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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
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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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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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
SESSION 1: Start-Up Basics
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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SESSION 1: Start-Up Basics
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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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• Self-starter
• Hard worker
• Responsible
• Organized
• Persistent
• Decisive
• Resourceful
• Healthy
• Supportive Family
Entrepreneur Characteristics
SESSION 1: Start-Up Basics
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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
SESSION 1: Start-Up Basics
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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
SESSION 1: Start-Up Basics
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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
SESSION 1: Start-Up Basics
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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
SESSION 1: Start-Up Basics
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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
SESSION 1: Start-Up Basics
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• Name recognition
• Qualification of
product/service
• Market identity
• Advertising
• Creating Trust
Branding
SESSION 1: Start-Up Basics
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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
SESSION 1: Start-Up Basics
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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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• 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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• 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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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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• 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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