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2. 2 Your instructor (and fellow Entrepreneur) Kim Brand Computer Experts, Inc. Server Partners, LLC Fax2You, Inc. IndianapolisKim@KimBrand.com

3. 3 Your (humble) instructor (and fellow Entrepreneur) Kim Brand Computer Experts, Inc. Server Partners, LLC Fax2You, Inc. IndianapolisKim@KimBrand.com

4. 4 Small Business Financing Small Business Financing How much money do you need to start your business? Do not answer this question based on “gut” feel. Let the numbers talk. Page 32-CFP and 33-CFP

5. 5 Small Business Financing Small Business Financing The amount you need for start-up includes: Page 32-CFP and 33-CFP Start-up Costs: Expenses that are incurred before the first sale is made. Working Capital: Shortfalls in cash flow when sales are not high enough to cover expenses. Your monthly cash flow projections will tell you how much you will need.

6. 6 Example Example Page 32-CFP and 33-CFP Start-upMonth 1Month 2Month 3 I will make$0$300$400$600 I will spend$1500$600 Difference-($1500)-($300)-($200)$0 How much start-up capital does this business owner need?

7. 7 Bank Financing Terminology Bank Financing Terminology Term (or Installment) Loan Line of Credit SBA Loan

8. 8 Bank Financing Bank Financing When reviewing your application for a loan, a lender will consider the 5 Cs of Credit: Capacity: How will the company repay the loan? Capital: What other sources of capital are being used? Collateral: What can you use to secure the loan? Conditions: What is the current local economic climate for the industry? Character: Are you likely to be able to successfully run this business and appropriately manage the finances to repay the loan?

9. 9 Sources and Uses of Funds Sources and Uses of Funds Your loan request must include a sources and uses of funds statement that shows: Your total capital needs Your sources of capital (including how much you are requesting from the bank) Exactly HOW you will use the money you are requesting Page 34-CFP

10. 10 Case Study Case Study Would you loan this business money? What are the strengths and weaknesses of this loan request?

11. 11 Before you apply for a loan Before you apply for a loan Check your credit history and know your credit score. Begin cleaning it up if necessary Find a lending institution that regularly lends to small business and is familiar with your industry. Start developing the relationship early Create a solid business plan with adequate market research and complete financial projections. Be prepared – know how much you need, how you will use it, and how you will repay it. If an existing business, get your business records in order. Most lending institutions will want to see your Financial Statements and tax returns.

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13. 13 Operations Planning Operations Planning “Operations – Where it all comes together” Page 1-OP

14. 14 Do your research Do your research Page 1-OP As the business owner, you are responsible and accountable for meeting the legal obligations of your business. Get your information straight from the source (i.e. IRS, City zoning office) or from experts (i.e. Certified Public Accountant (CPA), Attorney). Don’t take a friend or family member’s word for it.

15. 15 Business Compliance Considerations Business Compliance Considerations Pages 2-OP through 18-OP  Registering Your Business Name with the Appropriate Authorities Involves selecting a legal form of business  Registering with taxing agencies to obtain tax ID numbers for the business  Paying all appropriate taxes – in the right amount and the right time – It’s not your money!

16. 16 Business Compliance Considerations Business Compliance Considerations  Obtaining any required licenses and permits based on your type of business  Ensuring you are complying with any zoning regulations for your location  Obtaining appropriate insurance coverage, both to comply with the law and protect yourself  Having a separate business banking account and keeping appropriate records of business income and expenses Pages 2-OP through 18-OP

17. 17 Your Professional Advisors Your Professional Advisors Start building your team of professional advisors to help keep you in compliance, help you protect your business, and help you grow your business:  A CPA (certified public accountant)  An Attorney  A Banker  An Insurance Agent Page 19-OP and 20-OP

18. 18 Recordkeeping Recordkeeping Why keep records? What information can a good recordkeeping system provide the business owner? Page 21-OP thru 23-OP

19. 19 Recordkeeping Recordkeeping Design a recordkeeping system that will allow you to: Find information on a historical transaction When did Mrs. Smith last pay me and for what? Summarize the results of historical transactions What were my total sales last month? Keep track of who owes you (accounts receivable) and who you owe (accounts payable) Did Mr. Jones pay his last invoice? If not, how late is he in making payment? Page 21-OP thru 23-OP

20. 20 Recordkeeping rules Recordkeeping rules 1.Don’t co-mingle: track business transactions separately from personal transactions 2.Record every business transaction when it happens What is a transaction? Information to record: Date, Amount, Name of client or vendor, Description/Notes, Check #, category (revenue or expenses) 3.Save (and organize) all source documents 4.Summarize the transactions at least monthly Page 21-OP thru 23-OP

21. 21 Recordkeeping Recordkeeping KNOW what must be done. KNOW how to get it done. DO IT, or get it done. KNOW what the information means to you. UNDERSTAND the systems and procedures you have in place. If you pay for professional services they CHARGE by the hour. If your books are a mess or non-existent, YOU WILL PAY! Page 21-OP thru 23-OP

22. 22 Your Next Steps Your Next Steps  Complete as much of the business plan as you can based on what was covered during this course.  Decide if your business idea is desirable, feasible, and viable for you at this time and if you choose to move forward with it.  Continue to meet with your counselor and have your progress reviewed.

23. 23 Your Next Steps Your Next Steps When you’re ready, register for additional programs: 3-2-1 Launch! June 28 and 30, 6–8 pm Becoming An Official Business: June 15, 6–8 pm Establishing Your Brand Identity: June 14, 6–8 pm Intro to QuickBooks: June 21 and 22, 6–8:30 pm BOI networking event: June 27, 5:30–7:30 pm

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