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CIBC Veni Iozzo, Vice President Steven White, Senior Director Small Business Banking December 2007
Agenda <ul><li>Starting a business – What you need to know </li></ul><ul><li>Ownership Structures </li></ul><ul><li>Busine...
Starting a Business –  What You Need to Know <ul><li>Research your market </li></ul><ul><li>Consider your ownership struct...
Ownership Structures –  Determine What is Right for Your Business <ul><li>Deciding on a business structure that is right f...
<ul><li>Deciding on a business structure that is right for you is an important decision for your business.  The form of ow...
<ul><li>Deciding on a business structure that is right for you is an important decision for your business.  The form of ow...
Business Bank Account <ul><li>You have decided your business ownership structure and your ready to open our business accou...
Business Plan –  Your Roadmap to Success <ul><li>Whether you are starting a new business or running an established one, a ...
Business Plan –  cont’d <ul><li>Financial Plan </li></ul><ul><li>Your financial plan will include details on the following...
How do you finance your business? <ul><li>Equity </li></ul><ul><li>Debt </li></ul>There are two main ways to finance your ...
Financing your Business Equity Financing Can be obtained through savings or investors.  Investors typically receive an own...
Financing your Business There are a number of ways to finance a business.  The lender will evaluate your ability to borrow...
Financing your Business <ul><li>Line of Credit  – used to cover short term expenses like supplies, payroll and rent.  </li...
Financing your Business <ul><li>Canada Small Business Financing (CSBF) Program – Canada-Ontario Business Service Centre  <...
What is the Bank Looking For? <ul><li>The 5 C’s: </li></ul><ul><li>Character:  You must be trustworthy and have a strong c...
Why a Business Fails <ul><li>Poor management </li></ul><ul><li>The Business offers products and services that nobody wants...
Sources <ul><li>2007 Canada Business </li></ul><ul><ul><li>bsa.canadabusiness.ca/gol/bsa/site.nsf/en/index.html </li></ul>...
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Entrepreneurship 101: Mechanics of Starting a Business

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This presentation covers a number of issues relevant to starting and running a business, including:
* Starting a business: What you need to know
* Ownership structures: Pros/Cons of each
* Business plan: Your roadmap to success
* Financing your business
* Building a relationship with your bank
* Why businesses fail
Speaker: Ms Veni Iozzo, Vice President, CML Business Development, CIBC
More information: http://www.marsdd.com/Events/Event-Calendar/Ent101/2007/mechanics-business-20071212.html

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Entrepreneurship 101: Mechanics of Starting a Business

  1. 2. CIBC Veni Iozzo, Vice President Steven White, Senior Director Small Business Banking December 2007
  2. 3. Agenda <ul><li>Starting a business – What you need to know </li></ul><ul><li>Ownership Structures </li></ul><ul><li>Business Plan: Your Roadmap to Success </li></ul><ul><li>Financing your Business </li></ul><ul><li>Why a Business Fails </li></ul><ul><li>References </li></ul>
  3. 4. Starting a Business – What You Need to Know <ul><li>Research your market </li></ul><ul><li>Consider your ownership structure </li></ul><ul><li>Choose a business name </li></ul><ul><li>Hire Professionals </li></ul><ul><li>Register Your Business </li></ul><ul><li>Consider municipal, provincial and federal business requirements </li></ul><ul><li>Understand employer </li></ul><ul><li>responsibilities </li></ul><ul><li>Prepare a business plan </li></ul><ul><li>Arrange Financing </li></ul><ul><li>Network, network, network! </li></ul>
  4. 5. Ownership Structures – Determine What is Right for Your Business <ul><li>Deciding on a business structure that is right for you is an important decision for your business. The form of ownership you select will depend on what your future business plans are. </li></ul><ul><li>Sole Proprietors: </li></ul><ul><li>Unlimited personal liability </li></ul><ul><li>Fully responsible for the debts and obligations of their business </li></ul>
  5. 6. <ul><li>Deciding on a business structure that is right for you is an important decision for your business. The form of ownership you select will depend on what your future business plans are. </li></ul><ul><li>Partnerships: </li></ul><ul><li>An agreement between two or more persons often protected by a partnership agreement </li></ul><ul><li>Profits are shared according to their agreement </li></ul><ul><li>There are two types of partnership structures </li></ul><ul><ul><li>General Partnerships </li></ul></ul><ul><ul><li>Limited Partnership </li></ul></ul>Ownership Structures – Determine What is Right for Your Business
  6. 7. <ul><li>Deciding on a business structure that is right for you is an important decision for your business. The form of ownership you select will depend on what your future business plans are. </li></ul><ul><li>Corporations: </li></ul><ul><li>One or more people can form a private corporation. </li></ul><ul><li>Personal liability of the owners/shareholders is limited. </li></ul>Ownership Structures – Determine What is Right for Your Business
  7. 8. Business Bank Account <ul><li>You have decided your business ownership structure and your ready to open our business account – here is what is generally required: </li></ul><ul><li>For any business: </li></ul><ul><li>Any person to sign on the account is required to bring two pieces of original identification, including one with photo </li></ul><ul><li>Sole Proprietors: </li></ul><ul><li>If using a business name – business name registration </li></ul><ul><li>Partnerships: </li></ul><ul><li>Partnership registration or partnership agreement </li></ul><ul><li>Corporations: </li></ul><ul><li>Original articles of incorporation or certificate of incorporation </li></ul><ul><li>Recent filing with incorporating jurisdiction listing your directors </li></ul><ul><li>Trade name registration, if applicable </li></ul>
  8. 9. Business Plan – Your Roadmap to Success <ul><li>Whether you are starting a new business or running an established one, a good business plan helps set you on the road to financial success. By mapping out your goals and strategies, you’ll get a clearer picture of what your business really needs. </li></ul>Business Profile: This introduction to your business plan provides important information about your company’s business structure, key principals, professional advisors, and financial history. <ul><li>Business Plan: </li></ul><ul><li>Market Analysis </li></ul><ul><li>Business Assessment </li></ul><ul><li>Objectives, Strategies and Plans </li></ul>
  9. 10. Business Plan – cont’d <ul><li>Financial Plan </li></ul><ul><li>Your financial plan will include details on the following: </li></ul>It is important for your plan to be realistic and reviewed regularly – make changes whenever necessary. <ul><li>Balance Sheet </li></ul><ul><li>Income Statement </li></ul><ul><li>Cash flow forecast </li></ul><ul><li>Personal Financial Statement </li></ul>
  10. 11. How do you finance your business? <ul><li>Equity </li></ul><ul><li>Debt </li></ul>There are two main ways to finance your business
  11. 12. Financing your Business Equity Financing Can be obtained through savings or investors. Investors typically receive an ownership interest in your company in return for their investment <ul><li>Start up equity financing is typically sourced through yourself and people you know: </li></ul><ul><ul><li>Personal savings </li></ul></ul><ul><ul><li>Friends or relatives </li></ul></ul><ul><ul><li>Government </li></ul></ul><ul><ul><li>“ Angel” or informal investors </li></ul></ul><ul><li>Why invest your Money in the Business ? </li></ul><ul><ul><li>Least costly source of funds </li></ul></ul><ul><ul><li>You are more likely to get a loan with adequate equity in your business </li></ul></ul><ul><ul><li>A business that has adequate equity is more likely to succeed </li></ul></ul>
  12. 13. Financing your Business There are a number of ways to finance a business. The lender will evaluate your ability to borrow based on strength of your business plan, management capabilities, financing, your past personal credit history and collateral available to secure the loan. New business owners (in business less than 2 years) typically require collateral such as mortgages or cash/investments.
  13. 14. Financing your Business <ul><li>Line of Credit – used to cover short term expenses like supplies, payroll and rent. </li></ul><ul><li>Credit Cards – to cover and track small expenses or everyday business expenses. </li></ul><ul><li>Suppliers’ Credit – sometimes a very cheap source of financing, do not overlook the value of this source. </li></ul><ul><li>Business Term Loan – used to purchase long term assets required to operate your business. </li></ul><ul><li>Leasing – used to obtain assets to run your business, may provide more flexible options than traditional loans. </li></ul><ul><li>Government Programs – there are many government programs to support Small Business. Investigate all options. </li></ul>Sources of Debt Financing
  14. 15. Financing your Business <ul><li>Canada Small Business Financing (CSBF) Program – Canada-Ontario Business Service Centre </li></ul><ul><li>NRC Industrial Research Assistance Program (NRC-IRAP) – Canada-Ontario Business Service Centre </li></ul><ul><li>NORTHSTAR Trade Finance Inc. – Canada-Ontario Business Service Centre </li></ul><ul><li>Co-Vision - Start-up Financing Solution – Canada-Ontario Business Service Centre </li></ul><ul><li>Summer Company – Canada-Ontario Business Service Centre </li></ul><ul><li>Financing for Starting a Business – Business Development Bank of Canada </li></ul><ul><li>Growth Capital for Aboriginal Business – Canada-Ontario Business Service Centre </li></ul>Funding Sources and Programs (examples)
  15. 16. What is the Bank Looking For? <ul><li>The 5 C’s: </li></ul><ul><li>Character: You must be trustworthy and have a strong credit history (maintain a strong credit history personally and as a Business) </li></ul><ul><li>Conditions: How do the current economic conditions impact your business and industry? </li></ul><ul><li>Capital: How much do you have invested in your company? </li></ul><ul><li>Capacity: How will your company pay back the debt? </li></ul><ul><li>Collateral: What assets are available if your company cannot repay? </li></ul>
  16. 17. Why a Business Fails <ul><li>Poor management </li></ul><ul><li>The Business offers products and services that nobody wants or cannot afford </li></ul><ul><li>Inability to adapt to a changing environment </li></ul><ul><li>Failing to control costs </li></ul><ul><li>Poor execution creating dissatisfied customers </li></ul>Creating an effective business plan will assist you in avoiding the pitfalls of running a business. Seeking professional help is another important way to avoid or plan for business challenges. <ul><li>The business is undercapitalized – a business with too much debt and a cash flow that doesn’t support it </li></ul><ul><li>Business expansions that are poorly planned and not appropriately financed </li></ul>
  17. 18. Sources <ul><li>2007 Canada Business </li></ul><ul><ul><li>bsa.canadabusiness.ca/gol/bsa/site.nsf/en/index.html </li></ul></ul><ul><li>Canadian Bankers Association </li></ul><ul><ul><li>cba.ca/en/content/publications/SMALL%20BUSINESS%20BOOK%20-%20FINAL.pdf </li></ul></ul><ul><li>CIBC – Your Guide to Business Planning </li></ul><ul><ul><li>cibc.com/ca/small-business/article-tools/business-planning.html </li></ul></ul>
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This presentation covers a number of issues relevant to starting and running a business, including: * Starting a business: What you need to know * Ownership structures: Pros/Cons of each * Business plan: Your roadmap to success * Financing your business * Building a relationship with your bank * Why businesses fail Speaker: Ms Veni Iozzo, Vice President, CML Business Development, CIBC More information: http://www.marsdd.com/Events/Event-Calendar/Ent101/2007/mechanics-business-20071212.html

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