Business Start-Up
Fundamentals
Entrepreneurial Workshop I
AGENDA
The Planning Process

Assessing personal and
business needs

The importance of a
business plan

Understanding business plan
components
The Reality of Obtaining Financing
• What banks look for when
assessing a loan request
•
How to complete a loan
application
What
WhatBanks
BanksLook
LookFor
For
 Cash Flow

Credit

Collateral

Contribution (or capacity)

Character (industry / references)

Condition
Lifestyle Assessment
1. Do you have children?
2. Do you have savings?
3. Is your spouse employed?
4. What do you do with your free time?
5. Are you accustomed to working long hours
6. Are you a morning or night person?
Business Assistance Areas
•
Marketing
• Advertising
• Sales
• Tax Knowledge
•
Insurance
Business Assistance Areas (con’t.)
•
Business Finances
•
Presentation Skills
•
Communication Skills
•
Legal Aspects
•
Banking Services
Other Considerations
• Selecting a Business Name
• Business Identification Numbers
• Licenses and Permits
• Taxes
• Accounting System
Structural Forms of Business
•
Sole Proprietorship
•
Partnership
•
S Corporation
•
C Corporation
•
LLC – Limited Liability Co
Useful Web Sites
Internal Revenue Service www.irs.gov
MA Department of Revenue www.dor.state.ma.us
Inc.com - Where to start and
grow your business.
www.inc.com
Entreworld - A World of
Resources for Entrepreneurs
www.eventuring.org
Official Website of the State
of MA www.mass.gov
Official Website of the State
of RI www.ri.gov
All Business Champions of Small Business
www.allbusiness.com
MA Assoc. of Community
Development Corporations www.macdc.org
U.S. Small Business
Administration (SBA) www.sba.gov
e Podunk www.epodunk.com
Why Write a Business Plan?
•
•
•
•
•
A plan gives you a path to follow
Planning forces you to examine all
aspects of your business
Planning is ESSENTIAL to raising
capital
Your plan is a management tool
Your plan is a communications tool
Business Plan Format
•
Neatness Counts!
•
Use Simple Language
•
Keep Your Points Concise
•
Make Use of Tables and/or Graphs
Business Plan Format (con’t.)
Effective Formatting includes:
•
Headings
•
Paragraphs
•
Bold/Italics/Underline
•
Bullets
Business Plan Outline
Mission Statement/Statement
of Purpose
B. Table of Contents / Cover Page
C. Business Description
D. Marketing Plan
E. Financial Plan
A.
Statement of Purpose
This is the doorway to your plan.
Keep it short, but illustrate the main points.
Main Points:



State purpose/structure of your business
State purpose/amount of financing sought
State any key operational expectations
Business Description
a)
b)
c)
d)
e)
f)
g)
Type/Industry
Status (e.g. start-up, existing)
Form (e.g. proprietorship, corporation)
Location/Hours of operation
Market description
Description of competition
Management/Personnel
Marketing vs. Sales
MARKETING
Generates
interest
and leads.
SALES
Generates orders
and accounts
receivable and/or
cash receipts.
MARKETING PLAN
Your Customer are the Market!





Describe Your Customers
Industry Trends and Characteristics
List and Description of Your Competition
Description of Your Niche and
Competitive Plan
Market Segmentation
Marketing Mix
• Product – good or service
• Pricing – mark-up and break-even analysis
• Promotion – advertising
• Place – channels of distribution
Management and Personnel
• How many employees needed?
• What kind of skills required?
• Experienced or trainable?
• Management/People skills?
Financial Plan
• Balance Sheet
•
•
•
Projected Income Statement –
2 years
Sources and Uses of Funds
Projected Cash Flow by Month –
1st year
Financial Plan (con’t.)
• Historical Financial Statements of Business –
3 Years
• Personal Financial Statement
• IRS tax returns(personal & business) –
3 Years
Reminders for Completing Loan
Application
•
The more the person reviewing
your request can know about you
AND your business, the better.
•
Neatness and conciseness count
•
Be honest.
Loan Application (con’t.)
•
Emphasize your strengths and state
your weaknesses.
Let the loan officer know that YOU
recognize areas for improvement.

•
If you have questions, CALL!
Don’t
submit an incomplete
application.
Services Offered by SEED
 Business Assistance
 Business Support Center
 Loan Programs:
 Micro Loan/Mini Micro Loan
 Revolving Loan Fund (RLF)
 SBA 7A Packaging
 SBA 504