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Business Start-Up Business Start-Up FundamentalsFundamentals
Entrepreneurial Workshop I Entrepreneurial Workshop I
AGENDAThe Planning Process
Assessing personal and business needs
The importance of a business plan
Understanding business plan components
• What banks look for when assessing a loan request
• How to complete a loan application
The Reality of Obtaining Financing
Cash Flow
Credit
Collateral
Contribution (or capacity)
Character (industry / references)
Condition
What Banks Look For
What Banks Look For
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?
Lifestyle Assessment
• Marketing
• Advertising
• Sales
• Tax Knowledge
• Insurance
Business Assistance Areas
• Business Finances
• Presentation Skills
• Communication Skills
• Legal Aspects
• Banking Services
Business Assistance Areas (con’t.)
• Selecting a Business Name
• Business Identification Numbers• Licenses and Permits• Taxes• Accounting System
Other Considerations
• Sole Proprietorship • Partnership• S Corporation • C Corporation• LLC – Limited Liability Co
Structural Forms of Business
Internal Revenue Service -
www.irs.gov
MA Department of Revenue -
www.dor.state.ma.us
Inc.com - Where to start and grow your business.
www.inc.com
Entreworld - A World of Resources for Entrepreneurs
www.eventuring.org
Official Website of the State of MA -
www.mass.gov
Official Website of the State of RI -
www.ri.gov
All Business - Champions of Small Business
www.allbusiness.com
MA Assoc. of Community Development Corporations -
www.macdc.org
U.S. Small Business Administration (SBA) -
www.sba.gov
e Podunk -
www.epodunk.com
Useful Web Sites
• A plan gives you a path to follow• Planning forces you to examine all
aspects of your business• Planning is ESSENTIAL to raising capital• Your plan is a management tool• Your plan is a communications tool
Why Write a Business Plan?
• Neatness Counts!
• Use Simple Language
• Keep Your Points Concise
• Make Use of Tables and/or Graphs
Business Plan Format
Effective Formatting includes:
• Headings
• Paragraphs
• Bold/Italics/Underline
• Bullets
Business Plan Format (con’t.)
A. Mission Statement/Statement of Purpose
B. Table of Contents / Cover Page
C. Business Description
D. Marketing Plan
E. Financial Plan
Business Plan Outline
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
Statement of Purpose
a) Type/Industryb) Status (e.g. start-up, existing)c) Form (e.g. proprietorship, corporation)d) Location/Hours of operatione) Market descriptionf) Description of competitiong) Management/Personnel
Business Description
MARKETING
Generates
interest
and leads.
SALES
Generates orders and accounts receivable and/or cash receipts.
Marketing vs. Sales
Describe Your Customers Industry Trends and Characteristics List and Description of Your Competition Description of Your Niche and
Competitive Plan Market Segmentation
MARKETING PLANYour Customer are the Market!
• Product – good or service
• Pricing – mark-up and break-even analysis
• Promotion – advertising
• Place – channels of distribution
Marketing Mix
• How many employees needed?
• What kind of skills required?
• Experienced or trainable?
• Management/People skills?
Management and Personnel
• Balance Sheet• Projected Income Statement – 2 years• Sources and Uses of Funds• Projected Cash Flow by Month – 1st year
Financial Plan
• Historical Financial Statements of Business – 3 Years
• Personal Financial Statement
• IRS tax returns(personal & business) – 3 Years
Financial Plan (con’t.)
• The more the person reviewing your request can know about you AND your business, the better.
• Neatness and conciseness count
• Be honest.
Reminders for Completing Loan Application
• 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 application.
Loan Application (con’t.)
Business Assistance
Business Support Center
Loan Programs: Micro Loan/Mini Micro Loan Revolving Loan Fund (RLF) SBA 7A Packaging SBA 504
Services Offered by SEED