. ``SCORE is a great resource. These volunteers are former small business owners or executives - they have the experience. People can take their recommendations and avoid the same pitfalls.''
That's exactly what Rocky Schmon and Ray Shourds did 18 months ago. They have owned Rock-Ray Drilling, an environmental drilling company in Virginia Beach, for three years and wanted to expand.
But when they contacted banks about getting a loan for about $85,000 for two oil drilling rigs, the banks ``practically laughed at us,'' said Schmon.
``That's when I started talking to SCORE,'' he said. ``They were real friendly and had a lot of information to offer us.
``I was a little blind before. I learned a lot more how to deal with the banks,'' Schmon added. ``And when I went back (to the bank), they seemed more open to me. They could tell I knew what I wanted.''
A blustery northeaster couldn't keep Debbie Smalley from her appointment last Thursday with Gil Kraine, chapter president of SCORE. They met in one of the offices at the Virginia Beach Department of Economic Development and discussed Smalley's idea.
A self-described ex-Navy wife with four children, Smalley wants to get into the transportation business and off Aid to Dependent Children. Her idea, she told Kraine, is to drive Medicaid and Medicare patients to and from appointments. She would be paid by the state.
``I don't know anything about business but I'm willing to give it a try,'' said Smalley, who had worked as a fire watcher at Norfolk Naval Shipyard and as a janitor at Lillian Vernon. ``I'm independent and I help others. I have a lot of girlfriends who need transportation and I'm always driving them. I figured I might as well get paid for it.''
Kraine listened to Smalley with the compassion of a clergyman but talked to her with the bluntness of a police officer. She did not come in with what SCORE thinks is mandatory for new businesses - a detailed plan outlining the business description, financial resources, start-up costs, growth projections, and many other items. A real no-no.
``The key thing you need is a business plan - we'll give you an outline that you can follow,'' said Kraine, who is tall with a gentle smile and is a retired Coast Guard engineering officer. ``Then the first step is to establish a relationship with a bank. But there are very few things you can get at this time, with your lack of equity, your credit history, no business experience.''
Smalley's eyes grew wider as Kraine listed what she should outline. She will need special insurance from the state for her vehicle, a business license from the city, a telephone and beeper and start-up money. A banker would have to see a cash flow analysis to convince him that her business will repay the loan. Then you need collateral for the loan, he continued.
``There's not a tremendous outlay of cash needed up front,'' he said. ``You may be able to get this business started, you may not. You'll have to start small to show that you can do it.''
Bill Garry joined SCORE in 1985 because he ``wanted something to do'' after he retired as a Navy education specialist. He read about SCORE, joined the local Norfolk chapter and is now the national director of membership and training. The Norfolk chapter serves all of the Southside and has 22 members who counsel people twice a week. Last year the chapter counseled 1,650 clients.
``We really need more people to staff the Virginia Beach office,'' said Garry. ``We're short of professionals like accountants and attorneys and we would like to have more women join us.
``You must be willing to work, though,'' he added. ``We pay mileage but that's it.''
Garry, Gil Kraine, Taylor Ridgewell and Ed Groetzinger were sitting in the economic development department's conference room after the three-hour counseling session. All were dressed impeccably in suits and ties and each had seen three or four clients who needed business advice. The most common problem they see are people who think they can start a business with no money.
``If someone comes in with no money it's almost impossible to pull themselves up from their bootstraps,'' said Kraine.
Those who want to work at their business part time are more people destined for failure, added Garry.
``Most people don't realize it takes total dedication to start a business - 80-hour weeks are not uncommon,'' he said. ``You must be willing to sacrifice two years of your life to get a business going. Some don't want to quit their jobs and are not willing to take risks.''
Groetzinger said they have more people asking them for advice about retail, janitorial companies, day-care centers, restaurants and franchises than any other ideas.
``We see the most application for franchises and people don't do any investigation,'' said Groetzinger, a food service broker for the state of Virginia. ``If we can catch them before they put any money up, we can give them enough tools to determine whether the franchise is legitimate.''
The Norfolk, Portsmouth and Virginia Beach departments of economic development co-sponsor monthly business seminars with SCORE members called ``How to Really Start Your Own Business.'' Virginia Beach business development representative Jerry Stewart said they have an informal partnership with SCORE because it's a ``valuable asset.''
``I take a lot of calls from people who want to start up their own business,'' he said. ``I refer them to SCORE - there's not too many sources you can go to for that kind of free advice. SCORE helps us, and in turn, it helps promote business with the city.'' MEMO: SCORE members are available for counseling on Tuesdays from 9:30 a.m. to
12:30 p.m. at the Federal Building, Room 737, 200 Granby St. in Norfolk
and on Thursdays from 9:30 a.m. to noon at the Virginia Beach Department
of Economic Development, 780 Lynnhaven Parkway. For more information on
how to become a volunteer, call the SCORE office at 441-3733.
ILLUSTRATION: [photographer not unidentified]
ABOVE: Jerry Stewart, Virginia Beach business development
representative, says the city often refers callers to SCORE because
it's a ``valuable asset. SCORE helps us, and in turn, it helps
promote business with the city.''
RIGHT: Bob Rivera, 35, went to the Service Corps of Retired
Executives to get advice on starting his business - the popular
Dancing Goat Cafe on the second floor of Portsmouth Naval Hospital.
Photo by L. TODD SPENCER
Rocky Schmon, left, and Ray Shourds used advice from SCORE to secure
an $85,000 bank loan to expand their environmental drilling company
in Virginia Beach.
Staff photo by RICHARD L. DUNSTON
Ed Groetzinger, a SCORE counselor, said most questions involve
retail, janitorial companies, day-care centers, restaurants and
franchises.
Photo by PETER D. SUNDBERG
Debbie Smalley, an ex-Navy wife with four small children, discusses
with Gil Kraine, a chapter president of SCORE, her idea for a small
business that would provide transportation for Medicaid and Medicare
patients to and from appointments. She would be paid by the state.
Bill Garry has been a SCORE counselor since 1985.
HOW TO REALLY START YOUR OWN BUSINESS
SCORE and the Portsmouth Department of Economic Development are
sponsoring a step-by-step workshop from 9:30 a.m. to 4 p.m. Oct. 22
at the Holiday Inn Portsmouth on The Waterfront.
The session will be taught by members of SCORE and
representatives of area lenders and law firms.
They will go over topics such as the idea (opportunities),
testing the idea (market research), protecting the idea (validity),
structuring the business, finding the money, finding good people,
understanding cash flow, the business plan and starting out on the
right foot.
The cost is $25 and attendance is limited to 40 participants.
For more information, call 441-3733.
by CNB