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  1. NxLeveL Instructor Presentation “Business Plan Basics” NxLeveL Guide for Micro-Entrepreneurs 2nd Edition

  2. Course Overview • Session 1: Keys to Your Business Success • Session 2: Assessing Your Business Idea • Session 3: Business Planning • Session 4: The Marketing Plan • Session 5: Government Regulations • Session 6: Management • Session 7: Market Analysis • Session 8: Product and Pricing • Session 9: Placement and Promotion • Session 10: E-Commerce NxLeveL Guide for Micro-Entrepreneurs-OHD 1-a

  3. Course Overviewcontinued • Session 11: Selling Success • Session 12: Where’s the Cash? • Session 13: Managing the Money • Session 14: Financial Tips and Tools • Session 15: Bringing It All Together NxLeveL Guide for Micro-Entrepreneurs-OHD 1-b

  4. Participant Materials • SESSION OUTLINESOne Page Session-by-Session Outline for the Course • TEXT  “Business Plan Basics”NxLeveL® Guide for Micro-Entrepreneurs • WORKSHEETSNxLeveL® Micro-Entrepreneur Business Plan Worksheets • RESOURCE GUIDENxLeveL® Business Resource Guide • OTHERClass Handouts • Supplemental Material NxLeveL Guide for Micro-Entrepreneurs-OHD 1-c

  5. Class Agenda • Class Opener • Instructor Topics • Guest Speaker • Break • Refreshments • Networking Activity • Work Hour • Discussion Groups • Worksheet Activities • Business Plan Sections NxLeveL Guide for Micro-Entrepreneurs-OHD1-d

  6. Expectations & Ground Rules • Attendance • Absenteeism • Punctuality • Participation • Discussion • Confidentiality • Listening • Assignments • Reading • Worksheets • Written Business Plan Sections • Format • General • Safe environment to test ideas • Ask questions • Add ground rules as needed NxLeveL Guide for Micro-Entrepreneurs-OHD 1-e

  7. Traits of Successful Entrepreneurs • Passion • Persistence • Good Health, High Energy • Communication and Listening Skills • Creativity • Self-Confidence • Willingness to Work Hard NxLeveL Guide for Micro-Entrepreneurs-OHD 1-1

  8. What Are Your Goals? • Your goals may focus on: • Yourself • Family • Children • Health/weight/exercise • Friends/relationships • Further education/degree • Job/career • Cars/vehicles • Home ownership • Starting a business • Travel/vacation • Retirement NxLeveL Guide for Micro-Entrepreneurs-OHD 1-2

  9. Personal Assessment • Why do you want to start a business? • What special skills, experience, and knowledge do you have? • How’s your personal financial health? • Do you have a mentor or advisor? Can you get one? NxLeveL Guide for Micro-Entrepreneurs-OHD 1-3

  10. The Risks of Entrepreneurship • Failure: Can you bear the emotional and financial risk of failure? • Long Hours: 60-70 hours per week is normal • Family Strain: Potential strain on relationships because of long hours • No Regular Paycheck: How will you support yourself and your family? • No Health Benefits: No employer-provided health coverage • Isolation: You’ll be working by yourself much of the time • Debt: You may have to take on additional debt • Responsibility: Everything may rest on your shoulders • Stress: New emotional, financial, and physical pressures NxLeveL Guide for Micro-Entrepreneurs-OHD 1-4

  11. The Rewards of Entrepreneurship • Success: You’ll be able to support yourself, and hire others! • Independence: You get to be your own boss • Learning: No matter what happens, you’ll have valuable new skills and knowledge • Self-Respect: Few things are as rewarding as succeeding through your own talent and hard work • Recognition: It’s always nice to be noticed…and it can lead to new opportunities, too! • Family Benefits: You’ll have something special to leave your children • FUN: You can make money doing something you really enjoy! NxLeveL Guide for Micro-Entrepreneurs-OHD 1-5

  12. Why Do Businesses Fail? • Poor management • No business plan • Don’t listen to customers • Don’t set prices appropriately • Poor cash flow management • Don’t ask for help NxLeveL Guide for Micro-Entrepreneurs-OHD 1-6

  13. Why Do Businesses Succeed? • Careful planning • Clear focus and purpose • Offer a unique product • Understand customers’ needs • Sell at the right price • Seek and follow expert advice • Get help when necessary • Understand industry and competition • Do regular bookkeeping • Know how to keep existing customers, and get new ones • Understand cash flow management NxLeveL Guide for Micro-Entrepreneurs-OHD 1-7

  14. Professionalism in Business • Health and Hygiene • Personal ImageFirst Impressions REALLY Count! • Appearance and Dress • Etiquette and Manners • Always use the magic words: PLEASE and THANK YOU • Be on time • Keep your promises • Respect people and be courteous • Follow up with thank-you notes • Return all phone calls • Call ahead to confirm appointments NxLeveL Guide for Micro-Entrepreneurs-OHD 1-8

  15. Check Your Verbal Skills • Speak at a comfortable pacenot too fast, not too slow • Make sure people can understand you • Speak at a good volume—not too loud, not too quiet • Avoid slang and swear words • Answer the phone slowly and clearly • Practice talking into a tape recorder and play it back… • How does it sound? NxLeveL Guide for Micro-Entrepreneurs-OHD 1-9

  16. Check Your Nonverbal Skills • Stand and sit straight, but comfortably • Make eye contact • Don’t yawn when someone is talking with you • Respect people’s “personal space”keep at least 18” between you & your listener • Don’t fidget, rock, tap your feet, etc.it looks like you’re bored • Look confident and proud of your business • Smile! • Know what signals your different facial expressions send to your listener • Practice shaking handsit should be firm (not like a vice grip, but not like a wet rag, either!) • Practice talking into a mirror…Do you look comfortable and professional? NxLeveL Guide for Micro-Entrepreneurs-OHD 1-10

  17. Written Communication Skills • Make written communicationSimple, Short, Specific • Make sure it answers: • Who • What • Where • When • Why • How • Don’t write when you’re angry or upset. Sleep on it…you may feel differently the next day! NxLeveL Guide for Micro-Entrepreneurs-OHD 1-11

  18. Check Your Listening Skills • Stop what you’re doing and pay attention to what the other person says • Maintain eye contact…look alert and interested • Prove that you’re listening by summarizing points and asking questions • Listen, understand, judge carefully…and then react NxLeveL Guide for Micro-Entrepreneurs-OHD 1-12

  19. Networking Tips • Have a purpose for networking • Have a confident handshake • Be aware of your body language • Wear something unusual to spur conversation (unique pin, watch, tie) • Always carry your business cards with you • Be able to talk about more than just the weather • At a networking event, don’t try to juggle food and drinks • Follow through on promises you make • Set up a system to keep in touch with your network • If you’re not comfortable networking, learn from a pro NxLeveL Guide for Micro-Entrepreneurs-OHD 1-13

  20. What Are Your Time Wasters? • TV • Talking on the telephone • Not keeping lists; poor planning • Disorganization • Unclear goals • Lack of motivation • Procrastination • No schedule; no procedures • Interruptions from co-workers, family, friends • Waitingdoctor appointments, long lines, etc. • Red tape • Always tired • Lose or misplace things often • Negative attitude • Not able to say “No” NxLeveL Guide for Micro-Entrepreneurs-OHD 1-14

  21. Time Saver Tips • Set priorities • Keep lists; cross off completed items • Use a calendar or planner…EVERY day! • Combine personal and business calendars • Ask family for help with household responsibilities • Involve family or friends in the business as appropriate • Complete difficult tasks during your peak time • Call ahead; confirm appointments • Set time aside each day to handle the unexpected • Set working hours and family time • Learn to say “No” • Create agendas for meetings • Reward yourself when major projects are completed • Keep desk clear of clutter; file papers immediately • Keep business papers in one location • Be on time; encourage others to be on time NxLeveL Guide for Micro-Entrepreneurs-OHD 1-15

  22. Coping With Stress • Take a break! Step away from the problem for a while • Take a walk! Exercise will clear your head • Think positively! Refuse to be negative • Identify the problem, and isolate it • Ask for help and advice • Don’t overreact! Choose to be in charge of your emotions • Take control! Manage your time better • Breathe deeply • Relax, reflect, meditate, pray • Carry some inspirational quotes with you • Be open to change, and make the most of it NxLeveL Guide for Micro-Entrepreneurs-OHD 1-16

  23. Your Personal Budget • The money you expect to come in each month (income, earnings) • The money you expect to go out each month (expenses) • The amount left over NxLeveL Guide for Micro-Entrepreneurs-OHD 1-17

  24. Personal Financial Statement • What you own: Assets minus • What you owe: Liabilities equals • What’s left: Net Worth NxLeveL Guide for Micro-Entrepreneurs-OHD 1-18

  25. What You Should Know About Credit • It’s good to establish a credit history • Each time you purchase something on credit, or apply for credit, it’s reported to a national credit bureau • National credit bureaus track your credit and payment history • If you apply for credit, a credit report is generated based upon your name & SS# • A “credit score” is a rating assigned to you based upon your credit and payment history, and is used by creditors or lenders to make decisions about your application. • You can and should obtain a copy of your credit report. • Your personal credit will affect your ability to get credit for a start-up business. NxLeveL Guide for Micro-Entrepreneurs-OHD 1-19

  26. How to Protect Your Credit • Obtain a consumer copy of your credit report (small fee) • Clear up any disputes on your credit report (in writing) • Do not carry too many credit cards • Protect your SS#do not give it out haphazardly • Don’t apply for credit too often; it will count against you • Don’t give your credit card number to telemarketers you’re not familiar with • Be aware of hidden costs at check-cashing or rent-to-own establishments NxLeveL Guide for Micro-Entrepreneurs-OHD 1-20

  27. Ideas for Dealing with Bad Credit • Develop a budget and stick to it • Obtain a consumer copy of your credit report • If you find an error on your report, contact the credit bureau(s) in writing • If you are denied credit, find out why • Contact creditors to make arrangements to pay back old debt • Do not ignore student loans, utility bills or delinquent taxesPAY THEM! • Do not apply for more credit • Do not incur more debt • Keep only one or two credit cards; destroy others and close the accounts • Work with a reputable credit counseling or debt management service • Be wary of quick advertisements to repair creditthere are no easy cures • Do not automatically file bankruptcy; it can be more damaging in the long run NxLeveL Guide for Micro-Entrepreneurs-OHD 1-21

  28. Credit Bureau Information • Trans Union Corporation • 800-916-8800 • www.tuc.com • Experian • 800-682-7654 • www.experian.com • Equifax • 800-685-1111 • www.equifax.com • Also contact your local • Consumer Credit Counseling Service (CCCS) • 1,400 offices nationwide NxLeveL Guide for Micro-Entrepreneurs-OHD 1-22

  29. Business Idea Sources NxLeveL Guide for Micro-Entrepreneurs-OHD 2-1

  30. Types of Businesses NxLeveL Guide for Micro-Entrepreneurs-OHD 2-2

  31. What Can Make Your Business Unique? • Features (different size, color, format, etc.) • Your location • Offer things that cannot be found elsewhere • New invention • Use of materials (green, recycled, American-only) • Pricing, guarantees • Customer service policies • Unique packaging • Individual artistry (e.g., crafts) • Add-ons or extras that come with a purchase • Your experience • Delivery policies / timeframes NxLeveL Guide for Micro-Entrepreneurs-OHD 2-3

  32. Who Are Your Customers? • Gender (male or female) • Age or age range • Income level • Education level • Residence location • Employment/job location • Worker type (professional, hourly, etc.) • Marital status (married, single, widowed) • With or without children • Renter or home owner • Lifestyles/interests (sports, arts, pets...) • Level of familiarity with your service • Beliefs/Opinions • Specifics to your business NxLeveL Guide for Micro-Entrepreneurs-OHD 2-4

  33. What Do You Need To Know ? • Who? • What? • Where? • When? • Why? • How? NxLeveL Guide for Micro-Entrepreneurs-OHD 2-5

  34. Start the Research ProcessThings to learn about… • Your niche • The need for your product • Customer identification • Competition • Location • Pricing • Costs/financing information • Regulations, licensing, certification NxLeveL Guide for Micro-Entrepreneurs-OHD 2-6

  35. Is Your Business Idea Viable? • Work in your industry on a part-time basis • Get a business mentor and learn from him or her • Volunteer for a small business owner to learn day-to-day operations • If you have a product, test it at a trade show, community fair, or block party • Call sales reps that supply your industry • Talk with local realtors, business owners, bankers, elected officials, etc. • Research the competition – start with the phone book • Contact local economic development and/or government agencies NxLeveL Guide for Micro-Entrepreneurs-OHD 2-7

  36. Where to Begin…Accessing Business Resources • Public Library • Trade Associations • Published Reports and Articles • Studying the Competition • Talking with Customers • Suppliers/Vendors • Local Economic Development or Business Resources • Banks • Internet • Small Business Administration NxLeveL Guide for Micro-Entrepreneurs-OHD 2-8

  37. Questions About Business Planning • Isn’t planning for “big business” only? • How does planning help management? • Can’t I hire someone to do this for me? • How can I know all the answers? • How often do I have to do this? • What if I don’t complete the process during class? • What’s in it for me? NxLeveL Guide for Micro-Entrepreneurs-OHD 3-1

  38. The Planning Cycle NxLeveL Guide for Micro-Entrepreneurs-OHD 3-2

  39. Keys to a Successful Planning Process • The owner assumes the lead in the process • The planning process involves everyone in the family and business • The plan reflects reality • There is a contingency plan for the worst-case scenario • The goals and objectives are achievable and clear • The plan is flexible • The plan is reviewed often, and revised when necessary NxLeveL Guide for Micro-Entrepreneurs-OHD 3-3

  40. Managing Your Personal and Business Goals Goals: Dreams with deadlines Objectives: How you’ll get there (The steps to reach the goals, including what, who, when) Business goals can be set for many parts of your business: • Sales volume • Number of employees • Desired owner compensation • Profit • Time commitment • Other: • Other: NxLeveL Guide for Micro-Entrepreneurs-OHD 3-4

  41. NxLeveL® Micro-Entrepreneur Business Plan Outline Cover Page Table of Contents Section I. Executive Summary Section II. Personal Background Information A. Personal Skills and Experience B. Personal Financial Resources Section III. Business Concept A. General Description of the Business B. Business Goals and Objectives C. Industry Information Industry Background Information Current and Future Industry Trends Business Fit in the Industry Section IV. Business Organization A. Ownership, Regulations, and Contracts Ownership Government Regulations and Taxes Contracts and Leases B. Management Issues Managing People Internal Management Team Employees Outside Services/Advisors Risk Management C. Managing Books and Records NxLeveL Guide for Micro-Entrepreneurs-OHD 3-5

  42. NxLeveL® Micro-Entrepreneur Business Plan Outline (Cont.) Section V. The Marketing Plan A. Product Description Product Description Features/Benefits B. Market Analysis Customer Analysis Competitive Analysis Market Potential C. Market Objectives, Strategies, & Tactics Product Lines Positioning Packaging/Branding Pricing–A First Look Placement (Distribution) Promotional Strategies Customer Service Section VI. The Financial Plan A. Investment Required for Start-Up Start-up Costs/Needs Investment Required–Bank Loan/Self B. Cash Flow Projections Monthly Cash Flow Projections–Year One Notes to Cash Flow Projections Annual Cash Flow Projections—Years Two and Three C. Additional Financial Information Summary of Financial Needs Personal Financial Statement D. Conclusion Attachments NxLeveL Guide for Micro-Entrepreneurs-OHD 3-6

  43. Overview of Marketing Research Study the industry…then study the customer, competition and location. Analysis Analyze your research about the industry, customer, competition and location. Analyze your competitive advantage. Strategies and Tactics Determine the best method of getting your goods and service to market, based on your analysis NxLeveL Guide for Micro-Entrepreneurs-OHD 4-1

  44. Contents of the Marketing Plan PRODUCT DESCRIPTION: • Features and benefits (what makes it different or better?) • Design and material choices • Life cycle and seasonality MARKET ANALYSIS: • How big is your target market? • Who are your customers? (Demographics and psychographics) • Who are your competitors? What are their strengths and weaknesses? • What are the political, economic, social, and technological trends in your market? MARKETING OBJECTIVES, STRATEGIES, AND TACTICS: • What are your business’s objectives? How will you achieve them? • What’s your business niche? NxLeveL Guide for Micro-Entrepreneurs-OHD 4-2

  45. Sales Forecasting Methods Breakdown Forecasting: • Start with largest population, and break it down to estimate sales from target customers Buildup Forecasting: • Estimate size of each market segment, and add them to get a total Indirect Forecasting: • Find possible indicators of sales when specific market data are missing NxLeveL Guide for Micro-Entrepreneurs-OHD 4-3

  46. Primary and Secondary Sources SECONDARY: • Government (federal, state, local) • Small Business Development Centers • Women’s Business Centers • U.S. Small Business Administration • Trade and industry associations • Chambers of Commerce • Local newspapers and magazines • Census data • Business magazines PRIMARY: • Interviews • Surveys • Focus groups NxLeveL Guide for Micro-Entrepreneurs-OHD 4-4

  47. Research Tools • Libraries (Public, University/College, Private) • Online and offline • Trade Associations • Business Periodicals • State and Federal Resources • Local Resources (Chambers of Commerce, SBDCs, WBCs, BICs) • Professional Research Companies • NxLeveL Business Resource Guide • Studying the Competition • Surveys (focus groups and interviews) • Observation NxLeveL Guide for Micro-Entrepreneurs-OHD 4-5

  48. Ways to Contact Information Sources • In Person • Telephone • Facsimile (Fax) • Internet • E-mail • U.S. Mail • Express Delivery Services NxLeveL Guide for Micro-Entrepreneurs-OHD 4-6

  49. Drawing Industry Conclusions • How has the industry developed? • How do small businesses operate within this industry? • What are the current growth patterns in the industry? • What is the industry’s size at present? What’s projected a year from now?Five years from now? • Are there any niche markets that are hot? • How does international trade affect your industry? • How will current and new government regulations affect your industry? • How will technology affect your industry and the small businesses within it? NxLeveL Guide for Micro-Entrepreneurs-OHD 4-7

  50. Sole Proprietorship Advantages • Easy to form and the simplest way of doing business • Owner has complete control • Owner receives all the income • Avoids double taxation Disadvantages • Unlimited liability for all acts and debts of the business • Fewer tax benefits • The business dies when you die • Can’t expand the business through new owners and use of their money NxLeveL Guide for Micro-Entrepreneurs-OHD 5-1