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Entrepreneur Express, Jonah Fogel 09
 

Entrepreneur Express, Jonah Fogel 09

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Entrepreneur Express powerpoint on "Financing" by Dr. Jonah Fogel

Entrepreneur Express powerpoint on "Financing" by Dr. Jonah Fogel

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    Entrepreneur Express, Jonah Fogel 09 Entrepreneur Express, Jonah Fogel 09 Presentation Transcript

    • Financial Considerations for Your Small Business
      • Front door to the land-grant system
      • Research-based education
      • 107 county offices
      • 6 4-H Education Centers
      • 4 ARECs
      • Four Program Areas: ANR, FCS, 4-H, CV
      • Inventing the Future
      • http://www.ext.vt.edu
    • Financial Plan: By the numbers
      • Elements of a Business Plan
        • Executive Summary
        • Business Description
        • Marketing Strategies
        • Competitive Analysis
        • Design and Development Plan
        • Operations and Management Plans
        • Financial Plan
          • Test assumptions
          • Develop funding strategies
          • Communicate risk
    • Be Prepared: Financial Questions . . .
      • How much money do you need?
        • When will you need it?
        • Have you identified least-cost alternatives?
      • How much do you expect to make?
        • What are your profit goals?
        • How much can you charge for it? How much is customer willing to pay for it?
        • How many customers will you need in order to cover expenses?
    • Your Capital Portfolio
      • Start-up Capital
      • Working Capital
      • Cash Reserve
      • Look for ways to conserve capital needs
    • Be Prepared: Think Numbers . . .
      • Raw product
      • Labor
      • Facility costs / rent
      • Utilities
      • Transportation
      • Insurance (property loss, liability loss, product liability, business interruption, disability, loss of key employees)
      • Licenses
      • Accounting & legal
      • Advertising
      • Equipment (leasing / purchasing), technology, infrastructure
      • Office expenses
      • Loan interest
      Start-up / Ongoing Expenses
    • Where Do Business Funds Come From?
      • Your $$ (Savings, Friends and Family, Credit Cards, Assets, etc.)
      • Equity Financing (investors who provide cash in exchange for ownership stake)
      • Debt Financing (repayable loans – such as from commercial lenders, special category loans/government loans, etc.)
    • Your Resources / Sources of Capital
      • Commercial lenders
      • SBA-guaranteed loans
      • Private loans
      • Vendor credit
      • Other Government
      • Friends and Family
      • Leasing
      • Credit Cards
      • Angel Investors
      • Venture Capital
      • Savings
      • Other
    • Loans
      • Types
        • Real estate & Equipment
        • Working capital
        • Business expansion & acquisition
        • Cash flow management (long-term financing)
        • Receivables financing
        • Lines of credit (emergency funds)
      • Bank Department
        • Personal
        • Business
    • The Bank Wants to Know…
      • How much money do you need?
      • How will you use the money? Describe the benefit to your business.
      • How & when will you pay it back?
      • Are you credit worthy?
      • What is your experience, training, and business management skill?
      • What is your collateral?
      • What is your back up (contingency) plan?
    • Questions for your banker…
      • Bank’s policy on small-business lending?
      • Restrictions or covenants?
      • Terms and interest rate options?
      • Flexibility/tailor loan to needs?
      • Exit strategies?
      • Loan officer?
      • Specialty areas?
      • Names of existing customers?
      SCORE, 1997. How to choose the best bank for your business , Inc. Magazine.
    • Financial Stewardship
      • Be able to diagnose what is happening with your business and respond appropriately.
      • Exercise your creativity by constantly
        • Conserve capital
        • Add value
        • Increase revenue
        • “ Human creativity is the ultimate economic resource.”
        • -Richard Florida
    • Track your Bottom-line
      • Build a basic knowledge of business finance
      • Measure it – then manage it
        • Develop Effective Record-keeping, Accounting, and Financial Management systems
      • Look for patterns over time
      • Use software
        • www.quickbooks.com
        • www.peachtree.com
    • Bottom-line . . .Trends
      • Current cash position
      • Cash disbursements
      • New sales
      • Accounts receivable (beginning balances, outstanding credit, cash receivables)
      • Accounts-payable payments
      • Order backlog
      • Productivity (sales per employee, etc.)
    • Be Creative and Adaptable
      • … but stay true to your vision and mission
      • View setbacks as learning opportunities
      • Are risks acceptable?
    • The Economy : Trends are Mixed
      • Tougher to get credit but banks have money
      • Loans to start-ups declining
      • Retail and building materials sales are mixed
      • Housing market is declining slower
      • Unemployment is high but stabilizing
      • Stock market is doing better
      • ARRA monies are available
        • http://www.stimulus.virginia.gov/
    • Selected Financial Resources
    • Financial Resources . . .
      • U.S. Small Business Administration
      • Richmond District Office
      • The Federal Building
      • 400 North 8th Street, Suite 1150
      • Richmond, VA 23219-4829
      • (804) 771-2400 Fax 771-2764
      • E-mail:   richmond.va@sba.gov
      • Ronald E. Bew, District Director 
      • http://www.sba.gov/financing
    • Financial Resources . . .
      • SBA
        • Basic 7(a) Loan Program
          • Lenders participate with SBA in 7(a) program.
          • Up to $2 million with 90% guaranty.
          • Business applies to a lender for financing.
          • Repayment ability from cash flow of business is primary consideration in loan decision process but good character, management capability, collateral, and owner's equity contribution are also important.
      • SBA
        • Micro-Loans
          • Small loans to start-up, newly established, or growing small business concerns.
          • Maximum of $35,000 ($13,000 average).
          • Maximum term is 6 years.
          • Interest rates range between 8 to 13%.
          • Apply through Microlending Intermediaries
      Financial Resources . . .
      • SBA Startup Guide
        • http://www.sba.gov/smallbusinessplanner/plan/getready/serv_sbplanner_stguide.html
      • How to Write a Loan Proposal
      Financial Resources . . .
      • SCORE http://www.score.org
      • Business Funding Directory http://www.businessfinance.com
      • Venture Capital Information Guide
      • http://www.capital-connection.com
      • Virginia Department of Business Assistance
      • Virginia Small Business Financing Authority http://www.dba.virginia.gov/financing
      • 1-866-248-8814
      Financial Resources . . .
      • National Federation of Independent Business, Business Toolbox http://www.nfib.com/page/toolsHome
      • Virginia Business Information Center http://www.dba.virginia.gov/virginia/default.asp
      • 804-371-0438, toll-free at 1-866-248-8814
      Financial Resources . . .
      • Active Capital (angel investor network)
      • http://www.activecapital.com
      • Business statistics http://www.bizstats.com
      • Entrepreneur.com, Money and Financing
      • http://www.entrepreneur.com/money/finance/index.html
      • Fintel Scorecard Industry Benchmarking http://www.fintel.us/cms/DesktopDefault.aspx
      Financial Resources . . .
      • Energy-related business
        • USDA Rural Development
          • Renewable Energy and Energy Efficiency Grand and Guaranteed Loan (Section 9006) Program www.rurdev.usda.gov/rbs/farmbill
            • Application: www.rurdev.usda.gov.rbs.farmbill/tools.html
            • http://www.meeteetsecd-wy.gov/page22.html
            • Contact: Ms. Laurette Tucker, USDA Rural Development, Culpeper Building, Suite 238, 1606 Santa Rosa Road, Richmond, VA 23229, (804) 287–1594.
      Financial Resources . . .
      • Southside Virginia
        • Southside Region Tobacco Capital Access Program (TCAP)
          • A business located in the Southside Tobacco Region makes application to a bank in Virginia participating in the Southside Region Tobacco Capital Access Program. http://www.dba.state.va.us/financing/programs/TCAP.asp
      Financial Resources . . .
      • Virginia Tobacco Revitalization & Indemnification Commission
        • http://www.vatobaccocommission.org/SmallBusFinancing.htm
      • Food-based business
        • VCE publication
          • Starting a Food Processing Business in Virginia http://www.ext.vt.edu/pubs/foods/348-963/348-963.html
      Financial Resources . . .
    • Jonah Fogel, Ph.D. Community Viability Specialist Virginia Cooperative Extension 804-527-4234 [email_address]