Personal skills Determination Ability to take decisions Coordination skills: Ability to juggle several jobs Organization skills: Organize all resources to make the business run efficiently Ability to deal with stress Self-confidence Business knowledge Know your product / service / market Know what the competition offers Know what you ’re talking about! Ability to manage yourself and eventually other people Ability to manage money: Cash flow, credit line, financing and to negotiate with clients / suppliers Start-up money Savings - Love-money - Banks - Personal credit - Associate - Silent investors Support Surround yourself with a strong support system :Family, Friends, Professionals Get involved in community associations: Network with local business groups
Which Structure is for You? Sole Proprietorship : Unincorporated business owned by one person, called a &quot;proprietor.&quot; The owner does not have separate legal status from the business (although the business name itself may have to be registered) and pays personal income tax on the net taxable income generated by the business. ADVANTAGES Simplest and least expensive to set up, minimal registration requirements Inexpensive to maintain Proprietor owns the profits and runs the business Possible tax benefits: e.g. losses may be applied against other income of proprietor DISADVANTAGES You’re on your own You assume all the risk of the business. You are responsible for payment of all business debts. Creditors can seize your personal assets Possible tax disadvantages e.g. profits must be added to personal income. Partnership : An association or relationship between two or more individuals or corporations that join together to operate a trade or business for profit. Partners include their share of income or losses on personal or corporate income tax returns. ADVANTAGES Easy to set up and very flexible Partners provide additional capital and skills DISADVANTAGES If disagreements arise, business can suffer Partners assume personal liability for debts of the business Incorporation : A separate legal entity which can enter into contracts and own property, separately and distinctly from its owners who are the shareholders. A corporation has to pay tax on its net taxable income and file its own income tax return. A corporation can be federally or provincially incorporated. ADVANTAGES Limited liability of the owner(s) – liabilities generally limited to individual's personal investment in the business Money for the business can be raised by selling shares (equity) or by issuing debt (a promise to pay) DISADVANTAGES Paperwork required to meet regulations can be onerous Tax rules can be complex More expensive and complicated to set up and maintain
Tips for an effective proposal Written simply : Put yourself in your reader’ shoes. Long complicated words and sentences won’t impress your banker as much as the right information. Work with a professional if writing isn’t your force , BDC Consulting can help you put a good proposal together. Back-up any statements with facts. Don’t write a novel. It must be complete , but concise . Image counts . If you’re not particularly talented in page layout, work with a professional. Your proposal must show your company at is best and convince the reader that your are uniquely qualified to make your project succeed. Sell yourself!
What your business plan says about your company: A business plan conveys: Your business goals Strategies you'll use to meet them Potential problems that may confront your business and ways to solve them Organizational structure of your business (including titles and responsibilities) States the amount of capital required to finance your venture and keep it going until it breaks even. It needs to be constructed somewhat like a story…. Needs to answer what, who, where, when, why, as well as how.
1) A good executive summary is, above all, short . It should briefly describe: • Your industry • The products and services you offer or plan to offer • Your competitive advantage • The amount of financing required and why • Your company or your credentials (in 50 words or less) TIP: Executive summary should be done last . 2) Description of your company , this section provides details about your company and should include: • Company name • Address • Legal status (sole proprietorship, Partnership, Corp., Coop.) • Date company founded • Mission, objectives and vision, industry 3) Description of your management team : Sell yourself and your management team. Include information such as: Your respective roles (such as President, Chief Financial Officer, Marketing and Sales, Research and Development, Technology…) Your experience and competence (be sure to highlight similar or related projects) Your education
Include the following sections: Product or services : A description of what you offer and explanation of how your clients will benefit (why your products or services will sell) Market Potential : Include information about the future of your market or industry. Economics : facts about your industry (market size, market share, current demand, trends, consumer preferences, trends in product development. How to overcome barriers such as: high capital costs, production costs, marketing costs, brand recognition, training & skills, unique technology & patents, shipping costs, etc… 3. Your Competition: Offer proof that you know your competition well, marketing efforts, future prospects. Show your competitive advantage and how you will stand out; analyze the possible reactions of your competitors to your presence and indicate how your plan takes this into account. 4. Your Marketing Strategy: An overview of your marketing plan: Addresses the previous 3 sections and includes proof of effectiveness as well as information on the media chosen, partners, etc. Be specific ; give statistics, numbers & sources. Marketing plan will be the basis, later on, of the all-important sales projection.
HR planning : In many industries, qualified human resources are scarce. You might have to explain how you will have the ability to recruit, retain and develop your human resources. Be sure to mention: What type of HR policies you would privileged to attract qualified employees • Any subcontracting you plan to do • Outside professionals you plan to use (lawyers/accountants, etc.) • An overview of your organizational and development plans (your major divisions, training initiatives, career planning, etc.) Financial planning: This is the section that provides financial forecasts for the next 2 to 3 years and should include: • Balance sheet • Statement of income • Cash flow budget (if possible, 3 scenarios – best-case, realistic and worst-case) Appendices: Appendices do not add any new information – their purpose is to show that your proposal is based on facts. Brief bios of your management team Market studies or other research that supports your conclusions Proof of any calculations or hypotheses such as copies of leases, subcontractor estimates, letters of intent Client testimonials
Lenders will also have a high interest in: The amount of personal investment (money and/or equipment) you are investing in your project If there is a risk sharing strategy with a third party (another bank for instance) or If you are counting on your financial institution to take all the risk.
BDC Working capital solutions Complement your existing line of credit Help provide you the cash flow to fuel your growth. Offering flexible repayment terms and, Up to $ 1 50,000 long-term financing, BDC can be a winning partner for success. Financing possibilities: Increase inventory to boost sales and receivables; Provide working capital required to develop new markets and products; Pay R&D costs associated with introducing these new products or services; Finance development of e-commerce initiatives, such as Web sites; Implement a marketing plan or growth strategy; Explore new export markets; Adopt quality management standards, such as ISO certifications and HACCP.
One of the few financial institution to provide financing as well as consulting solutions across the country Provides financing at every stage of growth Work hand-in-hand with chartered banks and Caisses as we don to offer short term financing and are there to share the risks with them We do not offer grants nor interest-free loans and have eligibility criteria to respect (no loans to businesses operating in industries related to the promotion of alcohol, sex or gaming and to companies that do not respect environmental regulations).
Co-Vision Solution is designed to encourage the creation of new businesses that have good prospects of being viable by providing term financing adapted to their needs. Solution offered to most industries with an emphasis on manufacturing, distribution, construction, business services and tourism Home-based businesses: some conditions apply Businesses with store front operations in the house of one of the owner(s) and Businesses with no store front operations, which include the internet businesses. Changes of ownership are not eligible with Co-Vision solution but can be assessed under other type of loan at BDC Maximum total commitment: $150K Restaurant / Retail industries / Home-based business: minimum required credit score. Line of Credit (personal or corporate) is mandatory for cash flow needs (Working capital) Equity: debt to equity ratio: must not exceed 4:1 Repayment period: 6 years including initial postponement period of 12 months. Blended payments are not allowed. Documents needed: Business plan mandatory (including financial forecasts and opening balance sheet) Personal statements of Assets is mandatory (with proofs of declared assets) Signed permission to do an Equifax check on ALL shareholders
Possibility of deferred capital payment Guaranteed term: financing cannot be recalled without due cause Your choice of floating or fixed interest rates Fast track, no penalty repayment options up to 15% of remaining balance per year.
CBDC Community Business Development Corporations stimulate private sector employment through business financing, counselling and advisory services to small businesses. Visit www. dbdc .ca to find the CBDC nearest you and view their profile.