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Exploring businessownership

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Information about Exploring businessownership
Health & Medicine

Published on March 11, 2014

Author: xclark

Source: slideshare.net

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1 Exploring Business Ownership Presenters: Chris Herriman and/or Joan Hudson Economic Development Specialists Vermont District Office www.sba.gov/vt Butternut Mtn. Farm Morrisville, VT

2 Welcome, The U. S. Small Business Administration (SBA) is the only federal agency established with a mission to assist and protect the interests of small businesses, and help families and businesses recover from physical disasters. SBA has offices in every state, as well as Puerto Rico and Guam. What SBA provides: Business counseling Guaranteed loan programs Disaster recovery assistance Government contracting assistance A voice in government to protect small business interests Targeted programs for Veterans, Women, Exporters, etc. Chris.herriman@sba.gov Exploring Business Ownership

What we will discuss today… 3 •Is small business ownership right for you? •The money questions •Writing it down •Getting advice  To complete the plan  To make it legal  To pay for it  To market to your customers •Online Resources • Everyone will be on mute • Please send a note if you have a question Chris.herriman@sba.gov

Is it right for you? Why do you want to start a business? **More free time? **Make more money? **You hate working for someone else? Do you have the basics? • Does ownership fit your personal and career goals? • How long do you intend to stay in business? • Do you have experience running a business? • Do you have experience running this type of business? • Do you have the support of your family and friends? • Have you set aside some money? Chris.herriman@sba.gov Readiness Assessment Guide (https://eweb1.sba.gov/cams/training/business_primer/assessment.htm) 4

Answer the money questions… 1. Do you know what your personal financial needs are? Is it on paper? 2. Do you have money to put into the project? Your own money or someone else's. 3. Do you have another source of income? If you DO have another source of income: • Will that income stay the same or will it go down? If you DO NOT have another source of income: • How will you support yourself while the business is starting up? Chris.herriman@sba.gov 5

6 OK…so far it looks good, what’s next?

Write it down Create a draft Business Plan: Your plan should be focused and clear. Pretend that you are talking to someone that knows nothing about you or your business. It does not need to be a large document. The plan is an introduction to the overall concept of your business; it should tell a compelling story, and explain the following: Who you are What you are selling Who your customer is (hint: you cannot say ‘everyone’) Why customers will buy from you (hint: don’t say customer service) How the business will be managed Where the business will operate When the business will open How the business will be financed (exactly where the money will come from) Financial projections (more to come) Chris.herriman@sba.gov 7

• The financial projections will have two parts:  Start up costs (before you open the doors)- equipment, building improvements, rent and utility deposits, office supplies, insurance, materials, signage, marketing, computer, etc.  Income and expense projections (a best guess) of what you will spend and what you will sell in the first few years (the flow of cash) – include things such as: insurance, rent/mortgage, utilities, bookkeeper, office supplies, marketing, website, license fees, ongoing materials, credit card fees, taxes, and other business expenses. This will tell you how much money is needed to keep the business running and how much is left for you. At this point you will have a draft business plan. It should have enough information to show you the work and money required to get started, and help you decide whether it’s a good fit. Online resources for Business Plan templates and checklist-- • http://web.sba.gov/busplantemplate/BizPlanStart.cfm • http://www.score.org/resources/how-write-business-plan-0 Chris.herriman@sba.gov 8 Write it down (cont.)

Now what?

Get advice Seek business assistance and training: •Your business plan draft will give you a preliminary idea of the commitment and resources required to get started. Now you will need to fine-tune and formalize the plan to create a document that will be an effective guide for your business as well as a basis for financial support in the form of loans, grants or investments •The next steps are very important and should be done in a logical and cautious manner. A business advisor will guide you through those steps while helping you understand the importance of each one. SBA provides free small business counseling & training through a variety of programs and resource partners across the country: – SBA: http://www.sba.gov/training – VT Small Business Development Center: http://www.vtsbdc.org – VT Women’s Business Center: http://www.vwbc.org – SCORE: http://www.score.org Chris.herriman@sba.gov 10

Some of the ways a business advisor will help you…

Making it legal Determining the legal structure of your business •You need to determine which form of business ownership is best for you; Sole Proprietorship, Partnership, Limited Liability Company (LLC), S Corporation, C Corporation, Non-profit , etc. A business advisor can provide you with, and direct you to, resources for information relevant to your state and business entity. We recommend that you speak to a professional before making this decision because taxes, debt recovery and liability issues are affected by it.  Also decide whether you are going to use a majority ownership to get special benefits (i.e.. Veteran-owned, woman-owned, minority-owned etc.) before you make a final decision on percent of ownership for multiple owners. Online Resources for determining a business structure: – SBA: http://www.sba.gov/content/business-structure-and-tax-implications – SCORE: http://www.score.org/events/workshops/determining-your-business-legal-structure – IRS: http://www.irs.gov/Businesses/ – Vermont Secretary of State: http://corps.sec.state.vt.us/ Chris.herriman@sba.gov 12

Making it legal (cont.) Registering your business: •Business name registration needs to be done BEFORE you proceed with other things. Never assume that the name of your business is available for use. •You will need to make sure that you have all necessary federal, state and local permissions, licenses, permits and registrations before you can legally operate. Getting your tax ID numbers and a bank account •There are two different types of tax ID number, you may need one or both. After you have the necessary documents you can open a business bank account. A business advisor will help you follow the correct order.  Note – Check with your state and your financial institution to find out what is required. Online resources for registering your business: – National- SBA: http://www.sba.gov/content/5-steps-registering-your-business IRS: http://www.irs.gov/Businesses/ – Local- State of Vermont Secretary of State; http://www.sec.state.vt.us/ VT Agency of Commerce & Community Development; http://www.accd.vermont.gov/ Chris.herriman@sba.gov 13

Paying for it You will need to determine all of these: •Business owner contribution – How much money can you put into the project? (20% is typically required). •Will you have investments from family, friends, investors, etc.? If so…how much form each one? •Will you need loans? - There are many places to get loans such as; banks, credit unions, alternative lenders, municipal loan programs, state supported programs, etc. For an example see : www.sba.gov/vt  SBA guaranteed loan programs are designed for business owners who may have trouble qualifying for a traditional bank loan. There are monthly webinar Loan Clinics at www.sba.gov/vt on the calendar of events. • Do you qualify for grants? – In general, there are no grants for starting a business. However, in special circumstances programs may come available for particular industries (i.e. Matching grants for alternative energy projects). Grants have a different search method, but you can start with the government listing at www.grants.gov Chris.herriman@sba.gov 14

15 Marketing Your Business: •Your business plan identified your customer, now you need to see if you have covered all you bases and start to learn about their buying habits, where they are, and how to get them in the door. A business advisor has experience with marketing plans and can help direct you to the information you need. Here are some of the areas they can help with:  Determining the profile, buying habits and locations of your target market ( If you don’t know who they are, how can you know what they will buy?)  Deciding if you need an online presence and if it will include social media  What type of signage and local marketing you need (Who does it ‘speak’ to? Are you leaning toward your own preferences or targeting your customers?)  Packaging and labeling (Do you need it?)  Marketing budget ( Are you spending enough?) Online resources: – SizeUp tool –Market Research http://www.sba.gov/sizeup – http://www.sba.gov/content/developing-marketing-plan – Three Marketing Essentials You Can’t Do Without http://www.score.org/resources/3-marketing- essentials-you-can%E2%80%99t-do-without Chris.herriman@sba.gov Getting customers

Examples of Businesses that started out just like you… and received help from SBA resources Wheel House Designs Stowe, VT Lyndon Furniture Lyndonville, VT Black River Produce Springfield, VT

Online resources

18 SBA website

19 Affordable Care Act (Health insurance and how it will impact you)

20 Vermont – SBDC website

21 National - SCORE website

22 Vermont - Women’s Business Center Website

23 Veteran Resources

24 Wrap up - What’s next? • Determine if it’s right for you • Answer the money questions • Write it down • Get advice and training to guide you through:  Completing the plan  Making it legal  Paying for it  Getting customers (marketing plan) • Check the online resources - Assistance is available from SBA, SBDC, SCORE, WBC, VBOC. These organizations can walk you through all of these processes. Their job is to help you….let them! • Get started!! Surround yourself with people that will support you, and go to the experts for advice.

Any questions? For more information on SBA’s programs and services Please contact: Vermont District Office Chris Herriman or Joan Hudson SBA Vermont District 87 State Street, P O Box 605 Montpelier, Vermont 05601 Telephone: 802-828-4422 Or visit the website at: www.sba.gov/vt If you would like a copy of this presentation, please e-mail chris.herriman@sba.gov or joan.hudson@sba.gov 25

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