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Franklin County Entrepreneur Express #3 Presentation, May 12, 2010
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Franklin County Entrepreneur Express #3 Presentation, May 12, 2010

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The Virginia Department of Business Assistance partnered with the Franklin County Chamber of Commerce, West Piedmont Business Development Center, the Franklin Center and Longwood Small Business ...

The Virginia Department of Business Assistance partnered with the Franklin County Chamber of Commerce, West Piedmont Business Development Center, the Franklin Center and Longwood Small Business Development Center to conduct a workshop focused on steps to starting and growing a business in Virginia.

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Franklin County Entrepreneur Express #3 Presentation, May 12, 2010 Presentation Transcript

  • 1. Rocky Mount, VA May 12, 2010
  • 2. Are you sure?
  • 3. What Do These Entrepreneurs Have in Common? Confidence? Competitiveness?
  • 4. An Idea? Drive? Identified Market Need?
  • 5. A Plan of Action? Willing to take Risks?
  • 6. Focused? Goal & Objective? A successful enterprise
  • 7. Remember as a start-up your place in the food chain
  • 8. Small Business in Virginia  Small Businesses constitute 99% of all Virginia businesses.  Small Businesses create over 60-80% of all new jobs.  Small Businesses account for half of the Commonwealth of Virginia’s contribution to the U.S. Gross Domestic Product - a whopping $160 billion. Virginia is for Business Lovers
  • 9. Virginia is for Business Lovers • Virginia ranked #1 state for business by Forbes.com last four years. • Ranked #1 most business friendly state by Pollina Corporate Real Estate, Inc. last two years. • Named #1 best states for business by CNBC. Virginia is for Business Lovers Ask VBIC = 866- 248-8814
  • 10. How to Start and Operate A Business
  • 11. HOW TO START AND OPERATE A SMALL BUSINESS By Dick Ephgrave Director, Longwood University Small Business Development Center, Martinsville, VA
  • 12. What is the SBDC? • Small Business Development Center • VSBDC Mission – To foster small business success and grow Virginia’s economy • Vision – To be the small business resource of first choice in Virginia Where business comes to talk business.
  • 13. SBDC’s Goals • Increase new business success rate • Increase client’s revenue and profitability (new and existing businesses) • Assist existing businesses to grow by creating and retaining jobs, and increasing capital investments in the business Where business comes to talk business.
  • 14. How the SBDC can Benefit you Through one-on-one, Confidential and FREE Counseling, the SBDC can help you with… • Basic Business Information for start-ups as well as existing businesses • Business Planning • Training/Workshops- variety of topics • Networking Assistance • Basics of Navigating the financial process • Financial Analysis of your business • Marketing Ideas and Plans • Permits, Licenses and taxes • ETC Where business comes to talk business.
  • 15. LEGAL ENTITIES LEGAL STRUCTURES FOR A SMALL BUSINESS – SOLE PROPRIETORSHIP – PARTNERSHIP – LIMITED PARTNERSHIP – C-CORPORATION – S-CORPORATION – LIMITED LIABILITY COMPANY
  • 16. LEGAL ENTITIES FACTORS TO CONSIDER: SIZE & NATURE OF BUSINESS EASE OF FORMATION LEVEL OF CONTROL LIABILITY RISKS TAX IMPLICATIONS CONTINUATON/GROWTH POTENTIAL DISSOLUTION ISSUES Consider talking to an accountant/attorney before you decide.
  • 17. Why do I need a Business Plan? • To develop your own plan (roadmap) for YOUR Business idea. • To determine if the business idea is financially feasible. • To seek financing from a bank, SBA, and/or private investors. • To provide you with a management tool • To give you an objective view of your business idea Where business comes to talk business.
  • 18. What goes into a Business Plan? • Executive Summary • Table of Contents (optional) • Description of the Business • Description of Products and/or Services • Marketing Plan/Advertising • Industry Analysis • Customers • Competition Analysis • Location • Suppliers/Subcontractors • Organization and Management • Financial Plan Where business comes to talk business.
  • 19. Business Licence & Registration (7-Steps) • One - Determine entity • Two - State Corporation Commission • Three - IRS Forms - EIN • Four - Unemployment taxes – Va Employment Commission • Five - Registration – Va Dept. of taxation • Six - Local license/tax with local commissioner of the Revenue/Town Administrator • Seven - Other State Agencies for Licenses/Permits for professionals Where business comes to talk business.
  • 20. Pricing Structure • Margin based • Income based • Competitive Based • Image Based • Volume based • Testing based From “hypergrow your business” by Curtis Clinkinbeard Where business comes to talk business.
  • 21. VSBDC Office Dick Ephgrave, Director Longwood Small Business Development Center 115 Broad Street, PO Box 709 Martinsville, VA 24114 Phone: 276-632-4462 E-mail: ephgraverg@longwood.edu
  • 22. Turn to SCORE Counselors for Small Business Advice Live Your Dream. SCORE Can Help.
  • 23. “Counselors to America’s Small Business” Live Your Dream. SCORE Can Help. SCORE is a national nonprofit association. SCORE’s mission is to provide small business counseling and training to help America’s entrepreneurs succeed.  Local business workshops and seminars  Face-to-face counseling in 389 offices  Online counseling www.score.org  Free and confidential business advice for entrepreneurs
  • 24. Growing Your Business/Marketing Strategies
  • 25. Tourism Business Development & Marketing Assistance Randall A. Rose Development Specialist – Partnership Marketing Virginia Tourism Corporation rrose@virginia.org 276-322-2044 www.vatc.org (industry) www.virginia.org (consumer)
  • 26. • Virginia Tourism Corporation Overview • Tourism Business Opportunities • Marketing Your Small Business
  • 27. • 19.2 billion in revenue • supported 210,620 jobs • provided $1.28 billion in state and local tax revenue Impact of Tourism in VA - 2008
  • 28. • Advertising • Customer Service & Industry Relations • Electronic Marketing • Film Office • Marketing & Promotion • Public Relations • Research • Tourism Development • Others Virginia Tourism Corp. Services
  • 29. • Planning Assistance • Marketing Guidance • Workshops • Marketing/Advertising Benefits Business Assistance
  • 30. • Wilderness Road Heritage Trail • Virginia Coal Heritage Trail • ‘Round the Mountain • Heartwood • Spearhead Trails • Crooked Road • Fish Virginia First Development & Partnership Marketing
  • 31. • Franklin County • Pulaski County • Roanoke County • City of Radford • Craig County • Giles County • Patrick County • Tazewell County • Floyd County • Carroll County Locality Tourism Planning
  • 32. • Marketing Leverage Program Funding
  • 33. •Canoe Rentals and Tours •Fishing and Boating Rentals •Bicycle Tours and Outfitters •Adventure/Nature Camps Tourism Business Opportunities
  • 34. •Wineries/Vineyards •Corn Maze •Pumpkin Patch •Pick Your Own •Animal Parks •Herb/Flower Farms •Christmas Trees Farms Agri-tourism
  • 35. •Bed & Breakfast Inns •Cabins and Cottages •Lodges •Campgrounds •Horse Campgrounds •Horse Stables/Barns •House Boats •Green Lodging Unique Lodging Opportunities
  • 36. •Music/Theater Venues •Artisan Studios/Galleries •Heritage Sites •Tea Rooms •Breweries/Pubs •Eclectic Restaurants •Shopping •Spas Attractions
  • 37. Caterers Cleaning Services Food/Drink Distributors Electricians Restaurant Equipment Plumbers Security Systems Pool Maintenance Convenient Stores Lawn Care Web Site Designers Auto Repair Ad Agencies Events Planners Travel Agencies Florists Motorcoach Companies Linen Services Car Rental Offices Supporting Businesses
  • 38. • Visit www.vatc.org & www.virginia.org • Sign up for the Dashboard e-newsletter • Attend at VTC Help Desk event • Establish relationships with all VTC divisions – tap into our services (i.e. marketing, advertising, research, etc.) Learn More About VTC Services
  • 39. Now, let’s talk about marketing your small business
  • 40. Can you answer these two questions? • What is Marketing? • What is the difference between Marketing and Advertising?
  • 41. 6 Questions You Should Answer • What are you trying to accomplish? • Who is your target audience? • What message will move your audience? • What vehicles do you have to deliver the message? • What are your resources? • How do you measure your performance/success? Marketing Plan
  • 42. What are you trying to accomplish? • What is your mission and vision? • Are you the largest, cheapest, best service, best quality? • Sales goals? Marketing Planning
  • 43. Who is your target audience? • by demographics • by geography • by needs and wants • now and in the future Marketing Planning
  • 44. What message will move your audience? • Your brand • Your tagline/slogan/message • What do you want people to say about your business? Marketing Planning
  • 45. What vehicles do you have to deliver the message? • Website • Social Media • E-mail • Tradeshows • Advertising • Newsletters • Public Relations Marketing Planning
  • 46. What are your resources? • Budget/Money • Owner/Employee Skills • Friends/Family • Partnerships • Local/State/Federal Assistance • Chambers of Commerce, Business Associations, etc. Marketing Planning
  • 47. How will you measure your marketing performance? • Electronic Marketing Tools • Data Collection • Research Mechanisms • Surveys • Informal Questioning • Sales Data Marketing Planning
  • 48. Have a Calendar/Schedule Include: • Anticipated Ad Placement • Press Releases • Social Media Updates/Posts • Promotions • Other Scheduled Strategies Marketing Planning
  • 49. Marketing Plans Change • Because of business growth • Because of research • Because of economic factors • Because of technology (social media) • Because there is always change Marketing Planning
  • 50. Virginia’s Recent Ad Campaign
  • 51. Traditional Methods • Direct Mail • Sales/Promotions • Referrals • Phone Calls Marketing Tips
  • 52. Branding (it’s not just a logo) Marketing Tips
  • 53. Customer Service • Train and Empower Staff • Gauge Performance • Have Customer Service Plan (Goals, Objectives) Marketing Tips
  • 54. Electronic Marketing • Website • E-mail • E-newsletters • E-ads Marketing Tips
  • 55. Targeting Niches & Groups By Interest • Traditional Music (Crooked Road) • Cultural Heritage (Coal Heritage Trail) • Anglers (Fish Virginia First) • Outdoor Enthusiasts • Weddings/Meetings/Group Tours Marketing Tips
  • 56. Social Media Marketing Tips
  • 57. Public Relations Marketing Tips
  • 58. • Determine Ways to Stand Out /Be Unique • Be Creative • Have Fun! Marketing Tips
  • 59. Tourism Business Development & Marketing Assistance Randall A. Rose Development Specialist – Partnership Marketing Virginia Tourism Corporation rrose@virginia.org 276-322-2044 www.vatc.org (industry) www.virginia.org (consumer)
  • 60. Financing & Managing Resources
  • 61. Helpful Hints for Financing Your Business Harvey Brookins Business Banking © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.
  • 62. Helpful Hint #1 Get Your Financial House In Order  Obtain a copy of your personal credit report. • Check for any inaccuracies or mistakes. • Make certain that all accounts are current and there are no outstanding judgments or liens. • If there is any derogatory information, be proactive and prepare to explain the problems and why the problem is not likely to occur again.  Gather personal and/or business records • For the past three years, including: • Tax returns, financial statements with schedules and attachments, and interim year-to-date financial statements. • Any other financial documents that might help a lender. • Neatly photocopy all of the documents and prepare them for your presentation. © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use. 65
  • 63. Helpful Hint #2 Understand What Your Lender is looking for  Be specific in what you are asking for • Know how much you need • Be prepared to support all costs with estimates, invoices, or contracts • Never tell a lender that you want to borrow as much money as possible.  Primary source of repayment • Be able to demonstrate how you will pay back the loan • Debt Service Coverage = Earnings before Interest, Taxes, and Depreciation / Total Debt Service • Debt to Income= Debt service / Income available to service debt  Secondary source of repayment (back up plan) • Be prepared to be able to demonstrate how your lender will be paid back if income falls short • Be prepared to have guarantors and possible collateral © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use. 66
  • 64. Helpful Hint #3 Recognize Your Strengths And Weaknesses  Bank underwriters are paid to identify risk • Business owners tend to be optimistic • Be prepared for scrutiny • Address your strengths and challenges realistically & honestly  Most common weaknesses lenders find are: • Inability to demonstrate repayment ability • Insufficient collateral • Lack of management experience • Insufficient cash injection • Poor personal credit  Don't get scared; just get prepared • Depending on the severity of any particular weakness, you can often overcome it if you are prepared with a particularly noteworthy and compensating strength. © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use. 67
  • 65. Sources of Financing  Credit Cards o Most expensive o Credit lines may be cut unexpectedly o Most risk  Personal Savings o Lowest expense o Lowest risk o Do not use all of your savings for start up costs  Bank financing o Low cost o Shorter term o Higher equity requirements  Small Business Administration guaranteed loans o Low cost o Longer terms o Reduced equity requirements o Lower risk to partner Banks o Multiple plans to address real estate, equipment, and working capital needs  Non-profit community lenders © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use. 68
  • 66. Why NOW is the Best Time EVER to get a SBA Loan?  More companies than ever are eligible  Tangible net worth <$8.5MM  Net profits <$3MM in each of last two years  Transaction costs are at an all time low  SBA has waived the guarantee fee – usually ~2 points  Interest rates are at all time lows  Congress is now acting to increase lending limits, waive fees, and bolster lending! © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use. 69
  • 67. Advantages to SBA Loans  Lower down payment  Up to 90% financing on Owner Occupied Real Estate  Up to 85% financing on Business Acquisition  Up to 90% financing on Partner Buy Out  Longer amortization  20 – 25 Year Term on Owner Occupied Real Estate  10 Year Term on Business Acquisition or Refinance  Can lend with collateral shortfall  SBA does not have specific LTV  Must take “All available collateral” © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use. 70
  • 68. Types of Deals Financed  Acquisition of Owner Occupied Real Estate  Financing available up to $9MM  Refinance of Existing Debt  Up to $2MM  Must cut payments by 10% or more  Business Acquisition  Individual or corporate buyers  Partner or Management Buy-Outs  Loans up to $1.75MM  Start Ups  Require 30% equity © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use. 71
  • 69. Why Wells Fargo SBA Lending  Largest lender in United States  Closed over $900MM in 2009 – three times nearest competitor  Experienced Lenders and Underwriters  Preferred SBA Lender  Growing while others contract  2010 Goal - $1.2B  It’s a marathon not a sprint  We don’t sell our loans © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use. 72
  • 70. Harvey Brookins Business Banking Wachovia Bank (540) 563-7612 Harvey.Brookins@Wachovia.com © 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.
  • 71. A regional business incubator serving the City of Martinsville, Henry, Patrick and Franklin Counties
  • 72. What is Business Incubation?  Business support process that accelerates the successful development of start-up companies by providing entrepreneurs with an array of targeted resources and services  A business incubator’s main goal is to produce successful firms that will leave the program financially viable and freestanding
  • 73. Services  Favorable Rental Rates  Mentoring Services  Broad Band Internet Access  Shared Resources  Conference and training rooms  Shared receptionist  Business equipment  "Virtual Incubator" Available
  • 74. Benefits  Financial, professional, and technical services assistance  Access to facilities and equipment not otherwise available  Increased visibility  Environment where small businesses can share experiences and reduce the risks involved in business startup  87% of incubator graduates succeed!
  • 75. WPBDC  23,500 square foot facility in Uptown Martinsville  16 Tenants  3 Virtual tenants  15 Graduates  In 2009, $13+ million in tenant revenue
  • 76. Questions? Tiffani Underwood Executive Director West Piedmont Business Development Center 22 E. Church St. Martinsville, VA 24112 276.403.5085 tunderwood@wpbdc.org
  • 77. Other Business Resources Sandy Ratliff, Business Services Manager Virginia Department of Business Assistance 276-676-3768 sandy.ratliff@vdba.virginia.gov www.vdba.virginia.gov www.vastartup.org
  • 78. The Virginia Department of Business Assistance VDBA supports economic development in the Commonwealth by working with new and existing businesses to provide business and economic development communities with: • workforce incentives • financing • business information and counseling • state procurement assistance • incubator counseling and • educational opportunities www.vdba.virginia.gov
  • 79. Ask VBIC = 866- 248-8814
  • 80. Business Information Services To help businesses get started and to grow. Formation Assistance  Virginia Business Information Center (VBIC) 1-866-248-8814 Bridges the 26 state agencies, over 100 programs and over 300 forms that may touch a Virginia business Virginia Central Business Portal (www.business.virginia.gov) Covers registration, taxation, licensing Interactive Business Plan CD 5 Step process to a business plan  Entrepreneur Express Events 250 Events – 8,000 Trained
  • 81. Virginia’s Business One Stop Are you starting a business? Virginia’s Business One Stop system can help Winner of the you determine your business formation requirements and can 2009 pre-fill your business registration forms. Governor's Technology Visit http://www.virginia.gov/bos/index.html to Awards access the Business One Stop System. Create a Business One Stop account. Answer a few brief questions about your business. Receive a list of action items and pre-filled business registration forms. Questions? Contact the Virginia Business Information Center 1-866-248-8814 (804) 371-0438 vbic@vdba.virginia.gov
  • 82. Ask VBIC = 866- 248-8814
  • 83. Growing Your $ales - State  Governor’s Executive Order 33  $5 billion market  Access to buyers from 171 state agencies  Additional $5 billion from local governments  575 localities using eVA system.  Small Business Goal – 40%  Over 44,994 registered suppliers  Over 13,065 participating buyers Ask VBIC = 866- 248-8814
  • 84. • Examples of Purchasing: – Instant Ice Tea • 01/01/2009 – 12/31/2009 = $23,455.71 - 46 PO’s – Novelty – Specialty Advertising Products • 01/01/2009 – 12/31/2009 = $152,905.34 - 152 PO’s – Grounds Maintenance: Mowing, Edging, Plant (Not Tree) Trimming, etc. • 01/01/2009 – 12/31/2009 = $14,566,567.94 - 1150 PO’s – Tires and Tubes, Passenger Vehicles • 01/01/2009 – 12/31/2009 = $72,103.64 - 7 PO’s – Concessions, Catering, Vending: Mobile and Stationary • 01/01/2009 – 12/31/2009 = $6,187,712.31- 11,757 PO’s – Building Maintenance • 01/01/2009 – 12/31/2009 = $90,611,650.85 - 9285 PO’s – Earth Moving Equipment Rental • 01/01/2009 – 12/31/2009 = $8,573,333.24 -621 PO’s – Cleaning Services, Steam & Pressure • 01/01/2009 – 12/31/2009 = $3,358,694.55- 303 PO’s
  • 85. One–on-One Counseling Sessions Need Based: – Accessing New Markets/Sales Growth – Tailored Sales Development Solutions – Financing Resources – Social Media for Your Business To schedule an appointment, contact: Sandy Ratliff, Business Services Manager 276-676-3768 Email: sandy.ratliff@vdba.virginia.gov
  • 86. Entrepreneur Workshops • Launched October 2006 • Partnership with Service Providers and localities • Provide information on available resources to start and grow a business • Statewide Program • Free – ½ Day Session • Over 8,000 reached • www.vastartup.org
  • 87. Growing Your $ales Workshops  Business Sales Growth Program  Market Research and Expansion  Financing  Growth Management  Partnered events for SWAM certification and eVA registration  Networking of businesses and decision- makers
  • 88. Social Media Workshops You-Link-Twit-Face Upcoming Events: •May 18 – Galax •June 10 – Washington County
  • 89. Virginia Jobs Investment Program • Workforce recruiting and training – Create minimum 25 net new jobs within 12 months and capital investment of at least $1,000,000 – Minimum entry-level wage of $10.00/hr required. Only full- time jobs are eligible. • Small business workforce recruiting and training – 250 employees or less, hiring at least 5 new full time employees within 12 months of operation and capital investment of at least $100,000 – Minimum entry-level wage of $10.00/hr required. Only full- time jobs are eligible. • Retraining – Small businesses that are retooling and installing new technologies – Company must retrain minimum 10 full-time employees.
  • 90. Financing Programs • Direct Lending: In partnership with banks and other lenders, we provide direct loans in economic development transactions. We also provide direct loans under specific programs designed to promote environmental stewardship and assist licensed daycare centers and family home providers. • Indirect Lending: We provide loan guarantees or other types of credit enhancements to commercial banks in order to increase access to capital for businesses. • Conduit Financing: We are the statewide conduit issuer of tax-exempt industrial development bonds for manufacturers and 501c3 organizations.
  • 91. The VSBFA Does Not Give… • Grants • Loans or guaranties of loans without collateral • Loans or guaranties of loans without personal guaranties from all significant owners
  • 92. OTHER AVAILABLE RESOURCES • Virginia Department of Labor – Apprenticeship Program – Combination of on-the-job training and classroom instruction. – Advantage of skilled workforce and reduced turnover. – http://www.doli.virginia.gov • Virginia Department of Agriculture & Consumer Affairs – Virginia’s Finest Trademark = Marketing program that promotes foods and foods products grown in Virginia. – Facilitates expansion of agricultural businesses. http://www.vdacs.virginia.gov
  • 93. OTHER AVAILABLE RESOURCES Virginia Economic Bridge, Inc. – Non-profit organization to promote the economic vitality of SWVA and the Commonwealth. – Virginia’s Business Pipeline – Online searchable database of more than 24,000 Virginia based companies, business to business marketing & RFP resource www.VirginiaBusiness.org – Virginia’s Linked Workforce Showcase – Designed to create business partnerships yielding contracts between SWVA and Northern Virginia by connecting companies in specific industry sectors. www.LinkedWorkforceShowcase.org
  • 94. Starting and Growing a Business • Business Formation Assistance – Small Business Development Center Network = www.virginiasbdc.org – SCORE = www.score.org – Virginia Business Information Center = 866-248-8814 – Virginia Central Business Portal = www.business.virginia.gov – Virginia Business Incubator Association = http://www.vbia.org/
  • 95. Marketing Resources • SCORE = www.score.org • Virginia Tourism Corporation = www.vatc.org • Virginia Economic Bridge, Inc. = www.virginiabusiness.org • Virginia Department of Agriculture – Virginia’s Finest Trademark = www.vdacs.virginia.gov
  • 96. Financing Resources • Virginia Small Business Financing Authority = www.vdba.virginia.gov • Small Business Development Center = www.virginiasbdc.org • Small Business Administration = www.sba.gov • Local Economic Development Office or Chamber of Commerce
  • 97. “If you always do what you’ve always done, You will always get what you’ve always got!”
  • 98. Lets Connect: Sandy Ratliff The Virginia Department of Business Assistance 276-676-3768 sandy.ratliff@vdba.virginia.gov Online: Twitter: http://twitter.com/sandyratliff Facebook: http://www.facebook.com/sandy.ratliff LinkedIn - http://www.linkedin.com/in/sandyratliff YouTube - http://www.youtube.com/user/vastartup
  • 99. Survey Completions Please take a moment to complete our survey!
  • 100. CONTACTS • Sandy Ratliff, Virginia Department of Business Assistance  = 276‐676‐3768 or VBIC = 866‐248‐8814 • Dick Ephgrave, Longwood SBDC = 276‐632‐4462 • Randy Rose, Virginia Tourism Corporation = 276‐988‐ 6067 • Harvey Brookins, Wachovia Bank = 540‐563‐7612 • John Hunter, SCORE = 540‐857‐2834 • Janie Hopkins – Franklin County Chamber of Commerce =  540‐483‐9542 • Tiffani Underwood, West Piedmont Business Dev. Center  = 276‐638‐2523 • Carl Mitchell, Virginia Economic Bridge = 540‐ 731‐6800