Rob Piechota Webinar 2014

Business Planning Business Planning should not be a “Some0me” thing…. it must be an “All the Time” thing!

Robert Piechota 718-­‐797-­‐0187

NYS Small Business Development Center City College of Technology

Key Guiding Principles for Business Generally Speaking:

• You want to take in more $$$ than you pay out!

• You want to keep more of the money you make, a5er all expenses, than you are paying out.

• “Measure twice, cut once!”-­‐ Before you commit, you must know your costs!

Why do Small Business Fail?

• • • • • • • •

Lack of experience Insufficient capital (money) Poor locaGon Poor inventory management Over-­‐investment in fixed assets Poor credit arrangements Personal use of business funds Unexpected growth POOR PLANNING!!!

Always be thinking… “What if???”

EnPPes!

Expense

• CorporaGon (LLC/S-­‐ Corp/C-­‐Corp) • Partnership • Sole Proprietorship

Complexity

EnPPes! • CorporaGon (LLC/S-­‐ Corp/C-­‐Corp) • Partnership • Sole Proprietorship

ProtecGon

Start Time

Research and Development Phase • There is an array of Federal, State, and Local regulaGons that your business must comply with.

• There are variaGons by industry/trade/service.

• Be sure to thoroughly invesGgate the regulaGons that might affect your “space”

Brooklyn.NYSSBDC.org

hWp://www.dos.ny.gov/licensing/ hWp://www.nyc.gov/portal/site/businessexpress

The subsequent list is a guideline, but is by no means exhausPve 1. Business Licenses 2. Business Permits 3. Tax InformaGon 4. Employer IdenGficaGon Number (EIN) 5. Worker’s CompensaGon/ Disability Benefits 6. ImmigraGon Act 7. Industrial RegulaGons 8. Zoning & Variances

Business Licenses

City & Towns

• According to state law, each city and township may require permits-­‐ check your local municipality for license requirements.

• Contact County Clerk in each town where you will be conducGng business

Business Permits “GORR”

Governor’s Office of Regulatory Reform P.O. Box 2107 Albany NY 12220-­‐0107 Phone 518-­‐474-­‐8275 Or 800-­‐342-­‐3462 hWp:/www.nys-­‐permits.org

Why do you need a Business Plan ?

• Road map • Help to an/cipate change and adjustments • More chances of success

Value of the Business Plan: Entrepreneur

Define • Business • Strategies

Part of the financing

See structure

Investor or Lender

Viability

Business Plan How Long?

• Investors said 60% of business plans are too long

*From Growthink's survey of investors

Business Plan 3 secPons

1.

2.

3.

NarraGve Financial projecGons Exhibits

Typical Expenses • • • • • • • • • •

Rent Phone UGliGes Furniture & Fixtures Insurance Payroll (This includes your compensa/on!)

Computers/So5ware/Website Build out cost Working Capitol Start up costs v. Opera/onal costs. Difference???

(You will have to be able to produce this…3 years out) Jan

Feb

Mar

Apr…

Sales

5,000

4,000

6,500

5,700

Cost of Goods Sold:

1,000

1,000

1,400

1,600

Gross Profit:

4,000

3,000

5100

4,100

Salary

3,000

3,000

1,000

1,000

Taxes

1000

1000

200

200

Rent

1000

1000

1000

1000

Net. Inc

(1000)

(2000)

2900

1900

Total Op Expenses:

You must idenPfy all of these expenses and costs!!!

Six “C’s” of Credit

Is the borrower a good risk?

Character-­‐ Is borrower a solid ciGzen?

Capability (to manage your business) Capacity-­‐ Can the business turn a profit?

Collateral/Guarantees Context of Business-­‐ What is the state of the Market? State of the industry?

• Condi0on or terms of loans-­‐How much are you asking for? How long do you need it?

What are you buying?

• • • • •

Why might you need capital?

Reasons for seeking capital:

• Startup Costs-­‐ Lease/Equipment/Inventory • Expansion Costs-­‐Purchase of real estate/ capital equipment • Addi0onal Opera0ng Capital-­‐Seasonal hires/ inventory

Where might you find capital?

• Banks – Check with your own bank first…if they know you, you might get preferred terms.

• Credit Unions-­‐ RelaGonships count!

Membership usually a must.

• Micro Lenders-­‐ Small amounts of capital • Alterna0ve sources • Investors-­‐ SomeGmes this involves trading equity in your business for capital

Small Business AdministraPon (SBA) Programs SBA.GOV (No way to see this clearly on a PowerPoint…go to the web site!)

“Decisions, Decisions!”

The Center for Career and Professional Development offers services to alumni for life.

We offer one-­‐on-­‐one counseling, a free online job board (alumni.praWpro.com), blog arGcles (ccpd.praW.edu), and workshops and events to help uncover the resources and inspiraGon you need to apply your skills in the world.

Our upcoming events that focus on being your own boss include:

Freelancing: Part III – The Business of Freelancing Monday 03/31 | 6:00 PM | 18th Street Studios | hWps://140311-­‐ccpd-­‐cl.eventbrite.com Panelists will discuss what to look out for as a freelancer, including health and financial benefits and keeping on top of taxes. Panelists include accountants, HR reps, business owners and professional organizaGons representaGves.

Startup Session – Social Enterprise Friday 04/04 | 12:30 pm | CCPD Office, East Building, Rm. 001, Brooklyn | hWps://140404-­‐ccpd-­‐cl.eventbrite.com This Startup Session will cover the basics of social enterprise. Learn more about how to develop a business with a triple boWom line.

Startup Session – Funding Friday 05/02 | 12:30 pm | CCPD Office, East Building, Rm. 001, Brooklyn | hWps://140502-­‐ccpd-­‐cl.eventbrite.com This Startup Session will cover the basics of funding including crowdfunding, venture capital, and angel investments.

Startup Sessions are for students and alumni interested in starGng their own companies now or in the future.

For more informaGon about Startup Sessions or to join the startup email list (where we share all of the session presentaGons and upcoming events) email btucker@praW.edu.