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The Importance of Business Planning

The Importance of Business Planning. Presented By: Longwood University Small Business Development Center. W ho is Longwood University SBDC. We are a business planning and problem solving resource for small business owners – potential or existing.

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The Importance of Business Planning

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  1. The Importance of Business Planning Presented By: Longwood University Small Business Development Center

  2. Who is Longwood University SBDC • We are a business planning and problem solving resource for small business owners – potential or existing. • We provide FREE confidential one-on-one counseling and coaching • We have access to a team of experts as part of a statewide network of over 30 SBDC’s • We are part of your local economic development team, returning tax dollars to the community through jobs created and capital investment resulting from growth and retention of small businesses. • We are financially supported by Longwood University, the Small Business Administration, and your local government.

  3. LSBDC Client Impact - 2013 • 1148 Customers (Consulting, Training, Information) • 61 Training Events • Clients raised $6.5 million in business loans and investments as a result of assistance • Clients created 140 new jobs and retained 241 “at risk” jobs

  4. Starting A Business? Starting a business involves planning, making key financial decisions, and completing a series of legal activities. The following steps can help you plan, prepare, and manage your business.

  5. Necessary Steps to Take When Starting or Expanding a Business • Get Business Assistance and Training • Prepare a Business Plan • Determine or Evaluate the Legal Structure of Your Business • Establish Financing • Register a Business Name (New Businesses) • Get a Tax Identification Number (New Businesses) • Register for State and Local Taxes (New Businesses) • Meet with an Insurance Agent (Determine type of coverage needed) • Understand Employer Responsibilities when Hiring Employees • Develop a Marketing Plan

  6. Business Assistance and Training • One-on-One Confidential Consulting • Training • Business Planning • Financial Analysis • Business Valuations • Demographic & Market Research • Market Plan Development • Strategic Planning 315 West Third Street Farmville, VA 23901 434.395.2086 www.sbdc-longwood.com

  7. Overview of the Business Plan The best way to enhance your chances of success is to plan and follow through on your planning.

  8. What is a Business Plan? • Roadmap • Management and communication tool • Planning document • Feasibility test • Budget • Financing tool • Market study

  9. Why do a Business Plan? Which of the following options has the greatest chance of success? • Write a business plan and see if the idea makes sense • Open up or expand a business and hope you made the correct decision

  10. The “Typical” Plan • Statement of Purpose, Executive Summary or Request for Financing • Business History/Summary • Definition of Products and/or Services • Industry and Competitor Analysis • Market Analysis • Marketing and Sales Strategies • Organization and Management • Operational Plan • Financial Statements and Pro Forma Projections

  11. Is the Idea Feasible? Three Key Questions: 1) Are the market and industry attractive 2) Does the opportunity offer compelling customer benefits and a sustainable advantage over other solutions? 3) Can the team deliver?

  12. Determine / Evaluate the Legal Structure of Your Business

  13. Choosing the Right Financing • Why do you need financing: • Research and Development • Growth (or startup expenses) • Purchase a business • Seasonal working capital • Permanent working capital • Equipment acquisition • Real Estate Acquisition

  14. Choosing the Right Financing Fit the Loan to the Need • Short Term Debt • Seasonal inventory purchases • Short term liquidity problems • Repayment within a year • Intermediate Debt • Three to seven years • Permanent expansion of working capital • Acquiring equipment • Long Term Debt • Real estate purchase • Initial purchase of a business Key Point: Know what type of financing your business needs and communicate this through a sound and realistic business plan.

  15. Questions • Sheri McGuire – Director of Economic Development and Longwood SBDC Network • 434-395-2360 • mcguiresr@longwood.edu • Kim Ray – Business Analyst – Farmville Office • 434-395-2752 • raykw@longwood.edu • Pat Hood – Director, Crater SBDC of Longwood University • 804-518-2003 • hoodpa@longwood.edu

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