Empowering Business Spirit
Welcome to the
Empowering Business Spirit Seminar
Empowering Business
Spirit Seminar
Presenter:
To Be Announced
Entrepreneurial Spirit Seminar
Schedule
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EDC, EBS, SBDC, and partners (who we are
and what we do)
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Entrepreneurial Spirit (statistics and reality)
Feasibility Study Process (Will I have customers?)
10 Minute Break
Business Plan (overview)
Legal Issues/Business Structure (pros & cons)
Financing (you and the bank)
Questions & Answers (Evaluation)
MainStreet
EDC
EBS
C of C
SBA
EBS, Partners,
and Entrepreneur
LCC
NMHU
NMEDD
SBDC
Others
Overview of our Common Goals
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Goal: To Grow Businesses and Create Jobs
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Designed: To maximize business success by
coupling financial programs, managerial and
technical assistance
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What drives the EBS Project: Seeing Small
business succeed by Planning (a well developed
business plan) and Seeking Professional
Advisors, while avoiding the problems of staffing
and understanding that years of education do not
necessarily correlate with success
Empowering Business Spirit
•20 Major EBS Partners
• Referral system resources
• One on One Business Counseling
• Seminars
• Resources (software, stats & advice)
CLIENT FLOW CHART
Client
EDS Presentation
Business Plan Workshop
Resource Referrals
EDC
20 EBS
SBDC
SBA
Completed Business Plan
Others
Entrepreneurial Spirit Seminar
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Every 30 seconds of every day, someone
somewhere in the United States starts a
new business. Every 30 seconds someone
stakes their money, their labor, their good
name on the unshakable belief that they
can make or provide something bigger,
better, faster, or cheaper than the other
person.
Entrepreneurial Spirit Seminar
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In America today, smaller businesses,
Companies with fewer than 20
employees, create 98% of all new jobs.
Entrepreneurial Spirit Seminar
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There are more than 21,000,000 small
business in the U.S. 16,000,000 have
the owner as the sole employee.
5,000,000 have between 1 and 500
employees.
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It is estimated that between 800,000
and 1,000,000 business are begun
every year.
Entrepreneurial Spirit Seminar
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Small businesses…
– employ 53% of the private workforce.
– provide 47% of all sales receipts.
– provide 55% of innovations.
– account for 35% of federal contract dollars.
– account for 28% of jobs in high technology sectors.
– account for 51% of private sector output.
Entrepreneurial Spirit Seminar
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US Patent Office currently reviews more
than 10,000 patent applications
monthly.
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Over 500,000 new firms have emerged
in the US every year since the mid
eighties, around 1,500 daily.
Entrepreneurial Spirit Seminar
During the 1950’s only 100,000 new business
were incorporated annually.
 During the 1970’s the number was over
200,000 new businesses yearly.
 During the 1990’s the number is up to
600,000.
 During 2000’s number continues strong
 Add the increasing competition from US and
foreign corporations.
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Business Dissolution Rates (%)
all firms franchises 1-4 jobs
23.7
25.4
8.3
52.7
59.2
19.6
62.2
61.6
23.5
70.9
72.5
46.5
after 2 yrs.
after 4 yrs.
after 6 yrs.
after 8 yrs.
5 or more employees
6
13.1
21.1
30
80
70
60
50
after 2 yrs.
after 4 yrs.
after 6 yrs.
after 8 yrs.
40
30
20
10
0
all firms
franchises
1-4 jobs
5 or more
Source: Dun and Bradstreet Corp. and U.S. Department of Labor
How many small businesses opened?
Incorporate
New Firms
647,675
769,124
768,180
819,477
790,569
842,357
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Source: Dun and Bradstreet Corp. and U.S. Department of Labor
Incorporate
New Firms
How many small businesses closed?
Bankruptcies
Failures
Terminations
63,912
60,746
837,511
50,516
71,194
863,699
53,214
71,811 (125,025)
849,839
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Source: Dun and Bradstreet Corp. and U.S. Department of Labor
Bankruptcies
Failures
Terminations
Entrepreneurial Spirit
ORGANIZED
+ CREATOR
+ IMPROVER
+ MANAGER
(Plan, Staff, organize, and decision-making)
[Administer, maintain, control, short-term view, ask how and when, initiate, accept the
status quo, do things right.]
+ LEADER
(control, motivate, charismatic)
[Innovate, develop, inspire, long-term view, ask what and why, originate, challenge the
status quo, do the right things.]
--------------------= ENTREPRENEUR ! ! !
Entrepreneurial Spirit Seminar
Owning your business can be a wonderful
opportunity:
 To be your own boss.
 To take charge of your financial future.
 To work 7 days a week, 24 hours a day,
with no pay check at the end.
Entrepreneurial Spirit Seminar
Expect to work an average number of
about 64 hours per week
84% of Entrepreneurs polled love the
type of work that they do every week!
Myths of Business Ownership
1. I can start living off the business
immediately.
2. I’ll be my own boss.
3. I’ll get rich overnight.
4. I have nothing to lose (OPM).
5. Will give me independence.
More Myths….
Will allow me time off any time I
want.
 Will let me control the business.
 Will make a lot of money.
 Will be easy to do.
 Will be easy to get funding for my
great idea.
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Feasibility Study
It is a Planning Process That Helps you:
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Determine if your business idea is a true
opportunity or an unrealistic idea that will take
your time, money and energy?
Determine if your idea is “do-able”.
Assess personal and financial resources
necessary for success.
Become familiar with Business Plan concept.
Feasibility Study
DOES YOUR BUSINESS IDEA HAVE
THE THREE-WAY FIT?
Market Fit
 Financial Fit
 Personal Fit
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The Feasibility Process
IDEA
Definition
Objectives
The Feasibility Process
IDEA
MARKET
ANALYSIS
INDUSTRY
MARKET
COMPETITION
(price, differentiation,
and focus)
The Feasibility Process
IDEA
MARKET
ANALYSIS
REQUIREMENTS
EXPERIENCE
TIME
LEGAL
FINANCING
The Feasibility Process
IDEA
MARKET ANALYSIS
REQUIREMENTS
DECISION
The Feasibility Process
IDEA
MARKET
ANALYSIS
REQUIREMENTS
DECISION
GO
NO
REEVALUATE
The Feasibility Process
IDEA MARKET
ANALYSIS
REQUIREMENTS
DECISION
GO
BUSINESS
PLAN
Defining Your Objectives
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Define your short and long term goals
Personal Goals
–
–
Why are you starting this business?
What do you want to accomplish?
Business Goals
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More detailed, SMART targets of performance
 Specific
 Measurable
 Assignable
 Realistic
 Timely
Why are you going into business?
Source: Maslow, 1943; French and Raven, 1959
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Independence
Personal Fulfillment
Lifestyle Change
Respect
Money
Power
– Socialized Power
– Personalized Power
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Reward
Coercive
legitimate
Expert
Referent
Self Actualization
Esteem needs
Affection needs
Safety
Physiological
Goals
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The World has a funny habit of making
room for those who know where they
are going.
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Write them down
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Follow through
Defining Your Business Idea
1. What specific products/services will you
sell?
2. Who will be your main customers?
3. What is the real or perceived need for
your product or service?
4. Do you know your market? (demographics)
Defining Your Business Idea
5. How is that need being met currently?
(Competitive Analysis)
6. In what way will your business better
meet that need? (differentiation)
7. What additional products/services
could be offered as your business
grows?
What is a Business Plan?
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It is a document that convincingly
demonstrates that your business can sell
enough of its product or service to make a
satisfactory profit and be attractive to
potential backers.
What is a Business Plan?
It is a selling document. It sells your business
and its executives to potential backers, from
bankers to investors to partners to
employees.
 A short written document that serves as a
guide to your future, provides direction and
focus, and helps you model your business and
avoid problems.
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Why Bother ?
A Business Plan, should attract YOU to the
business.
 A Business Plan, should attract others into
the business.
 A Business Plan gives you confidence.
 A Business Plan improves your chances of
success.
 A Business Plan Provides a road map for
your business.
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What About The Real World?
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Obtaining bank financing.
Seeking investment funds.
Arranging strategic alliances.
Obtaining large contracts.
Attracting key employees.
Completing mergers and acquisitions.
Motivating your management team.
Press the flesh
The Business Plan-What Does It Do?
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Helps conceptualize business and set
reasonable and achievable goals.
Attracts lenders and investors.
Provides an organized view of your business.
Details research from the feasibility study,
management, sales, marketing, finances,
etc...
The Business Plan
“If you aim at nothing, you will hit it
everytime”
-Theodore Roosevelt
Key Elements of any Business Plan
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1. Executive Summary/Introduction
2. Description of Products/Services
3. Manufacturing & Operations Plan
4. Marketing Strategy and Competitor Analysis
5. Sales Plan
6. Management Plan
7. Financial Analysis
Attachments to the Business Plan
Tax Returns (Business & Personal)
 Resumes
 Written Estimates
 Personal Financial Statements
 Contracts / Agreements
 Org. Charts / Job Descriptions
 Appraisals / Blue Prints / Floor Plans
 Other Relevant Information
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Basics of the Business Plan
1. There is no single right format.
2. Be creative.
3. Be as concise and focused as possible.
4. The plan should reflect the company’s personality.
5. Include negatives as well as positives.
6. Write it over a period of weeks.
Guidelines for Preparing a
Business Plan
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Remember: No one can create your plan for you.
Lenders are interested in the strategies for
reaching financial projections.
Show how you plan to set your business apart
from competitors.
Identify your market, offer evidence that
customers for your product or service exist.
Develop realistic financial forecasts (be sure
to explain how they were derived)
Ways to Organize your Business
Sole Proprietorship
 General Partnership
 Limited Partnership
 Regular Corporation
 S Corporation
 Limited Liability Company
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When to see an Attorney
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Business Start-up
– Incorporation
– Partnerships
Leases / Real Estate / Contracts
Debt Collection
Patents, Inventions, Copyrights, Trademarks
Unemployment Hearings
Bankruptcy and Reorganization
Buying/Selling/Merging a Business
Compliance with Environmental Laws
Compliance with Employment Discrimination Laws
Licensing
Formal Written Opinions
Legal Checkup
Places To Go Before Starting Your
Business
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City Community Development Office
(Register/License Business, $35 annually)
Planning and Zoning (Zoning approvals)
Secretary of the State (Incorporate)
NM State Comptroller (Tax Permit)
Internal Revenue Service (EIN #)
City Offices
Fire Department
See Handout for More details
The 5 C’s of Credit
Character
 Capacity
 Conditions
 Collateral
 Capital
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$ources of Capital, From Most
Common to Least Common
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Personal Savings, Insurance, Retirement (0%)
Family or Friends (2-7%)
Suppliers
Personal Loans
Banks (10-16%)
Private Investors (18-25%)
Public Sources
Venture Capital (20-40+%)
Secondary Sources of Financing
Small Business Administration
 Farmers Home Administration
 Federal, State, and Local Programs
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How to Lower the Risk?
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Get experience in management and in your
business.
Plan ahead (save).
Have support from your family!
Be ready to persevere.
Use only facts in decision-making.
Follow your strengths and interests.
Never be too proud to quit.
Survival Strategies
Focus completely on satisfying the
customer.
 Study the success of others.
 Gather and analyze management
information regularly.
 The Kaizen strategy (continuous
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improvement involving everyone - TQM).
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Embrace change with a positive
attitude.
Source: Dan Taylor, Pres. Data Star Communications
Final Comments
Plan Your Work…
...And Work Your Plan ! !
THANK YOU ALL ! !