RISBDCRhode Island Small Business

Development Center

The Business PlanPresented bySixcia Devine

Regional Director401-263-5123 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 MetroTaco Center, Larry Friedman International

Center for EntrepreneurshipSixcia Devine, Regional Director

• Central & Southern RICentral RI Chamber of CommerceArdena Lee-Fleming, Regional Director

• Newport/EastBayNewport County Chamber of CommerceStacey Carter, Regional Director

• Northern Rhode IslandNorthern RI Chamber of CommerceDouglas Jobling, Regional Director

• Pawtucket & Central Falls268 Main Street, PawtucketAdriana 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 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

The Partnership Structure; an Inclusive Approach

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.– 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

• 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

• 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 & ResourcesOrder your free credit reports from: www.annualcreditreport.com

Credit Bureaus:

TransUnion Equifax Experian(800) 888-4213 (800) 525-6285 (888) 397-3742PO Box 1000 PO Box 740241 PO Box 9595Chester, PA 19022 Atlanta, GA 30374-0241 Allen, TX 75013www.transunion.com www.equifax.com www.experian.com

Credit ResourcesThe Fair Credit Reporting Actwww.ftc.gov/os/statutes/fcra.htmCredit Centralwww.truecredit.com/centralIdentity Theft Informationwww.consumer.gov/idtheft/index.html

RI SBDC 23

Challenges• 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

Free Tutorials and ArticlesStarting/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 Planhttp://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 CenterJohnson & Wales University

Headquarters

270 Weybosset Street, Richmond BldgProvidence, RI 02903

(401)-598-2702