RISBDC Rhode Island Small Business Development Center The

RISBDC Rhode Island Small Business Development Center The Business Plan Presented by Sixcia Devine Regional Director 401 -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 Metro Taco Center, Larry Friedman International Center for Entrepreneurship Sixcia Devine, Regional Director • Central & Southern RI Central RI Chamber of Commerce Ardena Lee-Fleming, Regional Director • Newport/East. Bay Newport County Chamber of Commerce Stacey Carter, Regional Director • Northern Rhode Island Northern RI Chamber of Commerce Douglas Jobling, Regional Director • Pawtucket & Central Falls 268 Main Street, Pawtucket Adriana Dawson, Regional Director

Small Business Facts • Small Business is the backbone of the American Economy • Two of every three new jobs result from 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 Partnership Structure; an Inclusive Approach 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 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 • 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 – Quick. Books / 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 & Resources Order your free credit reports from: www. annualcreditreport. com Credit Bureaus: Trans. Union Equifax Experian (800) 888 -4213 PO Box 1000 Chester, PA 19022 www. transunion. com (800) 525 -6285 PO Box 740241 Atlanta, GA 30374 -0241 www. equifax. com (888) 397 -3742 PO Box 9595 Allen, TX 75013 www. experian. com Credit Resources The Fair Credit Reporting Act www. ftc. gov/os/statutes/fcra. htm Credit Central www. truecredit. com/central Identity Theft Information www. consumer. gov/idtheft/index. html

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 RI SBDC 23

Free Tutorials and Articles Starting/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 Plan http: //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 Center Johnson & Wales University Headquarters 270 Weybosset Street, Richmond Bldg Providence, RI 02903 (401)-598 -2702