STARTING A BUSINESS

Berkeley Public Library

May 15, 2018

Alameda County SBDC

Thank you to Our Sponsor

Local SBA Ecosystem

Partnership and Hosting

We are the premier provider of Business Advisory Services to the small business

community.

Our mission is to create economic opportunity by

empowering entrepreneurs.

Free & Low Cost

Seminars

Our Services

Free One-on-One

Consulting

Seminar ExamplesAccess to Capital Successful Business Plans

Starting a Business Meet the Lenders

Social Media Government Contracts

Marketing Law for Entrepreneurs

Worker Owned Businesses Buying a Business

Starting a Restaurant Crowdfunding and Alternatives

Starting a Food Business How to Pitch Your Company

Finding Your Core Customer Exporting

Website Development Home Based Businesses

ACSBDC Consultants

Ron Barrett

LoansCynthia Mackey

Social Media

David Bokash

Business Technology

Lee Lambert

Director

Deagon Williams

Food & Restaurants

Paula Mattisonsierra

Retail & MarketingMari Lovalvo

Human Resources

David Mitroff

Social Media

ACSBDC Consultants

Dorian Webb

Operations

Bob Komoto

Export/ImportTom Camerato

Financial Modeling

Mary Passarella

Accounting

Tom Yeh

Strategy

Ed Duarte

Construction

Paul Bozzo

Equity Funding

Lisa Cain

Marketing

How to register for services

www.acsbdc.org

Our Client Results

ALAMEDA COUNTY: 2013 through 2017 (5 Years)

Presentation Download

www.acsbdc.org/handouts

Lee Lambert

Director, Alameda County SBDC – affiliated

since 2008

Founder/CEO, Simple Buyout Plans and

Hollywood Partners

Founder, Cambridge/Samsung Partners

(venture fund)

Samsung Electronics, Van Kasper & Co.,

Deloitte, Ernst & Young

Harvard Business School, UC Berkeley

Agenda

Attributes of Successful Entrepreneurs

Business Concept

Business Planning

Marketing plan 101

Preparing to Accessing Capital

Legal Issues

Permits and Licensing

Resources & Support

ATTRIBUTES FOR SUCCESS

15

Attributes for Success

Passion

Focus

Discipline

Business Plan (which includes a

financial plan)

Strong Support Team

16

Passion

17

Focus

The most successful businesses solve peoples problems by providing benefits to the client.

They then deliver that good/service to the client better than their competition.

18

Discipline

BUSINESS CONCEPT

Business Concept: 20 Questions Before

Starting a Biz

1. Am I prepared to spend the time, money and resources

needed to get my business started?

2. What kind of business do I want?

3. What products/services will my business provide?

4. Why am I starting a business?

5. What is my target market?

6. Who is my competition?

7. What is unique about my business idea and the

products/services I will provide?

8. How soon will it take before my products/services are available?

9. How much money do I need to get my business set up?

10. How long do I have to finance the company until I start making a profit?

11. Will I need to get a loan or raise equity funding?

12. How will I price my product compared to my competition?

13. How will I market my business?

Business Concept: 20 Questions Before Starting a Biz

14. How will I set up the legal structure of my business?

15. How will I manage my business?

16. Where will I house my business?

17. How many employees will I need to start up?

18. What types of suppliers do I need to contact?

19. What kind of insurance do I need?

20. What do I need to do to ensure I am paying my taxes

correctly?

Business Concept: 20 Questions Before Starting a Biz

BUSINESS PLANNING

24

Business Planning

Market Research

Marketing/ Sales

Management & Operations

Finance

The Summary

Business Planning: Market Research

This section will be your STEP ONE

Is your product/service properly targeted to your potential customer?

Does your product/service have a sufficient sized target audience (customer)?

Who is your customer? What are their wants/needs?

Why will they purchase from you?

Who is your competition?

Why and how do you “win”?

Business Planning: Market Research

Facts used to:

Modify the product

Define the message

Identify the consumer

Quantify the market

Define price points

Business Planning: Market Research

Primary Research:

SWOT

Focus groups

Zoomerang & Survey Monkey

Telephone surveys

Customer interviews

The Competition & your Industry

Business Planning: Market Research

How do you define your competition:

Direct

Indirect

Online vs. Offline

New or well entrenched

Who can you identify in your area?

29

Business Planning: Marketing

mar·ket·ing

ˈmärkədiNG/

noun

the action or business of selling your products or services. Building long-term relationships with your target audience.

30

Marketing: The Sections of the

Marketing Plan

Marketing Objectives

Marketing Segment

Demographic

Psychographics

The Marketplace

The Competition

Marketing Strategies

31

Marketing: The Sections of the

Marketing Plan

Marketing Objectives:

What do you want to achieve

after investing time & money

into marketing?

32

Marketing: The Sections of the

Marketing Plan

Marketing Segment:

The portion of the population, you plan to

sell to.

This group has two elements which will

help you to determine, if this is the right

audience for you:

Demographic

Psychographics

33

Marketing: The Sections of the

Marketing Plan

The Marketplace

The industry and also the

geographic where you plan to

offer you product and/or

services

34

Marketing: The Sections of the

Marketing Plan

The Competition

These include other

companies who you will be

competing for market share (a

piece of the pie)

35

Marketing: The Sections of the

Marketing Plan

Marketing Strategies

The strategies and promotional

tools to be used to convert

your potential customer.

36

Marketing: The Sections of the

Marketing Plan

Marketing StrategiesThis includes an evaluation of the 4 Ps:- Product/Service- Price- Placement- Promotion

37

Business Planning: Management

man·age·ment

ˈmanijmənt/Submit

noun

1. the process of dealing with or

controlling people. "The

management of elk herds"

38

Management & Operations: The parts of

the O&M

The Management Plan

Ownership

Why are you uniquely qualified to operate this

business

Advisor(s)?

Operations

What are the logistics of running your

operations on a day to day basis?

Required human resources

39

Business Planning: Operations

Operations is designing and

controlling the process of

production and delivery of your

company’s goods or services.

Build your team and personnel structure

Consider your support structure

Decide who you need on your team

Examine the use of independent contractors

Understand employment laws & consider personnel

policies

Consider your management style

Take Care of Facilities

Find and secure a location

Rent space

Setup home office

Office in your vehicle

Incubators; virtual office

Get Systems in Place

Choose a phone system

Choose software

Choose hardware

Get online

Develop a technology plan & budget

Establish Processes

Design procedures for handling administrative tasks

General office management, bookkeeping/accounting, order fulfillment

Operations manual & templates for forms (invoices, statements, proposals)

Setup address book/groups

44

Business Planning: Finance

fi·nance

ˈfīnans,fəˈnans

noun

1. the management of large amounts of money,

especially by governments or large companies.

synonyms: financial affairs, money matters, fiscal

matters, economics, money management,

commerce, business, investment, ”he knows about

finance"

45

Finance: The sections in the financial

plan

• Profit Loss Statement

• Statement of Cash Flow

• Balance Sheet

46

Business Planning: Finance

Profit Loss Statement

1. Income/Revenue/Sales

2. - COGS .

3. = Gross Profit

4. - Operating Expenses .

5. = Operating Profit

6. - Taxes/Owner’s Draw .

7. = Net Profit

47

Business Planning: Finance

Statement of Cashflow

1. Beginning Cash

2. Cash In

3. Cash Out

4. Ending Cash

48

Business Planning: Finance

Balance Sheet

1. Assets

2. Liabilities

3. Equity

A = L+E

49

Summary: The sections to be included

THIS SECTION IS TYPICALLY CREATED LAST

Executive Summary

Business Narrative

Current status of your industry

Introduction to Products/Service

50

Business Planning: Summary/Executive

Summary

Executive Summary

Is a synopsis of the entire business plan. Answering all the fundamentals

WHO

WHAT

WHY

WHERE

WHEN

& HOW MUCH

51

Business Planning: Summary/Business

Narrative

Business Narrative

What your goals for the business?

Goals accomplished to date

Short term goals

Long term goals

52

Business Planning: Summary/Status

Status

What does your current business

landscape look like?

Describe your product and/or

service

MARKETING PLAN 101

54

Marketing Plan 101

Why is Marketing important?

To create revenue

To maintain existing customer base.

To find new customers

Build the brand

55

Marketing Plan 101

Target MarketImportant Definition:

Target Audience /Customer

A unique groups of customers for your

product and/or service, who want and can

afford your product and/or service.

56

Marketing Plan 101

Target MarketDemographics Psychographics

The numbers used to describe your target

The lifestyle associated with your target

57

Marketing Plan 101

Features v. Benefits

58

Marketing Plan 101

Features are Facts

Benefits provide Value

Benefits answer the question:

“What’s in it for me?”

Source: Entreprenuer.com Laura Clampitt Douglas

59

Marketing Plan 101

Sooooo…

Are we meeting our Clients

needs/wants?

60

Marketing Plan 101

MARKETING

Product Price Placement Promotion

61

Marketing Plan 101

Marketing Strategies

Emerging Trends Specific to this Target

Group

Industry share

Marketing Vehicle to be used to convert

your potential customer base – The

Promotional Mix.

Marketing Plan 101/The promotional mix

www.sfsbdc.orgWritten & created by P. Mattisonsierra

63

Marketing : Positioning

Advil ($.05) vs. Ibuprofen ($.013)

Water : Voss ($.90) vs Nestle Pure Life ($.20)

Tide ($11.99) vs Arm & Hammer ($7.99)

64

Marketing Plan 101: Sales - Relationship

Selling

1. Know your product or service

2. Make the initial contact with your prospect

3. Find out your clients’ priorities

4. Propose a solution

5. Focus on why they should buy

6. Help your prospect see the bottom line

7. Ask for the sale

8. Deliver

9. Follow Up

ACCESSING CAPITAL

How are You Set Up?

Basics:

Bank Account

Are you separating business and personal?

Payroll Service or Manual payments

Accounting Program

IRS, EDD (UI/ETT/SDI), FTB, City/County License

- Are you “reserving funds” for the payments?

Are you free of liens and claims? If not, are you on a

payment plan?

Build Your Credit

Make sure your credit and public records are clean as

possible – check and correct any errors

Helpful sites:

nav.com, nerdwallet.com, creditkarma.com,

creditsesame.com

If you need help to build credit:

ccssf.org

operationhope.org/oakland

Keep Good Records

Set up a good record keeping system and maintain it

- Use Quickbooks, Xero, even an excel sheet

Don’t hide your income (if you want a loan)

Keep receipts and contracts handy

Debt – Getting Prepared

Check your personal and business credit to find out if you

have anything to clear up or explain:

Nav.com – free business and personal credit reports

Creditkarma.com, creditsesame.com, many others – personal credit

report

Your FICO and business scores will help determine your strategy

Start-ups - need a personal financial statement (pfs), business plan

(10-15 pages is sufficient) and financial projections

Seasoned companies – usually need personal financial statement,

2-3 years of tax returns and financial projections

What collateral do you have? Recent valuation

Pay your bills on time

– If you fall behind or are having trouble, contact your

creditor!

Lower high balances

Do not close zero balance accounts

Open credit lines only when needed– But, don’t open too many in a short period of time

Fix mistakes

Get a copy of your credit report

Accessing Capital : Fixing Your Credit

LEGAL ISSUES

Legal Issues: Forming a Legal Entity

In summary – It’s about Accountability

– Taxes, fees, profit distributions

A corporation is an “artificial person” you create by filing

certain documents with the California Secretary of State

That artificial person can own or lease property, opens

bank accounts and enter into contracts just like a natural

person

Legal Issues: Choice of Entity

External funding vs. internal

More flexibility vs. better established form

Build wealth vs. tax efficient cash flow

Legal Issues: Choice of Entity

Four basic types of legal entities

– Sole Proprietor

– Corporations (“B”, “C” and “S” types)

– Limited Liability Companies

– Limited Partnerships

Legal Issues: Choice of Entity

Sole Proprietor

- Happens by default

- You are also the company

- No others are owners of the company

- Entities can change over time as your business

grows

- No liability protection

Legal Issues: Choice of Entity

C Corp – Delaware “C” Corp is preferred by venture

investors

S Corp or LLC – “pass through” entities generally

preferred by small businesses that can keep things

simple

Sole proprietorship – preferred where there is little or

no liability, no investors, minimal assets to protect

Business Insurance

Property – buy based on replacement value

Named peril

All-risks policy

Liability – damage to property to someone

Look at similar businesses/consult a professional

Professional Liability/Errors and Omissions

Employment Practices Liability Insurance

e.g., wrongful termination, sexual harassment, race, gender

Workers’ Compensation

Optional Medical/Dental/Vision

Employees

HR Manual

Job Descriptions

Payroll Service/HR Service

Benefits

Minimum wage/sick leave requirements

LICENSES/PERMITS

Licenses/Permits

Requirements vary greatly depending upon the type of business you are launching. Best to walk through your business concept with an advisor who can help you to navigate through the process efficiently.

Business License or “Tax Certificate” – generally required in any city/area where you are present (possibly multiple places).

Cost varies by city/jurisdiction.

Fictitious name – File with the County if you do business in a name other than your own, and publish in an “approved” publication. If you incorporate and do business in the corporate name, not required. If needed, file this before the business license. https://www.acgov.org/auditor/clerk/filefbn2.htm

Filing/publishing service: https://www.dbastore.com/hometemplate.cfm

$40 to file, publishing cost varies. Do this before the Business License.

Licenses/Permits

Seller’s Permit – Needed if you sell “tangible personal property” subject to sales tax. No cost to obtain, but you will need to make quarterly filings going forward.

http://www.cdtfa.ca.gov/services/#Register-Renewals

Employees – Many requirements if you hire employees. http://www.edd.ca.gov/payroll_taxes/am_i_required_to_register_as_an_employer.htm

Food/restaurant businesses – Many county health department requirements plus possible state and federal requirements if manufacturing products for stores.

http://www.acgov.org/aceh/

Licenses/Permits

Many other possible requirements depending on the

business (sample list – not comprehensive):

Transportation businesses – State PUC

Professional services – possible state licensing

requirements

Serving alcohol – California Dept. Alcohol Beverage

Control

Construction activity – city zoning/permitting

Many, many other possible requirements

Licenses/Permits

State of California Permit Assistance Site

http://www.calgold.ca.gov/

Put in location and type of business and you can see a list

of possible licenses and permits required (many won’t

apply)

Highly recommended: Work with a business advisor

(SBDC, SCORE, other) and local economic development

staff to go through the requirements for your business.

Licenses/Permits: Stay in Compliance

Business Licenses

– City and county

– State: Business Transportation and Housing (916) 323-5400

Fictitious Business Name

Federal Self-Employment Tax

Local Fees

State Taxes

Seller’s Permit

Employer Identification Number

Worker’s Compensation Insurance

State/Federal Withholding

RESOURCES & SUPPORT

86

Support Team

• Business Consultant

• Accountant/Bookkeeper

• Lawyer

• Industry Experts

• Family/Friends

Do you have what it takes?https://eweb1.sba.gov/cams/training/business_primer/assessment.htm

City Berkeley Resource

https://www.cityofberkeley.info/businesslicense/

City Oakland Resource

https://oakland.opencounter-v2.com/

Alameda County Resource

http://www.acgov.org/cda/ecd/business-resources/

California Resourceswww.business.ca.gov

Online Courseshttps://www.sba.gov/tools/sba-learning-center

www.sba.gov

Alameda County SBDC

Next steps:

Make an appointment with the SBDC or East Bay SCORE

(depending upon your needs)

– Find your focus

– Gain feedback before you commit funds

– Ensure you have budgeted wisely

Or, participate in an entrepreneur training program

- Uptima, Centro, ICA, many others

Thank You

Alameda County

Small Business Development Center

2101 Webster St.

Offices of Main Street Launch

Oakland, CA 94612

510-208-0410

www.acsbdc.org/handouts