Bing Bang! First Steps to Starting your Business

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Bing Bang! First Steps to Starting your Business

  1. 1. BING BANG!First Steps to Starting your Business
  2. 2. How to start your OWN Business?
  3. 3. 6 STEPS1. IDEA2. PERSONAL FINANCES3. BUDGET4. PLAN5. FORMALIZE6. MANAGEMENT
  4. 4. 1. IDEAPersonal•What type of business do you want?•Am I ready for the investment of time and money?•Am I ready for the responsibility?• Impact in my life style• List of advantages and disadvantages
  5. 5. PERSONAL INVENTORY OF YOURSKILLS AND EXPERIENCEWhat: I know, I should know, I need to learn• Product/Service• Industry• Operations• Promotions/Sales (Language)• Financial Records• Legal Aspects
  6. 6. 2. PERSONAL FINANCES
  7. 7. Important Factors for Securing aLoanCollateralCreditScoreCapitalCharacterCapacityto repayConditions
  8. 8. Credit Score• What is credit?– An asset that allows you to access many different resources,both financial and non-financial– A point system between 300-850 that reflects your history ofrepaying your debts and how you manage your credit• Why is credit so important?– Financial institutions use your credit score to determine if youqualify for a loan, the interest rate you will pay, and the term ofthe loan. Employers, educational institutions, and landlord areother parties that may use your credit report.– Your business partner’s credit report plays a role in securingfinancing
  9. 9. Payment History35%Balance onAccounts30%Length of History15%New Debt10%Types of credit10%
  10. 10. Capacity• LEDC takes a holistic look at your ability torepay a microloan• If you are a start-up business, do you have anadditional source of income that will support youduring the initial start-up phase?• If you are an existing business, what does yourhistorical data show and how will these profits bemaintained? Do your business financials showpositive cash flow and a positive net equity?
  11. 11. Capital and Collateral• Capital: How much of your own money have youinvested in your business? (Your owner’s equity)• Your owner’s equity or contribution representsyour commitment to the venture• Collateral: a third source of repayment.• LEDC secures loans with lien-free car titles andbusiness assets
  12. 12. Character and ConditionsCharacter• Thorough understanding of your business model• Clear articulation of size and purpose of loan• Straightforwardness about financial situation• Number of years of industry experience• Quality of referencesConditionsCurrent economic climate of industry in whichbusiness is operating
  13. 13. 4. PLAN• Write a business plan• Why?- Organize your ideas- Focus your efforts- Create a common vision(partner)- Ask for financing- Gain confidence of theviability of yourbusiness- sustainable- Maximize your chancesof success
  14. 14. BUSINESS PLAN••••
  15. 15. $10 martini-and-manicure special—whichstarts at 5 p.m. nightly and continues until 11p.m. or laterThese fish can completely get rid of skinsmear and aging cortex
  16. 16. 5. FORMALIZE1. Register de business/Legal entity2. Register with the IRS for taxes at the federallevel3. Register to pay state’s taxes4. Licensing and permits
  17. 17. • REGISTER YOUR BUSINESSThe Dept of Consumer andRegulatory Affairswww.dcra.dc.gov• 941 North Capitol Street, NE,Washington, DC 20002• Tel: 202-442-4400• GET A FEIN• Register your business with theIRS to pay taxes to the federalgovernment and to open a bankaccount. For more informationvisit: www.irs.gov• STATE’S TAXES FOR DC• Register with OTR (Office of Tax&Revenue) www.otr.cfo.dc.gov• LICENSES AND PERMITSDepartment of Consumer andRegulatory Affairswww.dcra.dc.gov
  18. 18. 6. MANAGEMENTInsuranceConsultantsUpdate your abilities
  19. 19. • Marla Bilonick• mbilonick@ledcmetro.org• 202-540-7412• Rossana Espinoza• respinoza@ledcmetro.org• 202-540-7416

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