RISBDC
Rhode Island Small Business
Development Center
The Business Plan
Presented by
Sixcia Devine
Regional Director
401-263-5123
sdevine@jwu.edu
www.risbdc.org
Session Objective
TO PROVIDE YOU, THE ENTREPRENEUR,
WITH INFORMATION ABOUT STARTING
YOUR OWN BUSINESS AND GIVING
RESOURCES THAT WILL ASSIST YOU IN
THE DEVELOPMENT OF YOUR BUSINESS!
What is the RI SBDC?
• A Private/Public
Partnership
• United States Small
Business Administration
• Rhode Island Economic
Development Corporation
• Johnson and Wales
University
Regional Office Locations
•
Providence Metro
Taco Center, Larry Friedman International
Center for Entrepreneurship
Sixcia Devine, Regional Director
•
Central & Southern RI
Central RI Chamber of Commerce
Ardena Lee-Fleming, Regional Director
•
Newport/EastBay
Newport County Chamber of Commerce
Stacey Carter, Regional Director
•
Northern Rhode Island
Northern RI Chamber of Commerce
Douglas Jobling, Regional Director
•
Pawtucket & Central Falls
268 Main Street, Pawtucket
Adriana Dawson, Regional Director
Small Business Facts
• Small Business is the
backbone of the American
Economy
• Two of every three new jobs
result from the the small
business sector nationwide
• 39% of the US GNP is created
by small business
• Over 20 million small
businesses in the US
• RI businesses report 16.9%
increase in sales compared to
unassisted companies
The Partnership Structure;
an Inclusive Approach
The RI Small Business
Development Center at
Johnson & Wales
University is a public /
private partnership
providing management and
technical assistance to
small business owners and
aspiring entrepreneurs.
Partnerships include:
• CWE
• RICMI
• SBA
• Secretary of States Office
• SCORE
• RI EDC
• Every Company Counts
• Banks
• Chambers of Commerce
• Community Based Organizations
RISBDC connects you with the best fit resource for your business
• Why are we here?
• Why start a business?
• What are the steps to writing the plan?
• Why do businesses fail?
Visioning Your Future
• What does your business look like?
• What is the time frame?
• Create a collage.
• Keep a mental picture in your head.
Good Read:
The E-Myth Revisited by Michael Gerber
Where To Start
• Consider advantages, disadvantages, risks and
impact.
• Advantages: Be your own boss; Independence;
Personal Satisfaction; Sense of achievement;
Contribute to others.
• Disadvantages: Financial risks; Long hours;
Impact on social life/family; Responsibilities and
commitments.
Characteristics
• Consider these aspects of your personality.
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Independence
Self-Discipline
Creativity
Drive & Desire
Risk Taking
Confidence
• Also, consider your strengths and weaknesses in
these areas.
– Sales; Marketing; Financial Planning; Accounting;
Administration; and Management.
The Business Plan
Overview
Part I - The Organization
• Description of Business / Executive
Summary
(Limit to one page.)
– This portion of the Business Plan SHOULD BE WRITTEN LAST,
even though it goes first in the plan.
• Management and Personnel
(Who will be working for you?)
• Advisors / Board of Directors
(Lawyer, accountant, insurance agent, consultants, resource partners, etc.)
Forms of Business
• Sole Proprietorship: easy to organize; owner has complete
control and receives all income; owner has unlimited liability; benefits are not
business deductions.
• Partnership: easy to organize, but needs agreement; partners receive
all income and have unlimited liability; partners may disagree; life of business
may be limited.
• Corporation: shareholders have limited liability; can raise funds thru
sale of stock; Life of business is unlimited; incorporating takes time and
money; may result in higher taxes overall.
• Limited Liability Company (LLC): provides the limited
liability features of a corporation and tax efficiencies and operational flexibility
of a partnership; formation is more complex and formal than that of a general
partnership.
• Location
• Method of Record-keeping
• Insurance
• Security
• Products and Services
Procurement and Operations
• Equipment and Inventory
Exit Strategy
Part Two – Marketing
• Marketing
•
http://www.bizminer.com/free.asp#1
http://www.entrepreneur.com
(go to free forms)
• Trends
• Target Market
• Competition
(Everyone has competition)
• Promotion and Branding
• Location
• Method of Distribution
• E-commerce
• Sales and Marketing Strategy
• Product Design and Packaging
• Timing of Market Entry
(When do you plan to open and why?)
• Pricing
• Sales Forecast
– Pro-forma (month to month)
– 3 years projections
Legal Requirements
• Registration
– IRS (Form SS-4), Department of Labor & Training, RI
Division of Taxation, Town Clerk, Secretary of State
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Licenses / Permits
Worker’s Comp / Other Insurance
Collection Agencies & Legal Action
Determine Business Status
Taxes
Leases
Financial Management
• Software / Manual
– QuickBooks / Quicken; Peachtree; Excel Spreadsheets
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Accountant / Bookkeeper / Payroll Service
Cash / Checks / Credit Cards
Bank Accounts
Insurance
Bank Loan
6 C’s of Credit
•
Banks are in the business to make (not lose) money!
To maximize the possibility of getting paid back, banks look at:
1. Capacity - Your ability to repay the loan, cash flow.
2. Capital - How much money the owner has personally
invested in the business.
3. Collateral - Security guarantees.
4. Conditions - Intended purpose of the loan.
5. Character - Impression you make on the lender or
investor.
6. Credit - Your history (paid bills on time, bankruptcies).
Credit Reports & Resources
Order your free credit reports from: www.annualcreditreport.com
Credit Bureaus:
TransUnion
Equifax
Experian
(800) 888-4213
PO Box 1000
Chester, PA 19022
www.transunion.com
(800) 525-6285
PO Box 740241
Atlanta, GA 30374-0241
www.equifax.com
(888) 397-3742
PO Box 9595
Allen, TX 75013
www.experian.com
Credit Resources
The Fair Credit Reporting Act
www.ftc.gov/os/statutes/fcra.htm
Credit Central
www.truecredit.com/central
Identity Theft Information
www.consumer.gov/idtheft/index.html
Challenges
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Lack of staff training
Lack of product knowledge
Loss in sales
Competition
Failure to anticipate market trends
Insufficient working capital / cash flow
Poor budgeting
Ignoring financial position of company
Extending too much credit
Over-borrowing or using too much credit
Poor control over receivables
RI SBDC
23
Free Tutorials and Articles
Starting/Marketing:
http://www.mainesbdc.org/train_login.cfm
The Power of A Good Business Plan:
http://www.allbusiness.com/2976170-1.html
Ten Painless Steps to Start and Finish Your Business Plan
http://www.bizplanit.com/free/articles/ten_painless_steps.html
Getting Started:
http://www.myownbusiness.org/course.html
From Idea to IPO:
http://www.startupventuretoolbox.com/
For more planning information visit:
http://www.sba.gov/tools/resourcelibrary/publications/serv_pub_mplan.html
RI Small Business Development Center
Johnson & Wales University
Headquarters
270 Weybosset Street, Richmond Bldg
Providence, RI 02903
(401)-598-2702