Simple Steps for Starting Your Business - Amazon S3 · Simple Steps for Starting Your Business 1 ... Myth 2: If you go out on your own, you won’t have to work so hard or such long

Simple Steps for Starting Your Business

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SCORE Indianapolis

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• Successful and Experienced

Entrepreneurs and Executives

acting as Volunteers

• Free and Low-Cost Workshops

• No-Charge Mentoring

• One(or Two)-on-One

Resources for small business:

indianapolis.score.org

About SCORE

http://www.score.org/

http://www.score.org/

SESSION 1: Start-Up Basics

Sign Up For Mentoring

SCORE Offices - 8500 Keystone Crossing, Suite 401,

- One Zone Office - 10305 Allisonville Rd.

Call 317-226-7264 for an appointment in either location

Greenwood Chamber, Call 317-888-4856 For An Appointment

Or at Indianapolis.score.org

Or Request An Appointment Today – Card in Folder

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http://www.indianapolis.score.org/

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Stand up and briefly

tell us:

• Your name

• Your business idea or

company

• Why you decided to be

here

Nice to Meet You!

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• Myths and realities of

entrepreneurship

• Different ways to start a business

• Entrepreneurial characteristics

• Different parts of marketing

• Making it legal

• Funding and cash management

• Business planning basics

Today’s Topics


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MYTHS AND REALITIES OF

ENTREPRENEURSHIP

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Myth 1: All I need is a good idea to be a successful

entrepreneur.

Myth 2: If you go out on your own, you won’t have

to work so hard or such long hours.

Myth 3: You’ll be able to deduct everything, so you

don’t have to pay taxes.

Myths and Realities of

Entrepreneurship

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Myth 4: If you work independently, you won’t have to

report to a boss.

Myth 5: Business owners get to do the work they

want to do and only what they find interesting.

Myth 6: If you choose to be self-employed, you’ll be

limited in what you can achieve, since you’ll be working

alone.

Myths and Realities of

Entrepreneurship


Source: U.S Dept. of Commerce, Bureau of the

Census, Business Dynamics Statistics

After 2 Years

Reality: Business Success

After 5 Years

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3 WAYS TO GET IN BUSINESS

• Start a Brand New Business

• Buy an Existing Business

• Buy a Franchise

3 Places to Conduct Business

• Home Based Business

• On-Line Business

• Brick and Mortar Business

Starting a Business

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ADVANTAGES

• Not hampered by previous

image or technologies

• Can choose location, name,

logo, relationships

• Can explore new markets

and directions

• See your dreams come true.

DISADVANTAGES

• No base, must build all new

• Greater risk

• No track record = difficulty

in financing

• See your dream become a

nightmare.

Brand New Business

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ADVANTAGES

• Established clientele,

suppliers, location

• Known quantity, proven

formula/name

• Help in starting and running

business

• Can review records

• Easier to obtain financing.

DISADVANTAGES

• Potential hidden issues:

debts, poor reputation,

loyalty to owner, out-of-date

inventory or transfer issues

• No guarantee that success

will continue.

Buy an Existing Business

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ADVANTAGES

• Proven image and

product/service

• Marketing/Sales power

• Limited experience

• Training, professional

guidance

• Continued consulting

relationship

• Access to other franchisees

for help.

DISADVANTAGES

• Loss of control - not always

your own boss

• Franchise = franchise fee and

royalty payments ($)

• Operational boundaries and

limited choices

• Binding contract

• Franchisor problems are

your problems.

Buy a Franchise

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ADVANTAGES

• Convenient work location

• Less expensive

• Flexible schedule

• Tax Advantages

- Sq. Ft of total home

- Percentage of utilities.

– Or Safe Harbor

DISADVANTAGES

• Zoning or deed restrictions

• Isolation from others

• Difficult financing

• Family distractions

Home Based Business

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ADVANTAGES

• Lower startup costs

• Expanded geographic reach

• Convenience & accessibility

• Flexibility.

DISADVANTAGES

• Severe price pressure

• Need an excellent web

site

• Low conversion rates

• Low barriers to entry =

higher competition

• No personal contact/

limited sensory info.

Online Business

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ADVANTAGES

• You, the products and the

customers meet face-to-face

• Potential customers see

your business

• Convenience & accessibility

• Traditional.

DISADVANTAGES

• High startup costs

• Ongoing overhead

expenses

• Bad location?

• Lack of flexibility.

Brick and Mortar Business


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ENTREPRENEUR

CHARACTERISTICS

Entrepreneurs

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• Self-starter

• Hard worker

• Responsible

• Organized

• Persistent

• Decisive

• Resourceful

• Healthy

• Supportive Family

Entrepreneur Characteristics


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• 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

Successful Entrepreneurs

Have All This


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How many hats will you wear?


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THE DIFFERENT PARTS OF

MARKETING

Marketing


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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


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• Definition of offering

• Functionality and

packaging

• Differentiation

• Value Proposition

• Who needs it?

• Why do they need it?

• How is it different or better

than the competition?

Product and/or Service The 4 Ps of Marketing


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• Pricing Strategy is a Key

Part of Marketing

• Consumer Reaction

(Demand)

• Cost

• Competition

• Discounts

• Credit Terms.

Price The 4 Ps of Marketing


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• Location, Location, Location

• Niche / target market

• Competition

• Distribution

• Merchandising

• Is it a service?

• Where will you go?

Place: Where will your

product be?

The 4 Ps of Marketing

SESSION 1: Start-Up Basics Promotion

• advertising,

• sales promotion,

• public relations,

• direct marketing,

• online communications

• personal selling.

Informs Customers and Encourages

Buying

The 4 Ps of Marketing


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• Name recognition

• Qualification of

product/service

• Market identity

• Advertising

• Creating Trust

Branding


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• Customer contact work

• Finding prospects

• Managing Prospect Pool

• Making presentations

• Preparing bids

• Closing deals

• Processing orders.

Sales

Not the Same as Marketing


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• Size of operation and number of

employees

• Price and quality

• Services provided

• Reputation: strengths and

weaknesses

• Personal visits and observations

• Inspect their Website

• Talk to suppliers & contractors.

Know Your Competition


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MAKING IT LEGAL

The Law & Your Business

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• Sole Proprietorship

• Partnership

• Limited Liability Company

(LLC)

• “C” Corporation

(Conventional)

• “S” Corporation (Sub-

chapter S)

Business Entities

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Keep It Simple

• Sole Proprietorship is the

simplest

• If liability is a concern, an

LLC or S-corporation

• Multiple Owners increases

complexity

Recommendations

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• Property

• Liability

• Motor Vehicles

• Umbrella Liability

• Worker’s Compensation

• Health

• Life

Insurance Considerations

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• Business Licenses and Approvals

• Labor Laws

• Immigration Laws (Form I 9)

• IRS and Social Security Withholding & Payments

• State Sales Tax requirements

Government Regulations

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• Banker

• Lawyer

• Accountant

• Insurance Agent

• Business Mentor

Every Business Owner

Needs…


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FUNDING AND CASH

MANAGEMENT

Money

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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

Financially Able?

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Essential Considerations:

• Professional fees

• Web site

• Tools and equipment

• Leasehold improvements

• Licenses and permits

• Initial inventory

• Working capital reserve fund

Start-Up Cash Needs

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• Salaries

• Rent

• Insurance

• Taxes and fees

• Marketing

• Loan interest/ principal

• Utilities

• Maintenance

Operating Cash Needs

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Equity

Signifies Ownership

• Personal savings

• Family and friends

• Partners’ contributions

• Profits retained in the

business

• Banks and credit unions*

• Family and Friends

• Micro Loans

• Credit cards (not

recommended)

* Might be guaranteed by SBA

Debt

Does NOT Signify

Ownership

Sources of Capital

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• Credit score

• Cash flow

• Collateral, Capital

• Character, Commitment

• Industry knowledge

• Personal investment (%)

• Financial history

• Financial projections

• Management skills

• Competition

Lender’s View of

Borrower

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• Open a separate bank account for your

business

• Deposit all receipts “in total”

• Separate sales tax receipts on your books

• Hang on to cash as long as possible

• Aggressively collect your receivables

• Reconcile bank account monthly

• Have adequate cash and a reserve fund at the

start of the business

• Prepare and maintain a cash forecast for at

least six months into the future

Cash:

Most Important Asset Tips


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BUSINESS PLANNING BASICS

Business Planning

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Do not rush into writing a Business Plan.

• Clearly articulate your Vision

• Recognize the startup “Vision” as a series of untested

hypotheses in need of “customer proof.”

• Get out of the building and engage potential customers.

• Relentlessly test for insights, and quickly course-correct

• Preserve cash and eliminate time wasted on building features

and products that customers don’t want.

Key Question:

• Do enough people really care about the problem for this to be

a viable business?

Business Planning

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What we are talking about is:

• Use Lean Startup Principles

• Search YouTube for Lean Startup to learn more

• This is what the model looks like

When you are ready to write your Business Plan go to

Score.org and search Business Plan Template

Lean Startup

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SMALL BUSINESS READINESS

SELF-ASSESSMENT

Self -Assessment

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• A quick self-assessment will indicate strengths

and areas to work on with your mentor and

other associates.

• 5 minutes to fill-in and score – form in folder

Exercise 1: Small Business

Readiness Self-Assessment

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1. Write a vision statement for your business idea(s). Template in folder. 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.

Homework

Next Step – New Business

Academy

If you want to keep going and dig deeper there is

another SCORE Workshop that builds on everything

we talked about today.

– Saturday, October 26

– 8:30 to 5:00

– Limited to 25 participants

– Early Bird price $100 (regular $125) till 10/18

– Partner comes for free

– Register at indianapolis.score.org

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• Feedback Survey is in your folder

• Please complete before leaving

• Card for Free Mentoring Request on

Survey

Please complete our workshop survey:

Help Us, Help You

Documents

Simple Steps for Starting Your Business - Amazon S3 · Simple Steps for Starting Your Business 1 ... Myth 2: If you go out on your own, you won’t have to work so hard or such long