Business Start-Up Fundamentals Entrepreneurial Workshop I

AGENDA The Planning Process Assessing personal and business needs The importance of a business plan Understanding business plan components

The Reality of Obtaining Financing What banks look for when assessing a loan request How to complete a loan application

What Banks Look For What Banks Look For Cash Flow Credit Collateral Contribution (or capital) Character (industry / references) Condition

Lifestyle Assessment 1. Do you have children? 2. Do you have savings? 3. Is your spouse employed? 4. What do you do with your free time? 5. Are you accustomed to working long hours? 6. Are you a morning or night person?

Business Assistance Areas Marketing Advertising Sales Tax Knowledge Insurance

Business Assistance Areas (con’t.) Business Finances Presentation Skills Communication Skills Legal Aspects Banking Services

Selecting a Business Name Other Considerations Selecting a Business Name Business Identification Numbers Licenses and Permits Taxes Accounting System

Structural Forms of Business Sole Proprietorship Partnership S Corporation C Corporation LLC – Limited Liability Co

Useful Web Sites Internal Revenue Service - www.irs.gov MA Department of Revenue - www.dor.state.ma.us Inc.com - Where to start and grow your business. www.inc.com Entreworld - A World of Resources for Entrepreneurs www.eventuring.org Official Website of the State of MA - www.mass.gov Official Website of the State of RI - www.ri.gov All Business - Champions of Small Business www.allbusiness.com MA Assoc. of Community Development Corporations - www.macdc.org U.S. Small Business Administration (SBA) - www.sba.gov Analyze You Business - www.sba.gov/sizeup e Podunk - www.epodunk.com Money Smart for Small Business - www.fdic/gov

Why Write a Business Plan? A plan gives you a path to follow Planning forces you to examine all aspects of your business Planning is ESSENTIAL to raising capital Your plan is a management tool Your plan is a communications tool

Business Plan Format Neatness Counts! Use Simple Language Keep Your Points Concise Make Use of Tables and/or Graphs

Business Plan Format (con’t.) Effective Formatting includes: Headings Paragraphs Bold/Italics/Underline Bullets

Business Plan Outline Mission Statement/Statement of Purpose Table of Contents / Cover Page Business Description Marketing Plan Financial Plan

Statement of Purpose This is the doorway to your plan. Keep it short, but illustrate the main points. Main Points: State purpose/structure of your business State purpose/amount of financing sought State any key operational expectations

Business Description Type/Industry Status (e.g. start-up, existing) Form (e.g. proprietorship, corporation) Location/Hours of operation Market description Description of competition Management/Personnel

Marketing vs. Sales Generates MARKETING SALES interest and leads. SALES Generates orders and accounts receivable and/or cash receipts.

Your Customer are the Market! MARKETING PLAN Your Customer are the Market! Describe Your Customers Industry Trends and Characteristics List and Description of Your Competition Description of Your Niche and Competitive Plan Market Segmentation

Product – good or service Marketing Mix Product – good or service Pricing – mark-up and break-even analysis Promotion – advertising Place – channels of distribution

Management and Personnel How many employees needed? What kind of skills required? Experienced or trainable? Management/People skills?

Financial Plan Balance Sheet Projected Income Statement – 2 years Sources and Uses of Funds Projected Cash Flow by Month – 1st year

Financial Plan (con’t.) Historical Financial Statements of Business – 3 Years Personal Financial Statement IRS tax returns(personal & business) – 3 Years

Reminders for Completing Loan Application The more the person reviewing your request can know about you AND your business, the better. Neatness and conciseness count Be honest.

Loan Application (con’t.) Emphasize your strengths and state your weaknesses. Let the loan officer know that YOU recognize areas for improvement. If you have questions, CALL! Don’t submit an incomplete application.

Services Offered by SEED Business Assistance Business Support Center Loan Programs: Micro Loan/Mini Micro Loan Revolving Loan Fund (RLF) SBA 7A Packaging SBA 504