Business Start-up Fundamentals

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					 Business Start-Up
Entrepreneurial Workshop I
        The Planning Process

   Assessing personal and
      business needs
   The importance of a
      business plan
   Understanding business plan
The Reality of Obtaining Financing

• What banks look for when
      assessing a loan request
•   How to complete a loan
         What Banks Look For
          What Banks Look For
 Cash Flow

   Credit
   Collateral
   Contribution (or capacity)
   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
      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 -      MA Department of Revenue -            - Where to start and    Entreworld - A World of
grow your business.             Resources for Entrepreneurs           

Official Website of the State   Official Website of the State
of MA -                         of RI -          
All Business -                  MA Assoc. of Community
Champions of Small Business     Development Corporations -   

U.S. Small Business             e Podunk -
Administration (SBA) -
       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
•   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

A.Mission Statement/Statement
  of Purpose
B. Table of Contents / Cover Page
C. Business Description
D. Marketing Plan
E. 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

a)   Type/Industry
b)   Status (e.g. start-up, existing)
c)   Form (e.g. proprietorship, corporation)
d)   Location/Hours of operation
e)   Market description
f)   Description of competition
g)   Management/Personnel
      Marketing vs. Sales

Generates        Generates orders
                 and accounts
interest         receivable and/or
and leads.       cash receipts.
    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
             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
•   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
  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

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