Starting Your Own Business How to Turn Your Dreams Into Reality P. Griffith “Griff” Lindell www.lindellassociates.net
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Entrepreneur: One who organizes, manages, and assumes the risks of a business enterprise. • Question for me… – What’s really important to think about for perspective entrepreneurs? www.lindellassociates.net
Failure Rate • The U.S. Small Business Administration says that more than half of small businesses fail in their first year. www.lindellassociates.net
A Good Businessperson Has... • Discipline • Experience • Patience • People skills – make good choices in response • Aptitude with numbers • Ability to predict: – Costs – Impacts on time, the market, the customer www.lindellassociates.net
B A 5 Shapes: Select the one that is different from the others C D E www.lindellassociates.net
Do You Know the “Shape” of: Legal Structure? Marketplace? Customers? Competition? Distribution? Relationships? Your business? www.lindellassociates.net
Three Foundational Questions • Why do you want to move from being employed to Self-employed? • Are you suited to be an entrepreneur? • What should you do next? www.lindellassociates.net
Your Business Idea • Need in the marketplace? • Solution? • You passionate? • Real value to the customer? www.lindellassociates.net
Important Questions To Be Answered • Is your idea feasible? • Do you have the experience and background to make your idea flourish? • Are there many companies in this line of business? • Is there demand for your product or service? www.lindellassociates.net
Counting the Costs • Time costs • Life-style cost • Are you willing to invest your weekends, holidays, evenings, birthdays, anniversaries, etc.? www.lindellassociates.net
Counting the Costs • Is the market large enough to support your business idea? • Have you penciled the numbers? • Have you done a B/E? – Fixed costs – Variable costs www.lindellassociates.net
Counting the Costs $ Output in Numbers www.lindellassociates.net
Counting the Costs • Is the market large enough to support you business idea? • Have you penciled the numbers? • Have you done a B/E? – Fixed costs – Variable costs • Have you written a business plan? www.lindellassociates.net
The Plan Parts • Executive Summary The Company Products and Services Market Analysis Competition Business Strategy and Implementation Operations Organization Financial Analysis Supporting Documentation www.lindellassociates.net
Planning Process 1 Plan 6 Evaluate Prepare for the future explain variances from the plan Act implement the plan Success 2 5 Analyze compare results to the plan Results something happens Record 3 measure the results 4 failure www.lindellassociates.net
Planning Process 1 Plan 6 Evaluate Prepare for the future explain variances from the plan Act implement the plan Success 2 5 Analyze compare results to the plan Results something happens Record 3 measure the results 4 failure www.lindellassociates.net
YOU AL YO U ALWAYS YS SUC SUCCE CEED ED IN IN PRO RODU DUCING CING A RESU A RESULT ! T ! www.lindellassociates.net
Planning Process 1 Plan 6 Evaluate Prepare for the future explain variances from the plan Act implement the plan 2 5 Analyze compare results to the plan Results something happens Record 3 measure the results 4 www.lindellassociates.net
Planning Process 1 Plan 6 Prepare for the future Evaluate explain variances from the plan Act implement the plan 2 5 Analyze compare results to the plan Results Record something happens 3 measure the results 4 www.lindellassociates.net
Planning Process 1 Plan 6 Prepare for the future Evaluate explain variances from the plan Act implement the plan 2 5 Analyze compare results to the plan Results Record something happens 3 measure the results 4 www.lindellassociates.net
Planning Process 1 Plan 6 Prepare for the future Evaluate explain variances from the plan Act implement the plan 2 5 Analyze compare results to the plan Results Record something happens 3 measure the results 4 www.lindellassociates.net
The 10 Questions 1. Have you counted the costs? www.lindellassociates.net
Not yet Got it done! I have penciled it out. 1 2 3 4 5 6 7 8 9 10 I have money set aside. 1 2 3 4 5 6 7 8 9 10 I have access to money. 1 2 3 4 5 6 7 8 9 10 I have set-up a cash flow forecast. 1 2 3 4 5 6 7 8 9 10 I know my start-up costs. 1 2 3 4 5 6 7 8 9 10 I have calculated my break-even point. 1 2 3 4 5 6 7 8 9 10 36 – 40 = You are on your way! 32 – 35 = You are almost there – just a little more work to do. 28 – 32 = You have made a start: know what’s next and attack it. 27 or less = Are you sure you want to be in business? www.lindellassociates.net
FinishedActivity Start Date Completed Date □ I have penciled it out. _____________ _______________ What I have learned: ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ www.lindellassociates.net
The 10 Questions 1. Have you counted the costs? 2. Are you ready, willing and able for a change in your lifestyle? 3. Is your support team on board? • Risk/reward conversation • Family impact addresses 4. Do you enjoy the business of business? • Language of business? www.lindellassociates.net
Cash Flow www.lindellassociates.net
Cash Flow defined… 1. Cash Flow is the flow of cash INTO and OUT OF a business over a selected time period 2. Cash Flow is: Positive when cash receipts exceed cash payments – YOU CAN PAY YOUR BILLS! Negative when cash payments exceed cash receipts – YOU HAVE TO BORROW TO PAY BILL www.lindellassociates.net
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CASH FLOW $10,000 $5,000 $5,089 $3,769 Mar Apr $0 May Mar Apr May Jun Jul Aug Sep Oct Nov Dec ($549) ($573) Jun Jul ($2,861) ($5,000) Aug Sep Oct ($7,727) ($8,508) ($10,000) ($8,614) Nov Dec ($15,000) ($16,669) ($17,920) ($20,000) www.lindellassociates.net
CASH FLOW $16,000 $14,000 $14,427 $12,000 Mar $10,000 Apr May $8,000 Jun Jul $7,273 $6,000 $6,492 Aug $6,386 Sep $5,089 $4,000 Oct $3,769 Nov $2,000 Dec $0 Mar Apr May Jun Jul Aug Sep Oct Nov Dec ($549) ($2,000) ($1,669) ($2,861) ($2,920) ($4,000) $15,000 investment from Founders www.lindellassociates.net
Local, State & Federal Business Regulations • Fictitious Name Act (Filing In Oregon) www.filinginoregon.com • Licenses • Insurance • IRS - Employer Identification Number (866) 816-2065 • Federal Self-Employment Tax – if appropriate • Business Tax Information www.lindellassociates.net
The 10 Questions 1. Have you counted the costs? 2. Are you ready, willing and able for a change in your lifestyle? 3. Is your support team on board? 4. Do you enjoy the business of business? 5. Are you comfortable making tough decisions on the fly? www.lindellassociates.net
The 10 Questions 6. What's your track record of making stuff happen? 7. How well do you communicate? www.lindellassociates.net
Communicating About Your Business • Who are you targeting? • What are they looking for? • What are you offering? • Why it is so very special? • How it is unlike others? www.lindellassociates.net
Sample Positioning Statement FOR: Portland-area businesses NEEDING: who are looking for a quality, sophisticated Holiday entertainment experience WHAT: the Fireside Carolers of Vivace Voices, offer professionally trained voices WHY US: singing {in eight part harmony} both traditional and unique jazz versions of Holiday music WHY NOT THEM: unlike the 19 th century-type Carolers, we offer a truly American entertainment experience and, in the spirit of the Season, we give back a portion of our revenue to the community. www.lindellassociates.net
Let your holidays sparkle with the sophisticated, jazzy American sound of… …The Fireside Carolers In the Spirit of Giving www.lindellassociates.net
The 10 Questions 6. What's your track record of making stuff happen? 7. How well do you communicate? 8. Is this new business something about which you are passionate? 9. Are you a person that gives others energy – a self-starter? 10. Do you have a “partner”? www.lindellassociates.net
Ready for Business? ‘There are no shortcuts to any place worth going.” Beverly Sills www.lindellassociates.net
$14.95 www.lindellassociates.net
$14.95 4.95 4.95 4.95 $29.80 $20.00 www.lindellassociates.net
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