SEED Corporation Business Start-Up Fundamentals Entrepreneurial Workshop I.

SEED Corporation

Business Start-Up Fundamentals

Entrepreneurial Workshop I

SEED Corporation AGENDA

Assessing personal and business needs

The importance of a business plan

Understanding business plan components

The Planning Process

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What banks look for when assessing a loan request

How to complete a loan application

The Reality of Obtaining Financing

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WHAT BANKS LOOK FOR

Cash Flow

Credit

Collateral

Contribution (or capacity)

Character (industry / references)

Condition

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LIFESTYLE ASSESSMENT

1. Do you have children?

2. Do you have savings?

3. Is your spouse employed?

4. What do you do with your free time?

5. Are you accustomed to working long hours?

6. Are you a morning or night person?

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Business Assistance AreasBusiness Assistance Areas

Marketing

Advertising

Sales

Tax Knowledge

Insurance

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Business Finances

Presentation Skills

Communication Skills

Legal Aspects

Banking Services

Business Assistance AreasBusiness Assistance Areas (con’t.)(con’t.)

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Selecting a Business Name Business Identification Numbers Licenses and Permits Taxes Accounting System

OTHER CONSIDERATIONS

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Structural Forms of Business

Sole Proprietorship Partnership S Corporation C Corporation LLC – Limited Liability Co

USEFUL WEB SITESInternal Revenue Service -

www.irs.gov

MA Department of Revenue -

www.dor.state.ma.us

Inc.com - Where to start and grow your business.

www.inc.com

Entreworld - A World of Resources for Entrepreneurs

www.eventuring.org

Official Website of the State of MA -

www.mass.gov

Official Website of the State of RI -

www.ri.gov

All Business - Champions of Small Business

www.allbusiness.com

MA Assoc. of Community Development Corporations -

www.macdc.org

U.S. Small Business Administration (SBA) -

www.sba.gov

e Podunk -

www.epodunk.com

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WHY WRITE A BUSINESS PLAN?

• A Plan Gives You a Path to Follow• Planning Forces you to Examine All

Aspects of Your Business• Planning is ESSENTIAL to Raising Capital• Your Plan is a Management Tool• Your Plan is a Communications Tool

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BUSINESS PLAN FORMAT

Neatness Counts!

Use Simple Language

Keep Your Points Concise

Make Use of Tables and/or Graphs

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Effective Formatting includes:

Headings

Paragraphs

Bold/Italics/Underline

Bullets

BUSINESS PLAN FORMAT (con’t.)

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BUSINESS PLAN OUTLINE

A. Mission Statement/Statement of Purpose

B. Table of Contents / Cover Page

C. Business Description

D. Marketing Plan

E. Financial Plan

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This is the doorway to your plan. Keep it short, but illustrate the main points.

STATEMENT OF PURPOSE

Main Points: State purpose/structure of your business State purpose/amount of financing sought State any key operational expectations

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BUSINESS DESCRIPTION

a) Type/Industry

b) Status (e.g. start-up, existing)

c) Form (e.g. proprietorship, corporation)

d) Location/Hours of operation

e) Market description

f) Description of competition

g) Management/Personnel

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MARKETING vs. SALES

MARKETING

Generates

interest

and leads.

SALES

Generates orders and accounts receivable and/or cash receipts.

SEED CorporationMARKET PLAN

Describe Your Customers Industry Trends and Characteristics List and Description of Your Competition Description of Your Niche and Competitive Plan Market Segmentation

YOUR CUSTOMERS ARE THE MARKET!

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• Product – goods or services

• Pricing – mark-up and break even analysis

• Promotion – advertising

• Place – channels of distribution

MARKETING MIX

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• How many employees needed?

• What kind of skills required?

• Experienced or trainable?

• Management/People skills?

Management & Personnel

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• Balance Sheet• Projected Income Statement – 2 years• Sources and Uses of Funds• Projected Cash Flow by Month – 1st year

FINANCIAL PLAN

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FINANCIAL PLAN (con’t.)

• Historical Financial Statements

of Business – 3 yrs.

• Personal Financial Statement

• IRS tax returns

(personal & business) – 3 yrs.

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Reminders for Completing Loan Application

The more the person reviewing your request can know about you AND your business, the better.

Neatness and conciseness count

Be honest.

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Loan Application (cont.)

Emphasize your strengths and state your weaknesses. Let the loan officer know that YOU recognize areas for improvement.

If you have questions, call! Don’t submit an incomplete

application.

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Services Offered by SEED

Business Assistance

Business Support Center

Loan Programs: Micro Loan/Mini Micro Loan Revolving Loan Fund (RLF) SBA 7A Packaging SBA 504