Getting Started

Digital Safari Institute GreenBizz Project Getting Started … Being in business is a state of mind! Being in business is a state of mind! Keep your goal(s) in sight Keep your goal(s) in sight Make decisions based on your goals, not on: Make decisions based on your goals, not on: – Expediency (“this is the easiest way”) – Ignorance (“this is the only way I know”) – Inertia (“the other ways take too much effort”) – Tradition (“it’s always been done this way”)

Digital Safari Institute Good Advice … Know your business in depth Know your business in depth Develop a solid business plan Develop a solid business plan Manage financial resources Manage financial resources Understand financial statements Understand financial statements Learn to manage people effectively Learn to manage people effectively Stay focused, stay in balance! Stay focused, stay in balance! Be creative! Be creative! GreenBizz Project

Digital Safari Institute Personal Finances Know your monthly needs Know your monthly needs Estimate your ability to invest Estimate your ability to invest – Cash and credit – Equity – Check your credit rating Define your maximum loss limit Define your maximum loss limit Don’t underestimate your needs Don’t underestimate your needs Don’t under-capitalize your business Don’t under-capitalize your business GreenBizz Project

Digital Safari Institute Required Return on Investment Living wage Living wage Return on investment Return on investment Return on risk Return on risk GreenBizz Project

Digital Safari Institute Protect Your Intellectual Property (IP)! Patents Patents – Device/process patents – Design patents Trademarks / Service marks Trademarks / Service marks – Names, phrases, logos, images – TM vs. R Copyrights Copyrights – Protects creative works – Gives high level of control over use, etc. YOU have to protect your IP YOU have to protect your IP (“Intellectual Property”) GreenBizz Project

Digital Safari Institute Hobby Business No commitment / No risk No commitment / No risk Limited potential earnings Limited potential earnings Limited ability to purchase wholesale Limited ability to purchase wholesale Limited ability to write off expenses Limited ability to write off expenses – 3-year limit on losses Limited ability to do business: Limited ability to do business: – Sign leases, borrow money – Compete for contracts GreenBizz Project

Digital Safari Institute Real Business Goal: To create an entity separate from your personal finances Goal: To create an entity separate from your personal finances Goal: To provide a full-time income … and more! Goal: To provide a full-time income … and more! Goal: To create equity that can be sold in the future Goal: To create equity that can be sold in the future GreenBizz Project

Digital Safari Institute Business: IRS Definition You carry on the activity in a business-like manner, You carry on the activity in a business-like manner, The time and effort you put into the activity indicate you intend to make it profitable, The time and effort you put into the activity indicate you intend to make it profitable, You depend on income from the activity for your livelihood, You depend on income from the activity for your livelihood, Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business), Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business), You change your methods of operation in an attempt to improve profitability, You change your methods of operation in an attempt to improve profitability, You, or your advisors, have the knowledge needed to carry on the activity as a successful business, You, or your advisors, have the knowledge needed to carry on the activity as a successful business, You were successful in making a profit in similar activities in the past, You were successful in making a profit in similar activities in the past, The activity makes a profit in some years and the amount of profit it makes, and The activity makes a profit in some years and the amount of profit it makes, and You can expect to make a future profit from the appreciation of the assets used in the activity. You can expect to make a future profit from the appreciation of the assets used in the activity. GreenBizz Project

Digital Safari Institute Lifestyle Business Lifestyle and income are equally important Lifestyle and income are equally important Set earnings/effort goals Set earnings/effort goals Can be a very comfortable living Can be a very comfortable living Formalized as a legal business Formalized as a legal business Tax and business benefits Tax and business benefits Goal: Long-term income stream Goal: Long-term income stream GreenBizz Project

Digital Safari Institute Growth Business High potential reward High potential reward High risk, high stress! High risk, high stress! Requires focus, skill and dedication Requires focus, skill and dedication Need outside funding to grow Need outside funding to grow Goal: Sale, Merger or IPO Goal: Sale, Merger or IPO GreenBizz Project

Digital Safari Institute Product-Oriented Business Sell while you sleep! Sell while you sleep! Huge potential market Huge potential market May require upfront investment May require upfront investment May require keeping an inventory May require keeping an inventory Products have a lifecycle Products have a lifecycle May be left with unsold goods May be left with unsold goods GreenBizz Project

Digital Safari Institute Service-Oriented Business No up-front investment in inventory No up-front investment in inventory No old stock, no returns, no inventory taxes No old stock, no returns, no inventory taxes No vendor issues No vendor issues Work your own hours (!?) Work your own hours (!?) No work = no pay! No work = no pay! Highly competitive Highly competitive At the mercy of client loyalty At the mercy of client loyalty GreenBizz Project

Digital Safari Institute Ten Deadly Mistakes 1. Poor management 2. Lack of experience 3. Poor financial control 4. Weak marketing 5. No strategic plan GreenBizz Project

Digital Safari Institute Ten Deadly Mistakes 6. Uncontrolled growth 7. Poor location 8. Improper inventory control 9. Incorrect pricing 10. Inability to “be an entrepreneur” 11. Under-capitalized (lack of money!) GreenBizz Project

Digital Safari Institute Getting Started … Opportunity Assessment Opportunity Assessment – Market Research: Do your homework! – Business Model: Build one that works! Business Plan: Document your plan Business Plan: Document your plan Business Formation: Make it legal Business Formation: Make it legal Start-up Funding: Commit enough Start-up Funding: Commit enough Launch! Launch! GreenBizz Project

Go For It!

Digital Safari Institute Small Business Management Your First Assignments Task 1: Elevator Speech Task 1: Elevator Speech – Company name – Your product(s) / service(s) – Your target clients – Your value proposition – Your goal Task 2: Opportunity Assessment Task 2: Opportunity Assessment – See page 57