Getting Your Business Idea Off the Ground! Speaker Martha Londagin, - - PowerPoint PPT Presentation

getting your business idea off the ground
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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


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“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 EVENTS and/or to

book a no-charge business consultation!

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Roadmap:

  • Introduction to planning to launch a

small business

  • Lean Canvas/ Business Plan
  • Startup Steps
  • Financing
  • Resources in NWA to assist
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Market

 Status of current local industry?

Market size?

 Is there a demand for YOUR product

  • r service?

 YOUR competition?

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Founder/Owner

 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?

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Financing Needs

 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

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Prepare Your Plan to Launch!

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Lean Canvas Map

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Attorneys and Accountants

 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

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Registering Your Business Name and Incorporating Your Business

Articles of Incorporation or Organization filed with the Secretary of State if:

  • C Corporation (RARE)
  • S Corporation (RARE)
  • Limited Liability Company
  • ANNUAL fee due to S of S

(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.

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Formal Business Plan Elements

 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

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Financing

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Sources of Financing

 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

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General Comments About Obtaining Financing

 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

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US Small Business Administration Loans

 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

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SBA Loans continued…

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

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In-House Bank Loans

 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

  • n real estate has to be renewed every five years, good 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

  • r account for new business loan, they KNOW you!
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Basic Startup Requirements

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Permits, Licenses and Taxes

  • Check for licensing boards that may regulate your specific

line of business

  • Contact city or county clerk’s offices to obtain a business

license

  • Check zoning laws for your location (includes home-based)
  • May need to obtain FEIN number from IRS
  • Contact Dept. of Finance and Admin. (DFA) for sales and

use tax if selling a product or providing certain services

  • Check permit requirements (health, alcohol, tobacco, etc.)
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Taxes

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

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SLIDE 20

Recordkeeping

 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

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Banking

 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

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Insurance

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

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Personnel

 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

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Home-Based Business Issues

 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

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Marketing Your Business

 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

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Other local assistance resources:

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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Questions & Answers

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Thank You!

 We appreciated the opportunity to serve you!  Check out our next series of FREE events at

Startupjunkie.org and click the EVENTS tab!