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So You Want To Be an Entrepreneur
Are You REALLY Ready?
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(865) 692-0716
So you want to be an Entrepreneur
Developed by
To provide you a brief overview to help you
determine
if you want to start your own business
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ABOUT THIS WORKSHOP
Today, we will challenge your thinking
about being an entrepreneur.
There are critical questions you need to
answer, BEFORE you go into business.
Today, our focus is on four key areas, not on
the technical aspects of business. SCORE has
lots of additional workshops and handouts on
those topics that you may wish to investigate.
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Four Critical Questions
Do you have an entrepreneurial
personality?
Do you have adequate resources to start
a business?
Do you have a viable business idea?
Is your partner/family committed?
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So you want to be an Entrepreneur
Five Steps before opening your doors...
Complete a thorough self-assessment
Identify your financial resources
Define your business objectives
Research the market for your “idea”
Develop a Business Plan
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Assessing yourself and your idea
10 Questions to Ask Yourself
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What initial steps have you taken
Will you work full time or part time
Who are your partners
What are your assets
What kind of help do you need
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Assessing yourself and your idea
10 Questions to Ask Yourself
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What is your experience in business
What is your market?
Who is your customer
Who is your competition
Can you give a 10 second elevator talk
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The Entrepreneurial Personality
Self-Assessment is Difficult!
SCORE 10 for “Absolutely” and a 7 for “Probably”
• Are you a self-starter?
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• Do you enjoy competition?
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• Do you have will power and self-discipline?
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• Do you enjoy making decisions?
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• Are you a good planner?
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• Do you manage your finances well?
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• Are you willing to work 12-14 hour days?
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• Are you physically and emotionally strong?
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• Is your family supportive of your proposal?
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• Do you easily interact with other people?
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So you want to be an Entrepreneur
DID YOU SCORE A 90 OR MORE?
If so, your decision to Begin Business
is off to
THE RIGHT START!
But, there are more questions!
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Homework! More to do and read...
Do the Princeton Check List Handout Here
See Feb 2009 WSJ article
“So, You Want to Be an Entrepreneur” Here
SBA Readiness Assessment Tool
https://eweb1.sba.gov/cams/training/business_primer/assessment.htm
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What about Money?
Assuming you are comfortable with your
answers in the self-assessment . . .
The next task
IDENTIFY YOUR FINANCIAL RESOURCES
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Lack of cash leads to disaster
CASH TRULY IS KING!
• 70% of 1st year business
failures caused by poor
cash flow.
• Majority of small
businesses are under
capitalized
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So you want to be an Entrepreneur
$
Cash needs before launch
$
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So you want to be an Entrepreneur
Launch Fund
• Have a Cash Cushion at Start Up
– Six months family living expenses
– Six months business expenses
This is minimum***12 months better
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So you want to be an Entrepreneur
Fill in the Blanks
How much cash and savings do you have?
$
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What is the value of your real estate?
$
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Do you have life insurance? If so,
what is it’s cash value?
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What is the value of your vehicles?
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How much money do you owe:
On accounts?
On credit cards?
On real estate loans?
On taxes?
To family members?
$
$
$
$
$
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Do you have any other liabilities? Amount?
$
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So you want to be an Entrepreneur
What are Start Up Costs?
• Equipment, supplies and inventory
• Rent, utilities, licenses, deposits
• Insurance premiums and security costs
• Promotional costs and office supplies
• Professional fees (accountants & lawyers)
• Payroll & payroll taxes for the start-up period
• Your own compensation (living expenses)
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So you want to be an Entrepreneur
Type of Start Up Cost:
Land Purchase (a)
Building Purchase (b)
Building/Office Rental (c)
Equipment Purchases (d)
Equipment Rentals (e)
Utilities & Phone (f)
Inventory (g)
Property Taxes (h)
Leasehold improvements (j)
Autos & Trucks (k)
Advertising & Promotion (l)
Licenses (m)
Tax Deposits (n)
Equipment Maintenance (o)
Insurance (p)
Professional Services (q)
Payroll & Benefits (r)
Office Supplies (s)
Opening Promotional Costs (t)
Other Start Up Costs (v)
Total Start Up Costs
Cumulative Start Up Costs
Month
Month
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Month
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Month
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Month
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Create a Business Plan
Define your Business Objectives
(a new concept, an invention, a better product or more
efficient service, that satisfies customer needs or wants)
an organized and realistic approach to a new
business venture.
Answer the following questions:
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Define Your Business
What need or want will your business satisfy?
What services or products will you sell?
Are you considering a franchising operation?
What will make your product or service unique in the
marketplace?
Is your proposed product or service capable of being priced
at least equal to or above the competition?
How will you sell your product or service?
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Structure, Staff, and Resources
What will be the legal structure . . Proprietorship, Partnership,
Corporation or LLC?
How will your business records be maintained?
What insurance coverage will you need?
How will you hire, train and motivate employees?
How will you compensate yourself?
What will you name your business and where will it be located?
What are the applicable Federal, state and local laws and licensing
requirements?
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Business Forms
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Sole Proprietorship
Partnership
Limited Liability Company (LLC)
“C” Corporation (Conventional)
“S” Corporation (Sub-chapter “S”)
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LLC or Sole Proprietor are common
LLC
• Not difficult or
expensive to form
• Limited liability
protection for owners
• Fewer rules and
restrictions than
corporations
• Profits taxed only
once at owner’s level
Sole Proprietor
• Simple & easy to start
• Low start-up expenses
• Owner is sole manager
• Profits are not shared
• Income taxed on
owner’s individual
return
• Unlimited personal risk
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Is there really a demand for your
idea ?
Evaluate the MARKET
A CRITICAL step in finalizing your decision to
begin business is . . .
EVALUATING THE MARKET
Perform sufficient research to be able to answer
the following questions:
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Evaluating the Market
? Can you make a living ?
• Will your business be VIABLE ??
– Big enough idea
– Profitable
– Survey SurveyMonkey.com
• Market Research Leads to Answers
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Research Questions
• Who are your customers, how many are there and where are they
located?
• Who are your competitors and what are their strengths and
weaknesses?
• How will you advertise and/or promote your business?
• Will you source your product?
• How will you deliver your product or service?
• Can you price your product/service to make an adequate profit?
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Research Help
Knox County Public Library Catherine Moirai
Business Reference Manager
[email protected]
Greater SCORE Web Site
Article “Before You Start a Business”
http://scoreknox.org/before-you-start-a-business/
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More Help
Library References
Small Business Sourcebook profiles providing
•Start-up information
•Associations
•Licensinginformation
•Reference works
•Trade periodicals
Reference USA
•Find your competitors
•Find your prospective customers
Other Business Books
How to Start a Business. How to Make a Business Plan
Misc Information Demographic Data, Business Name Research
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Develop a BUSINESS PLAN
Contrary to popular belief, a Business Plan
is not only a primary tool with which to seek
financing . . .
It is YOUR PLAN for the
SUCCESSFUL BEGINNING and
CONTINUED MANAGING OF YOUR
BUSINESS!
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Business Plan Essential Elements
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Company Description
Market Analysis
Price Analysis
Marketing Plan
Sourcing & distribution
Business Team
Funding & Financials
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So you want to be an Entrepreneur
ADVISORS
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CPA
Lawyer (business law)
Insurance provider
Mentors
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A Final Essential Element
Family Commitment and Support
You are in this together
Lack of family commitment is usually fatal
Your family is a source of support, advice,
and ideas
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The Next Step is Yours
SCORE can help you
With most of the ESSENTIALS
NO
Complete a thorough self-assessment
YES
Identify your financial resources
YES
Define your business objectives
YES
Research the market for your “idea”
YES
Develop a Business Plan
www.scoreknox.org
(865) 692-0716
The Next Step is Yours
SCORE’s Online Resources
http://www.score.org/online_workshops.html
Specific workshops on starting, structuring, marketing, growing a business, and
managing cash flow, finances, and partners, with featured webinars you can
take anytime.
A special startup seminar with Steve Forbes!
A 2-minute readiness assessment workshop from e-myth
Access to SCORE counselors via social media
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Who is SCORE
Counselors to America’s Small Business
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History
– SCORE Is Part Of The Small Business Administration
– Established By Act Of Congress in 1964
– Over 389 Chapters Throughout The United States
– Over 10,500 Volunteers Nationwide
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SCORE Knoxville Chapter
– Provides Service To 18 Counties
– 3,000 Counseling Sessions Per Year (#25 out of 389)
– www.scoreknox.org Has 16,000 Unique Visitors Per Month
Purpose
– To Help Entrepreneurs Start A Business
– To Help Small Business Improve Operations
•
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Free Services for America’s Small Business
Greater Knoxville SCORE provides:
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Personal counseling for start ups
Educational Workshops
Personal counseling for existing businesses
Mentoring for owners and managers
Profit improvement program planning
Company guidance for strategic planning
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Available from SCORE
A GUIDE FOR STARTING A BUSINESS IN TENNESSEE
A detailed discussion of what’s needed to get started
 Entrepreneurship
 Pitfalls
 Startup Business Plan example
 50+ pages, written by Knoxville SCORE, includes
additional materials and financial spreadsheet
examples
 Order on web at http://scoreknox.org/ebook/
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A GUIDE FOR STARTING A BUSINESS IN TENNESSEE
TABLE OF CONTENTS
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KNOW YOURSELF: DO YOU HAVE WHAT IT TAKES TO BECOME AN ENTREPRENEUR? …...Page 4
Entrepreneurship – An Alternate Career Choice …………..………………………………….…….....Page 4
Let the Countdown Begin: A Six-Month Plan for Transitioning from Employee to Entrepreneur….Page 6
Entrepreneur Self Assessment Tests ………………………………………..………………………….Page 7
Princeton Entrepreneurial Evaluation Checklist ……………………………..…………………………Page 8
So, You Want To Be An Entrepreneur ……………………………………..……………….…………..Page 13
SEEK PROFESSIONAL HELP BEFORE YOU SCREW UP YOUR NEW BUSINESS! …………..…Page 17
Business Owners Should Take A Lesson From The Pros …………..……….……..………………..Page 17
What Are You Worth? ………………………………………………………………………………….…Page 20
The Seven Pitfalls of Business Failure and How To Avoid Them ..………………..……………..….Page 21
Assessing Your Business Idea ………………………………………..…………………………………Page 24
The 10 Second Elevator Pitch ……………………………………………………………….……..……Page 25
I’VE GOT WHAT IT TAKES? NOW IT’S TIME TO DO A BUSINESS PLAN …………………..…….Page 27
Business Plan for A Startup Business ………………………..………….……………..………………Page 27
What Pitfalls Should I Avoid For A Business Plan? …………………………………………….……..Page 43
DO I NEED TO SEE A LAWYER TO FORM MY COMPANY? ..………………………………….……..Page 45
Selecting The Legal Structure For Your Business …………………………...………….……………..Page 45
Tab le 1 – Comparison of Legal Structures for a Business ……………………………………………Page 49
HELPFUL INFORMATION TOIMPROVE YOUR CHANCES FOR A SUCCESSFUL LAUNCH…..… Page 50
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Free Services for America’s Small Business
For FREE mentoring
Register at www.scoreknox.org
or
Email [email protected]
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So you want to be an Entrepreneur
INFORMATION SOURCES for this presentation
• Statistics Data
– The Kaufmann Foundation of Entrepreneurship
• Funding Data
– SBA
• Website Data
– Gartner Inc.
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