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www.score.org QuickSTART: Start-up Basics

QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Page 1: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

www.score.org

QuickSTART: Start-up Basics

Page 2: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Start-up Basics

Session 1SCORE QuickSTART Series Workshop

Page 3: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Successful and experienced executives acting as volunteers

• Seminars and workshops• Free Mentoring

– One-on-one– E-mail

• Resources for small business: www.score.org www.scorecr.org - Locally

About SCORE

Page 4: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Counseling Locations

• Local counseling locations will be provided on this slide.

• Please make note of this information in your manual.

Page 5: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Myths• Business Opportunities• Assessing Your Journey• Organization, Insurance,

Regulations

• Funding and Cash Management

• Business and Marketing Plans• Next Steps

Agenda

Page 6: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Briefly tell us a bit about you:• Your name• Your Business idea(s)• What you want to learn today

Nice to Meet You!

Page 7: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Start-up Myths

Page 8: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Myth: All I need is a good idea to be a successful entrepreneur.

Reality: A good idea is a great start, but it takes hard work, research, and planning plus successful implementation strategies to turn your idea into a profitable enterprise.

Myth #1

Page 9: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Myth: If you go out on your own, you won’t have to work so hard or such long hours.

Reality: You’ll probably work harder and longer than you’ve ever worked before, but you’ll enjoy it more. Exhaustion fades at the moment you proudly say, “I did this!”

Myth #2

Page 10: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Myth #3Myth: You’ll be able to deduct everything so you don’t have to pay taxes.

Reality: Taxes are based on net income, which can be lowered by subtracting expenses related to the business from gross income. Strict regulations apply, so keep good records and learn how to make the tax system work for you.

Page 11: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Myth #4

Myth: If you work independently, you won’t have to report to a boss.

Reality: You don’t have a single boss, you have many. These are your clients and customers, each of whom have specific needs and demands. Your challenge is to keep all of them happy.

Page 12: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Myth #5

Myth: Business owners get to do the work they want to do and only what they find interesting.

Reality: Think again. You will have to wear many hats and juggle many skills, some of which may bore you or be downright challenging.

Page 13: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Myth #6

Myth: If you choose to be self-employed, you’ll be limited in what you can achieve, since you’ll be working alone.

Reality: The limitations are created mostly by the space between your ears. Be realistic, but don’t trap yourself with self-imposed limitations. You can make a difference.

Page 14: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Reality: Business Success

67%

33%SuccessfulFailed

Percent of New Businesses after Four Years

(Source: SBA)

Page 15: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Good choice of time and location• Adequate capital• Ability to manage and multi-task• Education/experience in field

• Strong work ethic

• Effective time management• Willingness to ask for input from

others

Critical Success Factors

Page 16: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Business Opportunities

Page 17: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Not hampered by previous image or technologies

• Can choose location, name, logo, relationships

• Can explore new markets and directions

• See your dreams come true

• No base, must build all new

• Greater risk• No track record = difficulty

in financing• See your dream become a

nightmare

ADVANTAGESADVANTAGES DISADVANTAGESDISADVANTAGES

Starting a New Business

Page 18: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Established clientele, suppliers, location

• Known quantity, proven formula/name

• Help in starting and running business

• Can review records

• Easier to obtain financing

• Potential hidden issues: debts, poor reputation, loyalty to owner, out-of-date inventory or transfer issues

• No guarantee that success will continue

ADVANTAGESADVANTAGES DISADVANTAGESDISADVANTAGES

Buying a Business

Page 19: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Proven image and product/service

• Marketing/Sales power• Limited experience• Training, professional

guidance• Continued consulting

relationship

• Access to other franchisees for help

• Loss of control - not always your own boss

• Franchise = royalty and other fees

• Operational boundaries and limited choices

• Binding contract• Franchisor problems are

your problems

Buying a FranchiseADVANTAGESADVANTAGES DISADVANTAGESDISADVANTAGES

Page 20: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Convenient work location• Less expensive

• Flexible schedule

• Tax Advantages - Sq Ft of total home - Percentage of utilities

• Zoning or deed restrictions• Isolation from others• Difficult financing• Family distractions• IRS scrutiny

Home Based Business

ADVANTAGESADVANTAGES DISADVANTAGESDISADVANTAGES

Page 21: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Allows operation in a not-for-profit status – no owners

• May qualify for government or foundation grants

• Protection from liability for directors and employees

• Can pay salaries to employees and consulting fees for contractors

• Focus on educational or charitable purposes and cannot profit those who created the organization

• All profits remain within the organization

• Must apply and qualify for 501c3 status or sales tax exemption

Non-Profit

ADVANTAGESADVANTAGES DISADVANTAGESDISADVANTAGES

Page 22: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Online Business

ADVANTAGESADVANTAGES DISADVANTAGESDISADVANTAGES

• Lower startup costs• Expanded geographic

reach• Convenience &

accessibility

• Flexibility

• Low conversion rates• Low barriers to entry =

higher competition• Visitor expectations

• No personal contact/ limited sensory info

Page 23: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Assessing Your Entrepreneurial

Journey

Page 24: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Self-starter• Resourceful• Responsible• Organized• Hard worker• Persistent• Decisive• Healthy• Supportive family

Entrepreneur Characteristics

Page 25: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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How Many Hats Will You Wear?

Page 26: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Strategy used to create a desire to purchase

• Creates your company image• Anything you do to get and keep a

customer• Your product or service will not sell

itself

Marketing

Page 27: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Customer contact work• Finding prospects• Making presentations• Preparing bids• Closing deals• Processing orders

Sales

Page 28: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Definition of offering• Functionality and packaging• Quality• Differentiation

Product and/or Service

Page 29: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Position

• Location, Location, Location• Niche / target market• Competition• Distribution• Merchandising

Page 30: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Name recognition• Qualification of

product/service• Market identity• Advertising

Branding

Page 31: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Price

• Consumer reaction

• Cost• Competition• Credit terms and discount

Page 32: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Competition • Size of operation and number of

employees • Price and quality • Services provided • Reputation: strengths and

weaknesses

• Personal visits and observations

• Suppliers & contractors• Other businesses in area

Page 33: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Details, Details:Legal Forms, Insurance, Regulations, Advisors

Page 34: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Sole Proprietorship• Partnership• Limited Liability Company

(LLC)• “C” Corporation (Conventional)

• “S” Corporation (Sub-chapter)

Business Organization Forms

Page 35: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Keep It Simple• Sole proprietorship or

partnership• If liability and/or tax are a

concern, an LLC or S-corporation

Recommendations for Start-ups

Page 36: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Property

• Liability

• Motor Vehicles

• Umbrella Liability

• Worker’s Compensation

• Health

• Life

Insurance Considerations

Page 37: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Business Licenses and

Approvals• Labor Laws• Immigration Laws• IRS and Social Security

Withholding & Payments

Government Regulations

Page 38: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Banker• Lawyer• Accountant• Insurance Agent• Business Mentor

Every Business Owner Needs:

Page 39: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Funding and Cash Management

Page 40: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Total monthly cost of living

• Areas where you can cut back• Outstanding debt• Amount in savings• Total amount needed to cover 6

to 12 months of expenses

Personal Budget Considerations

Page 41: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Essential Considerations:• Tools and equipment• Leasehold improvements• Licenses and permits• Professional fees• Initial inventory• Working capital reserve fund

Start-up Cash Needs

Page 42: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Salaries• Rent• Insurance• Taxes and fees• Advertising• Loan interest/ principal• Utilities• Maintenance

Operating Cash Needs

Page 43: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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EquitySignifies Ownership

Sources of Capital

• Personal savings

• Family and friends• Partners’ contributions• Profits retained in the

business

• Banks and credit unions*• Community Express Micro

Loans*

• Credit cards (not recommended)

* Usually guaranteed by SBA

DebtDoes NOT Signify Ownership

Page 44: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Lender’s View of Borrower • Character, Commitment

• Credit rating• Cash flow• Collateral, Capital• Industry knowledge

• Personal investment

• Financial history• Financial projections• Management skills• Competition

Page 45: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Open a separate bank account for your business ASAP

• Deposit all receipts “in tact”• Use a petty cash fund• Separate sales tax receipts on your

books• Hang on to cash as long as possible• Reconcile bank account monthly

Cash: Most Important Asset

Page 46: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Business and Marketing Plans

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• Encourages an objective view• Becomes foundation for

planning• Powerful management tool

• Communicates owner’s ideas

Business Plan Importance

Page 48: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Table of Contents• Executive Summary• Section One:

The Business• Section Two:

Financial Forecasts• Section Three:

Supporting Data

Business Plan Contents

Page 49: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Brief description of the business• How much money needed• How the money will be used• Whether you will seek a loan or

investors• When you will repay loans

Executive Summary

Page 50: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Description of business• Product or service• Market need• Location • Competition• Management and personnel• Use of new funds

Section 1: The Business

Page 51: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Capital equipment list • Income and expenses• Assets, liabilities & equity• Sources & applications of

funds (cash flow)• Break-even calculation• Historical records (including

variation analysis)

Section 2: Financial Forecasts

Page 52: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Target market: Is it large enough to be profitable?

• How is your product or service different/better?

• How is the market reached?• Costs involved?• Required pricing to make a

profit?• Who are your competitors and

where are they located?

Your Marketing Plan

Page 53: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Data you need is most likely available - the trick is to dig and find it!– Chambers of Commerce– Banks– Civic Organizations– Census Data– Internet– Libraries – Trade Associations

Market Plan Data Sources

Page 54: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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• Myths• Business Opportunities• Assessing Your Journey• Organization, Insurance,

Regulations

• Funding and Cash Management

• Business and Marketing Plans• Next Steps

Review

Page 55: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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Next Steps

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What do these businesses have in common?

DisneyAppleNike

Wal-marteBay

Amazon.comStarbucks

Your local grocery store, bakery, gift shop, landscaper…

Make Your Dream a Reality

Page 57: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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1. Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE).

• Test the feasibility of one or multiple business ideas and start work on a business plan and financials

• Learn more about topics presented in this session

1. Defer your decision about going into business for yourself at least for now.

Now What?

Page 58: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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→ Start-up Basics

→ Business Concept

→ Marketing Plan

→ Financial Projections

→ Funding Sources & Next Steps

QuickSTART SeriesTesting Your Business Ideas

Session 2

Session 3

Session 4

Session 5

Session 1

Page 59: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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“The best way to predict the future is to create it.” - Peter Drucker

Are you ready to create your future? Would you like support with taking the next step in starting your own successful business?

Sign-up for QuickSTART Series

Sign-up for the Remaining Workshops!

Page 60: QuickSTART: Start-up Basics · 57 1.Be well prepared to proceed by signing-up for the QuickSTART series (includes free, one-on-one mentoring with SCORE). • Test the feasibility

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1. Write a vision statement for your business idea(s). It should contain:A. The overall purpose of your business: What are you trying

to achieve? Why are you in business? B. Describe the products and services your business

provides. C. Explain what is important to your business—the values

your business lives by.

2. Read the business plan and background for Ann’s Nursery.

See you at the next session on Business Concepts

Homework

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1. On a scale of 0 - 10, how likely is it that you would recommend this workshop to your friends and colleagues?

2. What is the primary reason for the answer you just gave us?

3. What is the most important improvement that would make you rate us closer to a 10?

Help Us, Help YouAnswer the Following Questions