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Bing Bang! First Steps to Starting your Business

  1. 1. BING BANG! First Steps to Starting your Business
  2. 2. How to start your OWN Business?
  3. 3. 6 STEPS 1. IDEA 2. PERSONAL FINANCES 3. BUDGET 4. PLAN 5. FORMALIZE 6. MANAGEMENT
  4. 4. 1. IDEA Personal •What type of business do you want? •Am I ready for the investment of time and money? •Am I ready for the responsibility? • Impact in my life style • List of advantages and disadvantages
  5. 5. PERSONAL INVENTORY OF YOUR SKILLS AND EXPERIENCE What: I know, I should know, I need to learn • Product/Service • Industry • Operations • Promotions/Sales (Language) • Financial Records • Legal Aspects
  6. 6. 2. PERSONAL FINANCES
  7. 7. Important Factors for Securing a Loan Collateral Credit Score Capital Character Capacity to repay Conditions
  8. 8. Credit Score • What is credit? – An asset that allows you to access many different resources, both financial and non-financial – A point system between 300-850 that reflects your history of repaying your debts and how you manage your credit • Why is credit so important? – Financial institutions use your credit score to determine if you qualify for a loan, the interest rate you will pay, and the term of the loan. Employers, educational institutions, and landlord are other parties that may use your credit report. – Your business partner’s credit report plays a role in securing financing
  9. 9. Payment History 35% Balance on Accounts 30% Length of History 15% New Debt 10% Types of credit 10%
  10. 10. Capacity • LEDC takes a holistic look at your ability to repay a microloan • If you are a start-up business, do you have an additional source of income that will support you during the initial start-up phase? • If you are an existing business, what does your historical data show and how will these profits be maintained? Do your business financials show positive cash flow and a positive net equity?
  11. 11. Capital and Collateral • Capital: How much of your own money have you invested in your business? (Your owner’s equity) • Your owner’s equity or contribution represents your commitment to the venture • Collateral: a third source of repayment. • LEDC secures loans with lien-free car titles and business assets
  12. 12. Character and Conditions Character • Thorough understanding of your business model • Clear articulation of size and purpose of loan • Straightforwardness about financial situation • Number of years of industry experience • Quality of references Conditions Current economic climate of industry in which business is operating
  13. 13. 4. PLAN • Write a business plan • Why? - Organize your ideas - Focus your efforts - Create a common vision (partner) - Ask for financing - Gain confidence of the viability of your business- sustainable - Maximize your chances of success
  14. 14. BUSINESS PLAN • • • •
  15. 15. $10 martini-and-manicure special—which starts at 5 p.m. nightly and continues until 11 p.m. or later These fish can completely get rid of skin smear and aging cortex
  16. 16. 5. FORMALIZE 1. Register de business/Legal entity 2. Register with the IRS for taxes at the federal level 3. Register to pay state’s taxes 4. Licensing and permits
  17. 17. • REGISTER YOUR BUSINESS The Dept of Consumer and Regulatory Affairs www.dcra.dc.gov • 941 North Capitol Street, NE, Washington, DC 20002 • Tel: 202-442-4400 • GET A FEIN • Register your business with the IRS to pay taxes to the federal government and to open a bank account. For more information visit: www.irs.gov • STATE’S TAXES FOR DC • Register with OTR (Office of Tax &Revenue) www.otr.cfo.dc.gov • LICENSES AND PERMITS Department of Consumer and Regulatory Affairs www.dcra.dc.gov
  18. 18. 6. MANAGEMENT Insurance Consultants Update your abilities
  19. 19. • Marla Bilonick • mbilonick@ledcmetro.org • 202-540-7412 • Rossana Espinoza • respinoza@ledcmetro.org • 202-540-7416

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