1. 6.3 Starting a Small Business

2. Starting a Small Business
Every business begins with an idea
Hobbies, interests, old jobs
Small business owners need special skills
Decision making and management skills
Gained from experience
Finding the right place

3. Team Approach Owners are often independent…BUT
It is difficult to run a business alone
Cover extended hours & help grow
Each member brings specialized skills

4. Preparation & Research
Most important step is PREPARTION
Owner needs information:
Customers & competitors
Important operations
Government regulations
Can be found at libraries, universities, small business assistance centers

5. Developing a Business Plan
Business Plan - written description of the business idea and how it will be carried out, including all major business activities.
Most plans are developed for one year and then updated the next.
It serves as a guide to keep the business on track

6. Elements of a Business Plan...

7. Description of The Business
Business idea and main products/services
Ownership structure
Strengths & weaknesses
Long & short-term goals

8. Customer Analysis Customer Analysis Description of customers
Demographics of customers
Sales forecasts

9. Operations Plan Operations Plan Organization of the company
Describe major operations
Analysis of resources needed
Human resource plans

10. Marketing Plan Marketing Plan Describe major marketing activities
Schedule of marketing activities
Promotions
Social media?

11. Financial Plans Financial Plans Start-up costs
Short & long term financial needs
Sources for financing
Budgets
Financial statements

12. Steps in Developing Business Plan
Gather & review information
Develop strategic alternatives
Back up plans for manufacturing, marketing, staffing, and financing
Write out each section of the plan.

13. Financing Start-up financing – needed to open
Short-term financing - $$ needed to pay for current operating activities
Long-term financing - $$ needed for the main resources of a business
Land, buildings, & equipment

14. Sources of Financing Owner’s own money – personal savings Borrow
Friends and family
Banks & credit unions
Corporations are owned and financed by shareholders

15. Offering Credit
Companies may offer credit if they are financially stable
Be careful about accepting credit though…
Take into account:
Cost of the credit
When payments are due

16. Use this information to continue work on your own business plans!