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So You REALLY Want to Start Your OWN Business?

So You REALLY Want to Start Your OWN Business?. What We’ll Talk About Today. Do You Have What It Takes? Why…Why…Why? Reality or Myth? Business Planning What Will It Take? Your Next Steps? How Can SCORE Help You?. Why…Why…Why?. I want to get rich I’m bored with my job

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So You REALLY Want to Start Your OWN Business?

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  1. So You REALLY Want to Start Your OWN Business?

  2. What We’ll Talk About Today • Do You Have What It Takes? • Why…Why…Why? • Reality or Myth? • Business Planning • What Will It Take? • Your Next Steps? • How Can SCORE Help You?

  3. Why…Why…Why? • I want to get rich • I’m bored with my job • I’ll get to do what I love • I can be my own boss • I have an amazing idea • “Everyone” tells me I should • I will get more “free” time • I’ll show ‘em • I can do it! How important is this to you?

  4. From a Job or Hobby to a Business • Your Job • Support of others • Regular paycheck • Product experience • Defined responsibilities • May love it / may not • Your Hobby • Product knowledge • Done in spare time • No revenue • It’s not work • Love doing it

  5. You’re Going to Miss … • Credibility and clout • Contacts and camaraderie • Coffee and gossip • Tech support • Vacation and sick time • Health insurance

  6. Reality or Myth?

  7. Reality or Myth #1? • If I start a small business, I’ll be able to write off all of my expenses. • Mostly Reality! • You can deduct all legitimate business expenses – even from before you start your business

  8. Reality or Myth #2? • I don’t have to register my business if it’s really small. • Myth! • You need to register your business. • State, county, city • Other agencies, depending upon business type

  9. Registration References • United States • http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online • State of Florida • www.sunbiz.org • Florida Department of Revenue – sales tax • http://dor.myflorida.com/dor/ • Business Tax Receipts • Application Requirement Guide & Application https://www.pbctax.com/sites/default/files/pdf/PBCTC_65.pdf • Contact your city or search online for instructions

  10. Reality or Myth #3? • If I’m not selling much, it doesn’t count as a “real” business. • Myth! • All businesses are “real”, except … • If you don’t sell much for several years, the IRS may treat it like a hobby, not a business.

  11. Reality or Myth #4? • I don’t have to collect and remit sales taxes if I’m selling online. • Both Reality & Myth! • If your business is registered in Florida • You must collect sales tax on shipments to Florida addresses • You likely don’t have to on shipments to other states • Expect this to change!

  12. Reality or Myth #5? • There are all kinds of special tax breaks for home-based businesses. • Reality! • You can write off a portion of your home expenses – if it is used exclusively for business • Speak with your accountant! • Many articles describe this as an IRS audit flag.

  13. Reality or Myth #6? • There are all kinds of government grants to help start a small business. • Myth! • There are few government grants available. • Difficult to get, but not impossible. • Perhaps some for veterans & disabled veterans. • Some private sector grants may be possible.

  14. Reality or Myth #7? • Starting a small business will let me live the lifestyle of my dreams. • Perhaps Reality, Perhaps Myth! • It will depend upon what the lifestyle of your dreams is. • But owning your own business can be very rewarding financially and emotionally.

  15. Critical Steps to Jumpstart Your Planning • Clearly define your business idea • Examine your motives • Be willing to commit to hours needed • Have discipline • Cope with learning & frustrations common to owning a business • Conduct competitive analysis in your market – products, services, prices • Be aware of outside influences • Seek help – other businesses, professionals, vendors, agencies

  16. Create a Business Plan • Executive summary • Business description • Market & competition • Products and/or services offered • Marketing & selling plan • Management & personnel • Financial data • Cash flow analysis • Balance sheets • Income statements (P&L) • Break-even chart • Investment • Appendices

  17. So Are You Ready? • Do you have a product or service • That is needed • That people will pay for • Again and again?

  18. Guy Kawasaki Method • Find ONE customer/client • Make an offer they can’t refuse • Modify elements from feedback • Find ONE more customer • Repeat for ten years Easy, isn’t it?

  19. $$$$$$$$$$ • It’s all about cash • Do you have it? • How much comes in? • How much goes out?

  20. The Revenue & Expense Streams … • Revenue • 0-90 days after the sale • Usually overestimated • Expenses • 0-120 days before the sale • Start up costs, paying vendors, selling expenses • Usually underestimated You Need Money to Get Money

  21. What Will It Take to be Successful? • Do you have a product or service that is wanted? • Do you have the right kind of business experience? • Can you prepare a credible business plan? • Can you take responsibility? • Can you organize yourself and others? • Are you ready to put in the long hours? • Can you stick to it in rough times?

  22. What Else Will It Take? • Do you have family support? • Do you have enough resources & credit? • Is your health up to it? • Do you know your market? • Have you done your research? • Can you create the demand?

  23. Can You Qualify for a Loan? Lenders Will Ask … • What kind of business do you plan to start? • Do you have the right kind of business experience? • Is it a new or ongoing business? How long in business? • How large a loan will you need? How will you spend it? • Do you have savings/collateral equal to 1/3 of the loan? • Is your credit good? Bankruptcies? Debts? • Have you made a Business Plan complete with financial projections? If not, can you do it? • Do you have a realistic idea of expected income vs. your personal and business expenses? • Can you repay a loan from realistic projected earnings?

  24. Possible Funding Sources – Debt Funds • Your savings, bonds, stocks • Cash value life insurance • Your home equity • Loans from family or friends • Banks, credit unions, finance companies • Credit cards (not a long-term plan) • Customer prepayments • Credit from suppliers • Equipment leases

  25. Can You Qualify For…? • SBA loans – guaranteed or direct • Veterans Administration – G.I. loans • Department of Commerce – Export • Department of Energy • Federal Housing Administration

  26. Possible Funding Sources – Equity Funds • Family/friends ownership participation • Small Business Investment Companies • Venture capital • Angel investors • Limited partnerships • Sale of stock to public or friends • Crowdfunding

  27. How Much Money Will You Need? • Start-up expenses • Legal, accounting, training, … • Initial capital purchases & improvements • Computers, vehicle, build-out, … • Ongoing monthly expenses until breakeven is reached • Rent, utilities, salaries, benefits, … • Personal living expenses • If you have no other income coming in

  28. Do Your Research & Planning • Business won’t succeed just because you want it to succeed • Research your market • Know your competition • Understand important industry data

  29. Know Yourself & Be Honest with Yourself • Compare your skills & expertise • Know what particular capabilities made other companies profitable • Can you duplicate/surpass? • Unique skills or edge that you have • Level of capitalization that you can provide • Technical skills • Energy & passion

  30. Homework! Do You Have What It Takes?

  31. How May We Assist You? • Palm Beach SCORE has 45+ volunteers available for free one-on-one mentoring • Huge diversity of experience & expertise • Sign up at palmbeach.score.org • In person, phone, email • Attend other workshops that we offer • Wide variety of topics • Schedule & registration at palmbeach.score.org

  32. So You REALLY Want to Start Your OWN Business? Palm Beach SCORE 500 Australian Avenue South, Suite 115West Palm Beach, FL 33401Tel: (561) 833-1672Fax: (561) 833-1470

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