Program aids small businesses in northwest Houston

Program aids small businesses in northwest Houston

By Kimberly Stauffer Friday, 19 March 2010

NORTHWEST HOUSTON — Whether starting a new business or expanding an existing one, the Lone Star College Small Business Development Center is a resource for entrepreneurs in need of guidance and assistance.

The center, based at the community college’s system office in The Woodlands, will counsel anyone who walks in about his or her shop, restaurant or business plan. Sal Mira, director of the center, said his staff provides an unbiased view of a client’s ideas and business plans.

“We provide an objective assessment to their dreams because we don’t have an emotional attachment,” Mira said. “We tend to peel the onion back and give them a realistic assessment of what owning a small business really is.”

Mira and his team understand the small-business world from a personal perspective, as each member owned a business before joining the SBDC. A consultant serves each of LSCS’ five campuses—Cy-Fair, Montgomery, Tomball, North Harris and Kingwood.

“The community doesn’t really know who we are and what we do, but we provide a tremendous service,” Mira said. “It’s free. A business that is in trouble can’t afford to go to a consulting business. And that’s why we’re here.”

The SBDC is one of 15 centers that report to the University of Houston SBDC. The university provides access to several resources beyond what is available at any one center, including UH-LAW, a program that for $100, third-year law students work to resolve real-world problems, and UH-IT, which can design clients’ websites to elevate them from amateur to professional.

The U.S. Congress created the SBDC program in the 1980s to help small businesses grow and compete in the market with training and professional guidance. Mira said when the program first started at LSCS there was an overwhelming percentage of clients wanting to start a new business. Now, many business owners are seeking training opportunities, avenues for loans and ways to survive the recession. One of the center’s more difficult roles, Mira said, is knowing when to give a client a good dose of reality and when to encourage them.

“The thing we have to avoid is providing our bias on whether a business will succeed,” he said. “We don’t want to discourage the next Bill Gates.”

The center can lay out data on area demographics, per capita income and local competition—all-important information for startup entrepreneurs.

“[Clients] overestimate sales and underestimate costs and as a result are undercapitalized,” Mira said. “That’s why they say there is a 90 percent fail rate. You can do it; we can help.”

Karen Cavallaro, a senior consultant serving the Magnolia and Cy-Fair area, said she helps facilitate the process of finding lenders, gathering the appropriate documents and helping clients write a good business plan to attain a bank loan.

Cavallaro also assists clients with research and hundreds of leads each year to help them achieve a thriving business.

“Knowledge is power,” she said. “I try to give them enough information so they can run their business better.”

While the SBDC provides business owners the information and guidance they need, Cavallaro said what people want the most is encouragement.

Small business impact — Lone Star College System Small Business Development Center tracks its impact on local businesses.

What is the SBDC?

The Lone Star College System Small Business Development Center works with existing companies to help them grow and compete in today’s global economy. SBDC services are available for companies in every phase of the business life cycle, helping entrepreneurs make sound decisions and succeed. The SBDC also works with individuals to assist them with the development of new businesses and their operations. The resulting improvement in business performance leads to job creation, investments and economic growth in our community.

*Extended engagements refers to the SBDC’s work with business owners that goes beyond 10 hours.

Loan application process

Obtaining a bank loan is a difficult prospect in today’s economic climate even for borrowers with good credit. Here is a guide to acquiring the necessary financing to start a business.

Step One — Potential borrowers need to prepare a thorough business plan—a blueprint for building a successful company that includes a business summary, management resumes, explanation of products or services as well as market analysis, a marketing plan and cash flow projections. The Lone Star College Small Business Development Center can provide sample business plans and guidance to creating one.

Step Two — Check your credit score. A good score should be a minimum of 700. A credit score can be obtained for a nominal fee through several outlets, including www.annualcreditreport.com, which also provides a free annual credit report.

Step Three — Borrowers need adequate collateral against the value of the loan. A lender requires assets they can liquidate to pay the loan value if the business fails. Assets could include equipment, commercial real estate, real estate that is not your homestead and cash accounts.

Step Four — Borrowers must be able to provide at least 20–30 percent of the startup costs from their own funds. For example, if a business requires $100,000 to start up, the owner needs to be able provide $20,000–$30,000 of personal funding. Additionally, many banks now require at least six to eight months of available working capital after startup expenses are incurred.

Step Five — Lenders like for potential borrowers to have experience in the business they want to start. Without any experience, borrowers need to have someone on the management team who does.

Step Six — Contact the Lone Star College Small Business Development Center at 832-482-1057 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it for help.

Source: Karen Cavallaro, LSC SBDC senior consultant for Cy-Fair and Magnolia