English

NxLeveL Instructor NxLeveL Instructor PresentationPresentation

““Business Plan Basics”Business Plan Basics”

NxLeveL Guide for Micro-NxLeveL Guide for Micro-EntrepreneursEntrepreneurs

22ndnd Edition Edition

NxLeveL Guide for Micro-EntrepreneurNxLeveL Guide for Micro-Entrepreneurs-OHD 1-as-OHD 1-a

Course OverviewCourse Overview

Session 1: Keys to Your Business SuccessSession 1: Keys to Your Business SuccessSession 2: Assessing Your Business IdeaSession 2: Assessing Your Business IdeaSession 3: Business PlanningSession 3: Business PlanningSession 4: The Marketing PlanSession 4: The Marketing PlanSession 5: Government RegulationsSession 5: Government RegulationsSession 6: ManagementSession 6: ManagementSession 7: Market AnalysisSession 7: Market AnalysisSession 8: Product and PricingSession 8: Product and PricingSession 9: Placement and PromotionSession 9: Placement and PromotionSession 10: E-CommerceSession 10: E-Commerce

NxLeveL Guide for Micro-EntrepreneurNxLeveL Guide for Micro-Entrepreneurs-OHD 1-bs-OHD 1-b

Course OverviewCourse Overviewcontinuedcontinued

Session 11: Selling SuccessSession 11: Selling Success

Session 12: Where’s the Cash?Session 12: Where’s the Cash?

Session 13: Managing the MoneySession 13: Managing the Money

Session 14: Financial Tips and ToolsSession 14: Financial Tips and Tools

Session 15: Bringing It All TogetherSession 15: Bringing It All Together

NxLeveL Guide for Micro-EntrepreneurNxLeveL Guide for Micro-Entrepreneurs-OHD 1-cs-OHD 1-c

Participant MaterialsParticipant Materials

SESSION OUTLINESSESSION OUTLINESOne Page Session-by-Session One Page Session-by-Session Outline for the CourseOutline for the CourseTEXT TEXT “ “Business Plan BasicsBusiness Plan Basics””NxLeveL® Guide for NxLeveL® Guide for Micro-EntrepreneursMicro-EntrepreneursWORKSHEETSWORKSHEETSNxLeveL® NxLeveL® Micro-Entrepreneur Business Plan WorksheetsMicro-Entrepreneur Business Plan WorksheetsRESOURCE GUIDERESOURCE GUIDENxLeveL® Business Resource NxLeveL® Business Resource GuideGuideOTHEROTHERClass HandoutsClass HandoutsSupplemental MaterialSupplemental Material

NxLeveL Guide for Micro-EntrepreneurNxLeveL Guide for Micro-Entrepreneurs-OHD1-ds-OHD1-d

Class AgendaClass Agenda

Class OpenerClass OpenerInstructor TopicsInstructor TopicsGuest SpeakerGuest SpeakerBreakBreakRefreshmentsRefreshmentsNetworking ActivityNetworking ActivityWork HourWork HourDiscussion GroupsDiscussion GroupsWorksheet ActivitiesWorksheet ActivitiesBusiness Plan SectionsBusiness Plan Sections

NxLeveL Guide for Micro-EntrepreneurNxLeveL Guide for Micro-Entrepreneurs-OHD 1-es-OHD 1-e

Expectations & Ground RulesExpectations & Ground RulesAttendanceAttendanceAbsenteeismAbsenteeismPunctualityPunctualityParticipationParticipationDiscussionDiscussionConfidentialityConfidentialityListeningListeningAssignmentsAssignmentsReadingReadingWorksheetsWorksheetsWritten Business Plan SectionsWritten Business Plan SectionsFormatFormatGeneralGeneralSafe environment to test ideasSafe environment to test ideasAsk questionsAsk questionsAdd ground rules as neededAdd ground rules as needed

NxLeveL Guide for Micro-EntrepreneurNxLeveL Guide for Micro-Entrepreneurs-OHD 1-1s-OHD 1-1

Traits of Successful Traits of Successful EntrepreneursEntrepreneurs

PassionPassionPersistencePersistenceGood Health, High EnergyGood Health, High EnergyCommunication and Listening SkillsCommunication and Listening SkillsCreativityCreativitySelf-ConfidenceSelf-ConfidenceWillingness to Work HardWillingness to Work Hard


What Are Your Goals?What Are Your Goals?

Your goals may focus on:Your goals may focus on:YourselfYourselfFamilyFamilyChildrenChildrenHealth/weight/exerciseHealth/weight/exerciseFriends/relationshipsFriends/relationshipsFurther education/degreeFurther education/degreeJob/careerJob/careerCars/vehiclesCars/vehiclesHome ownershipHome ownershipStarting a businessStarting a businessTravel/vacationTravel/vacationRetirementRetirement


Personal AssessmentPersonal Assessment

Why do you want to start a business?Why do you want to start a business?

What special skills, experience, and What special skills, experience, and knowledge do you have?knowledge do you have?

How’s your personal financial health? How’s your personal financial health?

Do you have a mentor or advisor? Can Do you have a mentor or advisor? Can you get one?you get one?


The Risks of EntrepreneurshipThe Risks of Entrepreneurship

Failure: Can you bear the emotional and financial risk of Failure: Can you bear the emotional and financial risk of failure?failure?Long Hours: 60-70 hours per week is normalLong Hours: 60-70 hours per week is normalFamily Strain: Potential strain on relationships because of long Family Strain: Potential strain on relationships because of long hourshoursNo Regular Paycheck: How will you support yourself and your No Regular Paycheck: How will you support yourself and your family?family?No Health Benefits: No employer-provided health coverageNo Health Benefits: No employer-provided health coverageIsolation: You’ll be working by yourself much of the timeIsolation: You’ll be working by yourself much of the timeDebt: You may have to take on additional debtDebt: You may have to take on additional debtResponsibility: Everything may rest on your shouldersResponsibility: Everything may rest on your shouldersStress: New emotional, financial, and physical pressuresStress: New emotional, financial, and physical pressures


The Rewards of The Rewards of EntrepreneurshipEntrepreneurship

Success: You’ll be able to support yourself, and hire others!Success: You’ll be able to support yourself, and hire others!Independence: You get to be your own bossIndependence: You get to be your own bossLearning: No matter what happens, you’ll have valuable new Learning: No matter what happens, you’ll have valuable new skills and knowledge skills and knowledge Self-Respect: Few things are as rewarding as succeeding Self-Respect: Few things are as rewarding as succeeding through your own talent and hard workthrough your own talent and hard workRecognition: It’s always nice to be noticed…and it can lead to Recognition: It’s always nice to be noticed…and it can lead to new opportunities, too!new opportunities, too!Family Benefits: You’ll have something special to leave your Family Benefits: You’ll have something special to leave your childrenchildrenFUN: You can make money doing something you really enjoy!FUN: You can make money doing something you really enjoy!


Why Do Businesses Fail?Why Do Businesses Fail?

Poor managementPoor management

No business planNo business plan

Don’t listen to customersDon’t listen to customers

Don’t set prices appropriatelyDon’t set prices appropriately

Poor cash flow managementPoor cash flow management

Don’t ask for helpDon’t ask for help


Why Do Businesses Succeed?Why Do Businesses Succeed?

Careful planningCareful planningClear focus and purposeClear focus and purposeOffer a unique product Offer a unique product Understand customers’ needsUnderstand customers’ needsSell at the right priceSell at the right priceSeek and follow expert adviceSeek and follow expert adviceGet help when necessaryGet help when necessaryUnderstand industry and competitionUnderstand industry and competitionDo regular bookkeepingDo regular bookkeepingKnow how to keep existing customers, and get new onesKnow how to keep existing customers, and get new onesUnderstand cash flow managementUnderstand cash flow management


Professionalism in BusinessProfessionalism in Business

Health and HygieneHealth and HygienePersonal ImagePersonal ImageFirst Impressions REALLY Count!First Impressions REALLY Count!Appearance and DressAppearance and DressEtiquette and MannersEtiquette and Manners– Always use the magic words: Always use the magic words: PLEASEPLEASE and and THANK YOUTHANK YOU– Be on timeBe on time– Keep your promisesKeep your promises– Respect people and be courteousRespect people and be courteous– Follow up with thank-you notesFollow up with thank-you notes– Return Return allall phone calls phone calls– Call ahead to confirm appointmentsCall ahead to confirm appointments


Check Your Verbal SkillsCheck Your Verbal Skills

Speak at a comfortable paceSpeak at a comfortable pacenot too fast, not not too fast, not too slowtoo slowMake sure people can understand youMake sure people can understand youSpeak at a good volume—not too loud, not Speak at a good volume—not too loud, not too quiettoo quietAvoid slang and swear wordsAvoid slang and swear wordsAnswer the phone slowly and clearlyAnswer the phone slowly and clearlyPractice talking into a tape recorder and play it Practice talking into a tape recorder and play it back…back…How does it sound?How does it sound?


Check Your Nonverbal SkillsCheck Your Nonverbal Skills

Stand and sit straight, but comfortablyStand and sit straight, but comfortablyMake eye contactMake eye contactDon’t yawn when someone is talking with youDon’t yawn when someone is talking with youRespect people’s “personal space”Respect people’s “personal space”keep at least 18” between you & your listenerkeep at least 18” between you & your listenerDon’t fidget, rock, tap your feet, etc.Don’t fidget, rock, tap your feet, etc.it looks like you’re boredit looks like you’re boredLook confident and proud of your businessLook confident and proud of your businessSmile!Smile!Know what signals your different facial expressions send to Know what signals your different facial expressions send to your listeneryour listenerPractice shaking handsPractice shaking handsit should be firm (not like a vice grip, it should be firm (not like a vice grip, but not like a wet rag, either!)but not like a wet rag, either!)Practice talking into a mirror…Practice talking into a mirror…Do you look comfortable and professional? Do you look comfortable and professional?


Written Communication SkillsWritten Communication Skills

Make written communicationMake written communicationSimple, Short, SpecificSimple, Short, SpecificMake sure it answers:Make sure it answers:– WhoWho– WhatWhat– WhereWhere– WhenWhen– WhyWhy– HowHow

Don’t write when you’re angry or upset. Sleep on it…Don’t write when you’re angry or upset. Sleep on it…you may feel differently the next day!you may feel differently the next day!


Check Your Listening SkillsCheck Your Listening Skills

Stop what you’re doing and pay attention to Stop what you’re doing and pay attention to what the other person sayswhat the other person says

Maintain eye contact…look alert and Maintain eye contact…look alert and interestedinterested

Prove that you’re listening by summarizing Prove that you’re listening by summarizing points and asking questionspoints and asking questions

Listen, understand, judge carefully…and Listen, understand, judge carefully…and thenthen react react


Networking TipsNetworking Tips

Have a purpose for networkingHave a purpose for networkingHave a confident handshakeHave a confident handshakeBe aware of your body languageBe aware of your body languageWear something unusual to spur conversation (unique pin, Wear something unusual to spur conversation (unique pin, watch, tie)watch, tie)Always carry your business cards Always carry your business cards with youwith youBe able to talk about more than Be able to talk about more than just the weatherjust the weatherAt a networking event, don’t try to At a networking event, don’t try to juggle food and drinksjuggle food and drinksFollow through on promises you makeFollow through on promises you makeSet up a system to keep in touch with your networkSet up a system to keep in touch with your networkIf you’re not comfortable networking, learn from a proIf you’re not comfortable networking, learn from a pro


What Are Your Time Wasters?What Are Your Time Wasters?

TVTVTalking on the telephoneTalking on the telephoneNot keeping lists; poor planningNot keeping lists; poor planningDisorganizationDisorganizationUnclear goalsUnclear goalsLack of motivationLack of motivationProcrastinationProcrastinationNo schedule; no proceduresNo schedule; no proceduresInterruptions from co-workers, family, friendsInterruptions from co-workers, family, friendsWaitingWaitingdoctor appointments, long lines, etc.doctor appointments, long lines, etc.Red tapeRed tapeAlways tiredAlways tiredLose or misplace things oftenLose or misplace things oftenNegative attitudeNegative attitudeNot able to say “No”Not able to say “No”


Time Saver TipsTime Saver TipsSet prioritiesSet prioritiesKeep lists; cross off completed itemsKeep lists; cross off completed itemsUse a calendar or planner…EVERY day!Use a calendar or planner…EVERY day!Combine personal and business calendarsCombine personal and business calendarsAsk family for help with household responsibilitiesAsk family for help with household responsibilitiesInvolve family or friends in the business as appropriateInvolve family or friends in the business as appropriateComplete difficult tasks during your peak timeComplete difficult tasks during your peak timeCall ahead; confirm appointmentsCall ahead; confirm appointmentsSet time aside each day to handle the unexpectedSet time aside each day to handle the unexpectedSet working hours and family timeSet working hours and family timeLearn to say “No”Learn to say “No”Create agendas for meetingsCreate agendas for meetingsReward yourself when major projects are completedReward yourself when major projects are completedKeep desk clear of clutter; file papers immediatelyKeep desk clear of clutter; file papers immediatelyKeep business papers in one locationKeep business papers in one locationBe on time; encourage others to be on time Be on time; encourage others to be on time


Coping With StressCoping With Stress

Take a break! Step away from the problem for a whileTake a break! Step away from the problem for a whileTake a walk! Exercise will clear your headTake a walk! Exercise will clear your headThink positively! Refuse to be negativeThink positively! Refuse to be negativeIdentify the problem, and isolate it Identify the problem, and isolate it Ask for help and adviceAsk for help and adviceDon’t overreact! Choose to be in charge of your emotionsDon’t overreact! Choose to be in charge of your emotionsTake control! Manage your time betterTake control! Manage your time betterBreathe deeplyBreathe deeplyRelax, reflect, meditate, prayRelax, reflect, meditate, prayCarry some inspirational quotes Carry some inspirational quotes with youwith youBe open to change, and make the most of itBe open to change, and make the most of it


Your Personal BudgetYour Personal Budget

1.1. The money you expect to come in The money you expect to come in each month (income, earnings)each month (income, earnings)

2.2. The money you expect to go out each The money you expect to go out each month (expenses)month (expenses)

3.3. The amount left overThe amount left over


Personal Financial StatementPersonal Financial Statement

What you own:What you own: AssetsAssets

minusminus

What you owe:What you owe: Liabilities Liabilities

equalsequals

What’s left:What’s left: Net WorthNet Worth


What You Should Know About What You Should Know About CreditCredit

It’s good to establish a credit historyIt’s good to establish a credit historyEach time you purchase something on credit, or apply for Each time you purchase something on credit, or apply for credit, it’s reported to a national credit bureaucredit, it’s reported to a national credit bureauNational credit bureaus track your credit and payment historyNational credit bureaus track your credit and payment historyIf you apply for credit, a credit report is generated based upon If you apply for credit, a credit report is generated based upon your name & SS# your name & SS# A “credit score” is a rating assigned to you based upon your A “credit score” is a rating assigned to you based upon your credit and payment history, and is used by creditors or lenders credit and payment history, and is used by creditors or lenders to make decisions about your application.to make decisions about your application.You can and should obtain a copy of your credit report.You can and should obtain a copy of your credit report.Your personal credit will affect your ability to get credit for a start-up Your personal credit will affect your ability to get credit for a start-up business.business.


How to Protect Your CreditHow to Protect Your Credit

Obtain a consumer copy of your credit report (small Obtain a consumer copy of your credit report (small fee)fee)Clear up any disputes on your credit report (in Clear up any disputes on your credit report (in writing)writing)Do not carry too many credit cards Do not carry too many credit cards Protect your SS#Protect your SS#do not give it out haphazardlydo not give it out haphazardlyDon’t apply for credit too often; it will count against Don’t apply for credit too often; it will count against youyouDon’t give your credit card number to telemarketers Don’t give your credit card number to telemarketers you’re not familiar withyou’re not familiar withBe aware of hidden costs at check-cashing or rent-Be aware of hidden costs at check-cashing or rent-to-own establishmentsto-own establishments


Ideas for Dealing with Bad CreditIdeas for Dealing with Bad Credit

Develop a budget and stick to itDevelop a budget and stick to itObtain a consumer copy of your credit reportObtain a consumer copy of your credit reportIf you find an error on your report, contact the credit bureau(s) in writingIf you find an error on your report, contact the credit bureau(s) in writingIf you are denied credit, find out If you are denied credit, find out whywhyContact creditors to make arrangements to pay back old debtContact creditors to make arrangements to pay back old debtDo not ignore student loans, utility bills or delinquent taxesDo not ignore student loans, utility bills or delinquent taxesPAY THEM!PAY THEM!Do not apply for more creditDo not apply for more creditDo not incur more debtDo not incur more debtKeep only one or two credit cards; destroy others and close the accountsKeep only one or two credit cards; destroy others and close the accountsWork with a reputable credit counseling or debt management serviceWork with a reputable credit counseling or debt management serviceBe wary of quick advertisements to repair creditBe wary of quick advertisements to repair creditthere are no easy curesthere are no easy curesDo not automatically file bankruptcy; it can be more damaging in the long runDo not automatically file bankruptcy; it can be more damaging in the long run


Credit Bureau InformationCredit Bureau Information

Trans Union CorporationTrans Union Corporation800-916-8800800-916-8800www.tuc.comwww.tuc.comExperianExperian800-682-7654800-682-7654www.experian.comwww.experian.comEquifaxEquifax800-685-1111800-685-1111www.equifax.comwww.equifax.comAlso contact your localAlso contact your localConsumer Credit Counseling Service (CCCS)Consumer Credit Counseling Service (CCCS)1,400 offices nationwide1,400 offices nationwide


Business Idea SourcesBusiness Idea Sources


Types of BusinessesTypes of BusinessesCharacteristicCharacteristic Mfg.Mfg. ServiceService RetailRetail

Start-up costsStart-up costs HighHigh LowLow MediumMedium

Start-up timeStart-up time HighHigh LowLow MediumMedium

Technical SkillsTechnical Skills HighHigh MediumMedium LowLow

Selling skillsSelling skills MediumMedium HighHigh HighHigh

Creative skillsCreative skills Medium/HighMedium/High HighHigh Medium/HighMedium/High

Cost PressuresCost Pressures HighHigh LowLow MediumMedium

TechnologyTechnology Medium/HighMedium/High MediumMedium LowLow

Business Business LocationLocation

MediumMedium LowLow HighHigh

Risk to Risk to EntrepreneurEntrepreneur

Medium/HighMedium/High LowLow Medium/HighMedium/High


What Can Make YourWhat Can Make Your Business Unique? Business Unique?

Features (different size, color, format, etc.)Features (different size, color, format, etc.)Your locationYour locationOffer things that cannot be found elsewhereOffer things that cannot be found elsewhereNew inventionNew inventionUse of materials (green, recycled, American-only)Use of materials (green, recycled, American-only)Pricing, guaranteesPricing, guaranteesCustomer service policiesCustomer service policiesUnique packagingUnique packagingIndividual artistry (e.g., crafts)Individual artistry (e.g., crafts)Add-ons or extras that come with a purchaseAdd-ons or extras that come with a purchaseYour experienceYour experienceDelivery policies / timeframesDelivery policies / timeframes


Who Are Your CustomersWho Are Your Customers??

Gender (male or female)Gender (male or female)Age or age rangeAge or age rangeIncome levelIncome levelEducation levelEducation levelResidence locationResidence locationEmployment/job locationEmployment/job locationWorker type (professional, hourly, etc.)Worker type (professional, hourly, etc.)Marital status (married, single, widowed)Marital status (married, single, widowed)With or without childrenWith or without childrenRenter or home ownerRenter or home ownerLifestyles/interests (sports, arts, pets...)Lifestyles/interests (sports, arts, pets...)Level of familiarity with your serviceLevel of familiarity with your serviceBeliefs/OpinionsBeliefs/OpinionsSpecifics to your business Specifics to your business


What Do You Need To KnowWhat Do You Need To Know ? ?

Who?Who?

What?What?

Where? Where?

When?When?

Why?Why?

HowHow??


Start the Research ProcessStart the Research ProcessThings to learn about…Things to learn about…

Your nicheYour nicheThe need for your productThe need for your productCustomer identificationCustomer identificationCompetitionCompetitionLocationLocationPricingPricingCosts/financing informationCosts/financing informationRegulations, licensing, certificationRegulations, licensing, certification


Is Your Business Idea Viable?Is Your Business Idea Viable?

Work in your industry on a Work in your industry on a part-time basispart-time basisGet a business mentor and learn from him or herGet a business mentor and learn from him or herVolunteer for a small business owner to learn day-to-day Volunteer for a small business owner to learn day-to-day operationsoperationsIf you have a product, test it at a trade show, community fair, or If you have a product, test it at a trade show, community fair, or block party block party Call sales reps that supply your industryCall sales reps that supply your industryTalk with local realtors, business owners, bankers, elected Talk with local realtors, business owners, bankers, elected officials, etc.officials, etc.Research the competition – start with the phone bookResearch the competition – start with the phone bookContact local economic development and/or government Contact local economic development and/or government agenciesagencies


Where to Begin…Where to Begin…Accessing Business Resources Accessing Business Resources Public LibraryPublic LibraryTrade AssociationsTrade AssociationsPublished Reports and ArticlesPublished Reports and ArticlesStudying the CompetitionStudying the CompetitionTalking with CustomersTalking with CustomersSuppliers/VendorsSuppliers/VendorsLocal Economic Development or Business Local Economic Development or Business ResourcesResourcesBanksBanksInternetInternetSmall Business AdministrationSmall Business Administration


Questions AboutQuestions About Business Planning Business Planning

Isn’t planning for “big business” only?Isn’t planning for “big business” only?How does planning help management?How does planning help management?Can’t I hire someone to do this for me?Can’t I hire someone to do this for me?How can I know all the answers?How can I know all the answers?How often do I have to do this?How often do I have to do this?What if I don’t complete the process What if I don’t complete the process during class?during class?What’s in it for me?What’s in it for me?


The Planning CycleThe Planning Cycle


Keys to a Successful Planning Keys to a Successful Planning ProcessProcess

The owner assumes the lead in the processThe owner assumes the lead in the processThe planning process involves everyone in The planning process involves everyone in the family and businessthe family and businessThe plan reflects realityThe plan reflects realityThere is a contingency plan for the worst-There is a contingency plan for the worst-case scenariocase scenarioThe goals and objectives are achievable and The goals and objectives are achievable and clearclearThe plan is flexibleThe plan is flexibleThe plan is reviewed often, and revised when The plan is reviewed often, and revised when necessarynecessary


Managing Your Personal and Managing Your Personal and Business Goals Business Goals

GoalsGoals: Dreams with deadlines: Dreams with deadlinesObjectivesObjectives: How you’ll get there: How you’ll get there

(The steps to reach the goals, including(The steps to reach the goals, including what, who, when) what, who, when)

Business goals can be set for many parts of Business goals can be set for many parts of your business:your business:– Sales volumeSales volume– Number of employeesNumber of employees– Desired owner compensationDesired owner compensation– ProfitProfit– Time commitmentTime commitment– Other:Other:– Other:Other:


NxLeveL® Micro-Entrepreneur NxLeveL® Micro-Entrepreneur Business Plan Outline Business Plan Outline

Cover PageCover PageTable of ContentsTable of ContentsSection I. Executive SummarySection I. Executive SummarySection II. Personal Background InformationSection II. Personal Background InformationA. Personal Skills and ExperienceA. Personal Skills and ExperienceB. Personal Financial ResourcesB. Personal Financial ResourcesSection III. Business ConceptSection III. Business ConceptA. General Description of the BusinessA. General Description of the BusinessB. Business Goals and ObjectivesB. Business Goals and Objectives

C. Industry InformationC. Industry InformationIndustry Background InformationIndustry Background InformationCurrent and Future Industry TrendsCurrent and Future Industry TrendsBusiness Fit in the IndustryBusiness Fit in the IndustrySection IV. Business OrganizationSection IV. Business OrganizationA. Ownership, Regulations, and ContractsA. Ownership, Regulations, and ContractsOwnershipOwnershipGovernment Regulations and TaxesGovernment Regulations and TaxesContracts and LeasesContracts and LeasesB. Management IssuesB. Management IssuesManaging PeopleManaging PeopleInternal Management TeamInternal Management TeamEmployeesEmployeesOutside Services/AdvisorsOutside Services/AdvisorsRisk ManagementRisk ManagementC. Managing Books and Records C. Managing Books and Records


NxLeveL® Micro-Entrepreneur NxLeveL® Micro-Entrepreneur Business Plan Outline (Cont.)Business Plan Outline (Cont.)

Section V. The Marketing PlanSection V. The Marketing PlanA. Product DescriptionA. Product DescriptionProduct DescriptionProduct DescriptionFeatures/BenefitsFeatures/BenefitsB. Market AnalysisB. Market AnalysisCustomer AnalysisCustomer AnalysisCompetitive AnalysisCompetitive AnalysisMarket PotentialMarket PotentialC. Market Objectives, Strategies, & TacticsC. Market Objectives, Strategies, & TacticsProduct LinesProduct LinesPositioningPositioningPackaging/BrandingPackaging/BrandingPricing–A First LookPricing–A First LookPlacement (Distribution)Placement (Distribution)Promotional StrategiesPromotional StrategiesCustomer ServiceCustomer Service Section VI. The Financial PlanSection VI. The Financial PlanA. Investment Required for Start-UpA. Investment Required for Start-UpStart-up Costs/NeedsStart-up Costs/NeedsInvestment Required–Bank Loan/SelfInvestment Required–Bank Loan/SelfB. Cash Flow ProjectionsB. Cash Flow ProjectionsMonthly Cash Flow Projections–Year OneMonthly Cash Flow Projections–Year OneNotes to Cash Flow ProjectionsNotes to Cash Flow ProjectionsAnnual Cash Flow Projections—Years Two and ThreeAnnual Cash Flow Projections—Years Two and ThreeC. Additional Financial InformationC. Additional Financial InformationSummary of Financial NeedsSummary of Financial NeedsPersonal Financial StatementPersonal Financial StatementD. ConclusionD. ConclusionAttachmentsAttachments


Overview of MarketingOverview of MarketingResearchResearch

Study the industry…then study the customer, Study the industry…then study the customer, competition and location.competition and location.

AnalysisAnalysisAnalyze your research about the industry, Analyze your research about the industry,

customer, competition and location.customer, competition and location.

Analyze your competitive advantage.Analyze your competitive advantage.

Strategies and TacticsStrategies and TacticsDetermine the best method of getting your goods Determine the best method of getting your goods

and service to market, based on your analysis and service to market, based on your analysis


Contents of the Marketing PlanContents of the Marketing Plan

PRODUCT DESCRIPTION:PRODUCT DESCRIPTION:Features and benefits (what makes it different or better?)Features and benefits (what makes it different or better?)Design and material choices Design and material choices Life cycle and seasonalityLife cycle and seasonality

MARKET ANALYSIS:MARKET ANALYSIS:How big is your target market?How big is your target market?Who are your customers? (Demographics and psychographics)Who are your customers? (Demographics and psychographics)Who are your competitors? What are their strengths and Who are your competitors? What are their strengths and weaknesses?weaknesses?What are the political, economic, social, and technological trends in What are the political, economic, social, and technological trends in your market?your market?

MARKETING OBJECTIVES, STRATEGIES, AND TACTICS:MARKETING OBJECTIVES, STRATEGIES, AND TACTICS:What are your business’s objectives? How will you achieve them?What are your business’s objectives? How will you achieve them?What’s your business niche?What’s your business niche?


Sales Forecasting Methods Sales Forecasting Methods

Breakdown Forecasting:Breakdown Forecasting:

Start with largest population, and break it down Start with largest population, and break it down to estimate sales from target customersto estimate sales from target customers

Buildup Forecasting:Buildup Forecasting:

Estimate size of each market segment, and add Estimate size of each market segment, and add them to get a totalthem to get a total

Indirect Forecasting:Indirect Forecasting:

Find possible indicators of sales when specific Find possible indicators of sales when specific market data are missingmarket data are missing


Primary and Secondary Sources Primary and Secondary Sources

SECONDARY:SECONDARY:Government (federal, state, local)Government (federal, state, local)Small Business Development CentersSmall Business Development CentersWomen’s Business CentersWomen’s Business CentersU.S. Small Business AdministrationU.S. Small Business AdministrationTrade and industry associationsTrade and industry associationsChambers of CommerceChambers of CommerceLocal newspapers and magazinesLocal newspapers and magazinesCensus dataCensus dataBusiness magazinesBusiness magazines

PRIMARY:PRIMARY:InterviewsInterviewsSurveysSurveysFocus groupsFocus groups


Research ToolsResearch Tools

Libraries (Public, University/College, Private)Libraries (Public, University/College, Private)– Online and offlineOnline and offline

Trade AssociationsTrade AssociationsBusiness PeriodicalsBusiness PeriodicalsState and Federal ResourcesState and Federal ResourcesLocal Resources (Chambers of Commerce, SBDCs, Local Resources (Chambers of Commerce, SBDCs, WBCs, BICs)WBCs, BICs)Professional Research CompaniesProfessional Research CompaniesNxLeveL Business Resource GuideNxLeveL Business Resource GuideStudying the CompetitionStudying the CompetitionSurveys (focus groups and interviews)Surveys (focus groups and interviews)ObservationObservation


Ways to Contact Ways to Contact Information Sources Information Sources

In PersonIn Person

TelephoneTelephone

Facsimile (Fax)Facsimile (Fax)

InternetInternet

E-mailE-mail

U.S. MailU.S. Mail

Express Delivery ServicesExpress Delivery Services


Drawing Industry Conclusions Drawing Industry Conclusions

How has the industry developed?How has the industry developed?How do small businesses operate within this industry?How do small businesses operate within this industry?What are the current growth patterns in the industry?What are the current growth patterns in the industry?What is the industry’s size at present? What’s projected What is the industry’s size at present? What’s projected a year from now?a year from now?Five years from now?Five years from now?Are there any niche markets that are hot?Are there any niche markets that are hot?How does international trade affect your industry?How does international trade affect your industry?How will current and new government regulations affect How will current and new government regulations affect your industry?your industry?How will technology affect your industry and the small How will technology affect your industry and the small businesses within it?businesses within it?


Sole Proprietorship Sole Proprietorship

AdvantagesAdvantagesEasy to form and the simplest way of doing businessEasy to form and the simplest way of doing businessOwner has complete controlOwner has complete controlOwner receives all the incomeOwner receives all the incomeAvoids double taxationAvoids double taxation

DisadvantagesDisadvantagesUnlimited liability for all acts and debts of the businessUnlimited liability for all acts and debts of the businessFewer tax benefitsFewer tax benefitsThe business dies when you dieThe business dies when you dieCan’t expand the business through new owners and use Can’t expand the business through new owners and use of their money of their money


General Partnership General Partnership

AdvantagesAdvantagesFairly simple to set upFairly simple to set upCombination of resources & talentsCombination of resources & talentsPersonal tax benefitsPersonal tax benefits

DisadvantagesDisadvantagesMore recordkeeping requirementsMore recordkeeping requirementsUnlimited liability (including for each other’s actions)Unlimited liability (including for each other’s actions)Dissolution upon death of a partnerDissolution upon death of a partnerPartnership profits taxed as income to the partnersPartnership profits taxed as income to the partnersPossible friction between partnersPossible friction between partners


Limited Partnership Limited Partnership

AdvantagesAdvantagesGeneral partners can provide additional source of General partners can provide additional source of fundingfundingLimited partners have limited liabilityLimited partners have limited liabilityAllocation of income and losses to owners (no business Allocation of income and losses to owners (no business income tax)income tax)Finite existenceFinite existence

DisadvantagesDisadvantagesInitial organizational cost highInitial organizational cost highLimited partners have no control… might be hard to find Limited partners have no control… might be hard to find partners to invest without having authoritypartners to invest without having authorityCompliance with state and federal securities laws Compliance with state and federal securities laws


CorporationCorporation

AdvantagesAdvantagesLimited liability of shareholdersLimited liability of shareholdersExistence continues even if death of owner or sale of Existence continues even if death of owner or sale of stockstockFlexibility of financing through outside investorsFlexibility of financing through outside investorsTransfer of ownership by sale/gift of stock Transfer of ownership by sale/gift of stock Tax benefits available to corporate employeesTax benefits available to corporate employees

DisadvantagesDisadvantagesInitial organizational cost highInitial organizational cost highAnnual reporting requirementsAnnual reporting requirementsDouble taxation if paying dividends Double taxation if paying dividends


S CorporationS Corporation

AdvantagesAdvantagesSame as for corporationSame as for corporationTaxed at the individual shareholder levelTaxed at the individual shareholder level

DisadvantagesDisadvantagesExcept for the tax consequences, same as for Except for the tax consequences, same as for corporationcorporationWith some exceptions, only individuals can be With some exceptions, only individuals can be shareholdersshareholdersLimited number of shareholdersLimited number of shareholdersLimited to one class of stockLimited to one class of stockMust use calendar year Must use calendar year


Limited Liability Company Limited Liability Company

AdvantagesAdvantagesLimited liability without limits on management Limited liability without limits on management participationparticipationFlexible ownership and capital structureFlexible ownership and capital structureNo double taxationNo double taxationAllocation of tax benefits among membersAllocation of tax benefits among members

DisadvantagesDisadvantagesInitial organizational cost highInitial organizational cost highPoor tax treatment of fringe benefitsPoor tax treatment of fringe benefitsOwnership transfer must be governed by buy/sell Ownership transfer must be governed by buy/sell provisions provisions


CooperativesCooperatives

AdvantagesAdvantagesMembers own and control the businessMembers own and control the businessPotential for collective efforts to improve marketing and Potential for collective efforts to improve marketing and add value to productsadd value to productsShared expertise in operation is a Shared expertise in operation is a potentialpotential benefit benefit

DisadvantagesDisadvantagesLengthy process by members to set up (bylaws, major Lengthy process by members to set up (bylaws, major policy issues, direction, board)policy issues, direction, board)Effectiveness depends on members dedication to long Effectiveness depends on members dedication to long termtermGroup decision-making and “shared ownership” can be Group decision-making and “shared ownership” can be cumbersome cumbersome


Government RegulationsGovernment RegulationsWhich Affect YOUR Business?Which Affect YOUR Business?

General Business TaxationGeneral Business TaxationPersonal Income TaxPersonal Income TaxBusiness Income TaxBusiness Income TaxSales TaxSales TaxProperty TaxProperty TaxBusiness License FeesBusiness License Fees

Employee RegulationsEmployee RegulationsPayroll Tax/WithholdingPayroll Tax/WithholdingEmployee vs. Independent ContractorEmployee vs. Independent ContractorWage and Hour RegulationsWage and Hour RegulationsHiring RegulationsHiring RegulationsOSHAOSHA

Consumer Protection RegulationsConsumer Protection RegulationsWarrantiesWarrantiesUniform Consumer Credit Code Uniform Consumer Credit Code


Government RegulationsGovernment Regulationscont’dcont’dWhich Affect YOUR Business?Which Affect YOUR Business?

Commerce RegulationsCommerce RegulationsProfessional LicensesProfessional LicensesBusiness RegistrationBusiness RegistrationUniform Commercial CodeUniform Commercial Code

Zoning RegulationsZoning RegulationsHome-based businessHome-based businessSignageSignageManufacturing / retailManufacturing / retail

Bankruptcy RegulationsBankruptcy RegulationsHow much protection?How much protection?

Transportation RegulationsTransportation RegulationsProfessional LicensesProfessional LicensesCustomsCustoms

Environmental RegulationsEnvironmental RegulationsWaste disposalWaste disposalStorage tanksStorage tanksSiting / Buying property Siting / Buying property


IRS 20-Point ChecklistIRS 20-Point ChecklistIndependent Independent Contractor or Employee?Contractor or Employee?

Primary FactorsPrimary Factors YesYes NoNo1.1. Does the service recipient have the right to require compliance withDoes the service recipient have the right to require compliance with

significant instructions?significant instructions?2.2. Does the service recipient have the right to set the hours of work?Does the service recipient have the right to set the hours of work?3.3. Does the service recipient have the right to set the order or sequenceDoes the service recipient have the right to set the order or sequence

of services to be performed? of services to be performed? 4.4. Does the service recipient have the right to discharge the service provider?Does the service recipient have the right to discharge the service provider?5.5. Does the service provider have the right to hire, pay and superviseDoes the service provider have the right to hire, pay and supervise

assistants as the nature of the work requires?assistants as the nature of the work requires?6.6. Does the service provider have no ability to realize a profit or loss?Does the service provider have no ability to realize a profit or loss?7.7. Does the service provider have no investment in significant tools, materialsDoes the service provider have no investment in significant tools, materials

and other equipment when such items are necessary to accomplish and other equipment when such items are necessary to accomplish the task and are customarily provided by the service provider?the task and are customarily provided by the service provider?

8.8. Does the service provider have no significant investment in facilities when theyDoes the service provider have no significant investment in facilities when theyare necessary to accomplish the task and they are customarily provided?are necessary to accomplish the task and they are customarily provided?

Secondary FactorsSecondary Factors9.9. Does the service recipient train the service provider? Does the service recipient train the service provider? 10.10. Does the service recipient have the right to require oral or written reports? Does the service recipient have the right to require oral or written reports? 11.11. Does the service recipient pay by the hour, week or month?Does the service recipient pay by the hour, week or month?12.12. Does the service recipient pay for business and/or travel expenses?Does the service recipient pay for business and/or travel expenses?13.13. Does the service recipient have the right to require personal service? Does the service recipient have the right to require personal service? 14.14. Does the service provider usually not work for more than one firm at a time?Does the service provider usually not work for more than one firm at a time?15.15. Does the service provider maintain a continuing relationship with the Does the service provider maintain a continuing relationship with the

service recipient?service recipient?16.16. Does the service provider devote substantially full time to the service recipient?Does the service provider devote substantially full time to the service recipient?17.17. Does the service provider have the right to terminate the relationship at any Does the service provider have the right to terminate the relationship at any

time without incurring liability?time without incurring liability?18.18. Is the service provider integrated into the service recipient’s business?Is the service provider integrated into the service recipient’s business?19.19. Does the service provider not make his or her services available to theDoes the service provider not make his or her services available to the

public on a regular and consistent basis?public on a regular and consistent basis?20.20. Does the service provider work only on the service recipient’s propertyDoes the service provider work only on the service recipient’s property

or designated location?or designated location?Note:Note: ““Yes” suggests employee status. “No” suggests independent contractor status.Yes” suggests employee status. “No” suggests independent contractor status. More weight should be given to the first eight questions than the last twelve.More weight should be given to the first eight questions than the last twelve. If you answered “yes” to any of these 20 questions, proceed with caution. Consult an accountant or tax lawyer who is familiar with the problems raised by If you answered “yes” to any of these 20 questions, proceed with caution. Consult an accountant or tax lawyer who is familiar with the problems raised by

hiring individuals as independent contractors.hiring individuals as independent contractors.


Basic Contract Terms Basic Contract Terms

Performance. Performance. What actions must you What actions must you complete?complete?Price. Price. How much, in what currency?How much, in what currency?Place of delivery. Place of delivery. Where, by what Where, by what method? Who’s liable?method? Who’s liable?Time to perform. Time to perform. When are goods or When are goods or services due? When is payment due?services due? When is payment due?Legal remedies. Legal remedies. How can you enforce the How can you enforce the contract?contract?


What’s in a Lease? What’s in a Lease?

What are you leasing?What are you leasing?True cost of the leaseTrue cost of the leasePayment “escalators”Payment “escalators”Permitted usesPermitted usesLease responsibilitiesLease responsibilities(insurance, maintenance, etc.)(insurance, maintenance, etc.)Renewal optionsRenewal optionsPurchase rightsPurchase rightsRight of first refusalRight of first refusalExclusivity Exclusivity


Protecting Your Protecting Your Intellectual Property Intellectual Property

What needs protecting?What needs protecting?PatentPatent– Prevents others from copying and selling your invention. Prevents others from copying and selling your invention.

Costly to enforce.Costly to enforce.

TrademarkTrademark– Words, logos, symbols, that represent your company.Words, logos, symbols, that represent your company.

CopyrightCopyright– Protects work that is independently created, such as songs, Protects work that is independently created, such as songs,

textbooks, creative writing. Inexpensive to register.textbooks, creative writing. Inexpensive to register.

Trade secretsTrade secrets– Secret processes, methods and information may be Secret processes, methods and information may be

protected under Uniform Trade Secrets Act.protected under Uniform Trade Secrets Act.


Traits of Effective ManagersTraits of Effective Managers

Build a team and lead itBuild a team and lead it

Organize and planOrganize and plan

Solve problemsSolve problems

Manage moneyManage money

Provide superior customer serviceProvide superior customer service

Build strong public relationsBuild strong public relations


Business Communication Business Communication

Written Communication Written Communication – Be clear and to the pointBe clear and to the point– Keep duplicatesKeep duplicates– Develop a filing systemDevelop a filing system

Verbal CommunicationVerbal Communication– Be honest! Don’t make promises you can’t keep! Be honest! Don’t make promises you can’t keep! – Don’t say anything you wouldn’t put in writing!Don’t say anything you wouldn’t put in writing!

Phone EtiquettePhone Etiquette– Sound confident and enthusiasticSound confident and enthusiastic– Answer with a greetingAnswer with a greeting– Keep message pads handyKeep message pads handy– Always end with “Thank you!”Always end with “Thank you!”

NetworkingNetworking– When you get something from a networking partner, always give When you get something from a networking partner, always give

something in return!something in return!


Traditional Organizational ChartTraditional Organizational Chart

T ra d ition a l O rga n iza tion C h a rt

E m p lo ye es

Q u a lityC o n tro l

E m p lo ye es

A ss e m b ly

E m p lo ye es

L o g is tics

O p e ra tingM a na g er

E m p lo ye es

A reaM a n ag e rs

S a lesM a na g er

P R

E m p lo ye es

P ro m o tion

M a rk e tingM a na g er

E m p lo ye es

A cco u n ting

E m p lo ye es

F in an ce

F in a n c ia lM a na g er

President

NxLeveL Guide for Micro-EntrepreneurNxLeveL Guide for Micro-Entrepreneurs-OHD6-4s-OHD6-4

OtherOther

MarketingMarketing

Finance/Finance/AccountingAccounting

Optional Organizational Chart Optional Organizational Chart

OperationsOperations

Owner/Owner/EntrepreneurEntrepreneur


Key Management Issues Key Management Issues Learn to let go and delegateLearn to let go and delegate

Develop your internal team and your external Develop your internal team and your external teamteam

Look at the big pictureLook at the big picture– Develop management goals and strategiesDevelop management goals and strategies– Create a workable structureCreate a workable structure– Assign responsibilitiesAssign responsibilities

Communication is keyCommunication is key

Lead by exampleLead by example

Get adviceGet advice

Have fun, be creative!Have fun, be creative!


Key Employee Management Key Employee Management Practices Practices

Identifying tasks and job descriptionsIdentifying tasks and job descriptionsInterviewing, selecting and hiring, and Interviewing, selecting and hiring, and trainingtrainingSetting performance goalsSetting performance goalsEvaluating/measuring performanceEvaluating/measuring performanceCreating compensation and incentive Creating compensation and incentive strategiesstrategiesFacilitating communication and learningFacilitating communication and learningCreating cooperative teamsCreating cooperative teamsBuilding in fun and creativityBuilding in fun and creativity


Elements of a Personnel / Elements of a Personnel / Company Handbook Company Handbook

A letter from the founder, team leader, and A letter from the founder, team leader, and coach (you!)coach (you!)Company mission statementCompany mission statementEmployee relations policyEmployee relations policyEmployee benefits packageEmployee benefits package““Principles of doing business” statementPrinciples of doing business” statementEmployee performance appraisal proceduresEmployee performance appraisal proceduresEmployee problem resolution proceduresEmployee problem resolution proceduresVacation and holiday policiesVacation and holiday policiesReporting structure and functions Reporting structure and functions


Types of Insurance Types of Insurance

Covering Your BusinessCovering Your Business– General liabilityGeneral liability– Product liabilityProduct liability– Key-personKey-person– Business propertyBusiness property– Business interruptionBusiness interruption– AutomobileAutomobile– Electronic dataElectronic data

Covering Your EmployeesCovering Your Employees– Workers’ compensationWorkers’ compensation– Life insuranceLife insurance– Health/MedicalHealth/Medical– Pension plansPension plans


Risk Management Check-Up List Risk Management Check-Up List

Are my goals written, measurable and realistic?Are my goals written, measurable and realistic?Have I communicated those goals with everyone in the Have I communicated those goals with everyone in the business?business?Do I understand the goals of other family members and/or Do I understand the goals of other family members and/or employees?employees?Do I know which risks can keep me from attaining my goals?Do I know which risks can keep me from attaining my goals?Have I decided which risks I’m comfortable managing myself, Have I decided which risks I’m comfortable managing myself, and which I should seek assistance with?and which I should seek assistance with?Have I scheduled regular insurance check-ups for health, life, Have I scheduled regular insurance check-ups for health, life, casualty, property, disability, and long-term care?casualty, property, disability, and long-term care?Do I have a confident relationship with my risk management Do I have a confident relationship with my risk management advisors?advisors?Do I understand how much coverage I need to provide Do I understand how much coverage I need to provide adequate cash flow for my business?adequate cash flow for my business?Will my lender understand my overall plan for my business and Will my lender understand my overall plan for my business and help me achieve my goals?help me achieve my goals?


Risk Management Check-Up Risk Management Check-Up ListListcont’dcont’d

Are all of my assets covered in my risk management plan?Are all of my assets covered in my risk management plan?Do I know what financial records I need to adequately manage Do I know what financial records I need to adequately manage my business? To document my borrowing requests?my business? To document my borrowing requests?Do I understand the terms and conditions of my borrowing Do I understand the terms and conditions of my borrowing arrangements?arrangements?Do I have alternative sources of income in case of business Do I have alternative sources of income in case of business slowing, business failure, etc.?slowing, business failure, etc.?Do I have a will? When was it last reviewed?Do I have a will? When was it last reviewed?Have I advised family members as to the location of my will, Have I advised family members as to the location of my will, other important documents, etc.other important documents, etc.Do I have life insurance? Is my list of beneficiaries up to date?Do I have life insurance? Is my list of beneficiaries up to date?Have I explored ways of transferring assets to the next Have I explored ways of transferring assets to the next generation?generation?__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________


The Purpose of Market Research The Purpose of Market Research

You want to identify:You want to identify:Customers: Who will buy your product?Customers: Who will buy your product?

Market Niche: Who’s your competition, and Market Niche: Who’s your competition, and where do you fit into the market?where do you fit into the market?

Price: What price will make your product Price: What price will make your product competitive?competitive?

Competitive Edge: What makes you better Competitive Edge: What makes you better than or different from the competition?than or different from the competition?

Location: Where will you sell your product to Location: Where will you sell your product to reach your target customer?reach your target customer?


Important Info-Gathering Tips Important Info-Gathering Tips

Keep your eyes and ears openKeep your eyes and ears open

Ask lots of specific questionsAsk lots of specific questions

Carefully listen to the answersCarefully listen to the answers

Honestly evaluate the importance of the Honestly evaluate the importance of the answersanswers

Don’t let wishful thinking, assumptions, Don’t let wishful thinking, assumptions, or prejudices affect how you gather or or prejudices affect how you gather or interpret datainterpret data


Sources of Information Sources of Information Survey of potential customersSurvey of potential customersSmall Business Development CenterSmall Business Development CenterChamber of CommerceChamber of CommerceLibraryLibraryCommercial Sources (local utility companies, market research Commercial Sources (local utility companies, market research companies)companies)Trade AssociationsTrade AssociationsStock BrokersStock BrokersOnline ResourcesOnline ResourcesPhone BookPhone BookCompetition (visit, review advertising materials, buy their product)Competition (visit, review advertising materials, buy their product)Census InformationCensus InformationLocal Zoning PlanLocal Zoning PlanSuppliersSuppliersTest MarketTest MarketOther: ________________Other: ________________


The Marketing Mix The Marketing Mix The Four Ps will guide your research, The Four Ps will guide your research,

analysis, and strategies:analysis, and strategies:

PRODUCTPRODUCT

PRICEPRICE

PROMOTIONPROMOTION

PLACEMENTPLACEMENT


Features vs. Benefits Features vs. Benefits Features:Features:– SizeSize– QualityQuality– VarietiesVarieties– TypesTypes– MaterialsMaterials

Benefits:Benefits:– What your product will DO FOR your customer What your product will DO FOR your customer

(time savings, convenience, status, security, etc.)(time savings, convenience, status, security, etc.)

PEOPLE BUY BENEFITS, PEOPLE BUY BENEFITS, NOT FEATURES!NOT FEATURES!


Your Product In Use Your Product In Use If you sell something to eat…If you sell something to eat…

ask people to ask people to taste ittaste it..If you offer a service…If you offer a service…

ask people to ask people to use ituse it..If you sell something to wear…If you sell something to wear…

ask people to ask people to try it ontry it on..

THENTHEN

When people hate it, ask them WHY.When people hate it, ask them WHY.When people love it, ask them WHY.When people love it, ask them WHY.

Then, ask them more questions about themselves. Then, ask them more questions about themselves. These are yourThese are your

target customerstarget customers. .


Demographics Demographics

AgeAge

GenderGender

LocationLocation

EducationEducation

OccupationOccupation

Income LevelIncome Level

Marital StatusMarital Status

Kids / No KidsKids / No Kids


Psychographics Psychographics NeedsNeeds– Security, esteem, love, acceptance, understanding, Security, esteem, love, acceptance, understanding,

beauty, good healthbeauty, good health

ValuesValues– Status, success, greed, simplicityStatus, success, greed, simplicity

Buying StylesBuying Styles– Price, fads, quality, technology, luxury, conveniencePrice, fads, quality, technology, luxury, convenience

CulturesCultures– Modern, artistic, religious, liberal, conservative, Modern, artistic, religious, liberal, conservative,

environmentalenvironmental

InterestsInterests– Sports, reading, fitness, cooking, workaholic, Sports, reading, fitness, cooking, workaholic,

gardeninggardening


Why Analyze the Competition? Why Analyze the Competition? Because You Might:Because You Might:

Learn more about what the customer really Learn more about what the customer really wants wants (or doesn’t want)!(or doesn’t want)!Discover unserved niche marketsDiscover unserved niche marketsGet ideas for marketing, merchandising, Get ideas for marketing, merchandising, product mixproduct mixObtain valuable advice, support, information Obtain valuable advice, support, information from remote or indirect competitionfrom remote or indirect competition

Because You Will:Because You Will:Determine whether or not you have a Determine whether or not you have a COMPETITIVE ADVANTAGECOMPETITIVE ADVANTAGE


Things You Should Know About Things You Should Know About Your Competition Your Competition

Direct or Indirect Competition?Direct or Indirect Competition?Where are they located?Where are they located?What is their brand image?What is their brand image?Who are their customers?Who are their customers?How do they price their products?How do they price their products?How is their overall performance?How is their overall performance?How is their customer service?How is their customer service?What type of promotions do they use?What type of promotions do they use?What are their strengths and weaknesses? What are their strengths and weaknesses?


Choosing a Location Choosing a Location Proximity to customersProximity to customersNeighborhoodNeighborhoodConvenienceConvenienceSafety (lighting, off-street parking, etc.)Safety (lighting, off-street parking, etc.)Accessibility (ADA)Accessibility (ADA)VisibilityVisibilityFoot traffic, vehicle trafficFoot traffic, vehicle trafficOther complementary businesses nearbyOther complementary businesses nearbySize/floor plan requirements Size/floor plan requirements Lease or ownLease or ownZoning restrictions; landlord restrictionsZoning restrictions; landlord restrictionsCosts (property, amenities, required improvements)Costs (property, amenities, required improvements)


Your Target MarketYour Target MarketQuestions You Need to Answer:Questions You Need to Answer:

?? Are there enough people in the target Are there enough people in the target market to make enough sales to market to make enough sales to generate a profit?generate a profit?

?? Does it have unique and definable Does it have unique and definable characteristics that will let you develop characteristics that will let you develop marketing strategies for it?marketing strategies for it?

?? Are there unmet or under-met needs Are there unmet or under-met needs within the target group that your within the target group that your product or service could fill?product or service could fill?

?? Is there room for growth?Is there room for growth?


Product Strategies Product Strategies

Understand the features and benefits of your Understand the features and benefits of your productsproducts

Determine product lines and appropriate Determine product lines and appropriate product mix (depth and width)product mix (depth and width)

Position your product in the marketplacePosition your product in the marketplace

Package your products and your businessPackage your products and your business

Develop service enhancementsDevelop service enhancements

Create a unique brand identityCreate a unique brand identity


What Makes a Good Name? What Makes a Good Name?

Choose your business name wisely!Choose your business name wisely!Guidelines:Guidelines:Tells people what you doTells people what you doEasy to pronounceEasy to pronounceNot used by someone elseNot used by someone elseNo double or hidden meaningsNo double or hidden meaningsBe careful with acronymsBe careful with acronymsBe creative, but not too cuteBe creative, but not too cuteNot too longNot too longBe cautious about using your last name or initialsBe cautious about using your last name or initialsDevelop appropriate logo or trademarkDevelop appropriate logo or trademark


Basic Pricing Concepts Basic Pricing Concepts

VALUE is what your customer believes VALUE is what your customer believes your product is worthyour product is worthPRICE is the amount of money you PRICE is the amount of money you charge your customers per sales unit charge your customers per sales unit of your product of your product COST is what you spend to make your COST is what you spend to make your product or deliver your serviceproduct or deliver your servicePROFIT is what’s left over after you PROFIT is what’s left over after you subtract COST from PRICEsubtract COST from PRICE


Pricing Considerations Pricing Considerations

What are your costs?What are your costs?What will your customer pay?What will your customer pay?What image do you want to convey?What image do you want to convey?What does the competition charge?What does the competition charge?What will the market bear?What will the market bear?Where do you want to be positioned?Where do you want to be positioned?How does a service business determine How does a service business determine price?price?


You Must Understand Your Costs! You Must Understand Your Costs!

Variable CostsVariable CostsCosts that go up or down in relation to sales volume.Costs that go up or down in relation to sales volume.

Example: You sell personalized T-shirts for $10.00 each.Example: You sell personalized T-shirts for $10.00 each.Selling PriceSelling Price

$10.00$10.00Variable Costs:Variable Costs:

Raw material (t-shirt)Raw material (t-shirt) $3.00$3.00Hourly laborHourly labor $1.00$1.00Sales commission (10%)Sales commission (10%) $1.00$1.00Shipping chargeShipping charge $ .50$ .50

Total Variable CostsTotal Variable Costs $5.50$5.50Price minus Variable CostsPrice minus Variable Costs $4.50$4.50The $4.50 is called the The $4.50 is called the contribution margin contribution margin because it represents how because it represents how

much each unit of sales “contributes” towards paying for fixed costs much each unit of sales “contributes” towards paying for fixed costs and profits. and profits.


You Must Understand Your You Must Understand Your Costs!Costs!Fixed CostsFixed Costs

Costs that don’t change regardless of sales volume.Costs that don’t change regardless of sales volume.Example: Fixed expenses (per month)Example: Fixed expenses (per month)RentRent $ 800.00$ 800.00TelephoneTelephone 100.00 100.00InsuranceInsurance 50.00 50.00BookkeepingBookkeeping 100.00 100.00Loan paymentsLoan payments 300.00 300.00 Total Fixed Expenses Total Fixed Expenses $1,350.00 $1,350.00

QUESTION:QUESTION:How many t-shirts do you have to sell each month to pay for yourHow many t-shirts do you have to sell each month to pay for your

variable variable andand fixed expenses? fixed expenses?


Break-Even Analysis Break-Even Analysis


Your Break-Even PointYour Break-Even Point How many t-shirts do you need to sell each month before you pay for your variable How many t-shirts do you need to sell each month before you pay for your variable

and fixed expenses and fixed expenses andand start making a profit? start making a profit?Break-Even Units Volume = Break-Even Units Volume =

Fixed CostsFixed CostsPrice minus Variable CostsPrice minus Variable Costs

Example:Example:Selling PriceSelling Price $10.00 per unit$10.00 per unitVariable costsVariable costs $ 5.50 per unit$ 5.50 per unitContribution marginContribution margin $ 4.50 per unit$ 4.50 per unitFixed costsFixed costs $1,350 / month$1,350 / month

Break-Even Point in Units =Break-Even Point in Units = $1,350.00$1,350.00 = 300 t-shirts = 300 t-shirts

per monthper month $4.50$4.50

When you sell t-shirt #301, you will start making a profit When you sell t-shirt #301, you will start making a profit for that monthfor that month..Break-Even = 300 t-shirts x $10 =$3,000Break-Even = 300 t-shirts x $10 =$3,000


Planning for Profit Planning for Profit ?? Can you sell 300 t-shirts per month?Can you sell 300 t-shirts per month??? If it takes 300 t-shirts per month to break even, how If it takes 300 t-shirts per month to break even, how

many more can you sell to make a desired amount of many more can you sell to make a desired amount of profit?profit?

?? How much profit do you How much profit do you wantwant to make? to make?

ExampleExample: You want to make $900 profit per month. : You want to make $900 profit per month. How many more t-shirts per month do you have to How many more t-shirts per month do you have to sell?sell?

It took 300 t-shirts to just break evenIt took 300 t-shirts to just break evenAfter the first 300, $4.50 per t-shirt contributes After the first 300, $4.50 per t-shirt contributes

to to profit profit $900.00 $900.00 $4.50 = 200 t-shirts $4.50 = 200 t-shirts moremore to make to make

$900 $900 per month profit.per month profit.

?? Can you sell 500 t-shirts per month?Can you sell 500 t-shirts per month?


Pricing Strategies Pricing Strategies

Cost-based pricingCost-based pricing

Competition-based pricingCompetition-based pricing

Value-based pricingValue-based pricing

Retail pricingRetail pricing


Distribution Basics Distribution Basics Questions You Need to Answer:Questions You Need to Answer:

Where will I distribute my product?Where will I distribute my product?Retail location?Retail location?Wholesalers?Wholesalers?Customer’s site?Customer’s site?Internet?Internet?How will I deliver my product?How will I deliver my product?UPS, express mail services, USPS?UPS, express mail services, USPS?Personal delivery?Personal delivery?Special packing, warehousing?Special packing, warehousing?My office or their office?My office or their office?Will I need someone to help me sell?Will I need someone to help me sell?In-house sales team?In-house sales team?Sales representatives?Sales representatives?


Distribution StrategiesDistribution Strategies

Direct marketing (to customers or to other Direct marketing (to customers or to other businesses)businesses)Manufacturer to retailers through Manufacturer to retailers through intermediaries (sales reps, agents, brokers, intermediaries (sales reps, agents, brokers, wholesalers)wholesalers)ConsignmentConsignmentMail-order catalogsMail-order catalogsClassified adsClassified adsHome shopping networksHome shopping networks““Piggyback” with other productsPiggyback” with other productsInternetInternet


Elements of Effective Advertising Elements of Effective Advertising

WHO?WHO?– Right AudienceRight Audience

WHAT?WHAT?– Right MessageRight Message

WHEN?WHEN?– Right TimeRight Time

WHERE?WHERE?– Right PlaceRight Place

HOW MUCH?HOW MUCH?– Right CostRight Cost


Types of Advertising Types of Advertising

Word of MouthWord of MouthPrint (Newspaper)Print (Newspaper)Broadcast (Radio and TV)Broadcast (Radio and TV)Other:Other:– Business Cards/LetterheadBusiness Cards/Letterhead– Brochures/FlyersBrochures/Flyers– CatalogsCatalogs– MagazinesMagazines– Classified AdsClassified Ads– Direct MailDirect Mail– TelemarketingTelemarketing– SignageSignage– Novelty/Specialty AdvertisingNovelty/Specialty Advertising– Yellow PagesYellow Pages


The ABCs of Signage The ABCs of Signage Attracting new customersAttracting new customers

You need to “restock” customers who move You need to “restock” customers who move away or change their buying habits!away or change their buying habits!

Branding your businessBranding your businessYour sign is a promise that tells customers Your sign is a promise that tells customers what to expect. Remember, first impressions what to expect. Remember, first impressions count! count!

Creating impulse buysCreating impulse buysImpulse buys make up 68% of total sales!Impulse buys make up 68% of total sales!


Public Relations & Networking Public Relations & Networking

P.R. is:P.R. is:

Promotion without paid advertisingPromotion without paid advertising

Press releasesPress releases

Sponsoring eventsSponsoring events

Drawings, contests, Drawings, contests,

GiveawaysGiveaways

Speaking as a “Guest Expert”Speaking as a “Guest Expert”

Participating in community organizationsParticipating in community organizations


Online vs. Offline Buying Online vs. Offline Buying

WHY PEOPLE BUY ONLINE:WHY PEOPLE BUY ONLINE:Speed and convenienceSpeed and convenienceVast product selectionVast product selectionIt’s easy to compare prices and save It’s easy to compare prices and save Search capabilitiesSearch capabilitiesNo driving and parking, or crowds No driving and parking, or crowds

WHY PEOPLE WHY PEOPLE DON’TDON’T BUY ONLINE: BUY ONLINE:Product is easily available locallyProduct is easily available locallyDoubts about reliability of seller or shipperDoubts about reliability of seller or shipperSecurity, fraud, and privacy issuesSecurity, fraud, and privacy issuesShipping costs are too highShipping costs are too highInability to sample, try on, taste, or test productInability to sample, try on, taste, or test productReturn and warranty issues (trust)Return and warranty issues (trust)


Benefits of Being Online Benefits of Being Online

Provides business and product info to global Provides business and product info to global marketsmarketsIncreases consumer awareness of your Increases consumer awareness of your product product Improves customer service by providing Improves customer service by providing online product tips, instructions, and links to online product tips, instructions, and links to helpful siteshelpful sitesGives prospective customers one more way Gives prospective customers one more way to contact youto contact youNetworking, partnering, and bootstrapping Networking, partnering, and bootstrapping opportunitiesopportunities


Building Your Own Website: Pros Building Your Own Website: Pros and Cons and Cons

Advantages:Advantages:Your company learns site-building skillsYour company learns site-building skillsYou can update your site instantlyYou can update your site instantlySite maintenance costs may be lowerSite maintenance costs may be lower

Disadvantages:Disadvantages:Time spent learning skills distracts from core Time spent learning skills distracts from core business tasksbusiness tasksTime spent maintaining site distracts from core Time spent maintaining site distracts from core business tasksbusiness tasksCost of site-building tools, and possible trainingCost of site-building tools, and possible trainingSite may not have a professional look, and may take Site may not have a professional look, and may take longer to developlonger to develop


Hiring a Web Designer: Pros and Hiring a Web Designer: Pros and Cons Cons

Advantages:Advantages:You don’t have to learn new skillsYou don’t have to learn new skillsCosts are upfront and knownCosts are upfront and knownNo time wasted on site-buildingNo time wasted on site-buildingSite can be built quicklySite can be built quicklyProfessional lookProfessional look

Disadvantages:Disadvantages:You must rely on outside helpYou must rely on outside helpHigher expensesHigher expensesIt may take longer to update siteIt may take longer to update siteSite maintenance costs will be higher in the long runSite maintenance costs will be higher in the long run


Selling Through an E-Commerce Selling Through an E-Commerce Host: Pros and Cons Host: Pros and Cons

Advantages:Advantages:Usually very easyUsually very easyNo time wasted on site-buildingNo time wasted on site-buildingE-commerce functions already in place, with appropriate E-commerce functions already in place, with appropriate security security Some hosts may have consumer trust, and offer problem-Some hosts may have consumer trust, and offer problem-resolution servicesresolution servicesProfessional lookProfessional look

Disadvantages:Disadvantages:Higher charges (per month, per transaction, by traffic volume, Higher charges (per month, per transaction, by traffic volume, etc.)etc.)Some hosts have uniform look and provide fewer opportunities Some hosts have uniform look and provide fewer opportunities for brandingfor branding““One size fits all” format may not suit your business One size fits all” format may not suit your business


Issues to Address When Planning Issues to Address When Planning Your Site Your Site

What business tasks do you need to do What business tasks do you need to do online?online?Do your customers buy online?Do your customers buy online?What information do your customers need?What information do your customers need?How quickly do you need a functioning site?How quickly do you need a functioning site?How much can you budget for site creation How much can you budget for site creation and maintenance?and maintenance?How will you market your site?How will you market your site?Are you prepared to sell internationally, or Are you prepared to sell internationally, or will you only sell in the USA?will you only sell in the USA?How often will your site get updated?How often will your site get updated?


Website Tips Website Tips

Clean design, and fast-loading pagesClean design, and fast-loading pagesAccept as many forms of payment as Accept as many forms of payment as possiblepossibleAvoid backordersAvoid backordersSend an e-mail confirmation for all ordersSend an e-mail confirmation for all ordersOffer many shipping options, including Offer many shipping options, including express mailexpress mailInclude shipping info for foreign consumersInclude shipping info for foreign consumersMake sure site fits brand identityMake sure site fits brand identityOptimize for search-engine placementOptimize for search-engine placement


Things to Consider Before You Things to Consider Before You Start Selling Start Selling

Your image is your business’s image. Your image is your business’s image. These things influence that image:These things influence that image:

First ImpressionsFirst ImpressionsDressDressLanguageLanguageBeing On TimeBeing On TimeBusiness Meeting EtiquetteBusiness Meeting Etiquette


Traits of Successful Sellers Traits of Successful Sellers

High energyHigh energySelf-motivationSelf-motivationGood groomingGood groomingPersistence and perseverancePersistence and perseveranceGood listening skillsGood listening skillsTechnical knowledgeTechnical knowledgeAbility to use the productAbility to use the productAbility to explain the productAbility to explain the productGood communication skillsGood communication skillsAbility to overcome objectionsAbility to overcome objectionsKnowing how to close the saleKnowing how to close the sale


Six Steps to Sales Success Six Steps to Sales Success

1.1. Prospect and Prioritize AccountsProspect and Prioritize Accounts

2.2. Plan and Prepare for Sales CallsPlan and Prepare for Sales Calls

3.3. Make the First Contact CountMake the First Contact Count

4.4. Present your ProductPresent your Product

5.5. Handle ObjectionsHandle Objections

6.6. Close the SaleClose the Sale


Closing Techniques Closing Techniques Basic CloseBasic Close

Offer Alternative ChoiceOffer Alternative ChoiceCompare Pros and Cons of Buying the Compare Pros and Cons of Buying the

ProductProductAsk Closing Questions and SummarizeAsk Closing Questions and Summarize

Cite Examples of Others Who Have Cite Examples of Others Who Have PurchasedPurchased

Isolate the Customer’s Potential Isolate the Customer’s Potential Objection and ClarifyObjection and Clarify

Use a Secondary Question to CloseUse a Secondary Question to Close


Four Customer Service Basics Four Customer Service Basics Positive TalkPositive Talk

Recognizing Customer NeedsRecognizing Customer Needs

Finding Common GroundFinding Common Ground

Building TrustBuilding Trust

When We Communicate…

7% of our message is delivered by words

93% of our message isnonverbal!

When We Communicate…

7% of our message is delivered by words

93% of our message isnonverbal!


Learn What Your Customer Needs Learn What Your Customer Needs

To Be UnderstoodTo Be Understood

To Feel WelcomeTo Feel Welcome

To Feel ImportantTo Feel Important

To Feel ComfortableTo Feel Comfortable Why We Lose Customers:

1% die3% move away4% drift to another business5% change on a friend’s recommendation9% buy it cheaper somewhere else10% have a service problem that is not resolved68% leave because they feel they’re not getting good service

Why We Lose Customers:1% die3% move away4% drift to another business5% change on a friend’s recommendation9% buy it cheaper somewhere else10% have a service problem that is not resolved68% leave because they feel they’re not getting good service


What Customers Expect What Customers Expect Clean, comfortable, attractive surroundingsClean, comfortable, attractive surroundingsTo be welcomed pleasantlyTo be welcomed pleasantlyWell-groomed, professional sales personnelWell-groomed, professional sales personnelImmediate, focused attentionImmediate, focused attentionEye contactEye contactTo be addressed by nameTo be addressed by nameTo be assisted by someone with excellent product To be assisted by someone with excellent product knowledgeknowledgeConfidentialityConfidentialityTo be treated with courtesy and respectTo be treated with courtesy and respectOther: ___________________Other: ______________________________________________________________________________________________ _________________________


General Guidelines for Dealing General Guidelines for Dealing with a Complaintwith a Complaint

1.1. LISTEN!LISTEN!2.2. Recognize the customer’s feelingsRecognize the customer’s feelings3.3. Apologize when it’s the right thing to Apologize when it’s the right thing to

dodo4.4. Clearly explain what you’re going to Clearly explain what you’re going to

do about the situationdo about the situation5.5. Thank the customer for bringing the Thank the customer for bringing the

problem to your attentionproblem to your attention6.6. Take action to make things rightTake action to make things right


Customer Service Essentials Customer Service Essentials Welcome customers to your businessWelcome customers to your businessThank customers for coming to youThank customers for coming to youEducate customers about your productsEducate customers about your productsAnswer questionsAnswer questionsFollow up promptlyFollow up promptlyThank customers for choosing youThank customers for choosing youFollow up with the customer, to make sure Follow up with the customer, to make sure that your product and service were that your product and service were satisfactorysatisfactoryUse follow-up responses to improve your Use follow-up responses to improve your product or serviceproduct or service


Cash Flow Projection Worksheet Cash Flow Projection Worksheet Sections Sections

(A)(A) Beginning Cash BalanceBeginning Cash Balance(B), (C) & (D)(B), (C) & (D) Cash From OperationsCash From Operations

– (B)(B) Cash In from OperationsCash In from Operations– (C1)(C1) Variable ExpensesVariable Expenses– (C2)(C2) Operating ExpensesOperating Expenses– (D)(D) Net Operating CashNet Operating Cash

(E) Cash From Investment or Loan Activities(E) Cash From Investment or Loan Activities– (E1)(E1) Other Cash InOther Cash In– (E2)(E2) Other Cash OutOther Cash Out

(F) Net Monthly Cash(F) Net Monthly Cash(G) Ending Cash Balance(G) Ending Cash Balance


Sample Chart of Accounts Sample Chart of Accounts Account #Account # DescriptionDescriptionAsset Accounts:Asset Accounts:100100 Cash On HandCash On Hand

101101 Cash in the BankCash in the Bank102102 Petty CashPetty Cash

105105 InventoryInventory110110 Equipment (Net)Equipment (Net)

111111 Accum Deprec-EquipAccum Deprec-Equip

Liability Accounts:Liability Accounts:200200 Accounts PayableAccounts Payable210210 Payroll Taxes PayablePayroll Taxes PayableCapital Accounts:Capital Accounts:300300 Owner’s EquityOwner’s Equity310310 Owner’s DrawOwner’s DrawRevenue Accounts:Revenue Accounts:400400 SalesSales

401401 Product #1 SalesProduct #1 Sales402402 Product #2 SalesProduct #2 Sales403403 Service #1 SalesService #1 Sales

410410 Interest IncomeInterest Income420 420 Other Income Other Income


Sample Chart of AccountsSample Chart of Accountscont’d cont’d Account #Account # DescriptionDescriptionExpense Accounts:Expense Accounts:500500 Inventory PurchasesInventory Purchases600600 AdvertisingAdvertising610610 Auto ExpenseAuto Expense620620 Bank ChargesBank Charges630630 Dues & SubscriptionsDues & Subscriptions640640 InsuranceInsurance650650 LicensesLicenses660660 Office ExpenseOffice Expense670670 MiscellaneousMiscellaneous700700 Payroll TaxesPayroll Taxes710710 Professional ServicesProfessional Services720720 RentRent730730 SuppliesSupplies740740 TelephoneTelephone750750 TravelTravel760760 UtilitiesUtilities


Start-Up Expenses Worksheet Start-Up Expenses Worksheet START UP EXPENSES WORKSHEET

Months START UP1

January

(A) BEGINNING CASH BALANCE

(B) CASH IN FROM OPERATIONS

Operating Cash In

Total Operating Cash In (B) None

(C) OPERATING CASH OUT

(C1) Variable Expenses (Cost of Goods Sold)

6. Inventory Purchases

7. Materials

8 Film Processing

9. Other Direct Labor

10. Commissions

11. Other

Total Variable Expenses (C1)

(C2) Operating Expenses

12. Advertising

13. Bank Service Charge

14. Credit Card Fees

15. Delivery

16. Health Insurance

17. Insurance

18. Interest

19. Miscellaneous

20. Office

21. Payroll

22. Payroll Taxes

23. Professional Fees

24. Rent or Lease

25. Salary (owner)

26. Subscriptions and Dues

27. Supplies

28. Taxes and Licenses

29. Utilities and Telephone

30. Other:

Total Operating Expenses (C2)

(D) Net Operating Cash (B - C1 - C2)

(E) CASH FROM INVESTMENT or LOAN ACTIVITIES

(E1) Other Cash In

31. Investments in Business

32. Loan Proceeds

33. Other:

Total Other Cash In (E1)

(E2) Other Cash Out

34. Capital Purchases (Assets)

35. Loan Principal Payments

36. Other:

Total Other Cash Out (E2)

(E) Net Other Cash (E1 - E2)

(F) Net Monthly Cash (D + E)

(G) Ending Cash Balance ( A + F)


Operating Cash Out Worksheet Operating Cash Out Worksheet CASH FLOW PROJECTION WORKSHEET—January through June

MonthsSTART UP

1January

2February

3March

4April

5May

6June






7. Materials8 Processing

9. Other Direct Labor10.Commissions

11. OtherTotal Variable Expenses (C1)


12.Advertising

13.Bank Service Charge14.Credit Card Fees

15.Delivery16.Health Insurance

17.Insurance18.Interest

19.Miscellaneous20. Office

21.Payroll22.Payroll Taxes

23.Professional Fees

24.Rent or Lease25. Salary (owner)

26. Subscriptions and Dues27. Supplies

28. Taxes and Licenses29.Utilities and Telephone

30. Other:




Operating Cash In Worksheet Operating Cash In Worksheet Product/Service Sales ForecastProduct/Service Sales Forecast

Months1

Jan2

Feb3

Mar4

Apr5

May6

Jun

Product/Service #1:

Units Sold

Price per Unit

Total Sales

Product/Service #2:

Units Sold

Price per Unit

Total Sales

Product/Service #3:

Units Sold

Price per Unit

Total Sales

Total - AllProduct/ Service

Sales

CASH FLOW PROJECTION WORKSHEET - January through June

Months START UP1

January2

February3

March4

April5

May6

June


(B) CASH IN FROM OPERATIONSOperating Cash In

1. #1 Product/Service





Total Operating Cash In (B)



Michele’s Photo StudioMichele’s Photo StudioBlank Blank Worksheet Worksheet

MONTHLY CASH FLOW PROJECTION WORKSHEET

Months START UP1

January2

February3

MarchQuarterSubtotal


(B) CASH IN FROM OPERATIONSOperating Cash In

1. #1 Wedding Package

2. #2 Graduation Package

3. #3 Portrait Package

4. #4 Frames

5. #5 Albums

Total Operating Cash In (B)




7. Materials

8 Film Processing


10. Commissions

11. Other

Total Variable Expenses (C1)


12. Advertising

13. Bank Service Charge


15. Delivery


17. Insurance

18. Interest

19. Miscellaneous

20. Office

21. Payroll

22. Payroll Taxes


24. Rent or Lease

25. Salary (owner)


27. Supplies

28. Taxes and Licenses


30. Other: Auto Fuel




(E1) Other Cash In


32. Loan Proceeds

33. Other:

Total Other Cash In (E1)

(E2) Other Cash Out

34. Capital Purchases (Assets)


36. Other:

Total Other Cash Out (E2)

(E) Net Other Cash (E1 - E2)

(F) Net Monthly Cash (D + E)

(G) Ending Cash Balance ( A + F)


Michele’s Photo StudioMichele’s Photo StudioStart-Up Start-Up Expenses Expenses

START UP EXPENSES WORKSHEET—Michele's Photography Studio

Months START UP1

January

(A) BEGINNING CASH BALANCE 1,000 (1,567)


Operating Cash In

1. #1 Wedding Package

2. #2 Graduation Package

3. #3 Portrait Package

4. #4 Frames

5. #5 Albums

Total Operating Cash In (B) 0



)6. Inventory Purchases 500

7. Materials

8 Film Processing


10. Commissions

11. Other

Total Variable Expenses (C1) 500


12. Advertising 314

13. Bank Service Charge 58


15. Delivery


17. Insurance 50

18. Interest

19. Miscellaneous

20. Office 45

21. Payroll

22. Payroll Taxes


24. Rent or Lease

25. Salary (owner)


27. Supplies 550

28. Taxes and Licenses 50


30. Other: Auto Fuel

Total Operating Expenses (C2) 1,067

(D) Net Operating Cash (B - C1 - C2) (1,567)


(E1) Other Cash In


32. Loan Proceeds

33. Other:

Total Other Cash In (E1) 0

(E2) Other Cash Out

34. Capital Purchases (Assets) 1,000


36. Other:

Total Other Cash Out (E2) 1,000

(E) Net Other Cash (E1 - E2) (1,000)

(F) Net Monthly Cash (D + E) (2,567)

(G) Ending Cash Balance ( A + F) (1,567)


Michele’s Photo StudioMichele’s Photo StudioCompleted Completed Worksheet Worksheet

MONTHLY CASH FLOW PROJECTION WORKSHEET - Michele's Photography Studio

Months START UP1

January2

February3


(A) BEGINNING CASH BALANCE 1,000 (1,567) (849) (361) 1,000


Operating Cash In

1. #1 Wedding Package 600 600 600 1,800

2. #2 Graduation Package 550 275 275 1,100

3. #3 Portrait Package 125 125 125 375

4. #4 Frames 55 65 75 195

5. #5 Albums 125 155 155 435

Total Operating Cash In (B) 0 1,455 1,220 1,230 3,905



6. Inventory Purchases 500 500

7. Materials 50 45 60 155

8 Film Processing 10 10 10 30


10. Commissions

11. Other

Total Variable Expenses (C1) 500 60 55 70 685


12. Advertising 314 50 50 50 464

13. Bank Service Charge 58 58


15. Delivery


17. Insurance 50 22 22 22 116

18. Interest

19. Miscellaneous

20. Office 45 45

21. Payroll

22. Payroll Taxes

23. Professional Fees 50 50

24. Rent or Lease

25. Salary (owner) 500 500 500 1,500

26. Subscriptions and Dues 15 15 15 45

27. Supplies 550 550

28. Taxes and Licenses 50 50

29. Utilities and Telephone 70 70 70 210

30. Other: Auto Fuel 20 20 20 60

Total Operating Expenses (C2) 1,067 677 677 727 3,148

(D) Net Operating Cash (B - C1 - C2) (1,567) 718 488 433 72


(E1) Other Cash In


32. Loan Proceeds

33. Other:

Total Other Cash In (E1) 0 0 0 0 0

(E2) Other Cash Out

34. Capital Purchases (Assets) 1,000 1,000


36. Other:

Total Other Cash Out (E2) 1,000 0 0 0 1,000

(E) Net Other Cash (E1 - E2) (1,000) 0 0 0 (1,000)

(F) Net Monthly Cash (D + E) (2,567) 718 488 433 (928)

(G) Ending Cash Balance ( A + F) (1,567) (849) (361) 72 72


Michele’s Photo StudioMichele’s Photo StudioWhat If I What If I Borrow $2000? Borrow $2000? MONTHLY CASH FLOW PROJECTION WORKSHEET—"What If"... Michele Borrows $2000

Months START UP1

January2

February3


(A) BEGINNING CASH BALANCE 1,000 433 1,091 1,519 1,000


Operating Cash In

1. #1 Wedding Package 600 600 600 1,800



4. #4 Frames 55 65 75 195

5. #5 Albums 125 155 155 435

Total Operating Cash In (B) 0 1,455 1,220 1,230 3,905




7. Materials 50 45 60 155



10. Commissions

11. Other



12. Advertising 314 50 50 50 464



15. Delivery


17. Insurance 50 22 22 22 116

18. Interest 10 10 10 30

19. Miscellaneous

20. Office 45 45

21. Payroll

22. Payroll Taxes


24. Rent or Lease

25. Salary (owner) 500 500 500 1,500







(D) Net Operating Cash (B - C1 - C2) (1,567) 708 478 423 42


(E1) Other Cash In


32. Loan Proceeds 2,000 2,000

33. Other:

Total Other Cash In (E1) 2,000 0 0 0 2,000

(E2) Other Cash Out


35. Loan Principal Payments 50 50 50 150

36. Other:


(E) Net Other Cash (E1 - E2) 1,000 (50) (50) (50) 850

(F) Net Monthly Cash (D + E) (567) 658 428 373 892

(G) Ending Cash Balance ( A + F) 433 1,091 1,519 1,892 1,892

NxLeveL Guide for Micro-EntrepreneurNxLeveL Guide for Micro-Entrepreneurs-OHD12-11s-OHD12-11

Michele’s Photo StudioMichele’s Photo StudioWhat If No What If No Wedding Sales? Wedding Sales?

MONTHLY CASH FLOW PROJECTION WORKSHEET—"What If"... No Wedding Sales

Months START UP1

January2

February3


(A) BEGINNING CASH BALANCE 1,000 433 491 319 1,000


Operating Cash In

1. #1 Wedding Package 0 0 0 0



4. #4 Frames 55 65 75 195

5. #5 Albums 125 155 155 435

Total Operating Cash In (B) 0 855 620 630 2,105




7. Materials 50 45 60 155



10. Commissions

11. Other



12. Advertising 314 50 50 50 464



15. Delivery


17. Insurance 50 22 22 22 116

18. Interest 10 10 10 30

19. Miscellaneous

20. Office 45 45

21. Payroll

22. Payroll Taxes


24. Rent or Lease

25. Salary (owner) 500 500 500 1,500







(D) Net Operating Cash (B - C1 - C2) (1,567) 108 (122) (177) (1,758)


(E1) Other Cash In


32. Loan Proceeds 2,000 2,000

33. Other:

Total Other Cash In (E1) 2,000 0 0 0 2,000

(E2) Other Cash Out


35. Loan Principal Payments 50 50 50 150

36. Other:


(E) Net Other Cash (E1 - E2) 1,000 (50) (50) (50) 850

(F) Net Monthly Cash (D + E) (567) 58 (172) (227) (908)

(G) Ending Cash Balance ( A + F) 433 491 319 92 92


Sample Income Statement Sample Income Statement Your Business Income StatementYour Business Income Statement

For the Year EndedFor the Year EndedDecember 31, 20__December 31, 20__

NET SALESNET SALESProduct SalesProduct Sales $ 630$ 630Services SalesServices Sales $ $ 3275 3275

Total Net SalesTotal Net Sales $ 3905$ 3905COST OF GOODS SOLDCOST OF GOODS SOLD

Beginning InventoryBeginning Inventory $ 0$ 0Plus PurchasesPlus Purchases 500 500Less Ending InventoryLess Ending Inventory (185) (185) 315 315Other Direct LaborOther Direct Labor 0 0Other Materials ExpenseOther Materials Expense 185 185

Total Cost of Goods SoldTotal Cost of Goods Sold $ 500$ 500GROSS PROFITGROSS PROFIT $ 3405$ 3405OPERATING EXPENSESOPERATING EXPENSES

AdvertisingAdvertising $ 464$ 464Bank Charges and InterestBank Charges and Interest 88 88InsuranceInsurance 116 116OfficeOffice 45 45Professional FeesProfessional Fees 50 50Salaries (Indirect Wages/Benefits) 1500Salaries (Indirect Wages/Benefits) 1500Subscriptions and DuesSubscriptions and Dues 45 45SuppliesSupplies 550 550Taxes and Licenses Taxes and Licenses 50 50UtilitiesUtilities 210 210MiscellaneousMiscellaneous 60 60DepreciationDepreciation 100 100

Total Operating ExpensesTotal Operating Expenses $ 3278$ 3278NET PROFIT (LOSS) BEFORE TAXESNET PROFIT (LOSS) BEFORE TAXES $ 127$ 127Income Taxes DueIncome Taxes Due

0 0NET PROFIT AFTER TAXESNET PROFIT AFTER TAXES $ 127$ 127


Sample Balance Sheet Sample Balance Sheet Balance Sheet Formula:Balance Sheet Formula:

Your BusinessYour BusinessBalance SheetBalance Sheet

As of December 31, 20__As of December 31, 20__ASSETSASSETSCurrent AssetsCurrent Assets

CashCash $ 1892$ 1892Accounts ReceivableAccounts Receivable 0 0InventoryInventory 185 185OtherOther 0 0

Total Current AssetsTotal Current Assets $ 2077$ 2077Fixed AssetsFixed Assets

EquipmentEquipment $ 1000$ 1000Less Accum DepreciationLess Accum Depreciation (100) (100)Furniture and FixturesFurniture and Fixtures 0 0Less Accum DepreciationLess Accum Depreciation 0 0

Total Fixed AssetsTotal Fixed Assets $ 900$ 900TOTAL ASSETSTOTAL ASSETS $ 2977$ 2977LIABILITIESLIABILITIESCurrent LiabilitiesCurrent Liabilities

Accounts PayableAccounts Payable $ 0$ 0Payroll Tax, due not paidPayroll Tax, due not paid 0 0Sales Tax, due not paidSales Tax, due not paid 0 0Total Current LiabilitiesTotal Current Liabilities $ 0$ 0

Long Term LiabilitiesLong Term LiabilitiesNotes PayableNotes Payable $ 1850$ 1850Mortgages PayableMortgages Payable 0 0

Total Long Term LiabilitiesTotal Long Term Liabilities $ 1850$ 1850TOTAL LIABILITIESTOTAL LIABILITIES $ 1850$ 1850OWNER’S EQUITYOWNER’S EQUITY $ 1127$ 1127TOTAL LIABILITES TOTAL EQUITYTOTAL LIABILITES TOTAL EQUITY $ 2977$ 2977


Preparing for Success Preparing for Success Set achievable financial goalsSet achievable financial goalsDo business on the booksDo business on the booksKeep personal and business money Keep personal and business money separateseparateAccept the responsibility of paying Accept the responsibility of paying taxes on time!taxes on time!Develop a code of ethics for your Develop a code of ethics for your business, and stick to itbusiness, and stick to itCommit to keeping track of your Commit to keeping track of your budgets and comparing them to actual budgets and comparing them to actual expensesexpenses


Why Keep Records? Why Keep Records? Financial ManagementFinancial Management– To provide financial background information about your To provide financial background information about your

businessbusiness– To help produce financial statementsTo help produce financial statements– To provide tax preparation informationTo provide tax preparation information– To provide borrowing informationTo provide borrowing information– To pay and/or collect bills when dueTo pay and/or collect bills when due– To control cash flowTo control cash flow

Internal ControlInternal Control– To watch costs and budgetsTo watch costs and budgets– To prevent theftTo prevent theft

LegalLegal– To document events in case of lawsuitsTo document events in case of lawsuits

Management DecisionsManagement Decisions– To provide planning informationTo provide planning information– To monitor business progressTo monitor business progress


Learn the Terminology Learn the Terminology What is Recordkeeping?What is Recordkeeping?

Recordkeeping (or bookkeeping) is the tracking of income and Recordkeeping (or bookkeeping) is the tracking of income and expenses that relate to your business.expenses that relate to your business.

What Does “Cash vs. Accrual” Mean?What Does “Cash vs. Accrual” Mean?

There are two methods of accounting for your income and There are two methods of accounting for your income and expenses:expenses:

Accrual MethodAccrual Method Cash MethodCash MethodWork is doneWork is done Cash is received Cash is received

Record revenue &Record revenue & Record revenue & Record revenue &expenses at this timeexpenses at this time expenses at this expenses at this

timetimeeven though cash may noteven though cash may not even though work even though workhave been collected yethave been collected yet may not be complete may not be complete


Record Retention GuideRecord Retention GuideType of RecordType of Record Retention PeriodRetention PeriodBank statementsBank statements 7 years7 yearsBusiness licensesBusiness licenses Until expiredUntil expiredCash register tapesCash register tapes 3 years3 yearsCheck registersCheck registers Keep permanentlyKeep permanentlyCanceled checksCanceled checks 3 years3 yearsDeeds, titles, title insuranceDeeds, titles, title insurance While you own propertyWhile you own propertyFinancial statementsFinancial statements Keep permanentlyKeep permanentlyGeneral ledgerGeneral ledger Keep permanentlyKeep permanentlyInventory recordsInventory records 7 years7 yearsInvoices (A/P)Invoices (A/P) 3 years3 yearsInvoices (A/R)Invoices (A/R) 3 years3 yearsPhone/Utility billsPhone/Utility bills 3-6 years3-6 yearsProperty, plant & equip.Property, plant & equip. Keep permanentlyKeep permanently recordsrecordsPurchase ordersPurchase orders 3 years3 yearsReceiving reportsReceiving reports 3 years3 yearsTax returns (& related backup)Tax returns (& related backup) 10 years minimum10 years minimumTime cards or ticketsTime cards or tickets 3 years3 yearsTravel expense recordsTravel expense records 7 years7 yearsOther: ______________Other: ______________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________


Paperwork and Forms Paperwork and Forms Form Name Purpose of the Form Supplier

Sales Order Form

Purchase Order Form

Price List

Packing List

Shipping Record

Invoice

Statement

Time Sheet

Payroll Sheet

Accounting Ledgers

Out-of-stock Memo

Phone Message Form

Accident Report Form

Payroll Tax andReporting Forms

Business Entity TaxForms

Other:


Computerized Accounting Systems Computerized Accounting Systems Be sure you find out about:Be sure you find out about:

– Hardware requirementsHardware requirements– Ability to modifyAbility to modify– Support servicesSupport services– Ability to expandAbility to expand– User friendlinessUser friendliness– TrainingTraining– Reports and documentsReports and documents– Personnel requirementsPersonnel requirements– Local use (other businesses using this Local use (other businesses using this

software)software)


Business Ownership & Tax Forms Business Ownership & Tax Forms Each legal entity has its own tax filing requirements. Each legal entity has its own tax filing requirements.

Contact your accounting professional for help in Contact your accounting professional for help in finding out which forms must accompany your tax finding out which forms must accompany your tax

returns.returns.

Common Payroll Tax Forms Common Payroll Tax Forms 941 Employer’s Quarterly Federal Tax Return941 Employer’s Quarterly Federal Tax Return940 Employer’s Annual Return940 Employer’s Annual Return8109 Tax Deposit Coupon8109 Tax Deposit CouponW2 Wage and Tax StatementW2 Wage and Tax Statement1099 Miscellaneous Income Statement (used to 1099 Miscellaneous Income Statement (used to report independent contractor wages)report independent contractor wages) Workers’ CompensationWorkers’ Compensation


Tips for Keeping BetterTips for Keeping Better Books and Records Books and Records

1.1. Keep your records daily!Keep your records daily!2.2. Deal with your bookkeeping on a regular basis, and it could take as Deal with your bookkeeping on a regular basis, and it could take as

little as 20 minutes a day.little as 20 minutes a day.3.3. Keep an audit trailKeep an audit trail4.4. Keep checks in numeric order. Never skip a number, and always Keep checks in numeric order. Never skip a number, and always

record voided checks. Keep invoices filed sequentially and/or record voided checks. Keep invoices filed sequentially and/or alphabetically. Make everything easy to find and track!alphabetically. Make everything easy to find and track!

5.5. Request a bank statement with a “month-end” cut-off dateRequest a bank statement with a “month-end” cut-off date6.6. It’s easier to reconcile your records when they all end at the same It’s easier to reconcile your records when they all end at the same

time.time.7.7. Keep withholding taxes withheldKeep withholding taxes withheld8.8. Don’t spend this moneyDon’t spend this moneyit’s NOT YOURS!it’s NOT YOURS!9.9. Don’t panic if you find a mistakeDon’t panic if you find a mistake10.10. Everything can be fixed, if you’ve kept up with your recordkeeping Everything can be fixed, if you’ve kept up with your recordkeeping

chores. chores.


Twelve Check-Writing Tips Twelve Check-Writing Tips 1.1. Always write in ink (or type the check)Always write in ink (or type the check)2.2. Always write clearly, and be sure the spelling is correctAlways write clearly, and be sure the spelling is correct3.3. Date the check correctlyDate the check correctly4.4. Write the payee’s name after the printed words “Pay to the Write the payee’s name after the printed words “Pay to the

Order of…”Order of…”5.5. Write the amount of the check in numbers close to the Write the amount of the check in numbers close to the

printed dollar sign ($) so that other numbers can’t be printed dollar sign ($) so that other numbers can’t be insertedinserted

6.6. Write the amount of the check in words starting as far to the Write the amount of the check in words starting as far to the left as possible leaving no room for the amount to be left as possible leaving no room for the amount to be changedchanged

7.7. Draw a wavy line through any blank spaceDraw a wavy line through any blank space8.8. Do not sign a blank or partially complete checkDo not sign a blank or partially complete check9.9. Sign the check just as you signed the signature cardSign the check just as you signed the signature card10.10. Use the memo line to help keep a record of your spendingUse the memo line to help keep a record of your spending11.11. Record each check you write or deposit you make in your Record each check you write or deposit you make in your

checkbook register immediatelycheckbook register immediately12.12. Don’t forget to record automatic withdrawals or deposits in Don’t forget to record automatic withdrawals or deposits in

your checkbook register your checkbook register


Why Do You Need Financing? Why Do You Need Financing?

Research and developmentResearch and developmentStart-up expensesStart-up expensesPurchase a businessPurchase a businessSeasonal working capitalSeasonal working capitalPermanent working capitalPermanent working capitalEquipment acquisitionEquipment acquisitionReal estate acquisitionReal estate acquisitionOther: __________________Other: __________________


Sources of Capital Sources of Capital Debt CapitalDebt Capital– Money borrowed for the businessMoney borrowed for the business– Use of the money is repaid, with interest as “payment” for Use of the money is repaid, with interest as “payment” for

the use of the loanthe use of the loan

Equity CapitalEquity Capital– Money invested by the owner(s)Money invested by the owner(s)– Not a debt; nothing to pay backNot a debt; nothing to pay back– Investor(s) get a part of the ownership, and share in the Investor(s) get a part of the ownership, and share in the

profits or lossesprofits or losses

Personal CapitalPersonal Capital– Personal funds of the owner(s)Personal funds of the owner(s)– Any debt borrowed on a personal basisAny debt borrowed on a personal basis– Includes savings, second mortgages, personal loans, etc.Includes savings, second mortgages, personal loans, etc.

Angel MoneyAngel Money– Money received from friends, family, or interested 3rd partyMoney received from friends, family, or interested 3rd party– Document as you would for other debt or equity financingDocument as you would for other debt or equity financing


Fitting the Loan to the Need Fitting the Loan to the Need Short-term DebtShort-term Debt– Used to meet short-term needs:Used to meet short-term needs:– Bullet loanBullet loan– Seasonal inventory purchasesSeasonal inventory purchases– Line of creditLine of credit– Accounts receivable financingAccounts receivable financing

Intermediate DebtIntermediate Debt– Three to seven years:Three to seven years:– Permanent working capital loansPermanent working capital loans– Equipment loansEquipment loans

Long-term DebtLong-term Debt– Longer than seven years:Longer than seven years:– Real estate purchasesReal estate purchases– Initial purchase of a businessInitial purchase of a business


Debt or Equity Considerations Debt or Equity Considerations Change in ownershipChange in ownership

Obligation to repayObligation to repay

Tax considerationsTax considerations

Capital structureCapital structure

Time required to do itTime required to do it

Cost of obtaining the fundsCost of obtaining the funds

Personal factors/preferencesPersonal factors/preferences

Lender and investor reactionsLender and investor reactions


Other Sources of Financing Other Sources of Financing Home Equity LoansHome Equity LoansAlternative LendersAlternative LendersSuppliersSuppliersCustomer DepositsCustomer DepositsCredit CardsCredit CardsInsurance CompaniesInsurance CompaniesFactoring CompaniesFactoring CompaniesLoan GuarantorLoan GuarantorLoan BrokersLoan BrokersGrantsGrantsOther:Other:________________________________________________________________________________________________________________________


Financing Factors Financing Factors 1.1. The growth potential of your businessThe growth potential of your business2.2. The risk of your business ventureThe risk of your business venture3.3. The length of time you need the The length of time you need the

moneymoney4.4. The kind of money you need (debt or The kind of money you need (debt or

equity)equity)5.5. The amount of interest you can pay The amount of interest you can pay

(debt) or the amount of ownership you (debt) or the amount of ownership you will give up (equity)will give up (equity)

6.6. Profit potential of the businessProfit potential of the business


Preparing for the Loan Process Preparing for the Loan Process Before You Apply for a Loan:Before You Apply for a Loan:– Find a lending institution that regularly lends to Find a lending institution that regularly lends to

microbusinessesmicrobusinesses– What size businesses do they normally lend to?What size businesses do they normally lend to?– Do they shy away from making loans within certain Do they shy away from making loans within certain

industries?industries?– Check your credit historyCheck your credit history– Are there credit problems you need to clear up?Are there credit problems you need to clear up?– Do you know how to repair your credit?Do you know how to repair your credit?– Are there credit items you don’t know about?Are there credit items you don’t know about?– Get your business records in orderGet your business records in order– Have your business plan readyHave your business plan ready– Be able to describe your recordkeeping procedures and Be able to describe your recordkeeping procedures and

accounting systemaccounting system– Find out what books and records the lender will want to see, Find out what books and records the lender will want to see,

and gather themand gather them


What Lenders Require What Lenders Require Business Loan Application FormBusiness Loan Application FormComplete Business PlanComplete Business PlanCash Flow ProjectionsCash Flow ProjectionsMonthly for 12 monthsMonthly for 12 monthsQuarterly or Annual for Years 2 and 3Quarterly or Annual for Years 2 and 3Personal Financial StatementPersonal Financial StatementPersonal Tax ReturnsPersonal Tax Returns(2 to 3 years)(2 to 3 years)Other Documentation (Options)Other Documentation (Options)Accounts payable agingAccounts payable agingAccounts receivable agingAccounts receivable agingInventory status reportsInventory status reportsAppraisalsAppraisals


The Cs of Credit The Cs of Credit Credit HistoryCredit History

CharacterCharacter

CapacityCapacity

CollateralCollateral

ConditionsConditions


Tips for Working with Your Banker Tips for Working with Your Banker

Deal with a local bank when possibleDeal with a local bank when possibleMake an appointmentMake an appointmentSelect a banker you trustSelect a banker you trustSelect a banker familiar with your type of businessSelect a banker familiar with your type of businessDress appropriatelyDress appropriatelyAsk for advice or clarification of anything you do not Ask for advice or clarification of anything you do not understandunderstandDevelop a long-term relationshipDevelop a long-term relationshipKnow your needsKnow your needsPresent a complete proposalPresent a complete proposalExplain source and uses of the loanExplain source and uses of the loanBe flexibleBe flexibleBe patientBe patientTell the truthTell the truthRecommend your banker to othersRecommend your banker to others


Understanding the Financial Health Understanding the Financial Health of Your Business: of Your Business:

Ratio AnalysisRatio Analysis– Current Ratio =Current Ratio =

current assets current assets current liabilities current liabilitiesExample: $1,000 Example: $1,000 $500 = 2 (or 2:1) $500 = 2 (or 2:1)

– Debt to Equity Ratio =Debt to Equity Ratio =long-term liabilities long-term liabilities owner’s equity owner’s equityExample: $5,000 Example: $5,000 $10,000 = .5 (or 1:2) $10,000 = .5 (or 1:2)

– Net Profit Margin =Net Profit Margin =net profit net profit gross revenue from sales gross revenue from salesExample: $1,000 Example: $1,000 $10,000 = .10 or 10% $10,000 = .10 or 10%

What do the ratios tell you about the health of your What do the ratios tell you about the health of your business?business?How are ratios used by lending institutions?How are ratios used by lending institutions?


Ways to Offer YourWays to Offer Your Customer Credit Customer Credit

Credit CardsCredit CardsChecksChecksCredit TermsCredit Terms– Credit Card ConsiderationsCredit Card Considerations

Know what equipment you need to process the credit card Know what equipment you need to process the credit card paymentpaymentLook for the best merchant account rates (discount rate and Look for the best merchant account rates (discount rate and transaction fee)transaction fee)Know when deposits will be made to your accountKnow when deposits will be made to your account

– Check ConsiderationsCheck ConsiderationsCall the bank on large check amountsCall the bank on large check amountsDecide on your check acceptance policiesDecide on your check acceptance policiesTrust your instincts!Trust your instincts!Know your collection policies/optionsKnow your collection policies/options


Basics of Negotiation Basics of Negotiation There would be no negotiation unless There would be no negotiation unless both sides expected a benefitboth sides expected a benefitA goal of negotiation is to create a new A goal of negotiation is to create a new situation that’s better than the old onesituation that’s better than the old oneUnfair deals last only while one party Unfair deals last only while one party feels weaker than the otherfeels weaker than the otherWin-win negotiation delivers the best, Win-win negotiation delivers the best, most enduring dealsmost enduring dealsLike any other skill, negotiation can be Like any other skill, negotiation can be learned and practicedlearned and practiced


Traits of Effective Negotiators Traits of Effective Negotiators Good negotiators:Good negotiators:– Understand their counterparts' interests Understand their counterparts' interests

and perspectivesand perspectives– Understand the difference between Understand the difference between

positions and interestspositions and interests– Understand the difference between real Understand the difference between real

power and perceived powerpower and perceived power– Know their settlement rangeKnow their settlement range– Know their BATNA (Best Alternative To a Know their BATNA (Best Alternative To a

Negotiated Agreement)Negotiated Agreement)– Tough on problems, easy on participants!Tough on problems, easy on participants!


Stages of Negotiation Stages of Negotiation Setting an AgendaSetting an Agenda– Why are you negotiating? What are the issues, Why are you negotiating? What are the issues,

and what are the goals?and what are the goals?

Voicing Demands and OffersVoicing Demands and Offers– What are your interests and positions?What are your interests and positions?– What do you want, and what are you willing to What do you want, and what are you willing to

give in return? give in return?

Working to Minimize DifferencesWorking to Minimize Differences– Where do interests overlap?Where do interests overlap?– Where is the common ground? Where is the common ground?

Closing the DealClosing the Deal– ““Win-win” means both sides are better off than when Win-win” means both sides are better off than when

they started they started


Negotiation Strategies Negotiation Strategies Soft NegotiatorsSoft Negotiators– Avoid conflict at any costAvoid conflict at any cost– Usually don’t stand up for their best interestsUsually don’t stand up for their best interests

Hard NegotiatorsHard Negotiators– Aggressive and competitive Aggressive and competitive – May use threats of bluffsMay use threats of bluffs– Not trusting or trustworthyNot trusting or trustworthy

Win-Win NegotiatorsWin-Win Negotiators– Work towards the best outcome for allWork towards the best outcome for all– Flexible, but can be firm when it’s appropriateFlexible, but can be firm when it’s appropriate– Attack problems, not peopleAttack problems, not people


Pitfalls of Business Growth Pitfalls of Business Growth Growth may be short-termGrowth may be short-termInability to maintain performance standardsInability to maintain performance standardsUnprofessional behaviorUnprofessional behaviorPoor employee moralePoor employee moraleLack of adequate employee trainingLack of adequate employee trainingHigh employee turn-overHigh employee turn-overLoss of profitabilityLoss of profitabilityInefficient use of resourcesInefficient use of resourcesLoss of customer loyaltyLoss of customer loyaltyDiminished quality Diminished quality Inability to focus on core strengthsInability to focus on core strengthsParalyzed or overworked leadershipParalyzed or overworked leadershipCash crunchCash crunchBankruptcyBankruptcy


Bringing It All Together! Bringing It All Together!

Celebrate what you’ve accomplishedCelebrate what you’ve accomplished

Organize what you have learnedOrganize what you have learned

Fill in the gapsFill in the gaps

Complete your business planComplete your business plan

Ask for helpAsk for help

Remain positiveRemain positive

Never stop planning!Never stop planning!

English

Documents

business success session

business planning session

business idea session

management session

money session

business health

page session

pricing session