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B.A.S.E

The Workbook Part 1 of 4

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Basis of a Successful Enterprise 

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B.A.S.E. Basis of A Successful Enterprise

Agenda

Welcome & Introductions

SBDC Programs & Services

Steps In Starting Your Own Business * The Process That Improves Your Chances for Success * Look At Yourself * Look At Your Business Idea * Look At Your Market * Your Customer * Your Competition * Look At Your Resources * Financial * Family & Friends * Other Resources * Look At the Various Forms of Business Ownership * Ask Yourself These Questions: * “Based on all of the above, Is It Feasible?” * “Do I Have the Key Ingredients to Success?”

Business Plan Development If you fail to plan - you plan to fail! - A job well started is a job half done! * Why Plan & Why Put It In Writing * Business Plan Outline * Elements of an Effective Business Plan * Helpful Hints to Direct Your Thoughts * Important Questions To Answer - Supported by FACTS * Business Start-Up Model * www.sbdc.cscc.edu and click on the Start-Up Model Icon Financing: Expectations, Considerations, & Resources

Your Next Step

Class Evaluation

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B.A.S.E. Basis of A Successful Enterprise

Central Ohio Small Business Development Centers

Contact the Center Closest to You! Listed by County

Delaware Delaware Area Chamber of Commerce

(740) 369-6221

Fayette Fayette County Chamber of Commerce

(740) 335-0761

Fairfield Lancaster Chamber of Commerce

(740) 653-8251

Pickerington Area Chamber of Commerce (614) 837-1958

Village of Canal Winchester

(614) 837-7493 ext.106

Franklin Columbus State Community College

(614) 287-5294

Licking Newark & Licking County Economic Development

(740) 670-5215

Logan Logan County Area Chamber of Commerce

(937) 599-5121

Madison Madison County Chamber of Commerce

(740) 852-2250

Pickaway Circleville-Pickaway Chamber of Commerce

(740) 474-4923

Union Union County Chamber of Commerce

(937) 642-6279

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B.A.S.E. Basis of A Successful Enterprise

Entrepreneurial Quiz Do You Have What It Takes?

Analyzing yourself to see if you have what it takes to succeed as an entrepreneur is the first steps to beginning a successful enterprise. Granted, no one can predict your success. But studies of successful entrepreneurs show some common characteristics. The following quick quiz, prepared by Northwestern Mutual Life Insurance Co. in Milwaukee, WI. will give you an idea whether you’ll have a head start or a handicap to work with as a business owner. Enter a negative (-) or positive (+) number as instructed for each of the following questions: 1. Were your parents immigrants? ____ 2. Were you a top student in high school? ____ 3. Did you enjoy group activities? (clubs, team sports, double dating) ____ 4. Did you prefer to be alone as a youngster? ____ 5. As a child or young adolescent, did you operate your own small ____ 6. business (lemonade stand, delivering/selling newspapers) or run for

school class officer? 7. Were a stubborn child, you had to learn the hard way or ____

no way at all? 8. Were you cautious as a youngster? ____ 9. If you were daring, accepting any dare or challenge put to you ____

10. Do the opinions of others matter a lot to you? ____ 11. If an important motivation for starting your own business is to change ____

your daily routine 12. If you really enjoy work, are you willing to work long nights? ____ 13. If you would be willing to work “as long as it takes” with little ____

or no sleep to finish a job 14. When you complete a project successfully, do you immediately start ___

another project? 15. Would you be willing to spend all of your savings to start a business? ____ 16. Would you be willing to borrow from others (family, friends, banks)? ____ 17. If your business failed, would you immediately work to start another? ___ 18. If you would immediately start looking for a good paying job ____

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19. Do you believe entrepreneurs are “risky?” ____

20. Do you have long-term and short-term goal in writing? ____ 21. Do you believe you have more knowledge and experience with ____

cash flow than most people? 22. Are you easily bored? ____ 23. Which of the following do you consider yourself to be?

Optimist ____

Pessimist ____

ADD UP YOUR TOTAL SCORE

B.A.S.E. Basis of A Successful Enterprise

Entrepreneurial Quiz...Continued Do You Have What It Takes?

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YOUR ENTREPRENEURIAL QUOTIENT

A SCORE OF 35 OR MORE You have everything going for you. You ought to achieve spectacular entrepreneurial success (barring act of God or other variables beyond your control).

A SCORE OF 15 TO 35 Your background, skills and talents give you excellent chances for success in business. You should go far.

A SCORE OF ZERO TO 15 You have a head start of ability and/or experience in running a business, and ought to be successful in opening an enterprise of you own if you apply yourself and learn the necessary skills to make it happen.

A SCORE OF -15 TO ZERO: You might be able to make a go of it if you ventured on your own, but you would have to work extra hard to compensate for a lack of built-in advantages and skills that give others a “leg up” in beginning their own business.

A SCORE OF -43 TO -15: Your talents probably lie elsewhere. You ought to consider whether building your own business is what you really want to do because you may find yourself swimming against the tide if you make the attempt.

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B.A.S.E.

Entrepreneurship Advantages & Disadvantages of Being Your Own BOSS

Advantages

Disadvantages

♦ Independent of direct control by others

♦ Ability to influence own circumstances

♦ Potential limited only by own ability and opportunity

♦ Can be exciting

♦ Vehicle for recognition, involvement, and improving oneself

♦ Use one’s abilities to the fullest

♦ Fun to win and collect rewards

♦ Provides ability to impact community and your environment

♦ Diverse responsibilities

♦ No Boss, except YOU

♦ No time clock

♦ Set own income

♦ Set own policies and rules

♦ Select your own employees and your own professional network

♦ Hard work, high risk, no guarantees

♦ Fear of failure, fear of success

♦ Constant uncertainty (terror)

♦ A different form of “serfdom” and dependence

♦ Once in, high cost of exit if things don’t work out

♦ Emotional roller coaster

♦ Can displace other areas of life

♦ All the troubles and worries are yours

♦ Must wear many hats

♦ No paycheck

♦ No one understands

♦ Tough choices - pay people or self

♦ No holidays or vacations

♦ No benefits packages

♦ Need to take care of existing customers while getting new customers

♦ It’s a 24 hour 7 day a week job

♦ No one else to blame

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B.A.S.E.

The Profitable Process of “Ps”

Of Starting Your Own Business

Perceive The “Ah-Ha Moment” of “This is really what I want to do!”

Pleat & Prove

A pleat is a gathering of materials…DO YOUR RESEARCH! Gather in all the information needed to PROVE or DISPROVE…. ”There is someone else (other than yourself) sold on this idea. They need and/or want it and you know who and where they are. They’re able and probably willing to pay you what you need to be paid so… You can do for them what you want to do…and do it for a mighty long time!” Given you PROVE IT your next step is to...

Plan

Take all the information you’ve obtained throughout your research and plan the WHO, WHAT, WHERE, WHEN, WHY, HOW, AND HOW MUCH of it all. Use the business plan outline on pages 35-39 as your guide.

Process This is the step where you actually make things start to happen...and DO! Sign that lease. Register your business name and legal structure. Go for that loan or obtain a new credit card. Order that inventory. Sign those contracts...etc, etc.

Proceed Do It! You’ve got the proof, the plan, now all you have to do is persevere!

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❏ Customers/Competition

❏ Technology

❏ Management Skills

❏ Equipment

❏ Product/Service

❏ Location

❏ Operational Systems

❏ Marketing Strategy

❏ Delivery System

❏ Money

❏ Plan of Action

B.A.S.E.

What You Must Prove You Know You Have

- Key Elements to Research -

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B.A.S.E. Basis of A Successful Enterprise

Evaluate Your Business Idea

Answer These Questions 1. Can this idea be turned into a business? 2. Is there a “real” need for the product or service? 3. Who will buy? How much will they buy? How often will they buy it? What will they pay for it? 4. Is there competition? How much? Where is it? 5. How much growth potential exists? * Market Share * Product/Service line expansion 6. Can I afford to do this business now or ever? 7. What am I putting at risk? 8. If I decide “not to do” the deal, have I failed, or will I regret it later?

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B.A.S.E.

Market Research

Methods of Getting Needed Information

You can easily gather the primary data, answers and information you need through conducting a mixture of the following

* Focus Groups * Observations * Surveys * Interviews * Fax, Online Surveys * Informal Inquires

You can easily collect your secondary supportive information via:

* Internet * Government Resources * Marketing Companies

Other forms of market research that you may find very beneficial include:

* Research the Yellow Pages for your competition * Talk to various suppliers/distributors * Talk to your competitor’s customers * Attend conferences, trade shows, seminars, conventions * Study you competition * Advertisements in the local media * Handouts/billboard postings * Promotional efforts * Customer Service * Pricing * Talk to a business owner in the same business as you but in a noncompetitive area.

Conduct research with the resources available at the Columbus Metropolitan Library * Professional librarians are available during all open hours to assist you with your reference needs. * The library has up-to-date sources of information in many formats, both print and electronic. * Use of Library resources are FREE when you use your library card! (See pages 10-11)

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B.A.S.E.

Market Research Resources

Available in the Business & Technology Division of the Columbus Metropolitan Library-3rd Floor-96 Grant St.-Columbus, OH

*** Starting a Business ***

Small Business Sourcebook (R658.022 S6352) provides a starting point for a variety of small businesses, by listing sources such as trade associations, journal articles, franchise opportunities, and trade shows. Small Business Profiles (R658.1141 S635) gives overviews of a variety of businesses, such as start-up costs, factors to include when choosing a location, and legal issues. Business Plans Handbook (R658.152 B979) includes samples of actual business plans that worked, for a variety of small businesses. Encyclopedia of Small Business (R658.02203 H655e2) provides entries on many concepts relating to small business start-up, such as human resources issues, dealing with problem customers, taxation, etc.

*** Demographics Resources ***

Sourcebook of Zip Code Demographics (R317.3 S724) provides demographics such as population, income, population breakdown by race, sex and age, and effective buying income for every zip code in the U.S. County and City Databook (R317.3 U58c) supplies basic demographic data from the 2000 Census for all counties, cities and places in the country. Demographics USA (R658.8305 D3832) Also supplies demographic data on the zip code and county level. Woods & Poole State Profile Ohio (R317.71 O378) is unique in that it not only provides current demographic data for Ohio cities, but also provides projections up to 2025.

*** Electronic Resources for Demographic Information ***

U.S. Bureau of the Census (http://www.census.gov) is the definitive source for demographic information on people and industries. Ohio Office of Strategic Research (http://www.odod.state.oh.us/research/) compiles census data relevant to Ohio.

*** Psychographics ***

Best Customers: Demographics of Consumer Demand (R658.834 B561) identifies the demographic sectors that are the best customers of many products and services. Lifestyle Market Analyst (R658.834 L722) describes the top ten lifestyles (i.e. hobbies, interests) of the population of most major metropolitan areas, including Columbus. Also shows whether people in a particular city are more or less likely to engage in a certain lifestyle. Household Spending: Who Spends How Much on What (R339.47 H842) describes the target market for a number of products and services. Who's Buying Food and Drink (R658.834 M696w) identifies the best customers for various products and services relating to the food and beverage industry.

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B.A.S.E.

Market Research Resources

Available in the Business & Technology Division of the Columbus Metropolitan Library-3rd Floor-96 Grant St.-Columbus, OH

*** Finding Your Customers ***

Reference USA online database available through the Columbus Metropolitan Library's web site (www.columbuslibrary.org/). It is composed of two national directories, one for companies and one for individuals. Users can create lists of businesses in a particular industry in a particular geographic area, or find out information about specific companies. Direct Marketing List Source describes various marketing lists available for purchase.

*** Industry Information *** County Business Patterns (R331.29771 C855) provides information on various industries (such as numbers of businesses, number of employees, etc.) by county. Dun & Bradstreet Regional Business Directory (R338.74025 D9262) lists businesses in Central Ohio alphabetically, geographically, and by SIC code. Harris Ohio Industrial and Service Directories (R380.1025771 H315; R380.1025771 H3151) list businesses throughout Ohio by industry.

*** Special Directories *** Thomas Register of American Manufacturers (R670.2 T46) lists manufacturers of any kind of product imaginable. Also available online at http://www.thomasregister.com/. Thomas Food Industry Register (R380.1456413 T454) is a smaller version of the Thomas Register, for manufacturers of products specific to the food industry. American Wholesalers and Distributors Directory (R658.872025 A512) lists providers of a wide variety of wholesale goods.

OSBDC

*** Online Resources for Starting a Business *** Business Startup Model An interactive roadmap to entrepreneurial success provided for your use by the Columbus Chamber of Commerce and the Central Ohio Business Development Center. Going through the model takes you through all of the steps involved in starting your business. (http://www.cscc.edu/cpe/sbdc/SBDCindex.asp) 1st Stop Business Connection The 1st Stop Business Connection provides free business start-up information for entrepreneurs. A personalized business information kit may be created which will include basic information about starting a particular type of business, including the necessary state regulations and forms. The kit may be printed or e-mailed, or sent through the U.S. mail by calling a toll free number. (http://www.odod.state.oh.us/edd/1ststop)

Visit the OSBDC website www.odod.state.oh.us.edd/osb/sbdc

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B.A.S.E. Basis of A Successful Enterprise

Visit the 1st Stop Business Connection Web Site

www.odod.state.oh.us/edd/1ststop and obtain all the information and forms for all the permits and licenses you will need to legally

operate a business within the state of Ohio.

What You’ll Receive:

- All forms to register your business with the Secretary of State

- Filing Your Fictious Name Form

- Information Regarding Your Tax Requirements and Rights EIN Number: Form SS4 Self-Employment Tax Worker’s Compensation Property Tax Sales Tax

- Vendor’s License Application: County Auditor

- Information Regarding Employee Taxes Federal & State Withholding Federal & State Unemployment Worker’s Compensation Social Security

- Information on Trademark and Copyright Protection

- Miscellaneous Requirements Building Codes EPA Other Regulations

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B.A.S.E.

On-Line Research Resources

Web Crawling for Fun and Profit Federal: Federal Search www.firstgov.gov Bureau of Economic Analysis www.bea.doc.gov (income trends) Library of Commerce www.loc.gov Small Business Administration www.sba.gov U S Census Bureau www.census.gov City Cost of Living Comparisons www.bestplaces.net Internal Revenue Service www.irs.gov Links to Statistical Resources www.fedstats.gov/regional.html Demographics www.demographics.com/publications/ad/index CIA World Factbook www.cia.gov/cia/publications/factbook/index.html

State: State of Ohio www.state.oh.us Ohio Education www.ode.state.oh.us Ohio Labor Market Info www.lmi.state.oh.us Ohio Works www.ohioworks.com/prod Connect Ohio www.connectohio.com State Library www.winslo.state.oh.us Ohio DOD Strategic Research www.odod.state.oh.us/osr/data.html State Fact Sheets www.econ.ag.gov/epubs/other/usfact SBA District Office (Columbus) www.sba.gov/regions/states/oh/colu.html

News Services: Associated Press www.ap.org/index.html American Business Journals www.bizjournals.com State Newspapers www.connectohio.com Find Articles www.findarticles.com/Pl/index.jhtml

Business Profiles: Hoovers www.hoovers.com Securities & Exchange/Edgar www.sec.gov/edgarhp Harris Infosource www.harrisinfo.com Info USA www.infousa.com Economy.com www.economy.com/freelunch General Search www.ceoexpress.com

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Associations: Inc Magazine www.inc.com CUED www.cued.org Milken Institute www.milkeninstitute.org American Community Network www.acn.net ACCRA www.costofliving.org Maps: GIS Support Center www.geodata.state.oh.us Ohio Dept of Transportation www.dot.state.oh.us/map1 Ohio Dept of Natural Resources www.pnr.state.oh.us/gims PUCO www.puc.state.oh.us.pucogis Search Engines: Northern Lights www.northernlight.com Ask Jeeves www.askjeeves.com Dogpile www.dogpile.com Google www.google.com Meta Crawler www.metacrawler.com Docusearch www.docusearch.com Local Government Information Sources: City of Columbus Home Page (http://ci.columbus.oh.us) This page contains links to the web sites of many city departments and agencies. These sites contain very good overviews of city services and activities. One valuable statistical source is the City Planning Office’s INFOBase archive that is lined through the City Plan ning site or directly at www.columbusinfobase.org. The site offers economic and demo graphic information for the city’s 30 planning areas that extend beyond city boundaries to cover the entire county. County Web Sites The following county governments have official websites: Delaware www.co.delaware.oh.us Fairfield www.co.fairfield.oh.us Franklin www.co.franklin.oh.us Logan www.co.logan.oh.us Union www.co.union.oh.us County searches can be readily conducted on Google as well. Simply enter the county name, OH — example: Pickaway County, OH and click search

B.A.S.E.

On-Line Research Resources (Continued)

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IMPORTANT NUMBERS TO KNOW WHEN YOU’RE STARTING A BUSINESS IN OHIO

IRS EIN Information and Registration (866) 816-2065

IRS Small Business Tax Workshops (614) 225-6910

IRS Tax Information (800) 829-1040

Ohio Bureau of Workers’ Compensation (800) 644-6292

Ohio Civil Rights Commission (614) 466-5928

Ohio Department of Commerce, Wage and Hour Division (614) 644-2239, (614) 644-2393,

or (614) 644-2450

Ohio Department of Job and Family Services (800) 251-6237

Ohio Department of Taxation (888) 405-4039

Ohio Environmental Protection Agency (800) 329-7518

Ohio New Hire Reporting (888) 872-1490

Ohio Secretary of State (877) 767-3453

U.S. Dept. of Justice, Immigration and Naturalization Service (800) 375-5283

County Auditors

Delaware County Logan County (740) 833-2900 (937) 599-7209

Fairfield County Pickaway County (740) 687-7027 (740) 474-4765

Fayette County Madison County (740) 335-6461 (740) 852-9717 Franklin County Union County (614) 462-3230 (937) 645-3003 Licking County (740) 349-6026

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B.A.S.E.

Market Research Targeted Consumer

Demographics

Psychographics

♦ Income Level

♦ Age

♦ Sex

♦ Education

♦ Location

♦ Race

♦ Religion

♦ Hobbies

♦ Skills

♦ Health

♦ Marital Status

♦ Number of Children

♦ Buying Habits

♦ Special Interests

♦ Physical Handicaps

♦ Own or Rent Their Home

♦ Do-it-yourself Type

♦ Eating Habits

♦ Spare Time Activities

♦ Vacation Activities

♦ Age and Type of Car

♦ Household Pets

♦ Job and Position Held

♦ Age of Home

♦ Style of Clothes Worn

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B.A.S.E.

Market Research Your Competition

Demographics

Psychographics

♦ Sales and Revenues ♦ How Long Have They Been in

Business

♦ Industry Segment Held

♦ Privately or Publicly Held

♦ Location

♦ Credit Terms

♦ Purchasing Process & Power

♦ Requirements for EDI

♦ Licenses and Certifications Required

♦ Health of the Business

♦ What Are Their Strengths and Weaknesses

♦ Number of Employees

♦ What do Their Customers Like and Dislike About Them

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B.A.S.E.

Target Market Worksheet

1. Who are my customers? Profile: Economic Level: Psychological Make-Up (Lifestyle): Age Range: Sex: Income Level: Buying Habits: 2. Where are my customers located? Where do they live? Where do they work? Where do they shop? 3. Projected size of market 4. What are my customers needs? a. b. c. d. 5. How can I meet those needs? a. b. c. d. 6. What is unique about my business?

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B.A.S.E.

- Competition Worksheet -

Direct Competition Anything competing for exact same market. Anyone who is doing what you are doing. Indirect Competition

A substitute serving the same market. Anyone satisfying the same basic need or solving the same basic problem but in a way that is somewhat different from you. List five examples of your Direct Competition:

1. 2. 3. 4. 5. List five examples of your Indirect Competition:

1. 2. 3. 4. 5.

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1. Competitor: 2. Location: 3. Products or services offered: 4. Methods of distribution: 5. Image: Packaging: Promotional Materials: Methods of Advertising: Quality of Products or Service: 6. Pricing Structure: 7. Business History and Current Performance: 8. Market Share: (number, types and location of customers) 9. Strengths: (Competitor’s strengths must become your strengths as well) 10. Weaknesses: (Their weaknesses should help you identify ways to make your business unique and create additional benefit for your customer)

B.A.S.E.

Competition Evaluation Worksheet Profile of Your Competition

Find us at:

Sbdcfreeadvice.ning.com 614-287-5294

The Small Business Development Center of Ohio (SBDC) program is funded in part through a cooperative agreement with the U.S. Small Business Administration. The SBDC program is also funded in part by the Ohio Department of Development. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA. Reasonable accommodations for persons with disabilities will be made if requested at least two weeks in advance. Contact the Ohio SBDC at (614) 287-5294 or via email at sbdc@cscc.edu.

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