starting a business in il next steps

Starting a Business in IL: Next Steps

Presented by Miguel Hinojosa, PhDcSmall Business Advisor

ILSBDC at Harper College

All starts with the will

Seminar objetives

1. An overview of how to start a business2. Introduction to the key areas of business

planning3. Suggestions for further sources of

information

Agenda

1. Business idea2. Business Model3. Business Plan4. Invitation for IL SBDC at Harper College

Business Idea

What road

should I take?

It depends. Where do you

want to go?

If you don’t know where you are going, any road

will get you there

It doesn’t matter

What? and For whom?

• What product or service you want to offer? Match each picture with the words:

1. Price2. Quality3. Quantity4. Time

What? and For whom?

• Who would you want to sell? Competitor custormers or new. Match each picture with the words:

1. I sell according customer habits2. Need or problem that I help solving3. Results that customers expect

The real benefit

• What is the real benefit that the customer purchase?

•

Your Business Idea

• What?• Cost:• Quality:

• Quantity:• Time:

• To whom? • Needs:

• Habits:

• Results:

• Benefit?

Agenda

1. Business idea2. Business Model3. Business Plan4. Invitation for IL SBDC at Harper College

From business idea to business plan

The empathy map

Strategy business models

• What if …?

Create more prototypes

Your business model

Agenda

1. Business idea2. Business Model3. Business Plan4. Invitation for IL SBDC at Harper College

Business plan

1. Industry Analysis (4)2. Market Analysis (5)3. Products and Services (3)4. Description of Business (2)5. Marketing Strategy (6)6. Operations and Administration (7)7. Financial Plan (9)8. Implementation Plan (8)9. Contingency Plan (10)10. Executive Summary (1)

1. Industry Analysis

• Industry health• Industry cycle

1. Industry Analysis

• Economy of scale• Technology

2. Market Analysis

• Structure and size• The competence

2. Market Analysis

• Market Segment• Deep Research

• Positioning• Registered trademark,

Patent andCopyright

3. Products and Services

3. Products and services

• Customer preference• Fad, Fashion, trend and Lifestyle

4. Description of business

• Vision: To Provide assistance to Strengthen the management of small and medium enterprises

• Mission: To Provide a positive economic impact in the long term

• Values:Quality ServiceVisionary LeadershipDiversityIntegrity

4. Description of business

• Short and long term goals• Description of operation and facilities

5. Marketing Strategy

1. Target market identification2. Target markets features3. Tools and methods4. Market testing5. Marketing strategy implementation

5. Marketing Strategy

• Price fixing• Sales

1. Customer need2. Problem to solve3. Consequence of not resolving4. Demostrate the solution5. Facilitate the purchase6. Customer service

6. Operation and Administration

1. Location and facilities2. Processes and procedures3. Purchasing and controls4. Inventory administration5. Distribution6. Customer service

6. Operation and Administration

• Human resources• Management and organization• Professional services

6. Operation and AdministrationType of Company

Advantage Disadvantage

SolePropietorship

Easy formalization Unlimited liabilityPersonal tax

GeneralPartnerships

Collaborative Unlimited liabilityPersonal tax Coordination of interest

Limited Liability Co.

Legal entity Different State lawsLimited liability Tax: salary and income

SCorporation

Legal entity Lost controlCommon share, 100 owners Tax salary, income & FedLimited liability Reports & annual meeting

C Corporation Legal entityCommon&preferred share

Tax salary, income, Fed, S.Lost control

Limited liability Reports & annual meeting

6. Operation and Administration

7. Financial plan

• Financial Evaluation• Sensitivity Analysis• Scenario Analysis

Cash flow Data Time 0 Year 1 Year 2 Year 3 Year 4Sales 5% 100,000 105,000 110,250 115,763Cost of sales 75% -75,000 -78,750 -82,688 -86,822Operation expenses 19,275 -19,895 -19,515 -19,435 -19,355Operation flow 5,105 6,735 8,128 9,586Working capital 25,000 -25,000 25,000Loan W.C. 3,000 3,000 -3,000Investment capital 10,000 -10,000 5,000Loan I.C. 4,000 4,000 -1,000 -1,000 -1,000 -1,000Net Cash Flow -28,000 1,105 5,735 7,128 38,586Loan W.C. % 10% % & NPV 5% 16,156 IRR % 20%Loan I.C. % 8%

Cash flow Data Time 0 Year 1 Year 2 Year 3 Year 4Sales 5% 100,000 105,000 110,250 115,763Cost of sales 75% -75,000 -78,750 -82,688 -86,822Operation expenses 19,275 -19,895 -19,515 -19,435 -19,355Operation flow 5,105 6,735 8,128 9,586Working capital 25,000 -25,000 25,000Loan W.C. 3,000 3,000 -3,000Investment capital 10,000 -10,000 5,000Loan I.C. 4,000 4,000 -1,000 -1,000 -1,000 -1,000Net Cash Flow -28,000 1,105 5,735 7,128 38,586Loan W.C. % 10% % & NPV 5% 16,156 IRR % 20%Loan I.C. % 8%

8. Implementation Plan

• Tasks description• Deadline• Responsibility assignation

Gantt ChartBusiness Plan 1 2 3 4 1 2 3 41. Industry Analysis2. Market Analysis3. Products and Services4. Description of Business5. Marketing Strategy6. Operations and Administration7. Financial Plan8. Implementation Plan9. Contingency Plan10. Executive Summary

January FebruaryGantt ChartBusiness Plan 1 2 3 4 1 2 3 41. Industry Analysis2. Market Analysis3. Products and Services4. Description of Business5. Marketing Strategy6. Operations and Administration7. Financial Plan8. Implementation Plan9. Contingency Plan10. Executive Summary

January February

8. Implementation Plan

• Recruitment and selection• Marketing tactics• Development of products and services• Technology application

8. Implementation Plan

• Funding– Personal, Family y Friends– Institutions• SBA Microloan Program www.sba.gov• Accion Chicago www.accionchicago.org• Department of Commerce & Economic Opportunity

www.illinois.gov

8. Implementation Plan

• AccountingOperation evaluationTax declaration

• Bank AccountAll revenues depositedAll expenditures by check

9. Contingency Plan

1. Evaluation of possible events2. Response and Recovery Plan3. Damage Assessment Process4. Lifesaving procedure5. Rehabilitation Plan6. Recovery Plan

9. Contingency Plan

• Fall of income or loss of customers• Loss of personal• Change in the regulatory restrictions• Increased costs or loss of provider

10. Executive Summary

• For staff• For investors• For funders

Your business plan checklist1. Industry Analysis •Industry health o•Industry cycle o•Economy of scale o•Technology o2. Market Analysis •Structure and size o•The competence o•Market Segment o•Deep Research o3. Products and Services •Positioning o•Trademark, patent & Copyright o•Customer preference o•Fad, Fashion, trend and Lifestyle o

4. Description of Business •Vision o•Mission o•Values o•Short and long term goals o•Description of operation & facilitieso5. Marketing Strategy a.Target market identification ob.Target markets features oc.Tools and methods od.Market testing oe.Marketing strategy implementationo•Price fixing o•Sales o

Your business plan checklist6. Operations and Administration •Location and facilities o•Processes and procedures o•Purchasing and controls o•Inventory administration o•Distribution o•Customer service o•Human resources o•Management and organization o•Professional services o•Type of company o•Registration o7. Financial Plan •Financial Evaluation o•Sensitivity Analysis o•Scenario Analysis o

8. Implementation Plan •Tasks description o•Deadline o•Responsibility assignation o•Recruitment and selection o•Marketing tactics o•Development of products and serviceso•Technology application o•Funding o•Accounting o•Bank Account o9. Contingency Plan •From possible events to recovery plano•Fall of income or loss of customerso•Loss of personal o•Change in the regulatory restrictionso•Increased costs or loss of providero10. Executive Summary

Agenda

1. Business idea2. Business Model3. Business Plan4. Invitation for IL SBDC at Harper College

Small Business Development Center SBDC

The SBDC at Harper College is funded in part through a cooperative agreement with the U.S. Small Business Administration, Department of

Commerce and Economic Opportunity, and Harper College to help our local businesses start,

grow, and expand

SBDC Services• Workshops & seminars on key business topics• Free, Confidential, One-to-One

advising/coaching. Advising areas include Marketing, Finance & Accounting, Business Plans, Access to capital/funding, Operational issues, Strategy, & Starting a biz

• Client categories: Pre-venture, Start-up and Established

• SBDC Toolbox: GrowthWheel, ProfitMastery, ReferenceUSA and IBISWorld

SBDC Advisors

Tomas Joan Anthony Miguel Cassell Dubnicka Baldassano Hinojosa• Provide individual business

counseling/coaching, at no cost• Financial, Marketing, and Management

expertise• All Successful Entrepreneurs

SBDC Workshops and Seminars

• Starting a Business: First and Next Steps• Small Business Marketing Boot Camp• Small Business Financial Boot Camp• Social Media Boot Camp• QuickBooks for Entrepreneurs• Email Marketing 101

Invite you to register at www.harpercollege.biz

Starting a Business in IL-Next Steps

• Miguel Hinojosa Ph.Dc• Email mhinojos@harpercollege.edu• Cellphone (847) 873 – 2245• Office (847) 925 - 6520• Thank you for attending• Please complete the evaluation form