INFORMATIONAL MATERIAL
TENNESSEE SMALL BUSINESS DEVELOPMENT CENTERS
CLEVELAND STATE COMMUNITY COLLEGE
3535 ADKISSON DRIVE, CLEVELAND, TN 37312
TECHNOLOGY BUILDING, ROOM 126
PHONE: 423-478-6247 FAX: 423-478-6251
WWW.SBDCEMPOWERS.ORG
The Tennessee Small Business Development Center Network is funded in part through a cooperative agreement with the U.S. Small Business Administration.
Additional funding is provided by the Tennessee Board of Regents and the State of Tennessee. All opinions, conclusions or recommendations expressed are those of
the authors(s) and do not necessarily reflect the view of the SBA. All TSBDC programs and services are nondiscriminatory and available to individuals with disabilities.
For special needs, please contact the TSBDC at (423) 478-6247 two weeks prior to an event for which you would like to register.
Formulating & Evaluating Your Business Concept:
What business are you in?
Researching the following web sites could prove helpful:
 http://www.sba.gov
 http://www.toolkit.com
 http://www.tn.gov
 http://www.tech2020.org
Ask yourself….
What business am I in?
What are my goals and objectives? Can I reach them?
What products and services will I offer?
What are the needs my products and services meet?
Who are my target customers?
What are the characteristics of my “ideal” customer?
What benefits will my customers get from my products and services?
What needs do my products and/or services fulfill?
What makes my products and services unique to my customers?
What will the customer pay for my products and services?
How big is my trade area?
How will I reach, recruit, and retain my customers?
How much demand is there for my products and services?
Am I capable of delivering the service? Producing the product?
How much of the market can I capture?
Where will I locate my business?
So you must do a lot of research…
Visit the Business Resource Center of the TSBDC for reference material, guides, and assistance on researching your market and
business
Consider the following ways to research your market:


Interview potential customers
 Observe your competitors
Visit competitors that operate outside your target area and be observant
 Talk to existing or previous business owners
 Talk to trade buyers or suppliers
 Read trade publications
 Visit websites of competitors
SITES FOR SMALL BUSINESS ASSISTANCE
TSBDC – Cleveland
US Small Business Administration
TN Small Business Development Centers
Small Business Development Centers
Small Business Legal Guide
Low cost corporate/LLC filings online
SBA financing your business/loans
Federal grant resources
Entrepreneur Magazine’s Small Bus. Online
Inc. Magazine’s Small Business online
Business Week online
Business plans by Business Plan Pro
http://www.sbdcempowers.org
http://www.sba.gov
http://www.tsbdc.org
http://sbdcnet.org
http://smallbusiness.findlaw.com
http://mycorporation.com
http://www.sba.gov/financing
http://www.sba.gov/expanding/grants.html
http://www.entrepreneurmag.com
http://www.inc.com
http://www.businessweek.com/smallbiz
http://www.bplans.com
DEMOGRAPHIC INFORMATION
US Census
Easi Demographics
Maptitude Demographics
New Strategist Demographic Books
http://www.census.gov
http://www.easidemographics.com
http://www.caliper.com
http://www.newstrategist.com
IRS INFORMATION
Internal Revenue Service Small Business
IRS Forms/Publications
http://www.irs.gov/smallbiz
http://www.irs.gov/formspubs
FOR PATENT AND TRADEMARK
US Patents and Trade Marks Office
Trademark Center
US Copyright Office
http://www.uspto.gov
http://www.tmcenter.com
http://www.loc.gov/copyright
FOR OTHER REQUIREMENTS AND INFORMATION
US Citizenship and Immigration Services
Business forms
“Lectric Law” legal forms and help
Mobile credit card processing
http://www.uscis.gov
http://findforms.com
http://www.lectlaw.com
http://squareup.com
SBA WEBSITES FOR SMALL BUSINESS
http://www.sba.gov
SBA LOAN PROGRAMS
http://www.sba.gov/financing
FEDERAL ASSISTANCE PROGRAMS
8(a) Business Development Program
HUBZone
SUB-Net
Small Business Investment Com. (SBIC)
USDA Loan and Grant Programs
http://www.sba.gov/8abd/
https://eweb1.sba.gov/hubzone/internet
http://web.sba.gov/subnet
http://www.sba.gov/content/sbic-program-0
http://www.rurdev.usda.gov/rbs/busp/bprogs.htm
WEBSITES FOR DOING BUSINESS IN TENNESSEE:
http://tn.gov
Tennessee Small Business Development Centers
Cleveland State Small Bus. Dev. Center
Economic Community Development
SBDC International Trade Center
TN Secretary of State
TN Business Name Search
TN Fee Schedule for Corporations, LLC and Partnerships
TN Dept. of Revenue Sales and Use Tax Guide
TN Trademarks Information
TN Division of Regulatory Boards
TN Dept. of Labor and Workforce Development
TN Workers Compensation
TN Unemployment Services
TN Worker’s Comp., Unemployment Insurance Forms
TN New Hire Reporting
UT Center for Industrial Services and the Tennessee
Manufacturers Extension Program
http://www.tsbdc.org
http://www.sbdcempowers.org
http://www.state.tn.us/ecd
http://website.iexportimport.com/
http://www.tn.gov/sos
http://tnbear.tn.gov/ECommerce/NameAvailability.aspx
http://www.state.tn.us/sos/forms/corpfeeschedules.pdf
http://www.state.tn.us/revenue/taxguides/salesanduse.pdf
http://state.tn.us/sos/bus_svc/trademarks.htm
http://tn.gov/commerce/boards/index.shtml
http://www.state.tn.us/labor-wfd
http://www.state.tn.us/labor-wfd/wcomp.html
http://www.state.tn.us/labor-wfd/esdiv.html
http://www.state.tn.us/labor-wfd/mainforms.html
http://www.tnnewhire.com
http://www.cis.tennessee.edu/
FORMING YOUR ORGANIZATION
WHAT LEGAL FORM IS BEST FOR ME?
One of the first executive decisions you’ll make for your new business is deciding what type of business
organization is best for you. Listed from the simplest to the more sophisticated, the four types are:
SOLE PROPRIETORSHIP is a business with one owner and the most common. A business organized as a sole
proprietorship is not separate from its owner, but merely a different name with which the owner represents
him/herself to the public. The owner is the business and the business is the owner. They’re inseparable.
Thus, a sole proprietorship is known as a pass-through entity. This means that all income and expenses pass
through to and are filed as part of the owner’s personal tax return. If there is a business loss, the owner will
enjoy a deduction to offset personal income. However, if the business makes a profit, the owner is responsible
for any taxes due.
With few legal requirements, sole proprietorships are easy to form and operate. They can also be more
affordable since no legal documents need to be filed in most cases. Basically all one has to do to form a sole
proprietorship is get a business license and begin operations.
Although the sole proprietorship does have the advantage of simplicity, the negatives can steer entrepreneurs
away from this form of business organization.
The disadvantages of a sole proprietorship stem from its very nature – the business and the business owner
are inseparable. This leads to three potential problems.
First, owners can lose some lucrative tax-free fringe benefits because they cannot participate in company
funded employee benefit plans like medical insurance and retirement plans. Second, whoever sues the
business actually sues the owner. The owner’s personal exposure is unlimited. Finally, the business owner is
personally liable for the debts of the company, and unfortunately, personal assets can be taken to pay
company obligations.
PARTNERSHIP is similar to a sole proprietorship but has two or more owners and is not a separate legal entity
from its owners. Unlike the sole proprietorship however, the partnership can hold property and incur debt in
its name.
In general, the partnership shares the same advantages and disadvantages as the sole proprietorship.
However, the partnership has an additional drawback. A partner can be held liable for the acts of the other
partners, increasing personal liability.
Tax treatment of the partnership is also slightly different. Although it is a pass-through entity and does not pay
its own income tax, the partnership does file an informational tax return with the IRS. The pro-rata share of its
income and expenses are shown on each partner’s personal return. Taxes due are paid by the partners.
CORPORATIONS were conceived to solve the typical problems of the partnership. Incorporating allows a
group of entrepreneurs to act as one, much the way a partnership does, with one important advantage. Since
the corporation is a separate legal entity capable of being sued, it can protect its owners by absorbing the
liability if something goes wrong. In recent years, the corporation has developed as a a tax reduction and
planning tool.
A corporation is essentially an “artificial person” created and operated with the permission of the state where
it is incorporated. It is a person like you but only on paper. A corporation is brought to life when a person, the
incorporator, files a form with a state known as the articles of incorporation. The owner of a corporation is
known as a shareholder.
Since a corporation is a separate legal entity, the corporation actually owns and operates the business on
behalf of the shareholder, under the shareholder’s total control. This separation provides a legal distinction
between the owner and the business and provides three important benefits.
First, it allows you, the owner, to hire yourself as an employee (typically as the president) and then participate
in company funded employee benefit plans like medical insurance and retirement plans. Second, since you
and your company are now two separate legal entities, lawsuits can be brought against your company instead
of you personally. Third, when debt is incurred in the company name, a separate legal entity, you are not
personally liable and your assets cannot be taken to settle company obligations.
S CORPORATIONS are the same as any other business corporation with one important difference – the IRS
allows it to be taxed like a partnership, a pass-through entity.
When business corporations are created, they are all regular “C” corporations. This special filing status is
elected by filing the IRS Form 2553. Many people begin corporate life as an S corporation when there are
losses to offset their “paycheck” income and then revert to Corporation status when the corporation begins to
make taxable profits. It is important to remember that being an S corporation is a tax matter only.
LIMITED LIABILITY COMPANIES are the newest form of business organization. Available in 49 states, it is a
hybrid entity that blends favorable aspects of the corporation and partnership. The LLC features pass through
taxation of the partnership and limited liability of the corporation. You may choose to see it like this – the LLC
is a partnership that offers the limited liability protection of a corporation. Or conversely, it is a corporation
that is taxed like a partnership. Yes, it is much like an S corporation without the shareholder limitation.
The limited liability company is a promising type of business entity, but it does have a couple of disadvantages.
First, its newness means that law regarding the LLC is still evolving and some issues regarding its operation
remain unsettled. Also, if the LLC is taxed as a partnership, business owners will lose some company-funded
benefits.
SELF-ASSESSMENT: DO YOU HAVE THE RIGHT STUFF?
The following website may prove helpful in your self-evaluation:
http://www.sba.gov/starting_business/startup/areyouready.html
Ask yourself these important questions!
How will my business affect my family?
How much of my personal resources am I willing to risk?
Do I have the physical stamina to run a business?
Do I have the emotional stamina to run a business?
Is my drive strong enough to maintain my motivation?
Am I a self-starter?
What are my objectives? What are my goals? Are they attainable? (Identify 5)
How will I know I have attained my goals?
What skills and experience do I bring to the business?
How well do I plan and organize?
How good am I at decision-making?
Do I get along with different people/personalities?
Am I a good listener? Do I listen to “respond” or to “identify” needs?
What customer need will my product or service fill?
Do I understand the relationship between product cost, price, and value?
Do I understand the various operations needed to conduct my business?
Why do I think I will be successful in my business?
What is my exit strategy?
Whom do I want on my advisory board and why?
Compile the following:
Credit report: http://www.myfico.com
http://www.consumer.ftc.gov/articles/0155-free-credit-reports
Ask yourself: Do I need to improve my credit rating and how?
Tax filings for the last 3-4 years
Current/updated resumé
List of assets and value/documentation
List of liabilities/documentation
BUSINESS PLAN OUTLINE
There are no hard-and-fast format requirements for a business plan. The length and the content will vary
depending on the complexity of the business and the market. The following is a typical format that is effective
for both startup and expanding businesses.
EXECUTIVE SUMMARY
Key elements of the business plan in one or two
pages
 Brief description of the business and the
market
 Brief description of the management team
& related experience
 Summary of financial projections
 Amount of investment requested, the form
and how the proceeds will be used
PRODUCTION
 Facilities and equipment required
 Capacity and output targets
 Sources of raw material and supplies
 Labor requirements – skills, numbers,
unions
 Outsourcing or subcontracting
considerations
 Quality control and customer service
 Packaging and shipping
COMPANY AND INDUSTRY DESCRIPTION
 The concept – what is the product and/or
service
 Principals and the roles they will play
 Legal form of business
 Short-term and long-term goals
 History of the industry
 Number and kinds of firms in the industry
 Major influences, government regulation,
etc.
PERSONNEL
 Individuals responsible for finance,
marketing, production and management
 Who is accountable to whom
 Anticipated needs for additional personnel
 Personnel policies
MARKETING
 Description of market – size, growth rate
 Description of the segments to be pursued
 Who makes the buying decision and on
what basis – price, service, features, etc.
 Comparison of important aspects of the
product with the principal competitors –
price, service, features, etc.
 What are the key competitive advantages?
 Marketing schedule – who is to do what by
when and the projected cost
 Results expected and contingency plans
FINANCE
 Include underlying assumptions, i.e.:
continuation of trends, competitors’
responses, technologic changes, customer
needs, etc.
A. Funding Request
 Desired financing – sources of funds/uses of
funds
 Future financing
B. Past & Current Financial Statements
 Profit & Loss
 Balance sheet
 Cash flow
 Personal Financial Statement
COUNTY CLERK’S OFFICES
Bradley County
County Clerk: Donna Simpson
155 Ocoee St., Room 101 (Courthouse)
Cleveland, TN 37311
Phone: (423) 728-7226
Fax: (423) 478-8845
Hours of Operation: M-Th, 8:30 a.m. - 4:30 p.m.; Fri., 8:30 a.m. - 5 p.m.
McMinn County
County Clerk: Evonne Hoback
5 South Hill St., Suite A
Athens, TN 37303
Phone: (423) 745-4440
Fax: (423) 744-1657
Hours of Operation: M-F, 8:30 a.m. - 4 p.m.; Sat., 8:30 a.m. - noon
Meigs County
County Clerk: Janie Myers
17214 State Highway 58 N.
Decatur, TN 37322
Phone: (423) 334-5747
Hours of Operation: M-Tu & Th-F, 8:30 a.m. - 4:30 p.m. (Closed Wed.); Sat., 8:30 a.m. - noon
Monroe County
County Clerk: Larry Sloan
103 College St. S., Suite 1
Madisonville, TN 37354
Phone: (423) 442-2220
Fax: (423) 442-9542
Hours of Operation: M-Tu & Th-F, 8:30 a.m. - 4:30 p.m.; Wed. & Sat., 8:30 a.m. - noon
Polk County
County Clerk: Angie Sanford
P.O. Box 158
6239 Hwy 411, Office #102
Benton, TN 37307
Phone: (423) 338-4526
Fax: (423) 338-4551
Hours of Operation: M-F, 8:30 a.m. - 4:30 p.m.
Chambers of Commerce
Athens Area Chamber of Commerce
13 N. Jackson Street
Athens, TN 37303
Phone: 423-745-0334
Fax: 423-745-0335
www.athenschamber.org
Cleveland/Bradley Chamber of Commerce
2145 Keith St.
P.O. Box 2275
Cleveland, TN 37320
Phone: 423-472-6587
Fax: 423-472-2019
www.clevelandchamber.com
Etowah Area Chamber of Commerce
L&N Depot
P.O. Box 458
Etowah, TN 37331
Phone: 423-263-2228
Meigs County – Decatur Chamber of Commerce
P.O. Box 1301
Decatur, TN 37322
(423)334-5496
meigstnchamber@gmail.com
http://www.meigscountytnchamber.org/
Monroe County Chamber of Commerce
520 Cook St
Madisonville, TN 37354
(423) 442-4588
www.monroecountychamber.org/
Polk County Chamber of Commerce
Phone (423) 338-5040 or 1-800-633-7655
e-mail: westoffice@ocoeecountry.com
P.O. Drawer 560
Benton, TN 37307
Location: 1697 Highway 64, Benton, TN 37307
www.ocoeecountry.com