Small Business Development Center Presentation for: Northwest - - PowerPoint PPT Presentation

Small Business Development Center

Presentation for: Northwest Agriculture Business Center November 6, 2007 Jennifer Shelton Traci Harstad

Overview

 SBDC Program  Key Issues for Developing Business  Financing  Resources  Q & A

Small Business Development Centers

 No-cost Advising Services  Business Plans  Start-up Assistance  Financial Analysis  Marketing  Demographic & Industry Data  SBDC Network  26 Offices around the state  Research Center in Bellingham

New Approach

 A business that works not because of you,

but without you – frees you up more to live

 Go to work on your business not just in it!

 Goal – Financial Independence

Start with the end in mind

The human spirit does not invest itself in mediocrity! So far as success can be reduced to a formula, it consists of this: doing what you know you should do. ~Roger W. Babson ~Financier, Educator, Entrepreneur

Build Backwards Exercise



What is our ASAP revenue goal?



How many customers does it take to reach the goal?



Describe what the business needs to look like?



Where do we find this many customers?



Describe what will attract them to us?



What additional resources do we need?



Where can we start right now?

Purpose of Business Plan

 Feasibility Analysis  Operating Guide  Financing Tool  Valuation

Seven Functions of Business

 Management - Ownership  Production/Operations  Marketing & Sales  Accounting  Human Resources  Risk Management – Finance  Information Systems

Profitability

 Price  Quantity - Marketing or Operations  Variable Expenses  Fixed Expenses  Bookkeeping Errors

Management Strategy

 System for producing predictable, orderly,

consistent service to customer

 Your business must be alive, growing,

committed to keeping promises no competitor would dare to make

Production/Operations 5S’s



Seiri: Organization - elimination of waste



Seiton: Neatness - Arrange essential things in order for

quick & easy access and put them away



Seiso: Cleaning - Machines and working environment



Seiketsu: Standardization - Routine cleaning and

checking



Shitsuke: Discipline - Constantly improve the previous

four steps

Marketing Database Analysis

• Who are my most profitable customers?
• How do I get more of them?
• How should I segment my customers?
• Who are my best prospects?
• What is my ROI on marketing pieces?

Marketing Decisions

In order of increasing risk:

 Same Products, Same Markets  Same Products, New Markets  New Products, Same Markets  New Products, New Markets

Accounting

 A Sustainable Business:  Uses budgeting, cash flow projections, and other

planning tools to predict needs and make preparations early

 Plans for growth and the hire of additional professional

management

 Provides sustainable income & benefits to owner and

employees, including retirement

Human Resources People Strategy

 How we do it here  How we recruit, hire & train people to do it

here

 How we manage it here  How we change it here

It’s what you believe in. Why people buy from you, work for you, trust you.

Finance Risk Management

 Capability  Capacity to repay a loan  Collateral  Character/Credit  Commitment. Demonstrate your investment

Information Systems Strategy

 Identification of each consumer decision

point

 Preparation to get through each one

successfully

 Promise you make  Sale you make  Delivery on promise  Customer follow up

Go to work on your business not just in it! Go to work on your business not just in it! So you have a business that works So you have a business that works not because of you, but without you not because of you, but without you To free you up more to live To free you up more to live

Expanding or Developing your Business Often Means FINANCING

 What are lenders looking

for?

 What can you do to

prepare?

Expanding or Developing your Business Often Means FINANCING

WRITE A BUSINESS PLAN!

Why Write a Business Plan?

• Tells the lender everything they need

to know:

• Why do you need a loan?
• How much do you need?
• How are you going to use the loan?
• How are you going to repay the loan?

Why Write a Business Plan?

• Tells the lender everything they need

to know:

• Why do you need a loan?
• How much do you need?
• How are you going to use the loan?
• How are you going to pay the loan back?
• Provides you with:
• Strategic direction
• Tool for benchmarking

FINANCING

The 5 C’s of Credit



CHARACTER



CAPACITY



CAPITAL



CONDITIONS



COLLATERAL

FINANCING

The 5 C’s of Credit

 What is management’s reputation in

the industry and community?

 Experience in business and in your

industry will be important.

 Do you have good credit? Are you

trustworthy?

 Often, banks don’t differentiate

between the business and the business owner.



CHARACTER



Capacity



Capital



Conditions



Collateral

FINANCING

The 5 C’s of Credit

 Do you have the ability to repay the

loan?

 How much debt can your company

handle?

 Lender will look at:  Cash flow  Borrowing history  Track record for repayment  Probability of successful repayment  Past performance is a successful

indicator of future performance.



Character



CAPACITY



Capital



Conditions



Collateral

FINANCING

The 5 C’s of Credit

 How much money have you invested

in the business?

 Have you been willing to put yourself

at risk?

 How prepared are you to use your

• wn personal resources to support the

business?

 Investors want to see that you have a

financial commitment to the business.



Character



Capacity



CAPITAL



Conditions



Collateral

FINANCING

The 5 C’s of Credit

 What are the current economic

conditions?

 What are the trends for your industry?  How does your business fit in?  Lenders will look at the overall climate

and how it might affect your business.



Character



Capacity



Capital



CONDITIONS



Collateral

FINANCING

The 5 C’s of Credit

 Bankers will look for a secondary

source of repayment

 Pledging assets such as equipment,

real estate, A/R, inventory

 Personal guarantees  Typically 100% is expected



Character



Capacity



Capital



Conditions



COLLATERAL

FINANCING

Top Issues According to AG Lenders



Unproven = risky



Is there an established market?



Do you have a realistic plan?



Won’t typically loan based on prospect



Do you understand all the different roles you have to play?



7 Functions of business



Experience is key



Financial/managerial experience?



Degree/classes/training to supplement



Do you understand your market?



How are you going to sell your product?



Can you dependably provide a quality product?



Sales/distribution can be challenge



Vendors’ needs

Resources – Grant/Loan Programs

 U.S. Department of Agriculture  www.usda.gov  Mark Turner – Farm Service Agency

• 360-354-5658

 Melanie Drecksel – Rural Development; Area Director

• 360-428-4322

 Small Business Administration  www.sba.gov  7a & 504 Guarantee Loan Programs  Office of Minority & Women’s Business Enterprises  http://www.omwbe.wa.gov/  Linked Deposit Program

Resources

WSBDC – www.wsbdc.org existing 2+ years, growing, financing SBA – www.sba.gov/wa/seattle any stage of entrepreneur NWWBC – http://www.seattleccd.com/wbcmain/ young businesses, micro loans SCORE – www.score.org new businesses – pre start up

Practical Marketing Management

Reference USA

http://search3.webfeat.org/kclsmain.html

Proquest

http://search3.webfeat.org/kclsmain.html

Claritas & Melissadata

http://www.melissadata.com/lookups/zipdemo2000.asp http://www.claritas.com/MyBestSegments/Default.jsp?I D=20

Where are some places to look?

 Trade publications  Gartner Reports  Google Groups www.google.com  Blogs  Local, National news  Talking to customers, colleagues

More Resources



Inc. www.inc.com



Entrepreneur.com www.entrepreneur.com



Wall Street Journal http://www.startupjournal.com/



Edmonds CC - SBDC www.the-btc.com/sbdc

Contact Information

Jennifer Shelton Center Director Certified Business Advisor Edmonds Community College 728 134th St. SW, Suite 128 Everett, WA 98204 425-640-1435 jennifer.shelton@edcc.edu Traci Harstad Director of Business Development SBDC Business Advisor Economic Development Association of Skagit County 204 West Montgomery; PO Box 40 Mount Vernon, WA 98273 360-336-6114 traci@skagit.org

Questions?