basics of starting a business a to z

Leading Edge Business Strategies

How to Make the Leap to Starting How to Make the Leap to Starting Your Own BusinessYour Own Business

Presented byPresented byWilliam E. Rogers, MBA, CFP, EAWilliam E. Rogers, MBA, CFP, EA


The Entrepreneurial MindsetThe Entrepreneurial Mindset

1.) Identify the pain:Is there a pain that you feel that others might be

feeling?Examples: lack of reliable cell phone coverage in your

home, on demand medical advice 24/7, lack of affordable daycare close to home, etc.

2.) Develop the concept:What are some potential solutions to easing this pain?Who would be an appropriate customer for this type of

product / service offering


SWOT AnalysisSWOT Analysis

What are your strengths?What are your strengths?

What are your weaknesses?What are your weaknesses?

Are there any opportunities that you foresee?Are there any opportunities that you foresee?

Are there any potential threats?Are there any potential threats?


Generic Competitive StrategiesGeneric Competitive Strategies


Law of Competitive AdvantageLaw of Competitive Advantage

The value received (benefits) must exceed the cost The value received (benefits) must exceed the cost incurred of the product / service.incurred of the product / service.

If you fail to do so, then you are vulnerable to attack.If you fail to do so, then you are vulnerable to attack.Therefore, in order to obtain a competitive advantage, Therefore, in order to obtain a competitive advantage,

you must perform a set of activities that are different you must perform a set of activities that are different from competitors.from competitors.


Setting Yourself ApartSetting Yourself Apart

In today’s highly competitive environment, you must be In today’s highly competitive environment, you must be able to distinguish yourself from competitors. able to distinguish yourself from competitors. Otherwise, clients can only judge you based upon Otherwise, clients can only judge you based upon price.price.

What is your Unique Selling Proposition? What is your Unique Selling Proposition?

What do you do differently in your firm that can give What do you do differently in your firm that can give you a competitive advantage?you a competitive advantage?


Steps to Building a StrategySteps to Building a Strategy

Conducting analysisConducting analysisWhere are you?Where are you?

Establishing objectivesEstablishing objectivesWhere do you want to go?Where do you want to go?

Creating the strategyCreating the strategyHow will you get there?How will you get there?


Elements of Marketing StrategyElements of Marketing Strategy

1.) Customer Analysis1.) Customer Analysis Customer behavior and needsCustomer behavior and needs What is occurring in the market? Is it growing or in decline?What is occurring in the market? Is it growing or in decline?

2.) Competitor Analysis2.) Competitor Analysis Who are your competitors?Who are your competitors? What will they do?What will they do?

3.) Company Analysis3.) Company Analysis Economic analysis (cost structure, breakeven, profit centers, etc.)Economic analysis (cost structure, breakeven, profit centers, etc.) Company fit (culture, resources, mission, etc.)Company fit (culture, resources, mission, etc.)


Identifying Your Target MarketsIdentifying Your Target Markets Which markets are you trying to target?Which markets are you trying to target?

Small business owners, retirees, teachers, etc.?Small business owners, retirees, teachers, etc.?

What are some of the special needs unique to these markets?What are some of the special needs unique to these markets?

How can you add value compared to others in this market? How can you add value compared to others in this market?

Are there specific segments within your target markets?Are there specific segments within your target markets? Industry, geographic, demographic profile, or psychological profileIndustry, geographic, demographic profile, or psychological profile

What changes do you see occurring in these target markets? Are they in growth, What changes do you see occurring in these target markets? Are they in growth,

decline, or leveling off?decline, or leveling off?

Are there some potential target markets within your client base that you may not Are there some potential target markets within your client base that you may not

be aware of?be aware of?


Marketing Mix StrategiesMarketing Mix Strategies Product / ServiceProduct / Service

Develop a physical configuration of the features of your products and services Develop a physical configuration of the features of your products and services with its intended positioning.with its intended positioning.

PricePrice How does your pricing communicate value?How does your pricing communicate value? What position in the market are you trying to achieve with your pricing?What position in the market are you trying to achieve with your pricing?

PromotionPromotion How do you build awareness about your firm’s capabilities?How do you build awareness about your firm’s capabilities?

Place (Distribution)Place (Distribution) Where do you deliver your services? At your office, at the client’s home or place Where do you deliver your services? At your office, at the client’s home or place

of business? Are there any opportunities for online?of business? Are there any opportunities for online?


Creating Your ScorecardCreating Your Scorecard

Now that we have created your strategy, we need to translate your Now that we have created your strategy, we need to translate your vision and strategy into a series of actions.vision and strategy into a series of actions.Financial Measures Financial Measures – To succeed financially, how should we – To succeed financially, how should we

appear to you?appear to you?Customer Measures Customer Measures – To achieve our vision, how should we – To achieve our vision, how should we

appear to our customers?appear to our customers? Internal Business Process Internal Business Process – To satisfy our customers, what – To satisfy our customers, what

must we excel at?must we excel at? Learning and Growth Learning and Growth – To achieve our vision, how will we – To achieve our vision, how will we

sustain our ability to change and improve?sustain our ability to change and improve?


Steps to Forming Your BusinessSteps to Forming Your Business1.) Select choice of entity2.) Obtain a Federal Employer Identification Number (EIN)

Generally, an EIN is required in the following circumstances: If you pay wages to one or more employees, operate a pension

plan, pay excise taxes, orOperate as a partnership, LLC, corporation, or some other entity.

3.) File a Fictitious Business Name Statement A fictitious business name statement is required when a business uses a

trade name that is different than the legal name of the business or the surname of the proprietor.

4.) Open a bank account for the business


5.) Apply for a seller’s tax permit / reseller’s license

6.) Apply for a local business license / tax certificate You will need to obtain a local business license / tax certificate from the

cities or towns in which you plan to operate your business.

7.) Obtain any licenses or permits required to sell your product or service. Certain businesses are required to obtain special licenses or permits from

either the federal, state, or local government prior to commencing business.


Framework for Selecting an EntityFramework for Selecting an Entity

Raising Capital

Distributions Compensation

Administration

Liability

CHOICE OF ENTITY


Major Differences Between LLC’s and CorporationsMajor Differences Between LLC’s and Corporations

Limited Liability CompaniesLimited Liability Companies: Owners are called members LLC’s are established by filing an

Articles of Organization The governing document of an LLC is

the Operating Agreement Members are represented by managers Generally, must use a required year. Generally, taxed as a partnership, but

can elect to be taxed as a corporation. If owned by a single member, then it is taxed as a sole proprietorship.

Member basis is determined by profits, losses, capital contributions, withdrawals, and share of recourse liabilities.

Corporations (C &S)Corporations (C &S):: Owners are called shareholders or

stockholders Corporations are established by filing an

Articles of Incorporation The governing document of a corporation are

the By Laws Shareholders elect are represented by

officers and directors Can use any year unless the corp elects to be

treated as an S Corp. Taxes are paid on the profits at the corporate

level unless the corp elects to be treated as an S Corp.

Shareholder’s basis is usually determined by capital contributions only, unless the corp elects to be treated as an S Corp.


Major Differences Between C and S CorporationsMajor Differences Between C and S Corporations

C CorporationsC Corporations: Unlimited # of shareholdersUnlimited # of shareholders

No limit to classes and types of stockNo limit to classes and types of stock

No limitation on who can own stock.No limitation on who can own stock.

Can use a fiscal yearCan use a fiscal year

Tax paid on profits at corporate level. If dividends Tax paid on profits at corporate level. If dividends

are paid, then taxed again at shareholder level.are paid, then taxed again at shareholder level.

If assets are distributed to shareholders, they are If assets are distributed to shareholders, they are

generally subject to double taxation.generally subject to double taxation.

Shareholder’s basis is usually determined by capital Shareholder’s basis is usually determined by capital

contributions only. Profits and losses of corp do not contributions only. Profits and losses of corp do not

affect shareholder basis.affect shareholder basis.

S CorporationsS Corporations: Limited to 100 shareholdersLimited to 100 shareholders Limited to one class of stockLimited to one class of stock Non-resident aliens, most corporations, IRA’s, and Non-resident aliens, most corporations, IRA’s, and

most trusts cannot own stock.most trusts cannot own stock. Generally, must use a calendar yearGenerally, must use a calendar year Tax paid on profits at shareholder level.Tax paid on profits at shareholder level. Shareholders must report their distributive share of Shareholders must report their distributive share of

profit by their % of ownership.profit by their % of ownership. If assets are distributed to shareholders, they are If assets are distributed to shareholders, they are

generally subject to taxation at the shareholder generally subject to taxation at the shareholder level.level.

Shareholder basis is usually determined by share of Shareholder basis is usually determined by share of profits, losses, capital contributions, distributions, profits, losses, capital contributions, distributions, and monies directly loaned to corp.and monies directly loaned to corp.


The rest is up to you!The rest is up to you!


For more information about this For more information about this program or other programs, please feel program or other programs, please feel

free to contact me at (888)297-3321 or by free to contact me at (888)297-3321 or by email: email: [email protected]@ascendbusinessadvisory.com

Thank you for your attendance.Thank you for your attendance.

William E. Rogers, MBA, CFP, EAWilliam E. Rogers, MBA, CFP, EA

basics of starting a business a to z

Small Business & Entrepreneurship