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Hardy, Virginia November 15, 2011
WELCOME
Annette Stamus Smith Mountain Lake Chamber of Commerce
What Do
These
Entrepreneurs
Have in
Common?
SUCCESS!
SUCCESS!
Remember as a start-up
your place in the food chain
GET PREPARED…DO
YOUR HOMEWORK
OR……..
How to Start and Operate A Business
HOW TO START AND OPERATE
A SMALL BUSINESS By
Dick Ephgrave
Director, Longwood University Small Business Development Center,
Martinsville, VA
What is the SBDC?
• Small Business Development Center
• VSBDC Mission – To foster small business success and grow Virginia’s economy
• Vision – To be the small business resource of first choice in Virginia
Where business comes to talk business.
SBDC’s Goals
• Increase new business success rate
• Increase client’s revenue and profitability (new and existing businesses)
• Assist existing businesses to grow by creating and retaining jobs, and
increasing capital investments in the business
Where business comes to talk business.
How the SBDC can Benefit you Through one-on-one,
Confidential and FREE Counseling, the SBDC can help you with…
• Basic Business Information for start-ups as well as existing businesses
• Business Planning • Training/Workshops- variety of topics • Networking Assistance • Basics of Navigating the financial process • Financial Analysis of your business • Marketing Ideas and Plans • Permits, Licenses and taxes • ETC
Where business comes to talk business.
Why do I need a Business Plan? • To develop your own plan (roadmap)
for YOUR Business idea.
• To determine if the business idea is
financially feasible.
• To seek financing from a bank, SBA, and/or private investors.
• To provide you with a management tool
• To give you an objective view of your business idea
Where business comes to talk business.
What goes into a Business Plan?
Where business comes to talk business.
• Executive Summary
• Table of Contents (optional)
• Description of the Business
• Description of Products and/or Services
• Marketing Plan/Advertising
• Industry Analysis
• Customers
• Competition Analysis
• Location
• Suppliers/Subcontractors
• Organization and Management
• Financial Plan
VSBDC Office
Dick Ephgrave, Director
Longwood Small Business Development Center
115 Broad Street, PO Box 709
Martinsville, VA 24114 Phone: 276-632-4462
E-mail: [email protected]
Entrepreneur Express
SCORE Roanoke November 2011
About SCORE
SCORE was formed in 1964 as a resource partner of the Small Business Administration. SCORE's mission is to help new and existing small businesses succeed.
Facts (2010)
13,000 volunteer across 350 chapters
Volunteers donate 1 million hours of service
501,000 total services delivered annually
360,000 people served annually
Our Clients
Early stage entrepreneurs, who are considering to start a business but need help in defining their ideas, building a Business Plan, and obtaining financing.
Start-up businesses, who are seeking to grow their business and manage their finances.
Established businesses, who are seeking to grow and increase their customer base.
Our Services
Mentoring: SCORE provides free, confidential counseling in each of its 360 Chapters and also via the internet through www.score.org .
Workshops: Score provides training sessions on a variety of topics, from Business Plans to Marketing, to Financing. SCORE can provide customized seminars for community partners.
SCORE's Online Presence
SCORE has a tremendous online presence:
Tutorials and self study classes
Online workshops
Online mentoring: search for a mentor by their expertise and subject matter specialities.
SCORE website for SCORE volunteers provides great support:
Training courses
News and updates
Peer learning
Why SCORE Adds Value
Entrepreneurs are usually expert in their chosen field, but rarely have mastery of the entire range of business skills.
Success in business requires performing a wide range of tasks:
Marketing
Sales
Operations
Accounting, Finance, Legal, HR, Regulatory, Tax...
Seasoned SCORE mentors can point out areas of strength and weakness, recommend actions, and point the way to other resources.
Code of Ethics
SCORE has a strict Code Of Ethics to protect our clients. All volunteers need to agree and sign annually. Key points:
SCORE mentors are unable to make money in any way from SCORE clients.
Volunteers may not use our client or member databases for commercial reasons.
Steps For Creating Your Business
Choose the Structure
• Proprietorship, partnership, LLC, etc.
Register
• Name, trademarks, corporation
Obtain Tax ID's
• Federal and Virginia
Obtain licenses
• City/County/Town business license
• Occupation specific licenses (Virginia)
Business Licensing and Registration
State, county, city, and town may have requirements.
Why?
– Taxation
– Zoning
– Regulate certain activities
Business Licensing and Registration
Check with your local county / city / town
– Most have information on their websites
Web site for Virginia Department of Business Assistance: http://www.dba.state.va.us/
Great source of information!
Pricing
Price minus Cost = Profit .
Setting prices is vital to the success of any business. Things that affect pricing:
– Competition
– Customer preferences
– Costs
– Contractual and legal requirements
Each market is different.
Pricing
Common errors:
– Not understanding your costs.
– Not understanding the value of your product or service.
– Reluctance to lose any sale, leading to excessive discounting.
– Reluctance to discount under any circumstances.
Management Practices
I'm a small business. Am I involved in “Management”?
Management is the acquisition, deployment, and use of resources to achieve an organization's goals.
– Resources include labor, money, equipment, buildings, etc.
– Relationships with customers and suppliers are also resources that need managing.
Yes, small business people are in “Management”!
Management Practices
Do the Right Things.
– Must make choices on what to do.
Do Things Right.
– There are better and worse ways to accomplish tasks. Doing the Right Thing, badly, is not helpful.
Do the Right Things, Right, Right Now.
– Take action and get things done.
– Time is a valuable resource.
SCORE Roanoke Chapter Overview
Office location, open 10AM-3PM M-F:
105 Franklin Rd, SW, Suite 150
Roanoke VA 24011
540-857-2834
Call for an appointment.
Mentoring sessions can take place at our office, your place of business, or another site.
Growing Your Business/Marketing
Strategies
Tourism Business Development & Marketing Assistance
Randall A. Rose
Development Specialist – Partnership Marketing Virginia Tourism Corporation
[email protected] 276-322-2044
www.vatc.org (industry) www.virginia.org (consumer)
• Virginia Tourism Corporation Overview • Tourism Business Opportunities • Marketing Your Small Business
[email protected] 276-322-2044
www.vatc.org (industry) www.virginia.org (consumer)
Impact of Tourism in VA - 2010
• 18.9 billion in revenue
• supported 204,000 jobs
• provided $1.3 billion in
state and local tax revenue
Virginia Tourism Corp. Services
• Advertising
• Customer Service & Industry Relations
• Electronic Marketing
• Film Office
• Marketing & Promotion
• Public Relations
• Research
• Tourism Development
• Others
• Planning Assistance
• Marketing Guidance
• Workshops
• Marketing/Advertising
Benefits
Business Assistance
Development & Partnership Marketing
• Wilderness Road Heritage Trail
• Virginia Coal Heritage Trail
• ‘Round the Mountain
• Heartwood
• Spearhead Trails
• Crooked Road
• Fish Virginia First
Locality Tourism Planning
• Franklin County
• Roanoke County
• Craig County
• Patrick County
• Floyd County
• Pulaski County
• City of Radford
• Giles County
• Tazewell County
• Carroll County
Funding
• Marketing Leverage Program
Tourism Business Opportunities
•Canoe Rentals and Tours
•Fishing and Boating Rentals
•Bicycle Tours and Outfitters
•Adventure/Nature Camps
Agri-tourism
•Wineries/Vineyards
•Corn Maze
•Pumpkin Patch
•Pick Your Own
•Animal Parks
•Herb/Flower Farms
•Christmas Trees Farms
Unique Lodging Opportunities
•Bed & Breakfast Inns
•Cabins and Cottages
•Lodges
•Campgrounds
•Horse Campgrounds
•Horse Stables/Barns
•House Boats
•Green Lodging
•Music/Theater Venues
•Artisan Studios/Galleries
•Heritage Sites
•Tea Rooms
•Breweries/Pubs
•Eclectic Restaurants
•Shopping
•Spas
Attractions
Supporting Businesses
Caterers Cleaning Services Food/Drink Distributors Electricians Restaurant Equipment Plumbers Security Systems Pool Maintenance Convenient Stores Lawn Care Web Site Designers Auto Repair Ad Agencies Events Planners Travel Agencies Florists Motorcoach Companies Linen Services
Car Rental Offices
Learn More About VTC Services
• Visit www.vatc.org & www.virginia.org
• Sign up for the Dashboard e-newsletter
• Attend at VTC Help Desk event
• Establish relationships with all VTC divisions – tap into our services (i.e. marketing, advertising, research, etc.)
Now, let’s talk about marketing your small business
Can you answer these two questions?
• What is Marketing?
• What is the difference between Marketing and Advertising?
6 Questions You Should Answer
• What are you trying to accomplish?
• Who is your target audience?
• What message will move your audience?
• What vehicles do you have to deliver the message?
• What are your resources?
• How do you measure your performance/success?
Marketing Plan
What are you trying to accomplish?
• What is your mission and vision?
• Are you the largest, cheapest, best service, best quality?
• Sales goals?
Marketing Planning
Who is your target audience?
• by demographics
• by geography
• by needs and wants
• now and in the future
Marketing Planning
What message will move your audience?
• Your brand
• Your tagline/slogan/message
• What do you want people to say about your business?
Marketing Planning
What vehicles do you have to deliver the message?
• Website
• Advertising
• Public Relations
• Social Media
• Tradeshows
• Newsletters
Marketing Planning
What are your resources?
• Budget/Money
• Owner/Employee Skills
• Friends/Family
• Partnerships
• Local/State/Federal Assistance
• Chambers of Commerce, Business Associations, etc.
Marketing Planning
How will you measure your marketing performance?
• Electronic Marketing Tools
• Data Collection
• Research Mechanisms
• Surveys
• Informal Questioning
• Sales Data
Marketing Planning
Have a Calendar/Schedule
Include:
• Anticipated Ad Placement
• Press Releases
• Social Media Updates/Posts
• Promotions
• Other Scheduled Strategies
Marketing Planning
Marketing Plans Change
• Because of business growth
• Because of research
• Because of economic factors
• Because of technology (social media)
• Because there is always change
Marketing Planning
Virginia’s Recent Ad Campaign
Traditional Methods
Marketing Tips
• Direct Mail
• Sales/Promotions
• Referrals
• Phone Calls
Branding (it’s not just a logo)
Marketing Tips
Customer Service
Marketing Tips
• Train and Empower Staff
• Gauge Performance
• Have Customer Service Plan (Goals, Objectives)
Electronic Marketing
Marketing Tips
• Website
• E-newsletters
• E-ads
Targeting Niches & Groups By Interest
Marketing Tips
• Traditional Music (Crooked Road) • Cultural Heritage (Coal Heritage Trail) • Anglers (Fish Virginia First) • Outdoor Enthusiasts • Weddings/Meetings/Group Tours
Social Media
Marketing Tips
Public Relations
Marketing Tips
Marketing Tips
• Determine Ways to Stand Out /Be Unique
• Be Creative
• Have Fun!
Tourism Business Development & Marketing Assistance
Randall A. Rose
Development Specialist – Partnership Marketing Virginia Tourism Corporation
[email protected] 276-322-2044
www.vatc.org (industry) www.virginia.org (consumer)
Financing & Managing Resources
Helpful Hints for
Financing
Your Business Tommye Arnold
Community Relations Officer
© 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.
Helpful Hint #1
Get Your Financial House In Order
Obtain a copy of your personal credit report. • Check for any inaccuracies or mistakes.
• Make certain that all accounts are current and there are no outstanding judgments or liens.
• If there is any derogatory information, be proactive and prepare to explain the problems and why the problem is not likely to occur again.
Gather personal and/or business records • For the past three years, including:
• Tax returns, financial statements with schedules and attachments, and interim year-to-date financial statements.
• Any other financial documents that might help a lender.
• Neatly photocopy all of the documents and prepare them for your presentation.
73 © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.
Helpful Hint #2
Understand What Your Lender is looking for
Be specific in what you are asking for • Know how much you need
• Be prepared to support all costs with estimates, invoices, or contracts
• Never tell a lender that you want to borrow as much money as possible.
Primary source of repayment • Be able to demonstrate how you will pay back the loan
• Debt Service Coverage = Earnings before Interest, Taxes, and Depreciation / Total Debt Service
• Debt to Income= Debt service / Income available to service debt
Secondary source of repayment (back up plan)
• Be prepared to be able to demonstrate how your lender will be paid back if income falls short
• Be prepared to have guarantors and possible collateral 74 © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.
Primary Source of Repayment
Business Net Income + Outside Income (W-2)
Interest Expense +
Depreciation / Amortization +
Earning Before Interest, Depreciation, & Amortization
(EBIDA)
DIVIDED BY
Annual Debt Service Payments or
Interest Expense plus Current Maturities of Long Term Debt
Equals =
Debt Service Coverage (Target > 1.40 to 1.0)
75 © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.
Helpful Hint #3
Recognize Your Strengths And Weaknesses
Bank underwriters are paid to identify risk • Business owners tend to be optimistic
• Be prepared for scrutiny
• Address your strengths and challenges realistically & honestly
Most common weaknesses lenders find are: • Inability to demonstrate repayment ability
• Insufficient collateral
• Lack of management experience
• Insufficient cash injection
• Poor personal credit
Don't get scared; just get prepared • Depending on the severity of any particular weakness, you can
often overcome it if you are prepared with a particularly noteworthy and compensating strength.
76 © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.
Sources of Financing
Credit Cards
o Most expensive
o Credit lines may be cut unexpectedly
o Most risk
Personal Savings
o Lowest expense
o Lowest risk
o Do not use all of your savings for start up costs
Bank financing
o Low cost
o Shorter term
o Higher equity requirements
Small Business Administration guaranteed loans
o Low cost
o Longer terms
o Reduced equity requirements
o Lower risk to partner Banks
o Multiple plans to address real estate, equipment, and working capital needs
Non-profit community lenders (People Inc, etc)
77 © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.
Why NOW is the Best Time EVER to get a
SBA Loan?
More companies than ever are eligible
Tangible net worth <$8.5MM
Net profits <$3MM in each of last two years
Transaction costs are at an all time low
SBA has waived the guarantee fee – usually ~2 points
Interest rates are at all time lows
Congress is now acting to increase lending limits,
waive fees, and bolster lending!
78 © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.
Advantages to SBA Loans
Lower down payment
Up to 90% financing on Owner Occupied Real Estate
Up to 85% financing on Business Acquisition
Up to 90% financing on Partner Buy Out
Longer amortization
20 – 25 Year Term on Owner Occupied Real Estate
10 Year Term on Business Acquisition or Refinance
Can lend with collateral shortfall
SBA does not have specific LTV
Must take “All available collateral”
79 © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.
Tommye Arnold Community Relations Officer
Wachovia Bank
© 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.
601 State St – 3rd Floor
Bristol, VA 24201
(276) 645 – 5130
Other Business Resources
Sandy Ratliff, Business Services Manager Virginia Department of Business Assistance
276-676-3768
www.vdba.virginia.gov
www.vastartup.org
The Virginia Department of Business Assistance VDBA supports economic development in the Commonwealth by working with new and existing businesses to provide business and economic development communities with:
• workforce incentives
• financing
• business information and counseling
• state procurement assistance
• educational opportunities
www.vdba.virginia.gov
Ask VBIC = 866-248-8814
Business Information Services To help businesses get started and to grow.
Formation Assistance Virginia Business Information Center (VBIC) 1-866-248-8814
Bridges the 26 state agencies, over 110 regulatory programs and over 300 forms that may touch a Virginia business Questions on registration, taxation, licensing
Interactive business plan available online at www.vdba.virginia.gov or www.vastartup.org
5 Step process to a business plan
Ask VBIC = 866-248-8814
Ask VBIC = 866-248-8814
Governor’s Executive Order 33
$5 billion market Access to buyers from 171 state
agencies Additional $5 billion from local
governments 575 localities using eVA system.
Small Business Goal – 40% Over 50,070 registered suppliers Over 22,686 participating
buyers
Growing Your $ales - State
• Examples of Purchasing:
– Soft Drinks • 07/01/2010 – 06/30/2011 = $1,651,245 – 1,015 PO’s
– Souvenirs: Promotional, Advertising, etc. • 07/01/2010 – 06/30/2011 = $379,138 - 394 PO’s
– Grounds Maintenance: Mowing, Edging, Plant (Not Tree) Trimming, etc.
• 07/01/2010 – 06/30/2011 = $10,328,901 - 788 PO’s
– Tires and Tubes, Passenger Vehicles
• 07/01/2010 – 06/30/2011 = $519,410 - 393 PO’s
– Concessions, Catering, Vending: Mobile and Stationary
• 07/01/2010 – 06/30/2011 = $23,874,228 – 10,193 PO’s
– Building Maintenance • 07/01/2010 – 06/30/2011 = $40,240,266 - 5136 PO’s
– Earth Moving Equipment Rental • 07/01/2010 – 06/30/2011 = $15,452,634 - 764 PO’s
– Janitorial/Custodial Services • 07/01/2010 – 06/30/2011 = $5,336,396 - 887 PO’s
One–on-One Counseling Sessions
Need Based: – Accessing New Markets/Sales Growth
– Tailored Sales Development Solutions
– Financing Resources
– Social Media for Your Business
To schedule an appointment, contact:
Sandy Ratliff, Business Services Manager
276-676-3768 Email: [email protected]
Entrepreneur Workshops
• Partnership with Service Providers and localities
• Workshop Types: – Starting and growing a business
– How to sell to the Commonwealth
– Social media for business
– iPad for business
– Business of restaurants
• List of events: – www.vastartup.org
Virginia Jobs Investment Program
• Workforce recruiting and training
– Create minimum 25 net new jobs within 12 months and
capital investment of at least $1,000,000
– Minimum entry-level wage of $10.00/hr required. Only full-
time jobs are eligible.
• Small business workforce recruiting and training
– 250 employees or less, hiring at least 5 new full time
employees within 12 months of operation and capital
investment of at least $100,000
– Minimum entry-level wage of $10.00/hr required. Only full-
time jobs are eligible.
• Retraining
– Small businesses that are retooling and installing new
technologies
– Company must retrain minimum 10 full-time employees.
Financing Programs
• Direct Lending: In partnership with banks and other lenders, we provide direct loans in economic development transactions. We also provide direct loans under specific programs designed to promote environmental stewardship and assist licensed daycare centers and family home providers.
• Indirect Lending: We provide loan guarantees or other types of credit enhancements to commercial banks in order to increase access to capital for businesses.
• Conduit Financing: We are the statewide conduit issuer of tax-exempt industrial development bonds for manufacturers and 501c3 organizations.
OTHER AVAILABLE RESOURCES
• Virginia Department of Labor – Apprenticeship Program – Combination of on-the-job training and classroom instruction. – Advantage of skilled workforce and reduced turnover. – http://www.doli.virginia.gov
• Virginia Department of Agriculture & Consumer Affairs – Virginia’s Finest Trademark = Marketing program that promotes foods and
foods products grown in Virginia. – Facilitates expansion of agricultural businesses.
http://www.vdacs.virginia.gov
A regional business incubator serving
the City of Martinsville, Henry,
Patrick and Franklin Counties
What is Business Incubation?
Business support process that accelerates the
successful development of start-up companies by
providing entrepreneurs with an array of targeted
resources and services
A business incubator’s main goal is to produce
successful firms that will leave the program financially
viable and freestanding
Services
Favorable Rental Rates
Mentoring Services
Broad Band Internet Access
Shared Resources
Conference and training rooms
Shared receptionist
Business equipment
"Virtual Incubator" Available
Benefits
Financial, professional, and technical services
assistance
Access to facilities and equipment not otherwise
available
Increased visibility
Environment where small businesses can share
experiences and reduce the risks involved in business
startup
87% of incubator graduates succeed!
WPBDC
23,500 square foot facility
in Uptown Martinsville
11 Tenants
1 Virtual tenants
20 Graduates
231 jobs created
Questions?
Robbin Hall
Executive Director
West Piedmont Business Development Center
22 E. Church St.
Martinsville, VA 24112
276.403.5085
Starting and Growing a Business
• Business Formation Assistance – Small Business Development Center Network = www.virginiasbdc.org
– SCORE = www.score.org
– Virginia Business Information Center = 866-248-8814
– Virginia Central Business Portal = www.business.virginia.gov
– Virginia Business Incubator Association = http://www.vbia.org/
Marketing Resources
• SCORE = www.score.org
• Virginia Tourism Corporation = www.vatc.org
• Virginia Department of Agriculture – Virginia’s Finest Trademark = www.vdacs.virginia.gov
Financing Resources • Virginia Small Business Financing Authority =
www.vdba.virginia.gov
• Small Business Development Center = www.virginiasbdc.org
• Small Business Administration = www.sba.gov
• Local Economic Development Office or Chamber of Commerce
“If you always do what you’ve
always done, You will always
get what you’ve always got!”
Lets Connect:
Sandy Ratliff The Virginia Department of Business Assistance
276-676-3768 [email protected]
Online:
Twitter: http://twitter.com/sandyratliff Facebook: http://www.facebook.com/sandy.ratliff
LinkedIn - http://www.linkedin.com/in/sandyratliff
YouTube - http://www.youtube.com/user/vastartup
Survey Completions
Please take a moment to complete our survey!
CONTACTS
• Sandy Ratliff, Virginia Department of Business Assistance = 276-676-3768 or VBIC = 866-248-8814
• Randy Rose, Virginia Tourism Corporation = 276-322-2044
• Dick Ephgrave, Longwood SBDC = 276-632-4462 • Maynard Wiff, SCORE = 540-857-2834 • Tommye Arnold, Wachovia Bank = 276-645-5130 • Robin Hall, West Piedmont Business Development
Center = 276-638-2523 • Annette Stamus, Smith Mountain Lake County
Chamber = 540-721-1203
