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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