The SMALL BUSINESS DEVELOPMENT CENTER at the SUMMIT MEDINA BUSINESS ALLIANCE Presents

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The SMALL BUSINESS DEVELOPMENT CENTER at
theSUMMIT MEDINA BUSINESS ALLIANCEPresents
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Business BasicsWorkshop
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Why do YOU want to start a business?

• To make MONEY
• Non Profit is a separate case

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Business Defined
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Business is the use of RESOURCES

• Land
• Labor
• Capital
• To create REVENUE

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What is your business idea?
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• What resources do you already have to start your
  business?
• What is the value of what you already have?
• What resources do you need?
• What are the costs of the things you need?

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Can the use of those resources to produce your
product or service make money for you?
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Marketing
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What makes your idea unique?

• Differentiation

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• How can you communicate that unique quality?
• Why would someone want to buy from you versus
  somebody else?
• The VALUE PROPOSITION

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• value proposition (plural value
  propositions)noun Definition statement of
  business strategy a statement of the way a
  business proposes to use its resources to deliver
  superior value to its customers
• From MS Encarta

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What is your Value Proposition?
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• If you build it,
• they will come.

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• How do you get the word out?
• It takes a plan
• A MARKETING PLAN

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Accounting
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1st Accounting Principle

• Money you invest to acquire resources is EQUITY
• Loans and Credit you use to acquire resources are
  LIABILITIES
• Resources is another word for ASSETS

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Assets Liabilities Equity

• Have (Assets) Owe (liabilities) Worth
  (Equity)
• This is the Accounting Equation
• BALANCE SHEET
• The balance sheet is a snapshot in time
• What does it tell us?

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2nd Accounting Principle

• REVENUE is the money you bring in from sales
• EXPENSES are the costs of generating your product
  using your resources
• PROFIT is what is left of revenue after
  expenses have been paid

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Revenue Expenses Income

• Sales (Revenue) Costs (Expenses) Profit
  (Income)
• This is the Profit Equation
• INCOME STATEMENT
• The income statement shows performance over
  some period of time
• What does it tell us?

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3rd Accounting Principle

• Income ? Cash
• Where does your money come from?
• Where is your money going?

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What are the sources of cash?

• Revenue from sales
• Proceeds from financing
• Investment Income
• Cash from the sale of assets

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What are the uses of cash?

• Use cash to buy assets
• Use cash to pay operating expenses
• Use cash to pay financed debt
• Use cash to pay taxes

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Ending Cash Starting Cash Cash received from
Sources Cash spent on Uses

• This is called CASH FLOW
• Statement of Cash Flows
• This statement follows the money over some period
• What does it tell us?

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Financial Projections

• Estimate 12 to 60 months forward
• Show periodic detail
• Document assumptions
• Project the income statement
• Project the cash flows statement

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Risk
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What is Risk?

• Potential losses that could affect
• Operational Performance
• Financial Position
• What are some examples?

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How do we limit risk?

• Business Structure to separate personal and
  business liabilities
• Property Casualty or General Liability insurance

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Types of Entities

• SOLE PROPRIETORSHIP
• GENERAL PARTNERSHIP
• LIMITED LIABILITY PARTNERSHIP
• CORPORATION
• S CORPORATION
• LIMITED LIABILITY COMPANY

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Steven Cook New Business Legal
Clinic330.972.2358
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The Umbrella Insurance Policy

• Property Loss
• Business Interruption Loss
• Liability Loss
• Key Person Loss
• Automobile Loss

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Most Homeowners InsuranceDOES NOT cover
issues arising from operating a business in your
home!
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Most Personal Auto InsuranceDOES NOT cover
issues arising from using your car (or a rental
car) for business!
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Getting Started
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Do you have what it takes?

• Time
• Debt Tolerance
• Risk Tolerance
• Assertiveness
• Drive / Passion / Excitement
• COMMITMENT

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You Need a Plan
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The Business Plan

• Proving your idea to yourself
• Making the Case to your Investors
• Making the Case to your Banker
• Ongoing Performance Evaluation Benchmarks

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How to Write a Business Plan Workshop
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File with the State

• Your Entity Name
• Your Fictitious Name or DBA
• Your Entity Structure

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File with the IRS

• Tax ID Number / Employer ID Number

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Banks Financing
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Banking

• Choosing a Bank
• Open a Business Checking Account
• You must have your Tax ID

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Free Money is an Urban Legend
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Financing

• The Role of the Business Plan
• Be Specific about how much you need
• Show where how it will be spent
• You need 10 - 20 Down
• Good Credit Scores

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Other Licenses

• Vendors License (State) Ohio Dept. of Taxation
• Vendors License (County) County Auditor
• State Unemployment Ohio Dept. of Job Family
  Services
• Workers Compensation Ohio Bureau of
  Workers Compensation
  (group rating)

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• Start Up
• Strategic Planning
• Business Management
• Marketing Sales
• Merchandising
• Financial Analysis
• Product Development / Technology
  Commercialization
• Operations / Manufacturing / Engineering
• Market Expansion Export Procurement
• Franchising
• Human Resources

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