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Small Business Development Center
Presentation for:
Northwest Agriculture Business CenterNovember 6, 2007
Jennifer SheltonTraci Harstad
id22696515 pdfMachine by Broadgun Software - a great PDF writer! - a great PDF creator! - http://www.pdfmachine.com http://www.broadgun.com
Overview
SBDC Program
Key Issues for Developing Business
Financing
Resources
Q & A
Small Business Development Centers No-cost Advising Services
Business Plans Start-up Assistance Financial Analysis Marketing Demographic & Industry Data
SBDC Network 26 Offices around the state Research Center in Bellingham
New Approach
A business that works not because of you, but without you � frees you up more to live
Go to work on your business not just in it!
Goal � Financial Independence
Start with the end in mind
The human spirit does not invest itself in mediocrity!
So far as success can be reduced to a formula, it consists of this: doing what you know you should do.
~Roger W. Babson~Financier, Educator, Entrepreneur
Build Backwards Exercise
What is our ASAP revenue goal?
How many customers does it take to reach the goal?
Describe what the business needs to look like?
Where do we find this many customers?
Describe what will attract them to us?
What additional resources do we need?
Where can we start right now?
Purpose of Business Plan
Feasibility Analysis
Operating Guide
Financing Tool
Valuation
Seven Functions of Business
Management - Ownership
Production/Operations
Marketing & Sales
Accounting
Human Resources
Risk Management � Finance
Information Systems
Profitability
Price
Quantity - Marketing or Operations
Variable Expenses
Fixed Expenses
Bookkeeping Errors
Management Strategy
System for producing predictable, orderly, consistent service to customer
Your business must be alive, growing, committed to keeping promises no competitor would dare to make
Production/Operations 5S�s
Seiri: Organization - elimination of waste
Seiton: Neatness - Arrange essential things in order for quick & easy access and put them away
Seiso: Cleaning - Machines and working environment
Seiketsu: Standardization - Routine cleaning and checking
Shitsuke: Discipline - Constantly improve the previous four steps
Marketing Database Analysis
� Who are my most profitable customers?
� How do I get more of them?
� How should I segment my customers?
� Who are my best prospects?
� What is my ROI on marketing pieces?
Marketing Decisions
In order of increasing risk:
Same Products, Same Markets
Same Products, New Markets
New Products, Same Markets
New Products, New Markets
Accounting
A Sustainable Business:
Uses budgeting, cash flow projections, and other planning tools to predict needs and make preparations early
Plans for growth and the hire of additional professional management
Provides sustainable income & benefits to owner and employees, including retirement
Human Resources People Strategy
How we do it here
How we recruit, hire & train people to do it here
How we manage it here
How we change it here
It�s what you believe in. Why people buy from you, work for you, trust you.
Finance Risk Management
Capability
Capacity to repay a loan
Collateral
Character/Credit
Commitment. Demonstrate your investment
Information Systems Strategy
Identification of each consumer decision point
Preparation to get through each one successfully
Promise you make Sale you make Delivery on promise Customer follow up
Go to work on your business not just in it!Go to work on your business not just in it!So you have a business that works So you have a business that works not because of you, but without you not because of you, but without you
To free you up more to liveTo free you up more to live
Expanding or Developing your Business Often Means
FINANCING
What are lenders looking for?
What can you do to prepare?
Expanding or Developing your Business Often Means
FINANCING
WRITE A BUSINESS PLAN!
Why Write a Business Plan?
o Tells the lender everything they need to know:
� Why do you need a loan?
� How much do you need?
� How are you going to use the loan?
� How are you going to repay the loan?
Why Write a Business Plan?
o Tells the lender everything they need to know:
� Why do you need a loan?� How much do you need?� How are you going to use the loan?� How are you going to pay the loan back?
o Provides you with:o Strategic direction o Tool for benchmarking
FINANCINGThe 5 C�s of Credit CHARACTER
CAPACITY
CAPITAL
CONDITIONS
COLLATERAL
FINANCINGThe 5 C�s of Credit
What is management�s reputation in the industry and community?
Experience in business and in your industry will be important.
Do you have good credit? Are you trustworthy?
Often, banks don�t differentiate between the business and the business owner.
CHARACTER
Capacity
Capital
Conditions
Collateral
FINANCINGThe 5 C�s of Credit
Do you have the ability to repay the loan?
How much debt can your company handle?
Lender will look at: Cash flow Borrowing history Track record for repayment Probability of successful repayment
Past performance is a successful indicator of future performance.
Character
CAPACITY
Capital
Conditions
Collateral
FINANCINGThe 5 C�s of Credit
How much money have you invested in the business?
Have you been willing to put yourself at risk?
How prepared are you to use your own personal resources to support the business?
Investors want to see that you have a financial commitment to the business.
Character
Capacity
CAPITAL
Conditions
Collateral
FINANCINGThe 5 C�s of Credit
What are the current economic conditions?
What are the trends for your industry?
How does your business fit in?
Lenders will look at the overall climate and how it might affect your business.
Character
Capacity
Capital
CONDITIONS
Collateral
FINANCINGThe 5 C�s of Credit
Bankers will look for a secondary source of repayment
Pledging assets such as equipment, real estate, A/R, inventory
Personal guarantees
Typically 100% is expected
Character
Capacity
Capital
Conditions
COLLATERAL
FINANCINGTop Issues According to AG Lenders
Unproven = risky Is there an established market? Do you have a realistic plan? Won�t typically loan based on prospect
Do you understand all the different roles you have to play? 7 Functions of business
Experience is key Financial/managerial experience? Degree/classes/training to supplement
Do you understand your market? How are you going to sell your product?
Can you dependably provide a quality product? Sales/distribution can be challenge Vendors� needs
Resources � Grant/Loan Programs
U.S. Department of Agriculture www.usda.gov Mark Turner � Farm Service Agency
� 360-354-5658 Melanie Drecksel � Rural Development; Area Director
� 360-428-4322
Small Business Administration www.sba.gov 7a & 504 Guarantee Loan Programs
Office of Minority & Women�s Business Enterprises http://www.omwbe.wa.gov/ Linked Deposit Program
Resources
WSBDC � www.wsbdc.org
existing 2+ years, growing, financing
SBA � www.sba.gov/wa/seattle
any stage of entrepreneur
NWWBC � http://www.seattleccd.com/wbcmain/
young businesses, micro loans
SCORE � www.score.org
new businesses � pre start up
Practical Marketing Management
Reference USA
http://search3.webfeat.org/kclsmain.html
Proquest
http://search3.webfeat.org/kclsmain.html
Claritas & Melissadata
http://www.melissadata.com/lookups/zipdemo2000.asp
http://www.claritas.com/MyBestSegments/Default.jsp?ID=20
Where are some places to look?
Trade publications
Gartner Reports
Google Groups www.google.com
Blogs
Local, National news
Talking to customers, colleagues
More Resources
Inc.
www.inc.com
Entrepreneur.com
www.entrepreneur.com
Wall Street Journal
http://www.startupjournal.com/
Edmonds CC - SBDC
www.the-btc.com/sbdc
Contact Information
Jennifer Shelton
Center Director
Certified Business Advisor
Edmonds Community College
728 134th St. SW, Suite 128
Everett, WA 98204
425-640-1435
Traci Harstad
Director of Business Development
SBDC Business Advisor
Economic Development Association of Skagit County
204 West Montgomery; PO Box 40
Mount Vernon, WA 98273
360-336-6114
Questions?
