starting and nurturing your business
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Starting & Nurturing Your Business – Ten Steps
SCORE Chapter 34Greater Cincinnati Area
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Workshop Objectives
• Learn the ten steps to start a business
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Workshop Objectives
• Learn the ten steps to start a business
• Learn some tips to do each step
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Workshop Objectives
• Learn the ten steps to start a business
• Learn some tips to do each step• Get to know key Resources
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Workshop Objectives
• Learn the ten steps to start a business
• Learn some tips to do each step• Get to know key Resources• Learn tools/techniques to build
plan
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Workshop Objectives
• Learn the ten steps to start a business
• Learn some tips to do each step• Get to know key Resources• Learn tools/techniques to build plan• Know where to start
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Background - SCORE
Purpose of SCORE Provide counseling/training
- small business owners
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Background - SCORE
Purpose of SCORE Provide counseling/training
- small business owners
SCORE helps small business owners:Start-upGrow their businessSometimes helping them
avoid failure8
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Background - SCORE
Background: National Organization
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Background - SCORE
Background: National Organization
Over 11,000 volunteers750 Counseling locationsNon-Profit OrganizationAffiliated with Small Business
Administration
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Background - SCORE
Background: Cincinnati Chapter
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Background - SCORE
Background: Cincinnati Chapter
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•65 Counselors - various business backgrounds•Provides 25+ workshops per year over 400 students•Provides “one-on-one counseling; over 2200 Sessions last year•“No cost to You”•Sign up form will be provided
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Importance of Small Business to US Economy
• Number of Small Business that Are “in-business”
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Importance of Small Business to US Economy
• Number of Small Business that Are “in-business”
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•Small Businesses make-up 99% of all businesses (22 million in the US)
•Employ 51% of the private workforce.
•Historically, create over 60% of the NET jobs in the US.
•Comprise 96% of all exporters of goods & 51% of private sector output.
•Have a higher level of innovation than big Businesses; •“faster on their feet” than large companies.
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Importance of Small Business to US Economy
• Number of Small Business Are Successful (Why)
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Importance of Small Business to US Economy
• Number of Small Business Are Successful (Why)
Are “in-business”70% businesses are operating after 2 years50% operating after 4 years40% operating after 6 years
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Importance of Small Business to US Economy
Number of Small Business Are Successful (Why)
Are Successful:Business Plan is used:
• To establish what to work on and when• To regularly track key results (sales, profits,
expenses)• Do the “hard stuff” when it is needed (reduce
expenses)• Have sufficient funding (good cash flow)• Understand the time demands of a business• Have support of family and friends
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Starting New Business Process Ten Steps
Step 1: Identify skills and experience YOU have to start a Business
• Determine the high level of skills and experience you will provide to YOUR business.
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Starting New Business Process Ten Steps
Step 2: Perform risk assessment of YOUR business idea
• Document your idea then test with a person in a similar business, a SCORE Counselor and/or your commercial lender. Determine the likelihood of a successful business.
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Starting New Business Process Ten Steps
Step 3: Determine the level of Financial Resources needed versus YOUR financial status
• Determine the level of financial skills and experience required versus YOUR financial knowledge.
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Starting New Business Process Ten Steps
Step 4: Define who your target Customers are and your Product or Service
• Describe the target individual or group of people that you will focus your attention. Identify where your target audience is located. Describe YOUR product or service and the benefit it will provide your customers.
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Starting New Business Process Ten Steps
Step 5: Identify the organizational structure and the operations to provide YOUR product or service
• Describe the how the product or service will be made and design of the organization with number of people and skill levels.
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Starting New Business Process Ten Steps
Step 6: Learn the options for YOUR legal structure and key resources
• Learn the various legal options and the pros and cons of each.
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Starting New Business Process Ten Steps
Step 7: Develop YOUR Marketing Plan• Describe the process for developing
the various methods and approaches and making best choices for an effective Marketing Plan.
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Starting New Business Process Ten Steps
Step 8: Develop YOUR Financial Plan
• Develop a three year cash flow with actions steps as changes occur.
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Starting New Business Process Ten Steps
Step 9: Integrate all of the pieces into an overall business plan
• Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies as required.
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Starting New Business Process Ten Steps
Step 10: Work the Plan and learn to make Adjustments
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Now the Details – Are you ready????
289:35AM
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Step 1: Identify skills and experience YOU have to start a BusinessDetermine the high level of skills and experience you will provide to YOUR
business.
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Step 1: Identify skills and experience YOU have to start a BusinessDetermine the high level of skills and experience you will provide to YOUR
business.
Characteristics of Successful Business People• A burning desire to succeed
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Step 1: Identify skills and experience YOU have to start a BusinessDetermine the high level of skills and experience you will provide to YOUR
business.
Characteristics of Successful Business People• A burning desire to succeed• Expertise
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Step 1: Identify skills and experience YOU have to start a BusinessDetermine the high level of skills and experience you will provide to YOUR
business.
Characteristics of Successful Business People• A burning desire to succeed• Expertise• Management Skills
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Step 1: Identify skills and experience YOU have to start a BusinessDetermine the high level of skills and experience you will provide to YOUR
business.
Characteristics of Successful Business People• A burning desire to succeed• Expertise• Management Skills• Tolerance for a long work week
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Step 1: Identify skills and experience YOU have to start a BusinessDetermine the high level of skills and experience you will provide to YOUR
business.
Characteristics of Successful Business People• A burning desire to succeed• Expertise• Management Skills• Tolerance for a long work week• Adequate funding
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Step 1: Identify skills and experience YOU have to start a BusinessDetermine the high level of skills and experience you will provide to YOUR
business.
Characteristics of Successful Business People• A burning desire to succeed• Expertise• Management Skills• Tolerance for a long work week• Adequate funding• Resilience and flexibility
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Step 1: Identify skills and experience YOU have to start a BusinessDetermine the high level of skills and experience you will provide to YOUR
business.
Characteristics of Successful Business People• A burning desire to succeed• Expertise• Management Skills• Tolerance for a long work week• Adequate funding• Resilience and flexibility• An understanding of what’s required
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Step 1: Identify skills and experience YOU have to start a BusinessDetermine the high level of skills and experience you will provide to
YOUR business.
Characteristics of Successful Business People• A burning desire to succeed• Expertise• Management Skills• Tolerance for a long work week• Adequate funding• Resilience and flexibility• An understanding of what’s required
Do you have all of the characteristics to be successful?
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STEP 2
389:50AM
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Step 2: Perform risk assessment of YOUR business idea Document your idea then test with a person in a similar business, a SCORE
Counselor and/or your commercial lender. Determine the likelihood of a
successful business.
• Lack of commitment
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Step 2: Perform risk assessment of YOUR business idea Document your idea then test with a person in a similar business, a SCORE
Counselor and/or your commercial lender. Determine the likelihood of a successful business.
• Lack of commitment
• Lack of vision, purpose, or principles
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Step 2: Perform risk assessment of YOUR business idea Document your idea then test with a person in a similar business, a SCORE
Counselor and/or your commercial lender. Determine the likelihood of a successful business.
• Lack of commitment
• Lack of vision, purpose, or principles
• Lack of management systems
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Step 2: Perform risk assessment of YOUR business idea Document your idea then test with a person in a similar business, a SCORE
Counselor and/or your commercial lender. Determine the likelihood of a successful business.
• Lack of commitment
• Lack of vision, purpose, or principles
• Lack of management systems • Poor market definition and strategy
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Step 2: Perform risk assessment of YOUR business idea Document your idea then test with a person in a similar business, a SCORE
Counselor and/or your commercial lender. Determine the likelihood of a successful business.
• Lack of commitment
• Lack of vision, purpose, or principles
• Lack of management systems • Poor market definition and strategy • Competition
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Step 2: Perform risk assessment of YOUR business idea Document your idea then test with a person in a similar business, a SCORE
Counselor and/or your commercial lender. Determine the likelihood of a successful business.
• Lack of commitment
• Lack of vision, purpose, or principles
• Lack of management systems • Poor market definition and strategy • Competition
• Lack of Cash
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Step 2: Perform risk assessment of YOUR business idea Document your idea then test with a person in a similar business, a SCORE
Counselor and/or your commercial lender. Determine the likelihood of a successful business.
• Lack of commitment
• Lack of vision, purpose, or principles
• Lack of management systems • Poor market definition and strategy • Competition
• Lack of Cash
Please assess each element as to the level of risk to YOUR business (1 to 10) (1 is the lowest level of risk)
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STEP 3
4610:05AM
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Step 3: Determine the level of Financial Resources needed versus YOUR financial status
Determine the level of financial skills and experience required versus YOUR financial knowledge.
• Required:– Daily tracking of income/expenses and balancing the cash
drawer– Making deposits and writing checks– Prepare all of the personnel checks and reserve the taxes– Document all income and expenses by day for the month– Balance the check book with the Bank Statement
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Step 3: Determine the level of Financial Resources needed versus YOUR financial status
Determine the level of financial skills and experience required versus YOUR financial knowledge.
• Required:– Daily tracking of income/expenses and balancing the cash drawer– Making deposits and writing checks– Prepare all of the personnel checks and reserve the taxes– Document all income and expenses by day for the month– Balance the check book with the Bank Statement– Prepare a formal Profit and Loss statement each month– Prepare a formal Balance Sheet each month– Do a detailed analysis of the financial information
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Step 3: Determine the level of Financial Resources needed versus YOUR financial status
Determine the level of financial skills and experience required versus YOUR financial knowledge.
• Required:– Daily tracking of income/expenses and balancing the cash drawer– Making deposits and writing checks– Prepare all of the personnel checks and reserve the taxes– Document all income and expenses by day for the month– Balance the check book with the Bank Statement– Prepare a formal Profit and Loss statement each month– Prepare a formal Balance Sheet each month– Do a detailed analysis of the financial information– Prepare a forecast of the income and expenses for balance of year– Compare the forecast to the budget by line item– Make required adjustments to achieve the budget– Prepare quarterly documents– File and pay quarterly taxes– Prepare annual budget– Prepare and file Federal/State Taxes
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Step 3: Determine the level of Financial Resources needed versus YOUR financial status
Determine the level of financial skills and experience required versus YOUR financial knowledge.
• Check YOUR skills versus the Required Activities!
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STEP 4
5110:20
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Step 4: Define who your target Customers are and your Product or Services business.
Describe the target individual or group of people that you will focus your attention. Identify where your target audience is located. Describe YOUR product
or service and the benefit it will provide your customers.
• Identify your Customers:RetailBusiness to Business
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Step 4: Define who your target Customers are and your Product or Services business.
Describe the target individual or group of people that you will focus your attention. Identify where your target audience is located. Describe YOUR product or service and
the benefit it will provide your customers
• Define your Customer’s Profile:AgeSexIncome LevelsEthnicityHomeowner / RenterLocationOther
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Step 4: Define who your target Customers are and your Product or Services business.
Describe the target individual or group of people that you will focus your attention. Identify where your target audience is located. Describe YOUR product or service and
the benefit it will provide your customers.
• Define your Customer’s wantsFeatures, Benefits, and Advantages
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Step 4: Define who your target Customers are and your Product or Services business.
Describe the target individual or group of people that you will focus your attention. Identify where your target audience is located. Describe YOUR product or service and
the benefit it will provide your customers.
You have defined your customer or client AND what you think they want!
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Step 4: Define who your target Customers are and your Product or Services business.
Describe the target individual or group of people that you will focus your
attention. Identify where your target audience is located. Describe YOUR product or service and the benefit it will provide your customers
• Define each of your Service or Product:FeaturesBenefitsUniquenessDoes it fill a “Niche”?
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Step 4: Define who your target Customers are and your Product or Services business.
Describe the target individual or group of people that you will focus your attention. Identify where your target audience is located. Describe YOUR product or service
and the benefit it will provide your customers
Do your target customers wants MATCH your product or service???????
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Step 4: Define who your target Customers are and your Product or Services business.
Describe the target individual or group of people that you will focus your attention. Identify where your target audience is located. Describe YOUR product or service and
the benefit it will provide your customers
• Compare your Service or Product with yourCompetition against the same criteria:
FeaturesBenefitsUniqueness “Niche”
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Step 4: Define who your target Customers are and your Product or Services business.
Describe the target individual or group of people that you will focus your attention. Identify where your target audience is located. Describe YOUR product or service
and the benefit it will provide your customers.
Does your target customer want your product or service OR your competitor’s??????
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Step 4: Define who your target Customers are and your Product or ServiceDescribe the target individual or group of people that you will focus your attention. Identify where your target audience is located. Describe YOUR
product or service and the benefit it will provide your customers.
Elevator Pitch• Your mother would understand in the
time it takes to ride an elevator up to the second floor
• Now…Boil it all down to just…30-35 seconds
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Step 4: Define who your target Customers are and your Product or ServiceDescribe the target individual or group of people that you will focus your attention. Identify where your target audience is located. Describe YOUR
product or service and the benefit it will provide your customers.
Elevator Pitch• Your mother would understand in the time it takes to ride
an elevator up to the second floor• Put the Idea in Words
– State your business concept– What is it you do for Customers?– How does the Customer benefit?– What’s in it for the Customer?– Who is in your Target Market?– How can Prospects be identified? Separate from others?– How do you want customers to perceive your business?
• Now…Boil it all down to just…30-35 seconds
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Financial Skills Required, Target Customer and
product/service defined
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STEP 5
6310:50
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Step 5: Identify the organizational structure and the operations to provide YOUR product or service
Describe the how the product or service will be made and design of the organization with number of people and skill levels.
Organization Chart• Key Positions• Responsibilities and duties• Who• Qualifications• Employees/Subcontractors/Independent Contractors• When
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Step 5: Identify the organizational structure and the operations to provide YOUR product or service
Describe the how the product or service will be made and design of theorganization with number of people and skill levels.
Organization Chart• Key Positions• Responsibilities and duties• Who• Qualifications• Employees/Subcontractors/Independent Contractors• When• Other Factors to consider
• Growth and Expansion Plan• Training• Who will handle payroll• Support - Help• Board of Directors – Required for Corporation• Advisory Board – Desirable for All (Who?, Qualifications?)• Legal• Accounting• Insurance• Technical• Business
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Step 5: Identify the organizational structure and the operations to provide YOUR product or service
Describe the how the product or service will be made and design of the organization with number of people and skill levels.
Operation Plan - Checklist• How will You obtain/make/provide the product/service?• Make it, Buy it? All or part?• Sell it wholesale or retail?• At your store/service center?• By mail, internet?• Using Salespersons, Yourself?
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Step 5: Identify the organizational structure and the operations to provide YOUR product or service
Describe the how the product or service will be made and design of the organization with number of people and skill levels.
Operation Plan - Checklist• How will You obtain/make/provide the product/service?• Make it, Buy it? All or part?• Sell it wholesale or retail?• At your store/service center?• By mail, internet?• Using Salespersons, Yourself?• Startup Capital Requirements• Any Plans for Growth?• When? How? Resources Needed?• Patents and Copyrights?• What are Your plans for Contingencies?• Identify most probable/possible contingencies• How will You Address Them
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Step 5: Identify the organizational structure and the operations to provide YOUR product or service
Describe the how the product or service will be made and design of the organization with number of people and skill levels.
Facilities Plan – Checklist• Location?• Rent/lease/buy• How?• When?• How much?• Amenities• Parking• Public transportation
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Step 5: Identify the organizational structure and the operations to provide YOUR product or service
Describe the how the product or service will be made and design of the organization with number of people and skill levels.
Facilities Plan – Checklist• Location?• Rent/lease/buy• How?• When?• How much?• Amenities• Parking• Public transportation• Distribution/Shipping channels• Accessibility• Required Adaptation to your Business• Zoning• Utilities• Modifications• Licenses & Permits• Equipment Requirements?• New or used
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STEP 6
7011:05AM
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Step 6: Learn the options for YOUR legal structure and key resources
Learn the various legal options and the pros and cons of each.
• Select your Business Structure– Sole Proprietorship– Partnership – Limited Liability – Incorporation– C-Corp & S-Corp
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Step 6: Learn the options for YOUR legal structure and key resources
Learn the various legal options and the pros and cons of each.
Sole Proprietorship– Most used – 70% of 20 million businesses– Maximum control and freedom of action– Simple and least costly to start – Less government regulation and reporting– Profits are taxed as income to the owner– Owner’s Social Security and Medicare are taxed from business
profit
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Step 6: Learn the options for YOUR legal structure and key resources
Learn the various legal options and the pros and cons of each.
Partnership– Advantages are similar to sole proprietorship– Additional source of capital– Partners divide profit and loss– Two or more heads better than one
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Step 6: Learn the options for YOUR legal structure and key resources
Learn the various legal options and the pros and cons of each.
Limited Liability Company– A Hybrid – Corporate & Partnership– State chartered – business name includes LLC – Professional Services– Income and Tax Benefits– More flexibility in allocating profit & loss – Avoids double taxation better than C-corp– Reduced Personal Liability
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Step 6: Learn the options for YOUR legal structure and key resources
Learn the various legal options and the pros and cons of each.
Incorporation, C-Corp– Separates personal from business– Limited liability for stockholders– Flexibility– Easier to raise capital– Health & insurance benefits– Continuity– Change in ownership need not affect management
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Step 6: Learn the options for YOUR legal structure and key resources
Learn the various legal options and the pros and cons of each.
Incorporation, S-Corp – Corporate Credibility– Created for Small Business– Small Business Tax Benefits– Avoids C-Corp double taxation– Flexibility
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Step 6: Learn the options for YOUR legal structure and key resources
Learn the various legal options and the pros and cons of each.
Regulations - Licenses and Permits– YOU must assume that your
business requires them.
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Step 6: Learn the options for YOUR legal structure and key resources
Learn the various legal options and the pros and cons of each.
Regulations - Licenses and Permits– YOU must assume that your business requires them.– The failure of government to organize or
centralize the obtaining of licenses and permits does not exonerate you if you fail to obtain those required for your business.
– SCORE Brief #10.03 provides phone numbers of agencies in various locales which can help your search. See your SCORE counselor to get a copy.
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STEP 7
7911:20AM
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Step 7: Develop YOUR Marketing Plan.Describe the process for developing the various methods and approaches and
making best choices for an effective Marketing Plan.• Definition
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Step 7: Develop YOUR Marketing Plan.Definition
• The ENGINE that DRIVES your business
PriceProductPlacePromotion
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Step 7: Develop YOUR Marketing Plan.Describe the process for developing the various methods and approaches and
making best choices for an effective Marketing Plan.• Definition• Marketing Plan
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Step 7: Develop YOUR Marketing Plan.Marketing Plan
• Situation AnalysisTarget Customers
83
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Step 7: Develop YOUR Marketing Plan.Marketing Plan
• Situation AnalysisTarget CustomersCompetition
84
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Step 7: Develop YOUR Marketing Plan.Marketing Plan
• Situation AnalysisTarget CustomersCompetitionIndustry Trends
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Step 7: Develop YOUR Marketing Plan.Marketing Plan
• Situation AnalysisTarget CustomersCompetitionIndustry TrendsEconomic Trends
86
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Step 7: Develop YOUR Marketing Plan.Marketing Plan
• Situation AnalysisTarget CustomersCompetitionIndustry TrendsEconomic TrendsSocial Trends
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Step 7: Develop YOUR Marketing Plan.Describe the process for developing the various methods and approaches and
making best choices for an effective Marketing Plan.• Definition• Marketing Plan• Marketing Strategy
88
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Business Description
89
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Business Description:Product or Services
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Business Description:Product or ServicesCustomer Benefits
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Business Description:Product or ServicesCustomer BenefitsManagement Organization
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Business Description:Product or ServicesCustomer Benefits
Management OrganizationStrengths and Weaknesses“Niche”
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Business Description• Financial Requirements
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Financial Requirements:How much
95
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Financial Requirements:How muchHow will you get it
96
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Business Description• Financial Requirements• Target Market
97
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Target Market:Target Customers
98
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Target Market:Target CustomersMarket Segment
99
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Target Market:Target CustomersMarket SegmentProduct / Services
100
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Target Market:Target CustomersMarket SegmentProduct / ServicesCompetition
101
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Business Description• Financial Requirements• Target Market• Competition
102
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Competition:Major Competitors
103
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Competition:Major CompetitorsTheir Strengths and
Weaknesses
104
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Competition:Major CompetitorsTheir Strengths and WeaknessesTheir Marketing Strategies
105
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Business Description• Financial Requirements• Target Market• Competition• Promotion /Advertising
106
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Promotion /Advertising:Sales Style
107
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Promotion /Advertising:Sales StyleMedia services
108
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Promotion /Advertising:Sales StyleMedia servicesMeasurements
109
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Promotion /Advertising:Sales StyleMedia servicesMeasurementsNetworking
110
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Business Description• Financial Requirements• Target Market• Competition• Promotion / Advertising• Market Research
111
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Market Research:Market Trends
112
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Market Research:Market TrendsSales / Profitability
113
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Market Research:Market TrendsSales / ProfitabilityEconomic Interests
114
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Market Research:Market TrendsSales / ProfitabilityEconomic InterestsPopulation Shifts
115
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Step 7: Develop YOUR Marketing Plan.Marketing Strategy
• Market Research:Market TrendsSales / ProfitabilityEconomic InterestsPopulation ShiftsCompetition
116
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Step 7: Develop YOUR Marketing Plan.Describe the process for developing the various methods and approaches and
making best choices for an effective Marketing Plan.• Definition• Marketing Plan• Marketing Strategy• Advertising
117
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Step 7: Develop YOUR Marketing Plan.Advertising
• Promotional Materials
118
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Step 7: Develop YOUR Marketing Plan.Advertising
• Promotional Materials:Product LiteratureWeb SiteCatalogsBrochuresBusiness CardsNewslettersPoint-of-Sale Handouts
119
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Step 7: Develop YOUR Marketing Plan.Advertising
• Promotional Materials• Public Relations
120
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Step 7: Develop YOUR Marketing Plan.Advertising
• Public Relations:Press ReleasesNetworkingNewsletterCommunity InvolvementVolunteer InvolvementSpeakingSeminarsEvent SponsorshipsPublic Articles
121
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Step 7: Develop YOUR Marketing Plan.Advertising
• Promotional Materials• Public Relations• Promotional Events
122
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Step 7: Develop YOUR Marketing Plan.Advertising
• Promotional Events:Trade ShowsCertificatesSweepstakesOffersFrequent Buyer PointsCity/Township/Church Events
123
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Step 7: Develop YOUR Marketing Plan.Advertising
• Promotional Materials• Public Relations• Promotional Events• Budget
124
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Step 7: Develop YOUR Marketing Plan.Advertising
• Budget:Start-up FundsAllocate ½ of your Gross
Margin to Marketing
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Step 7: Develop YOUR Marketing Plan.Describe the process for developing the various methods and approaches and
making best choices for an effective Marketing Plan.• Definition• Marketing Plan• Marketing Strategy• Advertising• Customer Service
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Step 7: Develop YOUR Marketing Plan.Describe the process for developing the various methods and approaches and
making best choices for an effective Marketing Plan.• Customer Service
• Will you need a Customer Center• Will you need a Web Site• Will you need a 800 Number• Will you need a Receptionist• How will you handle returns• What about trade-ins• What about Warranties, Guaranties and
ServiceContracts• Analyze what your Competition does
127
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STEP 8
12811:50AM
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Step 8: Develop YOUR Financial Plan
Develop a three year cash flow with actions steps as changes occur.
129
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Year 1 Year 2 Year 3 Grand Total
# Services
Revenue per service
Income
# of employees
$ paid per employee
Personnel Costs
Total Expenses – using 50% rule
Income - Expenses
Startup costs
Total per year
Cum. Total
Amount you will invest
Amount you need to borrow
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Step 8: Develop YOUR Financial Plan
Develop a three year cash flow with actions steps as changes occur.
131
How much equipment will you need for startup? (List)
How many products or services will you provide in the first year?
How much will you charge per product or service?
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Step 8: Develop YOUR Financial Plan
Develop a three year cash flow with actions steps as changes occur.
132
How much equipment will you need for startup? (List)
How many products or services will you provide in the first year?
How much will you charge per product or service?
How many people will be on the payroll?
How much will you pay each person?
How much will your expenses be if payroll is 50% of the expenses?
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Step 8: Develop YOUR Financial Plan
Develop a three year cash flow with actions steps as changes occur.
133
How much money do you need to startup?
How much will YOU invest?
Please complete the next page to get the answer!
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Example Your Data
Year 1
Your Data
Year 2
Your Data
Year 3
Grand Total
# Services 500Revenue per
service150
Income 75,000# of employees 2
$ paid per employee
20,000
Personnel Costs 40,000Total Expenses –
using 50% rule60,000
Income - Expenses 15,000Startup costs 30,000Total per year (15,000)
Cum. Total (15,000)Amount you will
invest
Amount you need to borrow
134
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STEP 9
13512:05PM
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies as required
Business Plan – WHY?WHAT IS A BUSINESS PLAN?– The business plan is a written
document that describes your business and your plan for running it…. This becomes your management “BLUEPRINT” throughout your business life.
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies as required
Why do I need a Business Plan?– A plan raises your odds of success. The
process forces you to take an objective, critical, unemotional look at your project.
– The plan communicates your ideas to others and provides the basis for your financial proposal.
– The finished plan becomes your operating tool and benchmark of progress. (Are you working the plan and is it working?)
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies as required
Why do I need a Business Plan?It answers questions such as:• Why do I want to go into business?• What business do I want to be in?• Who are my customers?
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies as required
Why do I need a Business Plan?It answers questions such as:• Why do I want to go into business?• What business do I want to be in?• Who are my customers?• What is the market condition?• How will I manage this business?• What are my financial needs?
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies as required
Business Plan – • HOW TO…
• Researching and writing a solid business plan takes time
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies as required
Business Plan – • HOW TO…
• Focus on the intended reader
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies as required
Business Plan – • HOW TO…
• Be honest and realistic
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies as required
Business Plan – • HOW TO…
• Use layman terms
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies as required
Business Plan – • HOW TO…– Substantiate your statements
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies as required
Business Plan – • HOW TO…– Remain flexible
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures,
and then make adjustments to the strategies
BUSINESS PLAN – FORMAT and COMPOSITION• ESSENTIAL COMPONENTS
– Executive Summary– Description of Products and Services– The Market– Marketing Strategy– Competition– Organization and Operations– The Management Team– Personnel– Financial Information– Timetables & Benchmarks– Supporting Documentation
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies
EXECUTIVE SUMMARY - An overview of your business– Business Description–Market Niche–Management Expertise– Sales and Profit Forecast – five
years– Request for financing– Use of funds and repayment
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies
THE MARKET–Niche or target audience– Explanation of market demand–Market share– Growth potential– Product pricing
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies
MARKETING STRATEGY– Analyze competitors marketing
strategies– Integrate multiple media and
promotional strategies–Detail distribution strategy
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies
ORGANIZATION and OPERATIONS– Continuing Development– Staffing – Purchasing– Facilities– Equipment
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies
MANAGEMENT TEAM– Experience and Quality– Personal history of the principals–Work experience–Management experience– Responsibilities– Salaries and Benefits
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies
PERSONNEL– Current personnel needs– Future needs– Skill requirements– Job descriptions– Available labor pool– Salaries and benefit
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Step 9: Integrate all of the pieces into an overall business plan
Perform a quarterly check of the strategies status and the outcome measures, and then make adjustments to the strategies
FINANCIAL Information– Sources of Capital– Balance Sheet– Break-even analysis– Income Statement– Cash Flow
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Step 9: Integrate all of the pieces into an overall business planPerform a quarterly check of the strategies status and the outcome measures,
and then make adjustments to the strategies
SUPPORTING DOCUMENTATION– Resumes– Credit Information– Quotes or estimates– Letters of intent from prospective
customers– Personal references– Leases or buy/sell agreements– Legal documents relevant to the business
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STEP 10
15512:20PM
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Step 10: Work the Plan and learn to make Adjustments
Family Considerations (some things to think about)– You and Spouse in the same
business–How will business decisions be
made?–Who plays what role in the
business?– And at home?
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Step 10: Work the Plan and learn to make Adjustments
Family Considerations (some things to think about)– You and Spouse in the same business– How will business decisions be made?– Who plays what role in the business?– And at home?– You and Spouse have separate businesses– Which business has priority with family resources?– Who baby-sits while the other works over the weekend?– How will you coordinate travel and work schedules?– Only one is active in a business– You’re in different universes, how to avoid drifting
apart?– How to maintain a common vision of your financial and
family goals?
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Step 10: Work the Plan and learn to make Adjustments
How to Proceed –What Can SCORE Do?
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Step 10: Work the Plan and learn to make Adjustments
SCORE Counseling– CONFIDENTIAL
• Counselors abide by a code of ethics and honor confidentiality.
– FAST• Receive advice directly from an experienced executive.• Variety of Expertise available
– FREE• Offered free-of-charge, as a public service.• No limit on number of sessions• Available to all U.S. citizens & green card holders
– At downtown or satellite offices. Field counseling at your business' site.
– SCORE advice helps businesses succeed.– An application for personal counseling is included in
your workbook or you can apply on the web @scorechapter34.org
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Step 10: Work the Plan and learn to make Adjustments
• Honestly appraise your strengths and weaknesses
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Step 10: Work the Plan and learn to make Adjustments
• Do you have the Step 1 characteristics to succeed? Are there weaknesses you need to address? Do you know what to do next?
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Step 10: Work the Plan and learn to make Adjustments
• Do you have issues in the Step 2 risk assessment that you are not confident you can address? Do you know what to do next?
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Step 10: Work the Plan and learn to make Adjustments
What do You need to do?– SUCCESS in Small Business can be
yours. –When You Learn to Do It THE RIGHT
WAY!– The importance of doing it right…
(because the odds are against you)
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Step 10: Work the Plan and learn to make Adjustments
To beat the odds…• Select the right business [the one you know and have a passion for]• Know [research, learn] the market, customers and competition• Choose a viable market niche [avoid me-too and price cutting businesses]• Define your marketing strategy• Run a “back-of-the-envelope” break even assessment early in the game• DEVELOP A BUSINESS PLAN (A good business plan helps set you apart from
the crowd)• Develop credible [realistic and substantiated] financial projections and a
financial model • Define the right legal business structure• Adequately capitalize the company [equity and debt financing]• Keep records and establish and accounting system from day 1• Hire develop & TRAIN good employees• Manage risk [insurance]• Effectively use cyberspace and conventional advertising• Attract and retain customers• Manage cash flow, manage cash flow, manage cash flow…daily!
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Step 10: Work the Plan and learn to make Adjustments
• Seek counseling, use mentors or sounding boards [leave pride at the door]
• Stay up-to-date, research, learn from your customers and competitors, continuously improve, develop an edge…
• Work on your business rather than just in your business
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