Getting Your Business Idea Off the Ground! Speaker Martha Londagin, - - PowerPoint PPT Presentation
Getting Your Business Idea Off the Ground! Speaker Martha Londagin, Executive Business Consultant Former business attorney and commercial banker, current small business owner for 16 years Visit startupjunkie.org to see all our
Speaker Martha Londagin, Executive Business Consultant Former business attorney and commercial banker,
current small business owner for 16 years
Visit startupjunkie.org to see all our EVENTS and/or to
book a no-charge business consultation!
small business
Status of current local industry?
Market size?
Is there a demand for YOUR product
YOUR competition?
Your experience in the Industry? KEY! Who will do what? Team? Daily operations? Manage finances, who will keep “the
books”?
Who will perform services or deal with
customers/orders?
Identify all start-up costs Identify amount of owner’s investment
needed or required in cash or equipment
Formulate projected sales, profit, and cash
flow calculations to determine feasibility
Hire a true “small business” Attorney and a
CPA/Accountant
You will need a reputable attorney or CPA/Accountant
who regularly practices in the areas of small business and employment law in your region for legal entity setup and to file taxes; can hire just bookkeeper for day to day records
Attorneys don’t just incorporate-they help with
contracts, leases, employee issues, etc.
Can hire accountant or bookkeeper to train you on
software like QuickBooks
Registering Your Business Name and Incorporating Your Business
Articles of Incorporation or Organization filed with the Secretary of State if:
(these have FEIN #) Doing Business As (DBA) certificate is issued from county clerk’s office if not incorporated: Sole Proprietorship Partnership (RARE) (owner/s SS#)
Search the availability of name using sosweb.state.ar.us.
Executive Summary Company Description Market Analysis Strategic Plan
Competitive Advantage!
Marketing Plan (Outlets,
Social Media, Website)
Operations Plan Day to Day Organizational Plan Financial Plan
Balance Sheet Income Statement or P and L Cash Flow Statement
Your savings Friends and family Equipment leasing companies Bank financing (with or without
SBA Guaranty Loan Program)
Alternative financing options/credit cards Venture/Investor capital
Obtain a loan commitment before ANY binding
agreements are signed
Don’t expect to get a grant (more non-profit
sector)
Don’t assume you can get a bank loan Don’t expect 100% financing
SBA financing from a local bank due to SBA
guaranty to the bank (NOT all banks do SBA loans)
SBA does restrict the maximum allowable interest
rate prime rate plus 2.75% added to prime
SBA does allow for longer-term financing (7-10
years without real estate collateral, up to 25 years with real estate
SBA also offers longer term Lines of Credit more
than 1 year
SBA does charge a fee after your loan is approved (3% of the 75% or 50% guaranty) that the bank will add to your total loan amount
SBA does look at credit history
Be prepared for second mortgage on personal real estate for larger loans
All startup loans must have 10% of the TOTAL project need, cash or equipment already owned and valued, injected by the borrower into the business
SBA has requirements about criminal background, residency in USA, can’t have failed on a government loan ever SBA website sba.gov
Banks have their own in-house standards and rules for loans
as well, vary bank to bank
May be better interest rate, but usually shorter term, and
bad points to this
Banks can make quicker, more flexible decisions about your
loan amounts, repayments, problems, collateral, etc.
Good to work with bank you already have a home loan with
line of business
license
use tax if selling a product or providing certain services
Find out which taxes are applicable:
Sales and use taxes Self-employment tax (Social Security and
Medicare)
Federal and state income taxes for owners,
possibly including estimated tax payments you will have to send in quarterly
Withholding taxes on employee wages Federal and state unemployment taxes Corporate state franchise tax
Record all your business income sales activities and
business expenses separate from your personal records
Keep a schedule of business assets showing purchase
date, purchase price, serial and model numbers
Maintain business records for a minimum of 3 years,
in some cases indefinitely or permanently (for example, a car title)
Consult an accountant in setting up bookkeeping system Regularly visit the IRS website, www.irs.gov
Maintain a SEPARATE bank account for your
business income and expenses even if just dba
Do not co-mingle your personal money with
business money
Get to know a bank loan officer before you
need money
If you borrow money, keep the loan officer
informed about your business
Check with your insurance agent about the types of coverage your business needs.
Property/casualty General Liability Product Liability Workers’ Compensation Business Interruption Key Person Insurance or Life Insurance
Know employment laws - Arkansas Dept. of Labor
http://www.arkansas.gov/labor
Understand differences between an employee
and an independent contractor
Know proper practices for interviewing, hiring
and firing
Develop a personnel manual or employee
handbook
Consider employment or temp agencies
Zoning laws, covenants and regulations for your
location and type of business
Tax advantages of business use of home Insurance coverage other than
homeowner/renter policies
Mail delivery -> home vs. post office box
(GOOGLE business listing issue…)
Telephone -> business vs. residential
Website VITAL for validity (many free website
companies that will host you on the www)
Google Business listing Social Media Platforms to Choose Networking (chambers of commerce, networking
referral groups, small business community)
Advertising budget for direct mail, internet advertising
and directory listings
ASBTDC https://sbtdc.uark.edu/
ALL area chambers of commerce
SCORE (also helps non-profits) https://northwestarkansas.score.org/
Brewer Family Entrepreneurship Hub (U of A connections required) https://brewerhub.uark.edu/
Arkansas PTAC (for free help bidding on govt contracts) Max Franks is in Bentonville https://www.uaex.edu/business- communities/arkansas-ptac/default.aspx
Arkansas Food Innovation Center https://afic.uark.edu/
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