starting a business 2014-revised 6-23-14cedamichigan.org/wp-content/files/1-slides.pdf · 2014. 6....

Starting a Business 2014 MI-SBDC I-69 Trade Corridor Region Kettering University, Flint, MI

Copyright © MI-SBDC™. All Rights Reserved 1

Small Business Development CenterSmall Business Development CenterSmall Business Development CenterSmall Business Development Center

Starting a BusinessStarting a BusinessStarting a BusinessStarting a Business

SBDCMichigan.org

WelcomeWelcomeWelcomeWelcome

• Starting a Business

• Logistics

• Attendee record & Evaluation

• SBDC IntroductionFormerly known as Michigan Small Business Michigan Small Business Michigan Small Business Michigan Small Business

& Technology Development Center& Technology Development Center& Technology Development Center& Technology Development Center

• Presenter Introduction

SBDCMichigan.org

The Michigan SBDC is funded through a cooperative agreement with

the U.S. Small Business Administration (SBA), the Michigan Economic

Development Corporation (MEDC) and matching funds from Local

Network partners in each region.

The Michigan The Michigan The Michigan The Michigan SBDCSBDCSBDCSBDC

Michigan SBDC Michigan SBDC Michigan SBDC Michigan SBDC State HeadquartersState HeadquartersState HeadquartersState Headquarters

Grand Valley State Grand Valley State Grand Valley State Grand Valley State UniversityUniversityUniversityUniversity

Seidman College of BusinessSeidman College of BusinessSeidman College of BusinessSeidman College of Business

IIII----69 Trade Corridor Region 69 Trade Corridor Region 69 Trade Corridor Region 69 Trade Corridor Region –––– Kettering UniversityKettering UniversityKettering UniversityKettering University

Phone: 810Phone: 810Phone: 810Phone: 810----762762762762----9660966096609660

www.SBDCMichigan.orgwww.SBDCMichigan.orgwww.SBDCMichigan.orgwww.SBDCMichigan.org



SBDCMichigan.org

Michigan Michigan Michigan Michigan SBDCSBDCSBDCSBDC

Services: Services: Services: Services:

• No cost 1:1 consulting

• Business education

• Information based planning assistance

• Technology commercialization

Serving: Serving: Serving: Serving: New ventures, existing businesses, growth

companies, advanced technology companies

Consultant Teams: SConsultant Teams: SConsultant Teams: SConsultant Teams: Small Business, Growth, Export ,

Technology

SBDCMichigan.org

Michigan SBDCMichigan SBDCMichigan SBDCMichigan SBDC

Facilitator Introduction:Facilitator Introduction:Facilitator Introduction:Facilitator Introduction:

• Approx 100 consultants statewide – deep and wide

bench of expertise

• Experienced, professional business people – the

majority owned or still own their own business

• My background….

• Let’s get STARTED!

SBDCMichigan.org

ObjectivesObjectivesObjectivesObjectives

• Assess readiness for entrepreneurship

• Evaluate the viability of your business concept

(feasibility)

• Outline the steps of starting a business

• Introduce the Business Plan process



SBDCMichigan.org

• Introduce yourself

• Describe business or business idea

• As you listen, keep in mind this important

tool: NETWORKING!

IntroductionsIntroductionsIntroductionsIntroductions

SBDCMichigan.org

(http://(http://(http://(http://SBDCMichgan.orgSBDCMichgan.orgSBDCMichgan.orgSBDCMichgan.org/small/small/small/small----businessbusinessbusinessbusiness----team/team/team/team/

smallsmallsmallsmall----businessbusinessbusinessbusiness----tools/newtools/newtools/newtools/new----ventureventureventureventure----guideguideguideguide----totototo----startingstartingstartingstarting----aaaa----smallsmallsmallsmall----business/)business/)business/)business/)

Guide to Starting and Guide to Starting and Guide to Starting and Guide to Starting and

Operating a Small Operating a Small Operating a Small Operating a Small

BusinessBusinessBusinessBusiness

SBDCMichigan.org

Self AssessmentSelf AssessmentSelf AssessmentSelf Assessment

Personal Side: “Do I Have What It Takes?”Personal Side: “Do I Have What It Takes?”Personal Side: “Do I Have What It Takes?”Personal Side: “Do I Have What It Takes?”

“Guide” Page 2“Guide” Page 2“Guide” Page 2“Guide” Page 2

• Are you a self-starter?

• Do you plan, organize, and follow through?

• Are you a strong communicator?

• Do you have the ability to multi-task and work long hours?

• Can you balance your business and family life?



SBDCMichigan.org

Business Side: “Am I Ready?” Business Side: “Am I Ready?” Business Side: “Am I Ready?” Business Side: “Am I Ready?”

• Do you have management experience?

• Do you know how to sell?

• Where and how will you market your

product or service?

• Do you understand the fundamentals

of financial recordkeeping?

• Can you read and understand a

financial report

SBDCMichigan.org

Business VisionBusiness VisionBusiness VisionBusiness Vision

Where do you envision your business will be in

five years?

What is the exit or succession plan for your business? Sell it to your children or employees?

SBDCMichigan.org

Personal VisionPersonal VisionPersonal VisionPersonal Vision

Is the vision for the business in line with your personal goals?

Are your family needs and obligations in line with the demands of your business?



SBDCMichigan.org

Business Vision Business Vision Business Vision Business Vision ---- Personal Vision Personal Vision Personal Vision Personal Vision

Work

Life

Balance

SBDCMichigan.org

Ways to Start a BusinessWays to Start a BusinessWays to Start a BusinessWays to Start a Business

• Build from scratch

• Buy an existing business

• Buy assets

• Buy a franchise

• Inherit a business

• Join a business

SBDCMichigan.org

Steps to Starting a BusinessSteps to Starting a BusinessSteps to Starting a BusinessSteps to Starting a Business




SBDCMichigan.org

StepsStepsStepsSteps totototo Starting a BusinessStarting a BusinessStarting a BusinessStarting a Business

SBDCMichigan.org

As you think about your idea,

ask yourself:

• What PROBLEM does it SOLVE or NEED does it FILL?

Select a Business IdeaSelect a Business IdeaSelect a Business IdeaSelect a Business Idea

SBDCMichigan.org

• WHAT is your product or service?

• WHO will buy it?

• WHY should customers buy from you?

• HOW will customers learn about your product?

• WHERE can they buy it?

Questions you need to answer:Questions you need to answer:Questions you need to answer:Questions you need to answer:



SBDCMichigan.org

• How will your idea benefit customers?

• How many potential customers are there?

• What is your initial market area (geography)?

• How many competitors are there?

• What is your unique “selling point” ?

• What will motivate customers to buy from you?

What is the Market PotentialWhat is the Market PotentialWhat is the Market PotentialWhat is the Market Potentialfor Your Idea?for Your Idea?for Your Idea?for Your Idea?

SBDCMichigan.org

• Industry – Big picture

• Market – Everyone who buys

• Segments – Groups within market

• Customers – Individual buyers

• Competition – Direct & Indirect

RESEARCH RESEARCH RESEARCH RESEARCH Your Business IdeaYour Business IdeaYour Business IdeaYour Business Idea

Research Information Checklist: “Guide” Research Information Checklist: “Guide” Page 7Research Information Checklist: “Guide” Page 7Research Information Checklist: “Guide” Page 7

SBDCMichigan.org

Local Library:Local Library:Local Library:Local Library:Business librarians are very knowledgeable of books,

articles, associations, industry surveys, and more!

• Encyclopedia of American Industries

• Handbook of North American Industries

• Standard and Poor’s Industry Surveys

• Encyclopedia of Global Industries

• Industry and Trade publications

• Reference USA

How to do ResearchHow to do ResearchHow to do ResearchHow to do Research



SBDCMichigan.org

• Keywords - try different combinations

• Online phone directories

• Michigan Electronic Library Michigan Electronic Library Michigan Electronic Library Michigan Electronic Library

(mel.org)(mel.org)(mel.org)(mel.org)

• Government websites

• Trade websites

• Competition websites

Online ResearchOnline ResearchOnline ResearchOnline Research

SBDCMichigan.org

IndustryIndustryIndustryIndustry

• www.mel.lib.mi.uswww.mel.lib.mi.uswww.mel.lib.mi.uswww.mel.lib.mi.us

Michigan Electronic LibraryMichigan Electronic LibraryMichigan Electronic LibraryMichigan Electronic Library

AssociationsAssociationsAssociationsAssociations

• www.asaenet.orgwww.asaenet.orgwww.asaenet.orgwww.asaenet.org

TrendsTrendsTrendsTrends

• www.hoovers.comwww.hoovers.comwww.hoovers.comwww.hoovers.com

Markets/CustomersMarkets/CustomersMarkets/CustomersMarkets/Customers

• www.fedstats.govwww.fedstats.govwww.fedstats.govwww.fedstats.gov

CompetitionCompetitionCompetitionCompetition

• www.thomasregister.comwww.thomasregister.comwww.thomasregister.comwww.thomasregister.com

Additional sites: Additional sites: Additional sites: Additional sites:

• www.michigan.gov/business

• www.sba.gov

• www.irs.gov/businesses

• www.census.gov

• www.infousa.com

• www.annualcreditreport.com

• www.thomasnet.com

Research Resource Web SitesResearch Resource Web SitesResearch Resource Web SitesResearch Resource Web Sites

SBDCMichigan.org

• Surveys• Observation & comparison

− Visit and “shop” the competition

− Check out their Advertising

− Visit their Websites

• Talk to non-competitors

• Hired research

− College or university marketing

− students

− Market Research vendors

More Research ToolsMore Research ToolsMore Research ToolsMore Research Tools



SBDCMichigan.org

• Weigh the facts and make decisions

based on what you KNOW, not “think” or “feel”.

• Is there a need in the marketplace

for your product or service?

• Can you generate enough sales

to achieve your goals?

Evaluate Your Business IdeaEvaluate Your Business IdeaEvaluate Your Business IdeaEvaluate Your Business Idea

Decision Point: Decision Point: Decision Point: Decision Point: Determine the feasibility of your Determine the feasibility of your Determine the feasibility of your Determine the feasibility of your

business conceptbusiness conceptbusiness conceptbusiness concept

SBDCMichigan.org

SBDCMichigan.org

Identify and analyze the costs to

start the business you have in mind.

OR

Determine the resources/funds you

might have available for starting.

Start up Cost AnalysisStart up Cost AnalysisStart up Cost AnalysisStart up Cost Analysis




SBDCMichigan.org

• Personal resources

• Friends and family and ????

• Partner

• Grants

• Loans

Consider Sources of Consider Sources of Consider Sources of Consider Sources of FinancingFinancingFinancingFinancing

SBDCMichigan.org

• The Grant Fact: The U. S. government does have grant programs but generally speaking, virtually all grant money flows to local governments, state agencies, and nonprofits.

• Microloans

• SBA Loans

• Small business loans

Grants and LoansGrants and LoansGrants and LoansGrants and Loans

SBDCMichigan.org

• Is there enough need in the

marketplace for your product

for you to recoup your

investment?

• Can you generate enough

sales to justify the investment

and risk?

Can You Justify Your Investment?Can You Justify Your Investment?Can You Justify Your Investment?Can You Justify Your Investment?

Decision Point 2: Decision Point 2: Decision Point 2: Decision Point 2:

Determine Determine Determine Determine financial feasibilityfinancial feasibilityfinancial feasibilityfinancial feasibility of your businessof your businessof your businessof your business



SBDCMichigan.org

Steps to Starting a BusinessSteps to Starting a BusinessSteps to Starting a BusinessSteps to Starting a Business

SBDCMichigan.org

What is a Business Plan?What is a Business Plan?What is a Business Plan?What is a Business Plan?

Why do you need one?Why do you need one?Why do you need one?Why do you need one?

SBDCMichigan.org

Business Plan =Business Plan =Business Plan =Business Plan =

• TOOL to define goals and

structure

• Identify ACTIONS needed to

achieve the goals

• Systematic method for

REDUCING RISK and

INCREASING PROBABILITY of

SUCCESS

• REQUIRED by lenders



SBDCMichigan.org

The Business Plan: The Business Plan: The Business Plan: The Business Plan:

Key ComponentsKey ComponentsKey ComponentsKey Components

• Executive Summary

1. Business Description

2. Marketing/Sales

3. Management and Operations

4. Financials

SBDCMichigan.org

Business DescriptionBusiness DescriptionBusiness DescriptionBusiness Description

• Company history

• Product description

• Target customer

• Mission and vision

• Legal structure

SBDCMichigan.org

REGULATION START-UP COST &

REGISTRATION

ENTITY & LIFE LIABILITY TAXATION

SOLE

PROPRIETOR

Least Regulated Low Cost

County

Tied to Individual Unlimited Individual -Schedule “C”

PARTNERSHIP Limited Regulation

Low Cost

County

Tied to Partners Partners Liable

Shared return flows to individual returns

Form 1065

LIMITED LIABILITY

COMPANY

L3C

Limited Regulation

Relatively Inexpensive

State

As agreed to by Members

Limited to Assets of company

May choose to be taxed as partnership, sole prop, or corporation

CORPORATION

“C” CORP

“S” CORP

(IRS election)

Most regulated More Expensive

State

Perpetual Legal Entity

No Individual Liability

C-corp -Double taxation ?

S-corp flows to individual return

Legal Legal Legal Legal Structure OptionsStructure OptionsStructure OptionsStructure Options



SBDCMichigan.org

Marketing and SalesMarketing and SalesMarketing and SalesMarketing and Sales

• Industry Analysis

• Market Analysis

• Customers – Target Market(s)

• Competition

• Marketing Plan • Product

• Price

• Placement

• Promotion

• Position

• Sales Plan

SBDCMichigan.org

Management and OperationsManagement and OperationsManagement and OperationsManagement and Operations

• Set Goals. How will you measure success?

• Identify who will do what, where & when

• Management Team and StaffLawyer Marketing Consultant

Accountant HR Manager

Insurance agent IT Services

Realtor

• Location

• Equipment

• Suppliers

• Regulations, taxes, etc.

• Insurance

SBDCMichigan.org

Business InsuranceBusiness InsuranceBusiness InsuranceBusiness Insurance

• Liability

• Worker’s Compensation

• Structure/Contents

• Automobile/Fleet

• Group Life/Medical/Disability

• Business Interruption

• “Key Man”



SBDCMichigan.org

FinancialsFinancialsFinancialsFinancials

• Estimate or finalize start-up costs

• Estimate/project monthly expenses

• Project the first 2 years of operations

• Estimated funding needs

• Describe how you will fund your business

SBDCMichigan.org

Executive SummaryExecutive SummaryExecutive SummaryExecutive Summary

• Do this last

• Highlight the key components of the plan

• Order based on reader’s primary interestOrder based on reader’s primary interestOrder based on reader’s primary interestOrder based on reader’s primary interest

• Make it interesting and compelling

• Often used as standalone document

SBDCMichigan.org

• Guide to Starting and Operating a Small Business

• www.michigan.gov/business

“One Stop”

Startup ChecklistStartup ChecklistStartup ChecklistStartup Checklist



SBDCMichigan.org

Michigan SBDC is here to help you with:

• No cost counselingNo cost counselingNo cost counselingNo cost counseling

• Business educationBusiness educationBusiness educationBusiness education

• Information based planning assistanceInformation based planning assistanceInformation based planning assistanceInformation based planning assistance

• Technology commercializationTechnology commercializationTechnology commercializationTechnology commercialization

www.SBDCMichigan.org/trainingwww.SBDCMichigan.org/trainingwww.SBDCMichigan.org/trainingwww.SBDCMichigan.org/training

New training and guided planning opportunity New training and guided planning opportunity New training and guided planning opportunity New training and guided planning opportunity --------

Check out VPO….Check out VPO….Check out VPO….Check out VPO….

Wrapping UpWrapping UpWrapping UpWrapping Up

SBDCMichigan.orgSBDCMichigan.orgSBDCMichigan.orgSBDCMichigan.org

• 8-week online program to assist you in building

your business plan

• Hour-long, live webinar sessions led online weekly by business and industry experts

• Video and electronic textbooks for additional learning

• LivePlan interactive business planning software

• Consultant /coach guides you through the process

SBDCMichigan.org

1. Read “Guide to Starting and Operating a Small

Business”

2. Review the tools provided: a) assess your personal

situation, b) develop your market research to

determine feasibility, c) assess your startup

resources

3. Refine your business idea

4. Start writing your Business Plan (“Guide” outline)

5. Consider more business education

6. Make appointment to review plan with SBDC

counselor

What’s Next?What’s Next?What’s Next?What’s Next?



SBDCMichigan.org

Thank you!Thank you!Thank you!Thank you!

Please complete the Attendee Record Attendee Record Attendee Record Attendee Record and

Evaluation FormEvaluation FormEvaluation FormEvaluation Form

The Michigan SBDCThe Michigan SBDCThe Michigan SBDCThe Michigan SBDC

starting a business 2014-revised 6-23-14cedamichigan.org/wp-content/files/1-slides.pdf · 2014. 6....

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