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An experienced & award winning team

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An experienced & award winning

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Advised 936 Small Businesses…

Who is the SBDC at Columbus State?

Who is the SBDC at Columbus State?

An experienced & award winning

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Facilitated $5,863,724 in loans /

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An experienced & award winning

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Who is the SBDC at Columbus State?

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Award

An experienced & award winning

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Who is the SBDC at Columbus State?

The SBDC Service Excellence

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Starting Your Own Business

Everything takes longer than expected.

Don’t be in a hurry to get started.

Everything costs more than expected.

The third attempt at an idea is often the one that

finally works.

Consider other sources of income for living

expenses.

Entrepreneurship

“The process through which people pursue

opportunity, use resources, And initiate change to

create value.”

Entrepreneurship

Entrepreneurs are not risk takers. Entrepreneurs

recognize risks and are able to minimize the risks

associated with their opportunity to optimize their

chances of success.

• What is your product or service?

• Who is your primary customer?

• Do you need financing to start your business?

• Where do you see your business in 5 years?

• Why do you want to own your own business?

Introduce yourself and

your business.

Are a natural Entrepreneur?

Complete the entrepreneurial

Enter a Yes or No response for each question.

Score your quiz.

Are you naturally inclined to be an entrepreneur?

+ and – of being an

entrepreneur

List the advantages and disadvantages of being an

entrepreneur.

Prioritize the top 5 advantages and top 5

disadvantages of being an en entrepreneur.

For each disadvantage list 2 things you can do to

minimize that disadvantage in your business.

Define Your Product or Service

What is your product or service?

How is it different?

Who will buy your product?

Where will it be sold?

When will it be ready to be sold?

How will it be promoted?

Define Your Product or Service

Can you do it?

Profitable Process of “P’s”

• Perceive ~ The “Ah-Ha Moment”

• Pleat & Prove ~ Research and Prove it works

• Plan ~ Create your plan of action

• Process ~ Start to make things happen

• Proceed ~ Do It!

Make Meaning Make a difference Make Value

If you succeed in building a business,

either funding sources will be fighting to give you money or you won’t need their money.

Build A Business

Evaluating Your Idea

Can your idea be turned into a business?

Is there a “real” need for your product or service?

Who is out there to buy your product?

Will they pay for your product?

How big is your market?

Evaluating Your Idea

What are your product’s “features” and “Benefits”?

What are your key “Go/No Go” decisions?

• What do I want out of this business financially?

• What do I want out of this business emotionally?

• Can I afford to go into business?

• How long can I wait to see financial success?

• What am I willing to put at risk?

Market Research

Everything you listed in the previous exercise needs to

be verified.

How do you do that?

• Database customer research.

• Direct customer research.

Market Research

WHO ~

Demographics: the statistical data of a population, esp.

those showing average age, income, education, etc.

WHY ~

Psychographics: the use of demographics to determine

the attitudes and tastes of a particular segment of a

population, as in marketing studies.

Examples p. 17

Do it for you.

Keep it simple.

Keep it real.

Internalize it.

Work it.

Key to Writing an Operating Plan

Mission / Vision

Vision – Mission

A vision statement is sometimes called a picture of your

company in the future but it’s so much more than that. Your

vision statement is your inspiration, the framework for all

your strategic planning.

The mission statement articulates the company's purpose.

It announces to the world at large why your company exists.

Everything you do to promote

your business to get customers

to buy your product/services on a

regular basis.

What is Marketing?

Marketing Analysis

Who is your Target Customer?

What do you know about your customer?

What markets are you competing in?

How are you positioned?

What is your competitive edge?

How does price affect your positioning?

Market Research

Prove or Disprove

There is someone out there to buy my product

There is someone out there to buy my product at

my price

Marketing Your Business

• Set Goals

• Identify your target market

• Establish Your Objectives

• Map out your tactics

• Construct your budget

• Build your timeline

• Evaluate – Evaluate - Evaluate

What is Sales?

The exchange of goods or

services for an amount of

money or equivalent

Execute

Even if you are on the right track,

you will get run over if you just

sit there.

~ Will Rogers

Legal Structure

Key Factors:

• Control

• Taxes

• Liability

Legal Structure

Key Factors:

• Transferability of Ownership

• Longevity of the Business

• Raising Capital

Legal Structure

Sole Proprietorship ~ Simplest structure. Based 100%

on the business owner. Liability lies with the business

owner. Tax liability flows through to the owner.

Partnerships ~ Agreement to operate between one or

more individuals. Tax liability flows through to the

owner. Partnership agreement is critical. Does not

have to be 50/50

Legal Structure

Corporation (C Corp) ~ Separate legal entity. Liability

Lies with the corporation. Double taxed. More complex,

Popular with investable companies.

S Corporation ~ S Corp is a small business designation

of a corporation. Tax liability flows through to the owner.

Liability protection provided.

Legal Structure

Limited Liability Company (LLC) ~ State designation.

Tax liability flows through to the owner.

Liability protection provided.

Where To Start

Ohio’s 1st Stop Business Connection

http://development.ohio.gov/edd/1ststop/onestop/index.cfm

Name Registration

Legal Structure Designation

Vendor’s License

Etc.

“In preparing for battle I have

always found that plans are

useless, but planning is

indispensable.”

- Dwight D. Eisenhower

Plan to Win…

Make Meaning Make a difference Make Value

If you succeed in building a business,

either funding sources will be fighting to give you money or you won’t need their money.

Build A Business

Do it for you.

Keep it simple.

Keep it real.

Internalize it.

Work it.

Key to Writing an Operating Plan

Record Keeping

Critical to keep all records of your business.

• Business Operations and Monitoring

• Tax Purposes

• Financing

• So you know how you are “REALLY” doing

Review Startup costs material

Everything takes longer than you think and costs more than you

think

Go to the “Green” pages

Startup Costs

Building Your Plan

Feasibility Planning

Vs.

Business Planning

Financing Your Business

Bootstrapping is building the business from internally generated funds.

• You need to establish a foundation for your

business.

• Build credibility and show that your business has customers and a product that people want to buy.

• Focus on customers and cash flow.

• Work hard and be creative in seeking ways to drive revenue while holding expenses down.

Friends, Family, Founder

To make money not to make loans.

Lending is a tool to making money.

Why are banks in business?

Banks typically lend for “stuff”.

Banks are a great option if you have history and are looking to expand. However, for an early stage company with limited history and minimal collateral, getting a loan could prove difficult.

Commercial Banks

When the company is new the entrepreneur should establish a banking relationship and utilize this as far as it will go. The relationship with a bank will be very helpful in the future as the business becomes established.

There is no 100% financing from a typical commercial bank.

Commercial Banks

SBA is not in the business of making bad loans.

Once the bank has agreed that the loan is good but in some way outside their guidelines they will seek an SBA guarantee.

The SBA is there to help you with your cash flow.

Longer term Lower down payment

Small Business Administration

Credit Credit Score should strive to be over

740 +

Guard Your Credit Score

What do banks look for?

Business Plan

The business plan tells the bank how you are planning to repay the loan.

What do banks look for?

Collateral

There is no 100% financing

To a bank collateral is real estate or equipment.

What do banks look for?

Short-term money to operate the

business.

Typically financed by a Line of

Credit.

Working Capital

Know your credit score going in.

Establish a banking relationship

Keep you plan tight, clear and easy to understand.

Use common format, don’t be creative.

Help the banker say yes. Put yourself in the banker’s shoes.

Structure your ask. Separate working capital, equipment and real estate.

Getting the bank to say YES!

Business Operations

Everything you do to promote

your business to get customers

to buy your product/services on a

regular basis.

What is Marketing?

What is Sales?

The exchange of goods or

services for an amount of

money or equivalent

Key to Sales

How Full is Your Funnel?

Effective Sales Process

• Define Target Market

• Generate Sales Leads

• Quantify Sales Leads

• Approach Prospects

• Make Sales Presentation

• Handle Objections

• Close the Sale

• Create Relationship

• Service after the Sale

• Repeat

Pricing

Factors that Influence Price

Cost of goods

Demand for product/Service

Competition

Market Pricing

Customer Perception

Margin Standards

Factors Influenced By Price

Sales Volume

Sales Revenue

Market Share

Competitive Advantage

Company Image

Profitability

Price

Components of Profitability

Income Statement

Sales

- Cost of Goods Sold

Gross Margin

- Operating expenses

Net Income

Components of Sales

Sales = Number of Units Sold x Price (per unit)

Income Statement

XYZ Company

Revenue 39,000

Operating Expenses 14,850

Payroll Expenses 22,500

Depreciation 1,450

TOTAL EXPENSES 38,800

NET INCOME $200

Income and Cash Flow

XYZ Company

Income Statement

Revenue 39,000

Operating Expenses 14,850

Payroll Expenses 22,500

Depreciation 1,450

TOTAL EXPENSES 38,800

NET INCOME $200

XYZ Company

Cash flow Statement

Cash Sales 19,000

A/R 20,000

Total Revenue 39,000

Operating Expenses 14,850

Payroll Expenses 22,500

Depreciation

TOTAL EXPENSES 35,500

Cash Flow (16,500)

Income and Cash Flow with A/R

XYZ Company Cash flow

Statement, January

Cash Sales 19,000

A/R 20,000

Total Revenue 39,000

Operating Expenses 14,850

Payroll Expenses 22,500

Depreciation

TOTAL EXPENSES 35,500

Cash Flow (16,500)

XYZ Company Cash flow

Statement, February

Cash Sales 19,000

A/R 20,000

Payments on Account 20,000

Total Revenue 59,000

Operating Expenses 14,850

Payroll Expenses 22,500

Depreciation

TOTAL EXPENSES 35,500

Cash Flow (0)

Business Plan

Should be “concise”

Should provide a clear description of the problem you solve.

Should show how you solve it.

Should clearly articulate your business model.

The underlying magic of your product.

Should show your competitive advantage

Should contain a stand alone summary of no more than “four-pages”.

The Business Plan Should…

Business Plan Process

Business Plan Template available

at http://sbdcfreeadvice.ning.com

Next Steps…

Prepare Your Plan

Work Your Plan

Engage with the Ohio SBDC in

BizStartNow Consulting Sessions

Starting May 12 here at INC. @ 8000

Everything is always impossible

before it works.

That is what entrepreneurs are all

about – doing what people have told

them is impossible.

The Ohio SBDC at Columbus State

p. 614-287-5294

http://sbdcfreeadvice.ning.com

For Information on SBDC Activities