Entrepreneurship Primer

Overview of Steps for starting a

Successful Business

SBDC Small Business Development Ctr.of the

Eastern ShoreGeorge Bryan

Mission Statement

To contribute to the growth and development of the economy by providing management, technical and other assistance and

information to the region’s Small Business Community

Assessing the Opportunity

Applies to both you and your potential customer:

What Incentives & qualities do you have?

Relaxing luxury ?

Money?

Autonomy ?

Satisfaction ?

Must have

Discipline

Your life will henceforth no longer be in a

Assessing your marketOpportunity

Marketing Research?

Population issues on the VA Eastern Shore

Accomack County approx. 32,973

Northampton County approx. 12,155

Route 13 daily traffic flow ?? Summer/winter

If local retail, are there enough potential buyers for you product or service?

If you want to catch route 13 traffic, do you have the product or service to attract ?

If manufacturing, can you get your product or service off the Shore economically?

The Business Plan

• Why??

Ten Reasons to Prepare aBusiness Plan

• Forces you to look at the whole business• Focuses attention on important questions• Clarifies and communicates your goals and objectives• Becomes a means of assigning priorities• Becomes a framework for daily decision-making and

better management• Helps maintain a “proactive” business attitude• A benchmark to track performance• Stimulates development of new opportunities• Tool to access capital, partners and employees• Road Map

What is its content?

Business name

Mission and Goals

Legal structure

Background of your business and potential market

Marketing Plan

Financial Plan

Financing the Venture

Types of Financing

Borrowing—traditional/nontraditional

Angel investors

Grants

Stock

Bond

Most common methodBorrowing

Need Skin in the game 10-20%1.Have your business plan in hand2.Personal Financial statement available3.Be prepared to discuss your realistic plan4.Dress appropriately5.Provide a certification of business education6.Be Honest

* Rules of lending have changed over past ten years

Grants

Non-profit 501(c)-3

Research and Development

Some Green /Environmental

*Normally requires some skill in grant writing

Business licensing and Registration

Determine your legal form of business.

Contact County Clerk of Court for name registration.

Contact Commissioner of Revenue for tax purposes.

Depending on type of business and whether you are using a new or existing structure, you must clear with zoning, health department, ABC board , EPA, ETC.

Introduce yourself /business to Directors, Rich Morrison and Kris Tucker

What is Marketing?

Marketing is everything you do to promote your business, from the moment you conceive of it to the point at which customers buy your product or service and begin to patronize your business on a regular basis.

The key words to remember are everything and regular basis.

Jay Conrad Levinson

Designing Marketing Strategies

Research

Analysis

Strategy and Tactics

What do you Sell?

Product?

Service?

BENEFITS

Benefits cont’d

Features: Size, Quality, Varieties, Types,

Materials Used

BENEFITS: What will your product or

service DO FOR or GIVE TO your

customer? I.E.: Health, Convenience,

Social status, Time savings, Security

PARTS OF MARKET ANALYSIS

1. Determine the PROFILE of your customer

2. Determine your MARKET AREA- geographic boundaries and size

3. Determine the number of people(or businesses) in your trade territory who potentially FIT your customer profile

4. Determine the MARKET POTENTIAL for your business in your trade area

How to find out about your customer

• Phone surveys

• Personal Interviews

• Online Surveys

• Focus Groups• Secondary Sources

• Library references

• Trade associations

• U.S. Census

Demographics

Age

Gender

Location

Education

Occupation

Income Level

Marital Status

Household type

PSYCHOGRAPHICS

NEEDS• Security, esteem, love,

acceptance,• understanding, beauty,

good healthVALUES• Status,success,greed,

simplicityBUYING STYLES• Price,fads,quality,

Technology,luxury,convenience

CULTURES• Modern,artistic,religious,

liberal,conservative,environmental

INTEREST• Sports,reading,fitness,

cooking,workaholic,gardening

Goals of Market Analysis

• 1. Identify your customer profile (demographics, psychographics, access to & attitudes towards technology).

• 2.Identify your trade area( geographic and size).

• 3. Determine number of people(or businesses)in your trade area who match your customer profile.

• 4.Determine your market potential.

Understanding Financials

Remember

GIGO

Most Small Business start-ups don’t or won’t address the mundane chore of understanding the financials in their company.

REASON

Financials are not the primary product or service

Consequently

1. Pass it to the business accountant

2. Let the assistant/bookkeeper handle it

3. Let Quick Books do the calculation

4. Have the bank lender contact us

5. Wait for IRS to contact us

OOPS !!

What is the function of an Income Statement/P&L ?

What does a Balance Sheet reflect ?

Is there a relationship?

Good Accounting practices

1.Discuss with your business accountant2. Select a comprehensive but easy to use software system. (IE: QuickBooks)3.Set up internal controls for assignment of duties.4.Ensure Tax payments are made timely familiarize yourself with forms required.5. Set up files and know record retention requirements

CASH FLOW

This is a commercial banker’s Mantra.

The business owner should be able to observe when the “receivables” come in and when the

“payables” are due.

(a major cause of small business failure)

How to price your Product/Service

• Pricing the product is essential to know when you are breaking even.

• Consequently you must know how to calculate the break even applying the variable and

fixed cost of the business

Conclusion

You’ll make mistakes as well as good decisions.

Force yourself to take mental time off the work.

Smile a lot

“Tomorrow is another Day”