10 Questions to Consider BEFORE Investing Another Dime in the Costs of Starting a Business

1. Welcome to the
Portland chapter of SCORE
Starting Your Own
Business?
10 Questions to Consider
Before Investing a Dime.
Your Counselor…
Griff Lindell
www.scorepdx.org
503-326-3441

2. What is SCORE?
SCORE provides professional
guidance
and information to maximize
the success
of America‟s existing and
emerging
small businesses.
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503-326-3441

3. What is SCORE?
A Non-Profit Organization
– Over 390 chapters, 800 offices,
Experienced Volunteers
– 10,500+…all facets of business
Personal Counseling & Mentoring - FREE
– Face-to-Face, Telephone, On-Line
Workshops & Seminars
– About 7,000 workshops reaching >120,000 clients
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4. Counseling & Learning
Effective personal
counseling
plus
Powerful learning
resources.
Helping make success
happen
“For The Life Of Your
Business!”
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5. This Workshop is for those who are:
Contemplating the “Big Step” of…
RISKING SAVINGS, LIFESTYLES
AND RELATIONSHIPS…
…pursuing the dream of working for yourself.
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6. HOUSEKEEPING
• Facilitates
• Introductions
• Why this workshop?
• Kind of business you are considering
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7. Resources Offering
Encouragement and Guidance
• Practical material
• Personal and instant
feedback
• Performance
journaling
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8. Entrepreneur:
One who
organizes,
manages, and
assumes the risks
of a business
enterprise.
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9. www.scorepdx.org
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10. www.scorepdx.org
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11. www.scorepdx.org
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12. www.scorepdx.org
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13. www.scorepdx.org
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14. www.scorepdx.org
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15. Three Foundational Questions
What are yours?
• Why do you want to move from being
employed to Self-employed?
• Are you suited to be an
entrepreneur?
• What should you do next?
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16. B
A
5 Shapes: Select the one that is
different from the others
C
D
E
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17. A
A: the only one with no points!
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18. B
B: the only one that has all straight
lines!
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19. C: the only one that is
asymmetrical.
C
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20. D: the only one with both a straight
line and a curved line.
D
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21. E: the only one that looks like a projection
of a non-Euclidean triangle into Euclidean
space.
E
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22. Do You Know the “Shape” of…
…your risk of
starting a
business?
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23. Starting Your Own Business?
• A business idea that recognizes:
– A need in the marketplace
– A product or solution
– A real value to the customer
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24. The 10 Questions
Have you counted the costs?
Are you ready, willing and able for a change in your lifestyle?
Is your support team on board?
Do you enjoy the business of business?
Are you comfortable making tough decisions on the fly?
What's your track record of making stuff happen?
How well do you communicate?
Is this new business something about which you are
passionate?
Are you a person that gives others energy – a self-starter?
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Do you have a “partner”? 503-326-3441

25. Question 1
Have you counted the costs?
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26. Kinds of Costs
What kinds of costs?
• Start-up costs
• Investor costs
• Business costs
• Personal costs
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27. QUESTION 1:
Have You Counted the Costs?
• Have you penciled the numbers?
– Start-up costs
– Business Capital
• Do you know your Break Even point?
– Fixed costs
– Variable costs
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28. Counting the Costs
• Start-Up Expenses
• Cash Considerations
• The Funding Plan
 People you know
 Bank Loan (good credit)
 Government programs
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29. Some Start-Up Expenses
second & third month’s rent Legal Structure
Stock reorders salaries
fixtures setting up books
Rent
advertising
Deposits merchandise
furniture licenses equipment
living expenses during start-up...
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30. Choosing A Legal Structure
The four (4) legal structures are:
 Sole Proprietorship
 Partnership
 Incorporate
 S Corporation
 C Corporation
 Limited Liability
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31. Local, State & Federal
Business Regulations
• Legal Structure • Insurance
• Licenses • IRS - Employer
• Procedures Identification Number
– Fictitious Name Act
(866) 816-2065
• Business Tax
• Federal Self-
Information
Employment Tax
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503-326-3441

32. Counting the Costs
• Start-Up Expenses
• Cash Considerations
• The Funding Plan
 People you know
 Bank Loan (good credit)
 Government programs
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503-326-3441

33. QUESTION 1:
Have You Counted the Costs?
• Have you penciled the numbers?
– Start-up costs
– Business Capital
• Do you know your Break Even point?
– Fixed costs
– Variable costs
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34. Break-even Analysis
$900/75 = $12.00
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35. Information is Power
What do you want to know about your business?
How much am I putting on the books? Revenue
How much of this can I turn into money? Cash
How much am I spending? Expenses
Is my business making any money? Revenue –Expenses
What’s the value of what my Assets
business owns?
How much does my business owe
Liabilities
to others?
What is my business worth? Equity
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36. Dashboard Dials
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37. Cash Flow defined…
1. Cash Flow is the flow of cash INTO and
OUT OF a business over a selected time
period
2. Cash Flow is:
 Positive when cash receipts exceed cash
payments – YOU CAN PAY YOUR BILLS!
 Negative when cash payments exceed cash
receipts – YOU HAVE TO BORROW TO PAY BILL
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38. Cash Flow Rules
• Rule Nº 1: Cash is the most important
resource you have…
– More cash is better than less cash
– Collect Cash now is better than later
– Pay out Cash later is better than now
• Rule Nº 2:
– Focus on Cash Flow rather than
Operating Statement (P&L) profits
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39. Cash Flow Projection
• Plot anticipated cash flow positions
• Anticipate shortfalls
• Help you spot sales trends
• Tell if your customers are slow pay
• Help you plan for major asset
purchases
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40. Cash Flow Flow Forecast
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6
Week of:
Beginning Cash Balance 0 0 0 0 0
Cash Receipts:
Estimated Cash in from A/R
Estimated Cash in from Sales Counter
Decrease (Increase) in Savings
Miscellaneous
Borrowing from Line of Credit
Sub total 0 0 0 0 0 0
Total Cash Available 0 0 0 0 0 0
Disbursements:
Payroll (Net)
Must Pay
Payroll Taxes
Sales Tax
Rent
Purchases for Resale
Utilities
Total Cash Out 0 0 0 0 0 0
Balance Forward 0 0 0 0 0 0
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41. Mar Apr May Jun Jul Aug
Beginning Cash $ - $ (2,861) $ (549) $ 3,769 $ 5,089 $ (573)
Loans from Founder $ 5,000 $ 3,000 $ 5,000 $ 2,000 $ -
OUTFLOWS Cash available
Beginning $ 5,000 $ 139 $ 4,451 $ 5,769 $ 5,089 $ (573)
THAILAND Program Services $ 1,208 $ 534 $ 597 $ 368 $ 1,319 $ 1,319
Administrative $ 94 $ 145 $ 105 $ 109 $ 144 $ 144
Fund Raising $ 2,625 $ - $ - $ 193 $ 107 $ 108
Total Thailand Project Expenses
CORPORATE
$ 3,927 $ 679 $ 702 $ 670 $ 1,570 $ 1,570
Payroll $ - $ - $ - $ - $ - $ -
0.16 Payroll burden $ - $ - $ - $ - $ - $ -
Minus Allocated Payroll
MARKETING $ 57 $ - $ - $ - $ - $ -
Travel $ - $ - $ - $ - $ 3,500 $ -
Phones $ - $ - $ - $ - $ - $ -
WEB $ 3,500 $ - $ - $ - $ -
Insurance $ - $ - $ - $ - $ - $ -
Training/conferrences $ 352 $ - $ - $ - $ -
OTHER $ 25 $ 10 $ 10 $ 10 $ 10 $ 10
Total corporate expenses $ 3,934 $ 10 $ 10 $ 10 $ 3,510 $ 10
Total Expenses $ 7,861 $ 689 $ 712 $ 680 $ 5,080 $ 1,580
Capital expenses $ 1,000 $ 6,000
Total outflow $ 7,861 $ 689 $ 712 $ 680 $ 6,080 $ 7,580
Mar Apr May Jun Jul Aug
Estimated Revenue by source
Loans from Directors $ 5,000 $ 3,000 $ 5,000 $ 2,000 $ - $ -
Corporate Donations $0 $0 $0 $0 $0 $0
Foundation Grants $0 $0 $0 $0 $0 $0
Special Events $0 $0 $0 $0 $0 $0
Public Donations $0 $0 $30 $0 $0 $0
Web DONATIONS $0 $0 $0 $0 $418 $427
Interest Income $0 $0 $0 $0 $0 $0
Other Income $0 $0 $0 $0 $0 $0
Total est revenue $0 $0 $30 www.scorepdx.org
$0 $418 $427
Cash available in period $5,000 $139 $4,481 $5,769 $5,507 ($147)
Cash balance ($2,861) ($549) $3,769 $5,089503-326-3441
($573) ($7,727)

42. CASH FLOW
$10,000
$5,000
$5
,0
$3 89
,7 Mar
69
Apr
$0
Mar May
($Apr May Jun
($
Jul Aug Sep Oct Nov Dec
54 57 Jun
9) 3)
($ Jul
($5,000) 2,
86
1) Aug
Sep
($ Oct
($10,000) 7, ($ ($
72 8, 8,
7) 50 61 Nov
8) 4)
Dec
($15,000)
($ ($
17 16
,9 ,6
($20,000) 20 69
) )
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503-326-3441

43. CASH FLOW
$16,000
$15,000 investment from Founders
$14,000
$1
4,
42
7
$12,000
Mar
$10,000 Apr
May
$8,000
Jun
$7 Jul
$6,000 ,2
73 $6 $6 Aug
,4 ,3
92 86
$5 Sep
$4,000 ,0
89 Oct
$3
,7 Nov
$2,000 69
Dec
$0
Mar Apr May Jun Jul Aug Sep Oct Nov Dec
($
($2,000) 54
9) ($
($ ($ 1,
2, 2, 66
86 92 9)
($4,000) 1) 0)
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503-326-3441

44. SCORE Planner
• Software that will
help you manage
your cash.
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45. Simple.
Easy to use.
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46. Question 2
Are you ready, willing and able
for a change in your lifestyle?
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47. Lifestyle Change
• New hours
• New pressure
• Less family time
• Less play time
• More work calls
• More financial pressure
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48. Can you pay
current bills
without
drawing
funds from
the new
Have you prepared yourself and
business? for a change in
your family www.scorepdx.org
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lifestyle?

49. Question 3
Is your support team on board?
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50. Just WHO is the Support
Team?
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51. Just WHO is the Support
Team?
Journal!!!
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52. Support Team
Have you written a
business plan; has
your S.O. read it;
does your S.O
understand the
impact on your
current
RELATIONSHIPS ?
Have your talked about your hopes, www.scorepdx.org
dreams, fears,
finances – and how they can best support you?
503-326-3441

53. Question 4
Do you enjoy the business of
business?
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54. Business of Business
• Business Plan
• Business tools
• Market research
• Competitive Analysis
• Sales Skills
• Elevator Pitch
• Book-keeping
• Negotiating
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55. BUSINESS PLAN
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56. The Plan Parts
• Executive Summary
 The Company
 Products and Services
 Market Analysis
 Competition
 Business Strategy and Implementation
 Operations
 Organization
 Financial Analysis
• Supporting Documentation
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57. Planning Process
1
Plan
Evaluate 6 Prepare for the future
explain variances from the plan
Act
implement the plan
2
5
Analyze
compare results to the plan Results
something happens
Record 3
measure the results
4
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503-326-3441

58. Planning Process
1
Plan
Evaluate 6 Prepare for the future
explain variances from the plan
Act
Success implement the plan
2
5
Analyze
compare results to the plan Results
something happens
Record 3
measure the results
4
FAILURE
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59. YOU ALWAYS
SUCCEED
IN PRODUCING
A RESULT !
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60. Planning Process
1
Plan
Evaluate 6 Prepare for the future
explain variances from the plan
Act
implement the plan
2
5
Analyze
compare results to the plan Results
something happens
Record 3
measure the results
4
www.scorepdx.org
503-326-3441

61. Planning Process
1
Plan
Evaluate 6
Prepare for the future
explain variances from the plan
Act
implement the plan
2
5
Analyze
compare results to the plan Results
Record something happens
measure the results
3
4
www.scorepdx.org
503-326-3441

62. Planning Process
1
Plan
Evaluate 6
Prepare for the future
explain variances from the plan
Act
implement the plan
2
5
Analyze
compare results to the plan Results
Record something happens
measure the results 3
4
www.scorepdx.org
503-326-3441

63. Planning Process
1
Plan future
Evaluate 6 Prepare for the
explain variances from the plan
Act
implement the plan
2
5
Analyze
compare results to the plan Results
Record something happens
measure the results 3
4
www.scorepdx.org
503-326-3441

64. Planning Process
1
6 Plan
Evaluate
explain variances from the plan
Prepare for the future 2
Act
implement the plan
5
Analyze 3
compare results to the plan Results
4 something happens
Record
measure the results
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503-326-3441

65. Help in Writing Your Plan
• Community groups
• SCORE
• SBDCs
• Free templates online
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66. Persistence
• Plan carefully
• Execute vigorously.
• Persist continuously.
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67. Plan
You always must be planning.
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68. BUSINESS OF BUSINESS
UNDERSTANDING THE
COMPETITIVE LANDSCAPE
Market Research &
Competitive Analysis
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69. Understand the Competitive
Topography
• Who is in YOUR market?
• What do they offer?
• How different?
• What is unique?
• Why do people use them?
• What do they communicate?
– Copies of brochures, Web, Ads, etc.
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70. War-wall
Collection of competitive
Marketing Communications
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71. What To Look For
• Battles chosen
• Comparisons made
• Claims made
• Areas ignored
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72. Business of Business
Competitors
Keep your friends close and
your competitors closer.
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73. Question 5
Are you comfortable making
tough decisions on the fly?
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74. Mountain Climbing
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75. Frozen Falls Climbing
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76. A New Boss
• YOU make the
decisions
• No “team” to turn to
• You don’t report to
anyone who could
guide or help
• The buck stops
with you.
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77. How Well Do You Handle
Just a little uncertainty…
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78. Question 6
What's your track record of
making stuff happen?
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79. Getting Stuff Done
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80. GOALS
• S.M.A.R.T.
• Specific
• Measurable
• Accountable
• Realistic
• Timely
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81. Ideas Have Power
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82. Question 7
How well do you communicate?
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83. Communicating to People
in Ways They Prefer
High Phlegmatic
Choleric Accommodating
Assertiveness Dominant Adapting-dealing
Driver Amiable
Controlling-Taking Steadiness
Competing
Melancholic Sanguine
Compliant Influencer
Analytical Excelling
Conserving/Holding Supporting-giving
Avoiding Expressive
Low
Assertiveness
Low High www.scorepdx.org
Responsiveness Responsiveness
503-326-3441

84. Communicating to People in Ways They Prefer
Phlegmatic
Choleric Accommodating
Dominant Adapting-dealing
Driver Amiable
Controlling-Taking Steadiness
Competing
Melancholic Influencer
Compliant Excelling
Analytical Sanguine
Conserving/Holding Expressive
Avoiding Supporting-giving
www.scorepdx.org
503-326-3441

85. Communicating to People in Ways They Prefer
Phlegmatic
Choleric Accommodating
Dominant Adapting-dealing
Driver Amiable
Controlling-Taking Steadiness
Competing
Melancholic Influencer
Compliant Excelling
Analytical Sanguine
Conserving/Holding Expressive
Avoiding Supporting-giving
www.scorepdx.org
503-326-3441

86. Communicating to People in Ways They Prefer
Phlegmatic
Choleric Accommodating
Dominant Adapting-dealing
Driver Amiable
Controlling-Taking Steadiness
Competing
Melancholic Influencer
Compliant Excelling
Analytical Sanguine
Conserving/Holding Expressive
Avoiding Supporting-giving
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503-326-3441

87. If you want to learn more…
…contact me after the class for
my LIFO® (life orientations) offer.
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88. Question 8
Is this new business something
about which you are
passionate?
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89. “Each of us has a fire in our
heart for something. It’s our goal
in life to find it and keep it lit.”
- Mary Louwww.scorepdx.org
Retton
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90. Passion is not a substitute…
…for business understanding
…for market intelligence
…for product knowledge
…for positioning strategy
…for planning excellence
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91. What is positioning?
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92. Do You Have the Passion to
Discover the Dominant Paradigm?
• Core Beliefs – Dominant Paradigm
– Cotton is cooler than wool
– All sugar is the same
• What are the Core Beliefs that must be
managed in your market?
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93. Reason to Buy
• What is unique about your offering?
– Location?
– People?
– Other characteristics?
– Service?
–???
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94. Passion to Position Your Value
What is unique about your offering?
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95. Passion Drives the Discipline to
Learn, Grow and Produce Great
Results!
Passion is a choice!
A daily choice.
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96. Question 9
Are you a person that gives
others energy – a self-starter?
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97. Self-starter Tips
• Do you know your purpose?
• Why are you on earth?
• How does this business
help you fulfill your
purpose?
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98. Business / Happiness
5 Paths to Giving Others Energy February 2011 Reader’s Digest
1. “Use your resources
wisely”
2. “Create a family culture”
3. “Avoid „just this once‟”
4. “Remember to be
humble”
5. “Choose the right
yardstick”
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99. Question 10
Do you have a “partner”?
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100. Advisory Board – Why?
• Networking Potential
• Industry Trends
• Educated Opinion-makers
• Business Advice
• Emotional Support
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101. Advisory Boards - Who
• Suppliers
• Retailers
• Wholesalers
• Lawyers / CPA
• Retired Small Business People
• Professors
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102. Advisory Boards
In the counsel of
many there is wisdom.
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103. ARE YOU READY TO
CHANGE?
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104. www.scorepdx.org
503-326-3441

105. Today’s offer
Any 3 eBooks
$14.95
$4.95
$4.95
$4.95
$29.80
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106. Today’s offer
Book + 3
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107. www.scorepdx.org
503-326-3441