NCDC Director Training November 22, 2011 So You Want to Start a Business So You Want to Start a Business Matthew H. Williams President Gothenburg State Bank PO Box 81 Gothenburg, NE Fax

Come see Me.

Financial planning and analysis Managing people and payroll Marketing and advertising Selling and merchandising Processing and manufacturing Accounting and cash flow analysis Banking including borrowing Insurance Equipment repair

A new study of 12,185 companies by the U.S. Small Business Administration (SBA) shows that 67 percent of new ventures are successful after four years - a dramatic contrast to the popular estimate that only 10 percent of start-up businesses survive the first year. The study corrects the long-held belief that a large majority of start-up businesses fail - a belief that may have deterred many would-be entrepreneurs from taking on the risk. Knowing only 33 percent fail after four years may encourage more entrepreneurs to start a new venture. The study also indicates that businesses most likely to succeed begin with $50,000 in capital, an owner with a college degree and a home office. Taken from an NFIB Study

Small Business Profile: NEBRASKA Small businesses are the heart of Nebraska’s economy. Research by the Office of Advocacy shows that small businesses create most of the nation’s net new jobs, and they bring dynamic ideas, innovative services, and new products to the marketplace. They account for almost all of the nation’s employer firms and generate half of non-farm private output. New business creation is key to a state’s ability to increase its gross state product, state personal income, and total state employment. U.S Small Business Administration

Business Plan Financing Vision for Success *

Isn’t planning for “big business” only? How does planning help management? Can’t I hire someone to do this for me? How can I know all the answers? How often do I have to do this?

The owner assumes the lead in the process. The planning process involves everyone in the family and/or business. The plan reflects reality. There is a contingency plan for the worst case scenario. The goals and objectives are achievable and clear. The plan is flexible. The plan is reviewed often and revised whenever “reality” dictates.

Forces you to look at the whole business. Focuses attention on important questions. Helps clarify and communicate your goals and objectives. Becomes a means of assigning priorities. Becomes a framework for daily decision- making and better management.

Helps maintain a “proactive" business attitude. Serves as a benchmark to track performance. Stimulates development of new/future business opportunities. Becomes a tool to access capital, acquire business partners, attract employees. Road map increases your chances of success.

Financing *

Research and development Growth (or start-up) expenses Purchase a business Seasonal working capital Permanent working capital Equipment acquisition Real estate acquisition Other…

Short Term Debt Used to meet short-term needs, such as seasonal inventory purchases or short term liquidity problems; repayment within one year. Intermediate Debt Three to seven years. Used for permanent expansion of working capital or to acquire equipment. Long Term Debt Used for real estate purchases or the initial purchase of a business.

Change in ownership Obligation to repay Tax considerations Capital structure Time required to do it Cost of obtaining the funds Personal factors/preferences Lender and investor reactions

Lender Partner Investor Owner

Credit History Character Capacity Collateral Conditions Capital

Self Self Friends and Family Friends and Family Suppliers Suppliers Customer Deposits Customer Deposits Credit Cards Credit Cards Insurance Companies Insurance Companies Factoring Companies Factoring Companies Loan Guarantor Loan Guarantor Loan Broker Loan Broker Franchising Franchising Grants Grants Other… Other…

Deal with a local bank when possible Make an appointment Select a banker you trust Select a banker familiar with your type of business Dress appropriately Ask for advice (listen)

Develop a long term relationship Know your needs Present a complete proposal Explain uses and benefits of the loan Be flexible Be patient Tell the truth

Vision for 2007 Develop Core Values Leadership is the Key! Vision for Success “Decide that you want it more than you are afraid of it.” Bill Cosby

1. RECOGNIZE THE IMPORTANCE OF PEOPLE IN OUR SUCCESS. We must recognize that everything we do involves people. We must be sure that all decisions are made after considering what is in the best interests of people. People include not only our customers, but also our employees. Businesses that pay attention to people have demonstrated the ability to survive because they recognize needs and adapt to change. We must recognize that everything we do involves people. We must be sure that all decisions are made after considering what is in the best interests of people. People include not only our customers, but also our employees. Businesses that pay attention to people have demonstrated the ability to survive because they recognize needs and adapt to change. Teamwork Makes the Dream Work!

2. CONDUCT OURSELVES WITH A SENSE OF RESPONSIBILITY. We must recognize that this is our company and we are the custodians. We are responsible for our future. We cannot blame problems on the economy, the competition, the regulators, or other external factors. We must pay attention to those things that count the most. We must recognize that this is our company and we are the custodians. We are responsible for our future. We cannot blame problems on the economy, the competition, the regulators, or other external factors. We must pay attention to those things that count the most. ETHICS ETHICS “You don’t make decisions because they’re easy, you don’t make them because they’re cheap, you don’t make them because they’re popular; you make them because they’re right.”

3. STRIVE TO REACH OUR POTENTIAL. We must be committed to out hustling, out working, out thinking, out communicating, and out organizing the competition. The beginning of success in any business is organization. We need to learn how to work smarter and not always harder. We must be committed to out hustling, out working, out thinking, out communicating, and out organizing the competition. The beginning of success in any business is organization. We need to learn how to work smarter and not always harder. “Some succeed because they are destined to; most succeed because they are determined to.”

What about Retirement?

Tommy Lasorda