Learning Center Webinars

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1 Road to Entrepreneurship: Session 1 -Planning and Research Tips for a Successful Webinar Teleconference Press [ * ] [ 6 ] on your phone to mute and [ # ] [ 6 ] to unmute your line to help minimize background noise and interference. Please do not place calls on hold. Audience Participation Participate in the discussion! Be sure to state your first name when asking questions or making comments. Use the Chat feature to send comments to the presenter or the entire group. Respond to audience polls. Saving the Presentation After the webinar, you will have the opportunity to download the presentation, complete with annotations. 2 1

2 Session Objectives Learn the importance of a business plan and what to include Understand the due diligence required Identify who should be on your board of advisors Your objectives 3 Planning is the Single Most Important Element in Starting and Operating a Business 4 2

3 Why Create and Use a Business Plan? 5 Business Plan Preparation Who are you writing your business plan for? - Internal audience - External audience How far out into the future will your plan extend? How do you classify your business? - Service provider - Product producer or seller - Mixed 6 3

4 Key Sections of a Business Plan Executive summary - Business purpose and goals People involved - Resume (experience, education, personal information) Business information/profile - Describe your business and moving forward - What, where, why, how Economic assessment - Demographics Cash flow assessment Marketing Plan 7 Review Sample Business Plans 8 4

5 The Executive Summary Provides a High-Level Overview of the Plan Emphasize the factors that will make the business successful - Sound numbers, trends, company goals, ROI, capital expenditures, funding required Demonstrate why your business is a sound investment Prepare the executive summary after all the sections of the business plan are complete 9 Convey Your Understanding of the Market with a Thorough Market Analysis Industry description and outlook Target market information Market test results Lead times Evaluation of competition 10 5

6 Use Market Research and Analysis to Determine if Your Idea is Viable Current users (customers) Prospects (new users) Features and benefits Market potential Industry forecast 11 Identify the Demographics of Your Target Customer Individual Customer Age Income Education level Location Buying habits and preferences Company Industry Size Location Product Mix x Source: US Small Business Administration, Office of Advocacy 12 6

7 What is the Demographic Distribution of Your Customer? How many are in your industry segment or service area? How many are current consumers? Who are the prospects? 13 Primary Market Research Surveys and interviews - One-on-one - Online surveys - Focus groups Business networking Direct visits to competitors Market research firms 14 7

8 Competitive Analysis Who are your competitors? What are their strengths and weaknesses? How does your business differ? 15 People Are the Most Important Ingredient for Success Management team - Principals Functions and responsibilities Strengths and weaknesses - Board of Directors and/or Advisors Key personnel Employees needed - Labor pool of such employees in area Functions of business performed by consultants or specialists 16 8

9 Review Business Projections Start-up costs Sources and uses of funds Working capital requirements Financial operating characteristics and trends Consider - Reaction to economic cycles - Seasonal effect on product demand - Contingency needs 17 Financial Plan Include pro forma financials: Income statement - Compares revenues and expenses Balance sheet - Snapshot of business showing assets, liabilities, and equity Cash flow statement/projection - Shows projected and actual movement of money over a certain period of time Typically projected over 3-5 years 18 9

10 Pro Forma Projections Are Essentially Educated Guesses Update projections monthly or quarterly using any new and actual financial information as a base Project rate of return (ROI) Compare results on each item with others in same business - Lenders will notice inconsistencies 19 Break-even Analysis Point at which all costs will be recovered Number of unit sales needed to earn a profit Consider fixed and variable costs Management tool 20 10

11 Key Ratios Are Crucial to Lenders Liquidity - Working capital - Current ratio Capital structure - Debt to equity Profitability - ROI Return on Investment - ROS Return on Sales - ROA Return on Assets 21 ROI is the Single Most Important Factor in Understanding Your Business Potential If a person on the entrepreneurial track can get the same or better rate of return on the required investment elsewhere then it could be a bad decision to start or buy a business

12 SWOT Analysis Strengths - Company s strong points Weaknesses - Your own and competitors perspectives Opportunities - Areas for growth, leveraging competitive position Threats - Economic, competitive, changing technology, cash flow 23 SWOT Analysis Strengths Opportunities Weaknesses Threats 24 12

13 Planning Assumptions Industry analysis Business fit in your market Potential risks Projected customer benefits Projected market share 25 Dangerous Assumptions Customers will buy our product because we think it is good Customers will buy because our product is technically superior The product will sell itself We can develop the product on-time and on-budget and meet demand Competitors will respond fairly We will hold down prices while gaining rapid market share We can easily attract the right staff Customers will run no risk in buying from us instead of continuing to buy from their past suppliers 26 13

14 Exit Strategy How long do you plan to be associated with the business? How will you get out of the business? - Sell in five years - Stay with it, then retire - Close it - Take it public 27 Make Your Business Plan Compelling Keep it well-organized - Include a cover sheet and table of contents Use graphics and tables when possible 28 14

15 Your Board of Advisors Attorney Accountant or CPA Insurance Agent Banker 29 Next Steps Download the Entrepreneurial Online Resources guide Create a first draft of your business plan Begin your due diligence Identify your Board of Advisors 30 15

16 Related Road to Entrepreneurship: Session 2 - Finance and Legal Structure Road to Entrepreneurship: Session 3 - Marketing and Branding Exploring Independent Consulting 31 Road to Entrepreneurship: Session 2 Session Objectives Explore sources for financing the business Review types of business ownership Learn how to legally establish your business Discover questions to ask when establishing a banking relationship 32 16

17 Entrepreneurial Online Resource Guide 33 CRN: Starting a Business Milestones 34 17

18 Thank You Thank You Thank you for joining me today. I wish you great success with your job search! Attendance If you joined the webinar late, or are audio only, please notify the presenter before you logoff. Webinar Evaluation You will receive a brief survey via after the webinar. We value your feedback! 35 To Save the Presentation as a PDF Click on File in the upper left corner Select Save As > click on Document Choose where you want to save the file File name box > name the document Save as type box > select Portable Document Format (PDF) -this is the second option under the UCF Format option Click on Save To save additional attachments: Click on File > select Save All Select Shared Files and Save as PDF Click on Save > select OK 36 18