Part 7: Career Planning and Development

Chapter 26

Start Thinking... So you want to start your own business: What needs to happen to get the business off the ground? List as many steps and procedures you can think of. Why should you consider launching your own business? Advantages? Disadvantages?

Chapter Goals Learn about the process of starting a business and the forms it can take. Become aware of the financial and marketing tools that are part of a successful business plan. Gain knowledge of organizational concepts used for planning ahead and for motivating employees in your new business.

Starting Your Own Business 20 million people in the U.S. are in business for themselves Music industry examples: classical musicians as independent contractors composers as independent contractors innovators pursuing one-man-band ventures Technology has had a huge influence Self-promotion requires energy, enthusiasm, motivation, hard work, business skills

Getting the Process Started Resources available Small Business Administration (SBA) Internet resources First step: draw up a business plan What product or service is being offered? Who will own/run the company? What resources will be needed? Who are the customers and how will they be reached? How will the product or service be distributed? How will the profits be made?

Getting the Process Started Starting a Music Publishing Company 1. Research 2. Acquisitions 3. Structure your financing and business entity 4. Contact ASCAP, BMI, or SESAC 5. Register your firm name 6. Establish your company bank account 7. Business license 8. Arrange outside services

Getting the Process Started Starting a Music Publishing Company 9. Prepare your materials 10. Your first success 11. Forms and contracts 12. Your second company 13. Persistence and continued success

Choosing a Name Aesthetic and practical considerations of a name fit with the company’s offerings and image appeal to the target customer must be memorable Trademark the name

Forms of Ownership Sole Proprietorship Advantage easy to form, easy to dissolve you are the boss and retain all profits Disadvantages unlimited financial liability limited working capital management deficiencies potential lack of continuity of operation

Forms of Ownership Partnership Association of two or more persons who operate a business as co-owners by voluntary legal agreement Advantages simple to organize have more working capital complementary management skills Disadvantages unlimited financial responsibility Potential conflicts over strategy and personality

Forms of Ownership Corporation An entity, rather than people Advantages limited personal liability perhaps more capital diversity of managerial talent Disadvantages corporate structure difficult and expensive to set up potential for double taxation

Permits and Legalities File a DBA form Other permits Sales tax obtain tax number and file remittances Internet sales not taxable (for now) Don’t attempt to bypass the paperwork

Raising Funds Service offerings may not require much start-up capital Don’t be duped by offers of “free money” Seek a loan at the bank Collateral required SBA offers loan guarantees Personal funds, contributions of family and friends

Marketing Advertising = paid media coverage Marketing = getting people interested in a business and its services Product Price Place Promotion

Accounting and Finance When to record a transaction cash method accrual method How to record a transaction journal entries double-entry system

Keeping Track of the Money Balance Sheet Assets include cash, accounts receivable, value of inventory Liabilities include account payable, interest charges, taxes due, loans Equity is the sum of invested capital and retained earnings Assets – Liabilities = Equity

Keeping Track of the Money Income Statement Shows where money came from what was spent what remains after expenses were paid Applies to a period of time

Keeping Track of the Money Cash Flow Statement Cash flow statement shows cash inflow and outflow over a specific period of time Cash inflow core operations, investing, financing Shows short-term viability of a company

Operations Management Gantt Charts

Management 90% of business failures result from poor management Books and courses are available Effective leaders authoritarian democratic transactional transformational

Motivating Employees Maslow’s Hierarchy of Needs

Where To From Here? People entering workforce today will have at least 7 different careers plan for the unexpected! be ready to adjust to change Entrepreneurship not for everyone

For Further Thought... Compare the business structure, advantages, and disadvantages of a sole proprietorship, partnership, and a corporation. How do the “four Ps” of marketing guide the launch of a new business? Do you have the right personality to be a successful entrepreneur?