Sometimes the press glorifies the life of entrepreneurs
The reality is someone different., requiring a significant financial, emotional, and time commitment. The benefits can be tremendous, but the responsibilities and risks can not be ignored.Provide examples from clients you have worked with.
Here are a few of the balls the successful business owner juggles.
Personal or client examples of how entrepreneurship has impacted their daily lives.
It’s important for the entrepreneur to be comfortable that they are right for the environment they are about to enter. While there is no sure substitute for experience there are a variety of personal assessment tools available on the Internet that can help individuals thing through some of the issues they will face as a small business owners.
A true entrepreneur isn’t afraid of failure and isn’t afraid to re-assess their pass based on new infromation.
It is important to have qualified legal counsel at appropriate times in a business’ life: for example when reviewing a lease, adding your first employee, or, perhaps when getting a trademark.Add example of when legal assistance has been of value to your clients.
There are a variety of business structures available to the small business owner. The simplest form is a sole proprietorship, in which the individual is the business. It is incredibly easy to start, but exposes the owner’s full net worth to any liability resulting from the business. Income and losses flow through to the individuals tax return on Schedule C of his or her individual tax return. Slightly more complex is a partnership between one or more people. Roles and responsibilities of partners are defined by a partnership agreement. Similar to a sole proprietorship, income and losses flow to the partners and are taxed at the individuals tax rate.
The costliest and most complex structure is a corporation. In a C Corp, the corporation pays taxes on profits and distributions (dividends) to shareholders are taxed as well. Certain small corporations file an S Corp election, which has limitations but allows the flow through of income and loss to investors.Lastly, perhaps the most popular structure for business that have more than one owner is a Limited Liability Company. As the name implies this structure helps protect the owners from the liabilities of the business, provides a structure to attract investors to the business and facilitates the pass through of income and losses to investors.
So, how do you decide what’s right for you.It will depend on your individual situation, but more than likely a critical determination will be what type of liability could potentially accrue to you as the owner of the business, Other factors may include the cost to establish, and the need for outside equity investors. It’s useful to sit down with an attorney to discuss specific facts regarding your business to get a professional opinion about the appropriate structure. Most attorneys will provide a free consultation for you to get to know them during which you can discuss issues such as this.
You need to contact your local city’s Economic Development Department to discuss the appropriate local regulations you must adhere to and fees you must pay.
Quick overview of the insurance .Similar to determining a business structure, it is important to determine the types of insurance that businesses similar to yours carry and why and in what amounts.
Add url of local sbdc here.
NOTE: SUBSTITUTE RESOURCE FOR LOCAL LICENSING AND PERMITS ON THIS PAGE.
Do not go to the next slide until the audience has had a chance to complete this exercise.
Trade publications/shows, studies
Wait until group completes exercise to click to show sample features.
Startup Boot Camp Kick Starting Success forCalifornia‘s Retail, Restaurant and Service Entrepreneurs! Day 1 — Session 1
"The best way to predict the future is to create it." — Peter DruckerWELCOME/INTRODUCTIONS
Goals Designed specifically for entrepreneurs in the early stages of developing service, retail or restaurant businesses Test your business idea – Is It feasible given your goals, values, income requirements, and finances? Understand and execute basic business planning concepts – Determine what information is important and how to get it – Determine what questions need to be asked Develop an action plan Link to free and low-cost resources that can help 3
Expectations Attend entire program Complete all of the work Add your expertise to the discussions Become an SBDC client for one-on-one counseling upon completion of program to refine and complete your business plan 4
Caveat Like drinking out of a fire hose Exposure to many concepts Will touch on a wide variety of issues affecting startups, but concentrate on producing deliverables for the elements necessary to create a well-thought out business plan At the end of the program, you should become an SBDC client to refine your business plan and build-out your support network/systems. 5
One-Minute Introductions Identify yourself Describe your business idea Tell us about prior experience that is relevant to your business idea State one or two specific questions that you hope to answer as a result of the Boot Camp 6
Basics Business counseling, training Training free or low cost/counseling free Any stage of business growth Founded during Carter administration Oversight by federal Small Business Administration (SBA) Over 1,100 nationwide 8
What Is An SBDC? Assists ―business ready‖ entrepreneurs and existing small business owners who are ready to start, retain or expand their business Focuses on businesses with potential to produce economic impact for the local community: Provides no-cost, one-on-one business counseling Offers no- or low-cost training, workshops and business forums Measures and validates (through client surveys) success against 6 criteria – Business starts – Jobs created – Jobs retained – Sales increased – Capital investment received – Loans obtained 9
What Is An SBDC (cont‘d) Experienced, independent Business Advisors Generalists and specialists (examples) – Business planning – Market research, marketing, advertising – Loan assistance/financial management – Human Resources – Procurement/minority certification – Technology Part of local economic development community providing referrals to qualified small-business resources 10
North America‘s Largest Owner & Operator of Neighborhood & Community Shopping Centers. Who is Kimco?History Started in 1958 | IPO that initiated modern REIT era; NYSE-listed for ~20 years | S&P 500 Index (2006)Dividend $0.76 annually, ~3.9% yield (3/31/12)Shopping Center Properties 946 properties; 138.1M / 89.5M sq. ft. (gross/pro-rata)Geographic Footprint 44 states, Puerto Rico, Canada, Mexico and South AmericaOccupancy (pro-rata) 5-year average: 93.9% | High: 96.3% (12/31/07) / Low: 92.3%(6/30/09)Enterprise Value $13.2B (3/31/12)Credit Rating Investment Grade BBB+ | BBB+ | Baa1 (S&P | Fitch | Moody‘s)
Westlake Shopping Center - Daly City, CA What is KEYS? • Kimco Entrepreneurs Year Start (KEYS) is a business incubator program for qualified startup entrepreneurs. • Approved applicants receive: • Resources and services • One year of free rent (must pay NNN expenses only) • This incentive accelerates the growth of their new businesses in shopping centers owned by Kimco and its joint venture partners.
Redhawk Towne Center – Temecula, CA What does KEYS offer?• Qualified KEYS applicantswill benefit from: • Substantially lowermonthly overhead expenses • Lease term flexibility • Assistance of a Kimco counselor• Counselor will advise andguide potential tenantthrough the lease, storeselection and planningprocess, if desired.• After Tenant‘s initial firstyear lease term, the tenanthas choice to exercise afour-year lease option for theexisting store.• Also, the lease provides foran easy exit with no longterm obligation to Kimco ifthe startup entrepreneurfinds the businessunworkable.
Larwin Square Shopping Center – Tustin, CA How many spaces are available? • Currently, there are approximately: • 100 available stores • All under 2,500 square feet in size • Located in Kimco‘s demographically diversified California portfolio • Of the 100 available units, there is a mixture of both retail, service, and former restaurant build-outs.
The District at Tustin Legacy – Tustin, CA Who can apply to KEYS?• KEYS is open to: • New startup retailventures • Service operations • Restaurants• The entrepreneur shouldhave the training, skill,enthusiasm, and adequatefunding to launch a newbusiness.• Franchisees or productlicense agreementparticipants may not apply tothe program.
The District at Tustin Legacy – Tustin, CA What’s the catch? • There is NO catch! • Kimco benefits by bringing new and exciting tenants to its vacancies, while new entrepreneurs benefit from lower startup costs, favorable lease terms, and the help of a counselor, if desired. • Studies found that 87% of ‗incubator graduates‘ stayed in business, in contrast to 44% of all firms.
Westlake Shopping Center - Daly City, CA How do I get started?• Applicants can submit their • Applicants may also apply by • A printable application form business plan online at calling 1-888-668-1690 can be found online by clicking http://www.KimcoKeys.com here
The Textbook ―Entrepreneur‖ Recognition of available opportunities The long-term will, motivation, and endurance to stick with it to deliver a product or service to capitalize on the identified opportunities Identification of the resources needed Ability to acquire resources required but not currently controlled 22
The Real World EntrepreneurMany Responsibilities Many Benefits• Bookkeeping • Do what you enjoy• Record Retention • Do what you‘re good at• Reporting • Freedom• Bill Paying • Be in control• Regulations • Be your own boss• Tax filing • Make more money• Employees • Build an asset for• Administration retirement• Customer service • Be the decision maker• etc., etc., etc. 23
The Owner‘s Mindset Understand the tasks that need to be performed To the extent possible, focus on the ―drivers‖ of your growth and profitability When possible, hire professionals to handle other tasks (e.g., bookkeeping, taxes, insurance, etc.) Know your customer Know your competition Plan, act, assess . . . Adjust plan, act, assess . . . repeat Constantly innovate (do something different that can positively impact your business) Watch cash flow constantly 24
Your Commitment — You . . . May need to make financial sacrifices Will have less free time Must understand the opportunities and risks Need to involve your family – it‘s their commitment too! 25
Is This The Right Path For You? Are You: – Comfortable taking risks? – Independent? – Persuasive? – Able to negotiate? – Creative? – Supported by others? If interested, numerous self-assessment tools can be found on the Internet – Google ―entrepreneurship self assessment‖ to find some – A sample: http://www.youronestopcenter.com/entrepreneur-test.php 26 26
A Couple Interesting Quotes Steve Jobs Michael Jordan ―I‘m proud of what I‘ve done. ―Ive failed over and over and But I‘m most proud of what I over again in my life and that is decided not to do.‖ why I succeed.‖ 27
20 Starting Questions Why am I starting a business? What kind of business do I want? Who is my ideal customer? What products or services will my business provide? Am I prepared to spend the time and money needed to get my business started? What differentiates my business idea and the products or services I will provide from others in the market? Where will my business be located? How many employees will I need? What types of suppliers do I need? 28
20 Starting Questions (cont‘d) How much money do I need to get started? Will I need to get a loan? How soon will it take before my products or services are available? How long do I have until I start making a profit? Who is my competition? How will I price my product compared to my competition? How will I set up the legal structure of my business? What taxes do I need to pay? What kind of insurance do I need? How will I manage my business? How will I advertise my business? 29
At A Minimum . . . Get legal advice when . . . . – Determining the business structure – Adding your first employee – Reviewing leases and other agreements/contracts – Protecting intellectual property (e.g., trademarks) 31
Business Structures Sole Proprietorship: – Owned and operated by one person – Easy to start (report income and loss on Schedule C) – High personal liability Partnership: – Multiple owners – Partnership agreement defines control – Pass through of profits and loss to personal tax return (Form k-1) 32
Business Structures (cont‘d) Corporation: – Structured and formal – Complex filing with state – Bylaws govern operations and annual meetings – Strictly limits liability – Two forms: • C Corp: unlimited shareholders, double taxation • S Corp: less than 100 shareholders, profit and loss pass through Limited Liability Company – Any number of owners – Structure protects personal liability – Pass through of profits and losses 33
Business Structure (cont‘d) Factors to consider: – Number one consideration is YOUR PERSONAL LIABILITY – Outsider investors – Cost – Ease of formation – Taxes 34
Additional Considerations Business Licenses Required: city, county, state Federal Employer Identification Number (EIN) – Only required if you have employees, but should be considered for all businesses 35
Fictitious Business Name DBA (―doing business as‖) – Not necessary if doing business under own name – Allows use of descriptive name for business – Prevent others from using your name in business – Can use assumed name for bank accounts, credit cards, telephone listings, etc. Process – Confirm name is available – File with county clerk 36
Taxes Self-employment tax – Social Security and Medicare Income taxes State and local taxes Property tax Unemployment taxes 37
Sale of Tangible Goods Apply for seller‘s permit through the Board of Equalization – California state sales tax of 8.25% – Additional local sales taxes may apply 38
Business Insurance Property – buy based on replacement value – Named peril – All-risks policy Liability – damage to property or injury to someone – Look at similar businesses – Consult a professional insurance agent Professional Liability/Errors and Omissions Employment Practices Liability Insurance – e.g., wrongful termination, sexual harassment, race, gender Workers‘ Compensation Optional Medical/Dental/Vision 39
Checklist Be Legal – Seek the advice of an attorney when necessary Know your Tax Responsibilities – Determine what taxes your are responsible for Determine insurance needs Hire qualified professionals to help 40
Reference Three great resources – www.sba.gov – www.business.ca.gov – (Insert local SBDC website here!) 41
Reference (cont‘d) Business structure: http://www.taxes.ca.gov/Income_Tax/incbus.shtml Trademarks and service marks: http://www.sos.ca.gov/business/ts/ Business name search: http://kepler.sos.ca.gov/ Registering a fictitious business name: http://business.ca.gov/StartaBusiness/RegisteringaBusiness/FictitiousBusin essName.aspx Insert url for local licensing and permits here Starting a business overview: http://business.ca.gov/StartaBusiness.aspx Board of equalization: http://business.ca.gov/StartaBusiness/OperatingaBusiness/SellingMerchand ise.aspx 42
Reference (cont‘d) Business permits, licenses and registration requirements in California: http://www.calgold.ca.gov/ Business incentives: http://business.ca.gov/Portals/0/RelocateExpand/Docs/%5BCalBIS%5D%2 0Investment%20Guide%206-12.pdf Tools for business: (others as appropriate) http://alamedacowib.toolsforbusiness.info/california/0b/?CFID=20047345&C FTOKEN=48228e477ea10bf9-CBBF2EC4-080A-5D4F- FD33E2DE24B108AC Basic information on employees: http://business.ca.gov/StartaBusiness/AdministeringEmployees.aspx Apply for an EIN: http://www.irs.gov/businesses/small/article/0,,id=102767,00.html 43
―If you dont know where you are going, any road will take you there.‖ — Lewis CarrollSUCCESSFUL BUSINESS PLANS
Purpose: Business Plan Secure capital Roadmap to success Negotiate deals with landlords and channel partners Written execution plan Solidifies thinking Makes ―vision‖ in your head real The 3 C‘s: Clear, Compelling, Concise 45
Simplicity is Key ―People don‘t read anymore; Make it easy for them!‖ 46
Define your Mission Summary of your business and your plan? – Short and Sweet. – 100 words, hopefully less. – Think of it as ―your reason for being.‖ Clearly define your market and your role in it. How are your different from your competition? 50
Answer these Questions What will your company do? Who is your core customer? How will your reach them? Why are you better than the competition? What are your product benefits? What are your key features? 51
Example Take out a blank piece of paper Assume this Day Spa is your business: Take 3 minutes and write a Mission Statement for your business 52
Sample Mission StatementOur mission is to run a profitable business by providing high-end therapeuticmassage and aesthetician services in a caring, upscale, professionalenvironment. We offer massage in a variety of styles – traditional SwedishMassage, Sports Massage, Deep Tissue work, Sports Massage, Hot StoneMassage, Reflexology, and others. Our licensed aestheticians offer the latest inskin treatments, body treatments and anti-aging therapies.Our goal is to tailor the client‘s experience based on initial interviewinformation, as well as feedback during the treatments, to ensure the client‘scomfort and satisfaction, and to increase repeat business. We are mindful ofthe overall experience – using only the finest oils and lotions, beauty treatmentsand aromatherapies. Special lighting, music, decor, and textiles are usedthroughout the spa to complete the comfortable, plush environment andenhance the client‘s overall spa experience. 53
Write Down Your Mission Take out a sheet of paper and write ―Mission‖ on it. – Write down your first draft of your business‘ mission statement – Make it great! Remember . . . . – Short and Sweet. – 100 words, hopefully less. – Think of it as ―your reason for being.‖ Does it define your market and your role in it? Does it define how you differ from your competition? Write it and rewrite it over time as you gather new information 54
Startup Boot Camp — LUNCH Ask not what you can do for your country. Ask whats for lunch. – Orson Welles
―I dont know the key to success, but the key to failure is trying to please everybody.‖ — Bill CosbyWHO IS YOUR CUSTOMER?
Customer Definition Specifies your market AND your role in it Identifies your customers and why they will buy from you Defines your ―target‖ consumer 57
Types Of Customer Information Demographic Information - The study of human populations: – Size – Density and location – Age and gender – Race – Occupation, Income and other statistics Psychographic Information - Dividing a market into different groups based on: – Social class – Lifestyle – A personality characteristic 58
Market Segmentation The process of dividing the total market into a subgroup which consist of customers who share a similar set of needs and/or wants. 59
Identify Your Heavy User Group Specialty chocolate and women between 25 and 44 Domestic beer and blue collar males Imported beer and white collar males Any Others Come To Mind? 62
Example Take out a blank sheet of paper. Assume this is your bicycle shop: Take 3 minutes and write down everything you know about your target consumer. 64
Example Is this your customer? How about this?Or is this your customer? Or this? 65
ExampleIf this is your customer, what do we know/can we find outabout him/her? • Age? • Income? • Other Activities? • What do they watch/read? • Where do they get product information? • Who influences their decisions? • What brands do they like? 66
Identify Your Customer Take out a sheet of paper and write ―Customer‖ on it. Take 3 minutes and write down everything you think you know about your customer. 67
What is this? A Camera! What is its purpose! Capturing Memories! 69
Product What is it? What does it do? What problem does it solve? – If you can explain in 3 steps = you are golden! Create a competitive product matrix and show what the others are missing Demonstrate your added value 70
Example Take out a blank sheet of paper and over the next 2 minutes list sample features of a camera. fea⋅ture: noun. a prominent or conspicuous part or characteristic – 8x Optical Zoom with 28mm Wide-Angle Lens – Optical Image Stabilizer – 720p HD Video – Lithium-ion Battery – Warranty/Customer support Remember: Features don’t sell Products; Benefits sell Products! 71
Example ben⋅e⋅fit: noun. something that is advantageous or good; an advantage – Better sports pictures – Quality images – Longer time between charges – Affordability – Easy return policy Marketing and sales: Think . . . . Feature → Advantage → BENEFIT! Remember to ask Yourself: What problem are you solving for your customer? 72
More On Benefits The most compelling product benefits are those that provide: – Emotional rewards, or – Financial rewards. Example: It‘s not the brighter smile that the toothpaste offers; it‘s what the smile might bring you (e.g. friends, a better job, etc.). 73
Services Can a service have benefits? Of course! Name 5 potential features/benefits for a dentist. – Years in practice: ―The dentist knows what he/she is doing‖ – Name dental school: ―They are smart and, therefore, better‖ – Location: ―No hassle, saves time‖ – Parking: ―Convenient, saves time‖ – In Network, Preferred provider: ―Saves money and hassle‖ 74
Define your Product/Service Take out a sheet of paper and write ―Product/Service‖ on it. Take 3 minutes and write down your product/service and the associated features and benefits. Create a competitive matrix and show what your competitors are missing that you offer ―Anything that wont sell, I dont want to invent. Its sale is proof of utility, and utility is success.‖ — Thomas Edison 76