Startup Boot Camp
Kick Starting Success for
California’s Retail, Restaurant and
Service Entrepreneurs!
Day 1 — Session 1
"The best way to predict
the future is to create it."
— Peter Drucker
WELCOME/INTRODUCTIONS
Goals

Designed specifically for entrepreneurs in the early stages of
developing service, retail or restaurant businesses

Test your business idea
– Is It feasible given your goals, values, income requirements, and finances?

Understand and execute basic business planning concepts
– Determine what information is important and how to get it
– Determine what questions need to be asked

Develop an action plan

Link to free and low-cost resources that can help
3
Expectations

Attend entire program

Complete all of the work

Add your expertise to the discussions

Become an SBDC client for one-on-one counseling upon
completion of program to refine and complete your
business plan
4
Caveat

Like drinking out of a fire hose

Exposure to many concepts

Will touch on a wide variety of issues affecting startups,
but concentrate on producing deliverables for the
elements necessary to create a well-thought out
business plan

At the end of the program, you should become an SBDC
client to refine your business plan and build-out your
support network/systems.
5
One-Minute Introductions

Identify yourself

Describe your business idea

Tell us about prior experience that is relevant to your
business idea

State one or two specific questions that you hope to
answer as a result of the Boot Camp
6
XXXXXXXXX SBDC
Basics
 Business counseling, training
 Training free or low cost/counseling
free
 Any stage of business growth
 Founded during Carter administration
 Oversight by federal Small Business
Administration (SBA)
 Over 1,100 nationwide
8
What Is An SBDC?

Assists “business ready” entrepreneurs and existing small business owners
who are ready to start, retain or expand their business

Focuses on businesses with potential to produce economic impact for the
local community:

Provides no-cost, one-on-one business counseling

Offers no- or low-cost training, workshops and business forums

Measures and validates (through client surveys) success against 6 criteria
– Business starts
– Jobs created
– Jobs retained
– Sales increased
– Capital investment received
– Loans obtained
9
What Is An SBDC (cont’d)

Experienced, independent Business Advisors

Generalists and specialists (examples)
–
–
–
–
–
–

Business planning
Market research, marketing, advertising
Loan assistance/financial management
Human Resources
Procurement/minority certification
Technology
Part of local economic development community
providing referrals to qualified small-business resources
10
KIMCO KEYS PROGRAM
KEYS Program
12
North America’s Largest Owner & Operator of
Neighborhood & Community Shopping Centers.
Who is Kimco?
History
Started in 1958 | IPO that initiated modern REIT era;
NYSE-listed for ~20 years | S&P 500 Index (2006)
Dividend
$0.76 annually, ~3.9% yield (3/31/12)
Shopping Center Properties
946 properties; 138.1M / 89.5M sq. ft. (gross/pro-rata)
Geographic Footprint
44 states, Puerto Rico, Canada, Mexico and South America
Occupancy (pro-rata)
5-year average: 93.9% | High: 96.3% (12/31/07) / Low: 92.3% (6/30/09)
Enterprise Value
$13.2B (3/31/12)
Credit Rating
Investment Grade  BBB+ | BBB+ | Baa1 (S&P | Fitch | Moody’s)
Westlake Shopping Center - Daly City, CA
Kimco Entrepreneurs
Year
Start What is KEYS?
• Kimco Entrepreneurs Year
Start (KEYS) is a business
incubator program for qualified
startup entrepreneurs.
• Approved applicants receive:
• Resources and services
• One year of free rent
(must pay NNN expenses
only)
• This incentive accelerates the
growth of their new businesses
in shopping centers owned by
Kimco and its joint venture
partners.
Redhawk Towne Center – Temecula, CA
Kimco Entrepreneurs
Year Start
What does KEYS offer?
• Qualified KEYS applicants will
benefit from:
• Substantially lower
monthly
overhead expenses
• Lease term flexibility
• Assistance of a Kimco
counselor
• Counselor will advise and
guide potential tenant through
the lease, store selection and
planning process, if desired.
• After Tenant’s initial first year
lease term, the tenant has
choice to exercise a four-year
lease option for the existing
store.
• Also, the lease provides for
an easy exit with no long term
obligation to Kimco if the
startup entrepreneur finds the
business unworkable.
Larwin Square Shopping Center – Tustin, CA
Kimco Entrepreneurs
Year
Start
How many spaces are available?
• Currently, there are
approximately:
• 100 available stores
• All under 2,500 square
feet in size
• Located in Kimco’s
demographically diversified
California portfolio
• Of the 100 available units,
there is a mixture of both
retail, service, and former
restaurant build-outs.
KEYS Locations
The District at Tustin Legacy – Tustin, CA
Kimco Entrepreneurs
Year Start
Who can apply to KEYS?
• KEYS is open to:
• New startup retail
ventures
• Service operations
• Restaurants
• The entrepreneur should
have the training, skill,
enthusiasm, and adequate
funding to launch a new
business.
• Franchisees or product
license agreement participants
may not apply to the program.
The District at Tustin Legacy – Tustin, CA
Kimco Entrepreneurs
Year
Start What’s the catch?
• There is NO catch!
• Kimco benefits by bringing
new and exciting tenants to its
vacancies, while new
entrepreneurs benefit from
lower startup costs, favorable
lease terms, and the help of a
counselor, if desired.
• Studies found that 87% of
‘incubator graduates’ stayed in
business, in contrast to 44% of
all firms.
Westlake Shopping Center - Daly City, CA
How do I get started?
Kimco Entrepreneurs
Year Start
• Applicants can submit their
business plan online at
http://www.KimcoKeys.com
• Applicants may also apply by
calling 1-888-668-1690
• A printable application form
can be found online by clicking
here
THE BASICS
The Textbook “Entrepreneur”

Recognition of available opportunities

The long-term will, motivation, and
endurance to stick with it to deliver a
product or service to capitalize on the
identified opportunities

Identification of the resources needed

Ability to acquire resources required
but not currently controlled
22
The Real World Entrepreneur
Many Responsibilities
• Bookkeeping
• Record Retention
• Reporting
• Bill Paying
• Regulations
• Tax filing
• Employees
• Administration
• Customer service
• etc., etc., etc.
•
•
•
•
•
•
•
•
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Many Benefits
Do what you enjoy
Do what you’re good at
Freedom
Be in control
Be your own boss
Make more money
Build an asset for
retirement
Be the decision maker
The Owner’s Mindset

Understand the tasks that need to be performed

To the extent possible, focus on the “drivers” of your growth and profitability

When possible, hire professionals to handle other tasks (e.g., bookkeeping,
taxes, insurance, etc.)

Know your customer

Know your competition

Plan, act, assess . . . Adjust plan, act, assess . . . repeat

Constantly innovate (do something different that can positively impact your
business)

Watch cash flow constantly
24
Your Commitment — You . . .

May need to make financial sacrifices

Will have less free time

Must understand the opportunities and risks

Need to involve your family – it’s their commitment too!
25
Is This The Right Path For You?

Are You:
–
–
–
–
–
–

Comfortable taking risks?
Independent?
Persuasive?
Able to negotiate?
Creative?
Supported by others?
If interested, numerous self-assessment tools can be
found on the Internet
–
–
Google “entrepreneurship self assessment” to find some
A sample: http://www.youronestopcenter.com/entrepreneur-test.php
26
26
A Couple Interesting Quotes
Steve Jobs
Michael Jordan
“I’m proud of what I’ve done.
But I’m most proud of what I
decided not to do.”
“I've failed over and over and
over again in my life and that is
why I succeed.”
27
20 Starting Questions

Why am I starting a business?

What kind of business do I want?

Who is my ideal customer?

What products or services will my business provide?

Am I prepared to spend the time and money needed to get my
business started?

What differentiates my business idea and the products or
services I will provide from others in the market?

Where will my business be located?

How many employees will I need?

What types of suppliers do I need?
28
20 Starting Questions (cont’d)

How much money do I need to get started?

Will I need to get a loan?

How soon will it take before my products or services are available?

How long do I have until I start making a profit?

Who is my competition?

How will I price my product compared to my competition?

How will I set up the legal structure of my business?

What taxes do I need to pay?

What kind of insurance do I need?

How will I manage my business?

How will I advertise my business?
29
LET’S GET STARTED
At A Minimum . . .

Get legal advice when . . . .
–
–
–
–
Determining the business structure
Adding your first employee
Reviewing leases and other agreements/contracts
Protecting intellectual property (e.g., trademarks)
31
Business Structures

Sole Proprietorship:
– Owned and operated by one person
– Easy to start (report income and loss on Schedule C)
– High personal liability

Partnership:
– Multiple owners
– Partnership agreement defines control
– Pass through of profits and loss to personal tax return (Form k-1)
32
Business Structures (cont’d)

Corporation:
–
–
–
–
–
Structured and formal
Complex filing with state
Bylaws govern operations and annual meetings
Strictly limits liability
Two forms:
• C Corp: unlimited shareholders, double taxation
• S Corp: less than 100 shareholders, profit and loss pass through

Limited Liability Company
– Any number of owners
– Structure protects personal liability
– Pass through of profits and losses
33
Business Structure (cont’d)

Factors to consider:
– Number one consideration is YOUR PERSONAL LIABILITY
– Outsider investors
– Cost
– Ease of formation
– Taxes
34
Additional Considerations


Business Licenses Required: city, county, state
Federal Employer Identification Number (EIN)
– Only required if you have employees, but should be
considered for all businesses
35
Fictitious Business Name

DBA (“doing business as”)
–
–
–
–

Not necessary if doing business under own name
Allows use of descriptive name for business
Prevent others from using your name in business
Can use assumed name for bank accounts, credit cards, telephone
listings, etc.
Process
– Confirm name is available
– File with county clerk
36
Taxes

Self-employment tax
– Social Security and Medicare

Income taxes

State and local taxes

Property tax

Unemployment taxes
37
Sale of Tangible Goods

Apply for seller’s permit through the Board of Equalization
– California state sales tax of 8.25%
– Additional local sales taxes may apply
38
Business Insurance

Property – buy based on replacement value
– Named peril
– All-risks policy

Liability – damage to property or injury to someone
– Look at similar businesses
– Consult a professional insurance agent

Professional Liability/Errors and Omissions

Employment Practices Liability Insurance
– e.g., wrongful termination, sexual harassment, race, gender

Workers’ Compensation

Optional Medical/Dental/Vision
39
Checklist

Be Legal
– Seek the advice of an attorney when necessary

Know your Tax Responsibilities
– Determine what taxes your are responsible for

Determine insurance needs

Hire qualified professionals to help
40
Reference

Three great resources
– www.sba.gov
– www.business.ca.gov
– (Insert local SBDC website here!)
41
Reference (cont’d)

Business structure: http://www.taxes.ca.gov/Income_Tax/incbus.shtml

Trademarks and service marks: http://www.sos.ca.gov/business/ts/

Business name search: http://kepler.sos.ca.gov/

Registering a fictitious business name:
http://business.ca.gov/StartaBusiness/RegisteringaBusiness/FictitiousBusin
essName.aspx

Insert url for local licensing and permits here

Starting a business overview: http://business.ca.gov/StartaBusiness.aspx

Board of equalization:
http://business.ca.gov/StartaBusiness/OperatingaBusiness/SellingMerchand
ise.aspx
42
Reference (cont’d)

Business permits, licenses and registration requirements in California:
http://www.calgold.ca.gov/

Business incentives:
http://business.ca.gov/Portals/0/RelocateExpand/Docs/%5BCalBIS%5D%2
0Investment%20Guide%206-12.pdf

Tools for business: (others as appropriate)
http://alamedacowib.toolsforbusiness.info/california/0b/?CFID=20047345&C
FTOKEN=48228e477ea10bf9-CBBF2EC4-080A-5D4FFD33E2DE24B108AC

Basic information on employees:
http://business.ca.gov/StartaBusiness/AdministeringEmployees.aspx

Apply for an EIN:
http://www.irs.gov/businesses/small/article/0,,id=102767,00.html
43
“If you don't know where you are going,
any road will take you there.”
— Lewis Carroll
SUCCESSFUL BUSINESS PLANS
Purpose: Business Plan

Secure capital

Roadmap to success

Negotiate deals with landlords and channel partners

Written execution plan

Solidifies thinking

Makes “vision” in your head real
The 3 C’s: Clear, Compelling, Concise
45
Simplicity is Key
“People don’t read anymore;
Make it easy for them!”
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Success Factors





10 or fewer written pages
Plus financials and supporting documents
Formula works for all companies
At any stage of development
Easy to customize
48
WHAT IS YOUR MISSION?
Define your Mission

Summary of your business and your plan?
– Short and Sweet.
– 100 words, hopefully less.
– Think of it as “your reason for being.”

Clearly define your market and your role in it.

How are your different from your competition?
50
Answer these Questions

What will your company do?

Who is your core customer?

How will your reach them?

Why are you better than the competition?

What are your product benefits?

What are your key features?
51
Example


Take out a blank piece of paper
Assume this Day Spa is your business:
Take 3 minutes and write a Mission Statement for your
business
52
Sample Mission Statement
Our mission is to run a profitable business by providing high-end therapeutic
massage and aesthetician services in a caring, upscale, professional
environment. We offer massage in a variety of styles – traditional Swedish
Massage, Sports Massage, Deep Tissue work, Sports Massage, Hot Stone
Massage, Reflexology, and others. Our licensed aestheticians offer the latest in
skin treatments, body treatments and anti-aging therapies.
Our goal is to tailor the client’s experience based on initial interview
information, as well as feedback during the treatments, to ensure the client’s
comfort and satisfaction, and to increase repeat business. We are mindful of
the overall experience – using only the finest oils and lotions, beauty treatments
and aromatherapies. Special lighting, music, decor, and textiles are used
throughout the spa to complete the comfortable, plush environment and
enhance the client’s overall spa experience.
53
Write Down Your Mission

Take out the first sheet of paper with “Mission” on it.
– Write down your first pass at your business’ mission statement
– Make it great!

Remember . . . .
– Short and Sweet.
– 100 words, hopefully less.
– Think of it as “your reason for being.”



Does it define your market and your role in it?
Does it define how you differ from your competition?
Write it and rewrite it over time as you gather new
information
54
“I don't know the key to success,
but the key to failure is trying to
please everybody.”
— Bill Cosby
WHO IS YOUR CUSTOMER?
Customer Definition

Specifies your market AND your role in it

Identifies your customers and why they will buy from you

Defines your “target” consumer
56
Types Of Customer Information

Demographic Information - The study of human
populations:
–
–
–
–
–

Size
Density and location
Age and gender
Race
Occupation, Income and other statistics
Psychographic Information - Dividing a market into
different groups based on:
– Social class
– Lifestyle
– A personality characteristic
57
Market Segmentation

The process of dividing the total market into a subgroup
which consist of customers who share a similar set of
needs and/or wants.
58
A Viable Market Segment . . . .

Can be measured?

Is large enough to earn profit?

Is reasonably consistent over time?

Is possible to reach using available promotion and distribution
channels?

Has relatively consistent product preferences?

Can be differentiated from other consumers with other preferences?

Responds similarly to a market stimulus?

Can be reached in a cost-effective manner?
59
Market Segmentation

Simple segmentation scheme
60
Identify Your Heavy User Group

Specialty chocolate and women between 25 and 44

Domestic beer and blue collar males

Imported beer and white collar males

Any Others Come To Mind?
61
Example

Take out a blank sheet of paper.

Assume this is your bicycle shop:
Take 3 minutes and write down everything you know
about your target consumer.
63
Example
Is this your customer?
How about this?
Or is this your customer?
Or this?
64
Example
If this is your customer, what do we know/can we find out
about him/her?
• Age?
• Income?
• Other Activities?
• What do they watch/read?
• Where do they get product information?
• Who influences their decisions?
• What brands do they like?
65
Identify Your Customer

Take out the second sheet of paper with “Customer” on it.

Take 3 minutes and write down everything you think you
know about your customer.
66
WHAT IS YOUR PRODUCT/SERVICE?
What is this?
A Camera!
What is its purpose!
Capturing Memories!
68
Product

What is it?

What does it do? What problem does it solve?
– If you can explain in 3 steps = you are golden!

Create a competitive product matrix and show what the
others are missing

Demonstrate your added value
69
Example


Take out a blank sheet of paper and over the next 2
minutes list sample features of a camera.
fea⋅ture: noun. a prominent or conspicuous part or
characteristic
–
–
–
–
–
8x Optical Zoom with 28mm Wide-Angle Lens
Optical Image Stabilizer
720p HD Video
Lithium-ion Battery
Warranty/Customer support
Remember: Features don’t sell
Products; Benefits sell Products!
70
Example

ben⋅e⋅fit: noun. something that is advantageous or good;
an advantage
–
–
–
–
–

Better sports pictures
Quality images
Longer time between charges
Affordability
Easy return policy
Marketing and sales: Think . . . .
Feature → Advantage → BENEFIT!
Remember to ask Yourself: What problem
are you solving for your customer?
71
More On Benefits

The most compelling product benefits are those that
provide:
– Emotional rewards, or
– Financial rewards.
Example: It’s not the brighter smile that the
toothpaste offers; it’s what the smile might bring
you (e.g. friends, a better job, etc.).
72
Services

Can a service have benefits?

Of course! Name 5 potential features/benefits for a
dentist.
–
–
–
–
–
Years in practice: “The dentist knows what he/she is doing”
Name dental school: “They are smart and, therefore, better”
Location: “No hassle, saves time”
Parking: “Convenient, saves time”
In Network, Preferred provider: “Saves money and hassle”
73
Competitive Feature Matrix
74
Define your Product/Service

Take out the third sheet of paper with “Product/Service”
on it.

Take 3 minutes and write down your product/service and
the associated features and benefits.

Create a competitive matrix and show what your
competitors are missing that you offer
“Anything that won't sell, I don't want
to invent. Its sale is proof of utility,
and utility is success.”
— Thomas Edison
75
Startup Boot Camp — LUNCH
Ask not what you can do for your
country. Ask what's for lunch.
– Orson Welles