small business orientation 2012 v1

Texas State SBDC 2011

Getting Started in Business

The Business Plan

Texas State SBDC 2011

The Business Advisor

Small Business

Development Centers

Introductions …

Texas State SBDC 2011

Managing Expectations

1) From Idea to Launch … What Happens? 50% Don’t Make it to Step-2 (Business Plan), 75% Never Launch

* It is Hard Work & Long Hours * I Have to Promote & Sell Myself

* I Have to Use My Own Money * I’m Not Really That Committed

2) Failure Rates …. Why? 50% of Starts Fail in First 2 Years, 75% of Starts Fail in First 5 Years

* Start For the Wrong Reasons * Location, Location, Location

* Poor Management * Poor Planning

* Insufficient Capital * Overexpansion (Focus/Discipline)

* Website & Technology * Sales, Marketing, Pricing

3) What Can You Do Differently? * Research/Plan * Resources/Help

* Over-Funding * Networking/Technology

* Do It Yourself * Sell, Sell, Sell

Texas State SBDC 2011

Dispelling Myths & Misconceptions

• The SBA “Money Tree” & Grants Will Get Me There• If I Build It, They Will Come !!!• I Believe … Therefore everyone else will• Raising money is the end in itself; $ validates you• Someone is going to steal my idea…

– Confidentiality Agreements & Intellectual Property• No Platitudes …

• It’s flawless, can’t fail• I must maintain control

• There is no competition• Best customer service

Texas State SBDC 2011

Startup Money

Sources of Start-up Capital… – Owner Equity – Family & Friends– Funding Websites

----------------------------------------------------------------– Bank Loans– Formal Investors– Grants & Competitions– SBIR/STTR/Etc.

Business Cycle Bank Loan Decisions &Outside Funding Paths

Business Cycle Bank Loan Decisions &Outside Funding Paths

85%85%

A Business Plan ???

Texas State SBDC 2010

Texas State SBDC 2010

Texas State SBDC 2011

Do You Need it in Writing?

• Do you have a clear vision?• Do you have years of experience, network, and

reputation in your industry?• Can you clearly describe your customer profile, market

niche, marketing approach, sales strategy? • Do you have the capital, credit score, partners and

resources?

Three Stories – No, Yes, Partial

Texas State SBDC 2011

The Business Plan

• Narrative Component & Financial Component– Starting with Assumptions– DIY: Don’t Use Canned Software or Paid Writer

• What Characterizes a Good Business Plan• What’s New in Business Plans• What is Your Audience Looking For?

– Ten Traits in Ten Minutes

• Additional Suggestions• Do’s & Don’t’s• Keep Your Eye on the Prize

Texas State SBDC 2010

Narrative Components of a Business Plan

• Introduction, Executive/Financial Summary• The Idea: Your Products and Services• Customer Profile, Need, Target Market• Product, Technology, Operations• Marketing Plan & Budget• Sales Strategy & Tactics• Team

Texas State SBDC 2010

Financial Components of a Business Plan

• Budgets (Launch / Operations)• Sources & Uses of Funds • Business Financial Projections• Personal Financials & Tax Returns• Credit Score / Report• Supporting Documentation

Show Milestones

Texas State SBDC 2011

What Characterizes a Good Plan?

• 3 Legged Fit. Market, Personal, Financial• Targeted, direct, purposeful. Specific/Focused• Supported by verifiable research and insightful

analysis. Bottom-up, First.• Recognizes risks, threats, and the competitive

environment. Realistic.• Embodies real-world opportunities and planned

contingencies. Thoughtful & Agile.• Reflects you & your Business. Unique.• Clear, Concise, and Compelling. Respect.

Texas State SBDC 2011

What’s New in Business Plans!by Rhonda Abrams (Business Plan Author)

• Consider Globalization / Outsourcing• Greater Emphasis on Feasibility Analysis• Plan for the Use/Role of Technology and

Social Media in Your Business • Address Social Responsibility• Have a Plan for Distributing your Plan• Peter Gruber (Yahoo Finance) …

– “If you can’t tell it, you can’t sell it” (VIDEO)

Texas State SBDC 2011

Ten Traits in Ten Minutes (by David Rose, Venture Capitalist)

Experience Leadership

Knowledge Commitment

Skills Vision

Passion

Integrity

Realism Traction

Humility/Coachability

Texas State SBDC 2011

Additional Suggestions

• Know Your Plan (Walk the Talk)• Get Help & Solicit Genuine Feedback • Make Sure it all Connects, Be Consistent• Be Passionate, Don’t Follow Your Passions • Communicate @ 8th-Grade Level• Professionalism Counts• People Connect to People• Remember: It’s All About Money

Texas State SBDC 2011

Do’s and Don’ts

• Do: Progress logically & use lots of visuals

• Do: Connect to things your audience understands

• Do: Cite independent sources for validation

• Do: Make sure the opportunity is believable

• Do: Edit, Edit, Edit – Devil’s Advocate

• Don’t: Include typos, errors, omissions

• Don’t: Present internal inconsistencies or contradictions

• Don’t: Discuss things the audience won’t understand

• Don’t: Say anything untrue, unbelievable, or irrelevant

• Don’t: Guess at numbers or use random assumptions

Texas State SBDC 2011

Keep Your Eye on the Prize

• I Don’t Know You ?• I Don’t Know This Business?• Why Should I Even Care ?

• How Can I Help ?• What are the Next Steps ?• Where Do I Send the Check ?

Texas State SBDC 2011

When it all Seems Overwhelming, Remember .. Persistence Pays

Texas State SBDC 2011

Next Steps

• Get Help & Solicit Genuine Feedback • Do Your Homework. Know Your Business• Analyze Feasibility & Prove Concept

• Write, Re-Write, Write, Re-Write !!!