empowering business spirit welcome to the empowering business spirit seminar empowering business...

Empowering Business SpiritEmpowering Business Spirit

Welcome to the Welcome to the

Empowering Business Spirit SeminarEmpowering Business Spirit Seminar

Empowering Business Empowering Business Spirit SeminarSpirit Seminar

Empowering Business Empowering Business Spirit SeminarSpirit Seminar

Presenter:Presenter:

To Be Announced

Entrepreneurial Spirit SeminarEntrepreneurial Spirit SeminarEntrepreneurial Spirit SeminarEntrepreneurial Spirit Seminar

Schedule EDC, EBS, SBDC, and partners (who we are and what

we do)

Entrepreneurial Spirit (statistics and reality)

Feasibility Study Process (Will I have customers?)

10 Minute Break Business Plan (overview)

Legal Issues/Business Structure (pros & cons)

Financing (you and the bank)

Questions & Answers (Evaluation)

Others

SBA

NMHU

NMEDD

MainStreet

SBDC

EBS, Partners, and Entrepreneur

LCC

C of C

EBSEDC

Overview of our Common GoalsOverview of our Common GoalsOverview of our Common GoalsOverview of our Common Goals

Goal: Goal: To Grow Businesses and Create JobsTo Grow Businesses and Create Jobs

Designed: Designed: To maximize business success by coupling To maximize business success by coupling financial programs, managerial and technical financial programs, managerial and technical assistanceassistance

What drives the EBS Project: What drives the EBS Project: Seeing Small business Seeing Small business succeed by Planning (a well developed business plan) succeed by Planning (a well developed business plan) and Seeking Professional Advisors, while avoiding the and Seeking Professional Advisors, while avoiding the problems of staffing and understanding that years of problems of staffing and understanding that years of education do not necessarily correlate with successeducation do not necessarily correlate with success

•20 Major EBS Partners20 Major EBS Partners

• Referral system resourcesReferral system resources

• One on One Business CounselingOne on One Business Counseling

• SeminarsSeminars

• Resources (software, stats & advice)Resources (software, stats & advice)

Empowering Business SpiritEmpowering Business Spirit

CLIENT FLOW CHARTCLIENT FLOW CHART

Client

EDS Presentation

Business Plan Workshop

Resource Referrals

EDC 20 EBS SBDC SBA Others

Completed Business Plan


Every 30 seconds of every day, someone somewhere in the United States starts a new business. Every 30 seconds someone stakes their money, their labor, their good name on the unshakable belief that they can make or provide something bigger, better, faster, or cheaper than the other person.


In America today, smaller businesses, Companies with fewer than 20 employees, create 98% of all new jobs.


There are more than 21,000,000 small business in the U.S. 16,000,000 have the owner as the sole employee. 5,000,000 have between 1 and 500 employees.

It is estimated that between 800,000 and 1,000,000 business are begun every year.


Small businesses… – employ 53% of the private workforce.– provide 47% of all sales receipts.– provide 55% of innovations.– account for 35% of federal contract dollars.– account for 28% of jobs in high technology sectors.– account for 51% of private sector output.


US Patent Office currently reviews more than 10,000 patent applications monthly.

Over 500,000 new firms have emerged in the US every year since the mid eighties, around 1,500 daily.


During the 1950’s only 100,000 new business were incorporated annually.

During the 1970’s the number was over 200,000 new businesses yearly.

During the 1990’s the number is up to 600,000.

During 2000’s number continues strong Add the increasing competition from US and

foreign corporations.

Business Dissolution Rates (%)Business Dissolution Rates (%)

all firms franchises 1-4 jobs 5 or more employeesall firms franchises 1-4 jobs 5 or more employeesafter 2 yrs.after 2 yrs. 23.723.7 25.425.4 8.38.3 66after 4 yrs.after 4 yrs. 52.752.7 59.259.2 19.619.6 13.113.1after 6 yrs.after 6 yrs. 62.262.2 61.661.6 23.523.5 21.121.1after 8 yrs.after 8 yrs. 70.970.9 72.572.5 46.546.5 3030

Business Dissolution Rates (%)Business Dissolution Rates (%)

all firms franchises 1-4 jobs 5 or more employeesall firms franchises 1-4 jobs 5 or more employeesafter 2 yrs.after 2 yrs. 23.723.7 25.425.4 8.38.3 66after 4 yrs.after 4 yrs. 52.752.7 59.259.2 19.619.6 13.113.1after 6 yrs.after 6 yrs. 62.262.2 61.661.6 23.523.5 21.121.1after 8 yrs.after 8 yrs. 70.970.9 72.572.5 46.546.5 3030

0

10

20

30

40

50

60

70

80

all firms franchises 1-4 jobs 5 or more

after 2 yrs.after 4 yrs.after 6 yrs.after 8 yrs.

Source: Dun and Bradstreet Corp. and U.S. Department of Labor

How many small businesses opened?How many small businesses opened?

Incorporate Incorporate 647,675647,675 768,180768,180 790,569790,569 New Firms New Firms 769,124769,124 819,477819,477 842,357842,357

How many small businesses opened?How many small businesses opened?

Incorporate Incorporate 647,675647,675 768,180768,180 790,569790,569 New Firms New Firms 769,124769,124 819,477819,477 842,357842,357

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

IncorporateNew Firms


How many small businesses closed?How many small businesses closed?

BankruptciesBankruptcies 63,91263,912 50,51650,516 53,21453,214FailuresFailures 60,74660,746 71,19471,194 71,811 (71,811 (125,025)TerminationsTerminations 837,511837,511 863,699863,699 849,839849,839

How many small businesses closed?How many small businesses closed?

BankruptciesBankruptcies 63,91263,912 50,51650,516 53,21453,214FailuresFailures 60,74660,746 71,19471,194 71,811 (71,811 (125,025)TerminationsTerminations 837,511837,511 863,699863,699 849,839849,839

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

BankruptciesFailuresTerminations


Entrepreneurial SpiritEntrepreneurial SpiritEntrepreneurial SpiritEntrepreneurial Spirit

ORGANIZED

+ CREATOR

+ IMPROVER+ MANAGER (Plan, Staff, organize, and decision-making) [Administer,

maintain, control, short-term view, ask how and when, initiate, accept the status quo, do things right.]

+ LEADER (control, motivate, charismatic) [Innovate,

develop, inspire, long-term view, ask what and why, originate, challenge the status quo, do the right things.]

---------------------

= ENTREPRENEUR ! ! !


Owning your business can be a wonderful opportunity:

To be your own boss. To take charge of your financial future. To work 7 days a week, 24 hours a day,

with no pay check at the end.


Expect to work an average number of about 64 hours per week

84% of Entrepreneurs polled love the type of work that they do every week!

Myths of Business OwnershipMyths of Business Ownership

1. I can start living off the business 1. I can start living off the business immediately.immediately.

2. I’ll be my own boss.2. I’ll be my own boss.

3. I’ll get rich overnight.3. I’ll get rich overnight.

4. I have nothing to lose (OPM).4. I have nothing to lose (OPM).

5. Will give me independence.5. Will give me independence.

More Myths….More Myths….

Will allow me time off any time I Will allow me time off any time I want.want.

Will let me control the business.Will let me control the business. Will make a lot of money.Will make a lot of money. Will be easy to do.Will be easy to do. Will be easy to get funding for my Will be easy to get funding for my

great idea.great idea.

Feasibility StudyFeasibility StudyFeasibility StudyFeasibility Study

It is a Planning Process That Helps you:It is a Planning Process That Helps you:

Determine if your business idea is a true Determine if your business idea is a true opportunity or an unrealistic idea that will take opportunity or an unrealistic idea that will take your time, money and energy?your time, money and energy?

Determine if your idea is “do-able”.Determine if your idea is “do-able”. Assess personal and financial resources Assess personal and financial resources

necessary for success.necessary for success. Become familiar with Business Plan conceptBecome familiar with Business Plan concept.

Feasibility StudyFeasibility StudyFeasibility StudyFeasibility Study

DOES YOUR BUSINESS IDEA HAVE THE THREE-WAY FIT?

Market Fit Financial Fit Personal Fit

The Feasibility ProcessThe Feasibility Process

IDEA

Definition

Objectives

INDUSTRY

MARKET

COMPETITION

(price, differentiation, and focus)


IDEA MARKET ANALYSIS


IDEA MARKET ANALYSIS REQUIREMENTS

EXPERIENCE

TIME

LEGAL

FINANCING


IDEA MARKET ANALYSIS REQUIREMENTS DECISION


IDEA MARKET ANALYSIS REQUIREMENTS DECISION GO

NO

RE-EVALUATE


IDEA MARKET ANALYSIS REQUIREMENTS DECISION GO BUSINESSPLAN

BUSINESBUSINESSS

PLANPLAN

Defining Your ObjectivesDefining Your Objectives

Define your short and long term goals Personal Goals– Why are you starting this business?– What do you want to accomplish?

Business Goals– More detailed, SMART targets of performance

Specific Measurable Assignable Realistic Timely

Why are you going into business?Why are you going into business?

Independence Personal Fulfillment Lifestyle Change Respect Money Power

– Socialized Power– Personalized Power

Reward Coercive legitimate Expert Referent

Self Actualization

Esteem needs

Affection needs

Safety

Physiological

Source: Maslow, 1943; French and Raven, 1959

GoalsGoalsGoalsGoals

The World has a funny habit of making room for those who know where they are going.

Write them down

Follow through

Defining Your Business IdeaDefining Your Business Idea

1. What specific products/services will you sell?

2. Who will be your main customers?

3. What is the real or perceived need for your product or service?

4. Do you know your market? (demographics)

Defining Your Business IdeaDefining Your Business Idea

5. How is that need being met currently?(Competitive Analysis)

6. In what way will your business better meet that need? (differentiation)

7. What additional products/services could be offered as your business grows?

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

It is a document that convincingly demonstrates that your business can sell enough of its product or service to make a satisfactory profit and be attractive to potential backers.

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

It is a selling document. It sells your business and its executives to potential backers, from bankers to investors to partners to employees.

A short written document that serves as a guide to your future, provides direction and focus, and helps you model your business and avoid problems.

Why Bother ?Why Bother ?Why Bother ?Why Bother ?

A Business Plan, should attract YOU to the business.

A Business Plan, should attract others into the business.

A Business Plan gives you confidence. A Business Plan improves your chances

of success. A Business Plan Provides a road map

for your business.

What About The Real World?What About The Real World?What About The Real World?What About The Real World?

Obtaining bank financing. Seeking investment funds. Arranging strategic alliances. Obtaining large contracts. Attracting key employees. Completing mergers and acquisitions. Motivating your management team. Press the flesh

The Business Plan-- The Business Plan-- What Does It Do? What Does It Do?

The Business Plan-- The Business Plan-- What Does It Do? What Does It Do?

Helps conceptualize business and set reasonable and achievable goals.

Attracts lenders and investors. Provides an organized view of your business. Details research from the feasibility study,

management, sales, marketing, finances, etc...

The Business PlanThe Business PlanThe Business PlanThe Business Plan

“If you aim at nothing, you will hit it everytime”

-Theodore Roosevelt

Key Elements of any Business PlanKey Elements of any Business PlanKey Elements of any Business PlanKey Elements of any Business Plan

1. Executive Summary/Introduction 2. Description of Products/Services 3. Manufacturing & Operations Plan 4. Marketing Strategy and Competitor Analysis 5. Sales Plan 6. Management Plan 7. Financial Analysis

Attachments to the Business PlanAttachments to the Business PlanAttachments to the Business PlanAttachments to the Business Plan

Tax Returns (Business & Personal) Resumes Written Estimates Personal Financial Statements Contracts / Agreements Org. Charts / Job Descriptions Appraisals / Blue Prints / Floor Plans Other Relevant Information

Basics of the Business PlanBasics of the Business PlanBasics of the Business PlanBasics of the Business Plan

1. There is no single right format.

2. Be creative.

3. Be as concise and focused as possible.

4. The plan should reflect the company’s personality.

5. Include negatives as well as positives.

6. Write it over a period of weeks.

Guidelines for Preparing a Guidelines for Preparing a Business PlanBusiness PlanGuidelines for Preparing a Guidelines for Preparing a Business PlanBusiness Plan

Remember: No one can create your plan for you. Lenders are interested in the strategies for

reaching financial projections. Show how you plan to set your business apart

from competitors. Identify your market, offer evidence that

customers for your product or service exist. Develop realistic financial forecasts (be sure

to explain how they were derived)

Ways to Organize your BusinessWays to Organize your BusinessWays to Organize your BusinessWays to Organize your Business

Sole Proprietorship General Partnership Limited Partnership Regular Corporation S Corporation Limited Liability Company

When to see an AttorneyWhen to see an AttorneyWhen to see an AttorneyWhen to see an Attorney Business Start-up

– Incorporation– Partnerships

Leases / Real Estate / Contracts Debt Collection Patents, Inventions, Copyrights, Trademarks Unemployment Hearings Bankruptcy and Reorganization Buying/Selling/Merging a Business Compliance with Environmental Laws Compliance with Employment Discrimination Laws Licensing Formal Written Opinions Legal Checkup

Places To Go Before Starting Your Places To Go Before Starting Your BusinessBusinessPlaces To Go Before Starting Your Places To Go Before Starting Your BusinessBusiness

City Community Development Office (Register/License Business, $35 annually)

Planning and Zoning (Zoning approvals) Secretary of the State (Incorporate) NM State Comptroller (Tax Permit) Internal Revenue Service (EIN #) City Offices Fire Department See Handout for More details

The 5 C’s of CreditThe 5 C’s of CreditThe 5 C’s of CreditThe 5 C’s of Credit

Character Capacity Conditions Collateral Capital

$ources of Capital, From Most ources of Capital, From Most Common to Least CommonCommon to Least Common$ources of Capital, From Most ources of Capital, From Most Common to Least CommonCommon to Least Common

Personal Savings, Insurance, Retirement (0%) Family or Friends (2-7%)

Suppliers Personal Loans Banks (10-16%) Private Investors (18-25%)

Public Sources Venture Capital (20-40+%)

Secondary Sources of FinancingSecondary Sources of FinancingSecondary Sources of FinancingSecondary Sources of Financing

Small Business Administration Farmers Home Administration Federal, State, and Local Programs

How to Lower the Risk?How to Lower the Risk?How to Lower the Risk?How to Lower the Risk?

Get experience in management and in your business.

Plan ahead (save). Have support from your family! Be ready to persevere. Use only facts in decision-making. Follow your strengths and interests. Never be too proud to quit.

Survival StrategiesSurvival StrategiesSurvival StrategiesSurvival Strategies Focus completely on satisfying the

customer. Study the success of others. Gather and analyze management

information regularly. The Kaizen strategy (continuous

improvement involving everyone - TQM). Embrace change with a positive

attitude.Source: Dan Taylor, Pres. Data Star Communications

Final CommentsFinal CommentsFinal CommentsFinal Comments

Plan Your Work…Plan Your Work…

...And Work Your Plan ! !...And Work Your Plan ! !

THANK YOU ALL ! !THANK YOU ALL ! !

empowering business spirit welcome to the empowering business spirit seminar empowering business...

Documents

jobs n

business plan slide

strong n

business success

technical assistance

success slide

developed business plan

business dissolution