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Business Seminars After Start Up… Replanning Your Business October, 2010 Prepared for Real Diaper

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RDIA 2010 Annual Meeting Presentation by SCORE Las Vegas - Replanning Your Business.

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Page 1: Real diaper replanning 10.14.10

Business Seminars

After Start Up…

Replanning Your Business

October, 2010Prepared for Real Diaper

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SCORE Southern Nevada Chapter 243 2

Welcome…

Bob Cushman

SCORE Business Counselor

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The Perks of the Small Business Owner:

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The Perks of the Real Diaper Owner:

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SCORE Southern Nevada Chapter 243 5

About SCORE ®

National Association formed in 1964; now with over 12,000 volunteers in 360 + chapters providing 500,000 counseling hours annually

SBA Resource Partner

Non-profit – all counselors donate their time – so all consultations are free and confidential

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SCORE Southern Nevada Chapter 243 6

About SCORE ®

Largest business Consulting organization in the World

Average Chapter provides free face-to-face counseling, free e-mail business counseling, and offers regular seminars

Find the office nearest you at score.org or use the site to find one of 1,100 online mentors

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SCORE Southern Nevada Chapter 243 7

FIRST - do you need to

re-organize Your Legal Business Structure?

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SCORE Southern Nevada Chapter 243 8

What are the Choices?

Proprietorship

Partnership

Corporation

Limited Liability Company

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SCORE Southern Nevada Chapter 243 9

Proprietorship

• Advantages• Easy to organize• Less reporting• One level of tax

• Disadvantages• Unlimited personal liability• Termination on death of owner• Difficult to raise capital

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SCORE Southern Nevada Chapter 243 10

Partnership•Advantages•Pooling of resources & talents•State registration normally not required

•Disadvantages•Unlimited personal liability•Partner conflict•Death of a partner causes dissolution

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SCORE Southern Nevada Chapter 243 11

Limited Liability Partnership

•Advantages•Pooling of resources & talents•Limited personal liability

•Disadvantages•Partner conflict•Death of a partner causes dissolution

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SCORE Southern Nevada Chapter 243 12

C-Corporation (Federal Registration)

•Advantages•Limited liability of shareholders•Survives shareholders •Transfer of ownership

•Disadvantages•More complex•More reporting•Possible double taxation

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SCORE Southern Nevada Chapter 243 13

S-Corporation (Federal Registration)

Advantages•Same as C-Corporation except one level of tax

Disadvantages

•No double taxation but no retention of profits

•Generally only people can be owners

•Limited to one class of stock

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SCORE Southern Nevada Chapter 243 14

Limited Liability Company

•Advantages•Flexible ownership and capital structure•Limited personal liability•Tax choices complex•Losses may offset other income (new)

•Disadvantages•No retention of profits•Complex Operating Agreement

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But they don’t stay the same…

SCORE Southern Nevada Chapter 243 15

PAUL D. GARNETT AND ALICIA GARNETT, Petitioners v.COMMISSIONER OF INTERNAL REVENUEFiled June 30, 2009.The Garnett’s owned interests in L.L.P.s, L.L.C.s, and tenancies in common. The parties request a ruling as to whether their interests are subject to the rule of sec. 469(h)(2), I.R.C., which treats losses from an “interest in a limited partnership as a limited partner” as presumptively passive.Held: Because they did not hold their interests in the L.L.P.s or L.L.C.s as “limited partners”, these interests are not subject to the rule of sec. 469(h)(2), I.R.C.

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BUT THEY DON’T STAY THE SAME…

The Small Business Jobs and Credit Act provides an opportunity to avoid taxes.

Individuals who acquire stock in small businesses after October 1 pay NO capital gains if they hold the stock for more than five years. However, it only applies to C corporations and stock has to be acquired by January 1, 2011 — so act fast.

SCORE Southern Nevada Chapter 243 16

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SCORE Southern Nevada Chapter 243 17

Practical DifferencesProprietorship $14,000 13.3%

Partnership $82,500 23.6%

Corporation $28,600 17.5%

S-Corp $51,200 26.9%

Limited Liability Company

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SCORE Southern Nevada Chapter 243 18

Outline of other considerations:1. Government2. Facility3. Personnel4. Legal5. Accounting 6. Banking7. Risk Management8. Computer and Telephone9. Public Relations10. Suppliers

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SCORE Southern Nevada Chapter 243 19

Government

Legal Structure of Business

Government Relations

New Hire advantages

Independent Contractors

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SCORE Southern Nevada Chapter 243 20

Facility (physical location)

Stay at Location with rent reduction?Move to get lower rent?

Lease RestrictionsBuild-out AllowancesSignageLease Options

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SCORE Southern Nevada Chapter 243 21

Facility (Internet Presence)

Stay at One Website with upgrades?Move to Multiple Websites?

Traffic studies (Alexa, etc.)SEO studiesContent RestrictionsCompetitors

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SCORE Southern Nevada Chapter 243 22

Personnel

Contracts and Agreements Leased PersonnelUpgrading Job DescriptionsPolicy & Procedure ManualsPersonnel Training

Performance of the processMarketing and Sales

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SCORE Southern Nevada Chapter 243 23

Legal and Lawyers

Business StructureContracts, Guarantees and AgreementsIntellectual PropertyTax Law Leases

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SCORE Southern Nevada Chapter 243 24

Accounting and CPA’s

CASH versus ACCRUALAmortization & DepreciationBusiness Structure Tax changesAccounting systemBookkeepingTax strategy/Return preparation

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SCORE Southern Nevada Chapter 243 25

Banking and Loan Officers Establish relationship with a Second Bank

– Payroll and Payroll Tax AccountSBA approved program lender

– Preferred lenderCredit Card processingLines of Credit

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SCORE Southern Nevada Chapter 243 26

Risk Management and Insurance

Premises - property and liabilityDirectors & OfficersProduct Liability Errors and OmissionsContents - self and othersAutomotiveEmployeeBonding

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SCORE Southern Nevada Chapter 243 27

Computers and Telephones

Domain and WebsiteWebsite MaintenanceBackupSocial NetworkingPhone LandlinesCell Phones and Smart PhonesAnswering Systems

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SCORE Southern Nevada Chapter 243 28

Public and Press Relations

Disposable Diaper problemsLandfill problemsDiaper Rash problems

Social NetworkingLocal PressUnits of larger papers

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SCORE Southern Nevada Chapter 243 29

Suppliers

NEW SUPPLIERSCredit terms/DiscountsAssured pricesTime lineBusiness plan

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SCORE Southern Nevada Chapter 243 30

A Resource to MOVE FORWARD…

A NEW

BUSINESS PLAN

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The Business Plan: Your Roadmap to Change

• Do I really need it?• Do I really have to write it?

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SCORE Southern Nevada Chapter 243 32

The Business Plan is a:Document that sells and explainsDiscussion of future plansDemonstration of achievabilityBenchmark for measuring progress

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SCORE Southern Nevada Chapter 243 33

Using The Plan: External

Bank financingNon-bank financing Investors Landlords Suppliers

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SCORE Southern Nevada Chapter 243 34

Using The Plan: Internal

A “Sanity” checkForces critical thinkingAllows goals to be setCommits participantsBasis for course correction

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SCORE Southern Nevada Chapter 243 35

Required Plan Information

Company BasicsPersonnel Resume’sMarketing PlansProduct/Service DescriptionProduction/LogisticsForecast in Units/Dollars

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SCORE Southern Nevada Chapter 243 36

Plan Length

Narrative:Five to fifteen pages of text

Financials: Longer than the text

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SCORE Southern Nevada Chapter 243 37

Sample Table of ContentsExecutive Summary (Write this last)Company HistoryMarket CompetitionMarketingProcessingFinancialsAppendices

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SCORE Southern Nevada Chapter 243 38

Valuable Plan ContentsMarket Overall Demographics – population trends Internet Demographics – usage trends County and Zip Code Demographics Competition How are parents deciding now? Where are they buying now? Include Competitor Information

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SCORE Southern Nevada Chapter 243 39

Marketing Plan

• Sales Projections (by month for years 1-2)

• Advertising and its cycles

• Promotion Programs and seasonality

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A BUSINESS PLAN TOOL:

ULTIMATE BUSINESS PLANNER ®

SCORE evaluated many and choose this because of ease of use and for the sample plans that are included.

Because SCORE is a non-profit, we can sell it for less.

Because SCORE is a non-profit, we aren’t required to charge sales tax.

SCORE Southern Nevada Chapter 243 40

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SCORE Southern Nevada Chapter 243 41

ResourcesChamber(s) of CommerceCounty and Municipal OfficesTrade AssociationsData bases -D&B, List BrokersBureau of Census, Bureau of Labor StatisticsNon-competitors (Mentors, Colleagues, Coaches)Public Library

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SCORE Southern Nevada Chapter 243 42

SOME USEFUL WEBSITES

SCORE National www.score.orgSBA www.sba.govUS Governmentwww.firstgov.govBusiness Plan www.scorelv.orgLegal advice

www.businesslaw.comIRS www.irs.govIntuit www.quicken.com

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SCORE Southern Nevada Chapter 243 43

Next Steps

•Focus on your current needs•Develop your Business Plan•Use FREE SCORE Counseling

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SCORE Southern Nevada Chapter 243 44

GOOD LUCK!