Presentation Title

10 Steps to Starting your Own Business

Subtitle
Date
Course Objective

What You Will Learn Today

What you will need to do in order to start your own business
10 Steps
1. Personal Assessment: Are you ready to become an
entrepreneur?
2. Hone your Idea
3. Develop your Business Plan
4. Determine your Legal Structure
5. Set up your Bookkeeping
6. Get Permits, Licensing and Insurance
7. Selecting your Location
8. Build Your Internet Presence
9. Put Together your Team
10. Get Financing 2
STEP 1:DETERMINE IF YOU ARE AN “ENTREPRENEUR”

Marketing Legal Structure

Above the Surface Bookkeeping HR &

Organization
Business Planning is only &Financing
half the battle Business
Feasibility
Below the Surface
You need to do serious self-
Personal Funds evaluation before you start
Passion your business.
Time
Support of Experience

Family, Friends
Motivation

Both are equally important in preparing to

start your own business.
3
STEP 1:DETERMINE IF YOU ARE AN “ENTREPRENEUR”

WHY START A BUSINESS? WHAT IS INVOLVED?

• Be your own boss • 60-80 hr week

• Best option at the time (between things) • Fewer holidays, less leisure time
• More flexibility • Often making less money than when
• Living your passion employed (at start)
• Earning big bucks • High financial risk
• Desire to do something • No paid time off
extremely well • No benefits
PRO • Ultimate responsibility for the
S CON success of the business
PROS S • NEED to network
• You will play different roles: You will
be the manager, marketing
executive, accountant, planner,
seller!

4
STEP 1:DETERMINE IF YOU ARE AN “ENTREPRENEUR”

In the United States, it is estimated that only 30% of startups

are still in business after 5 years. The two following reasons
are the cause of most failures:

• Owner lacks necessary planning and management skills

• Owner underestimates money needed for the business

NYC Business Solutions offers

How to Write a Business Plan – In just 3 hours, you will learn the
basics of conducting an opportunity analysis and writing a business
plan
Entrepreneurship Boot Camp – A 4-session comprehensive business
planning course that provides an in-depth overview of Marketing,
Operations, Developing Financials, and Obtaining Financing.

5
STEP 2: DEVELOPING YOUR IDEA
TALENT, EXPERIENCE, INTEREST
-What are your skills/hobbies?
-What are you good at doing?
IS IT FEASIBLE?
- Can you launch your product now?
-What are your revenue sources,
what are the costs, how will I make
money?
IS THERE A MARKET?
-Who are your customers?
-Will they buy your
product/service?
-How will you reach them?
WHAT CUSTOMER VALUE
DO YOU OFFER?
-Does the business help solve a problem?
Beat deadlines? Product/Service that is short
in supply?
-Is the business the only one in the
neighborhood?
-Is the business an improvement from the
competitor in the neighborhood? If so, how?
-Does the business cater to a specific
customer group/niche? 6
STEP 3: DEVELOP YOUR BUSINESS PLAN

Having a business plan is EXTREMELY important:

• Forces you to think your concept completely through

• Focuses you on your market
• Establishes how much capital you need
• Provides a strong business case to:
• Yourself
• Other investors
• Lenders
• Employees
• Business partner

7
STEP 3: DEVELOP YOUR BUSINESS PLAN

Sections Brief Description

Executive Summary 1-page summary - What is the business? Why this business? And why
you? (written last)

Business Description What is the business, legal structure, location? What are the short and
long-term goals?

Management & Employees Who are your founders? What are their skills? How and when will you
hire employees? What is the cost?

Operation & Location How will you produce your product? What will you need to produce
your product? How and where will your operations take place?

Marketing Who will buy your product? How will your reach your target customers?
Who are your competitors? What is your advantage?

Financial Request How much money will you need? How will the money be used? How and
when will the money be repaid?

Financial Projections Personal financial statement, balance sheet, income statement, cash
flow statement.
8
Steps 1-3 Solution: Attend Business Planning Courses

Next Steps:
1) NYC Business Solutions Business Planning
Courses:
a) Business Planning Basics
b) Entrepreneurship Boot Camp
2) SIBL Resources
3) NYC Business Solutions Website resources

9
STEP 4: DETERMINE YOUR LEGAL STRUCTURE

Structure Ownershi Personal Documents Tax Management Cost

p Liability
Sole
Proprietorship
One owner Unlimited
personal
None (may
want DBA
Owner income
taxed once
Owner
$120
liability Certificate)
Partnership Unlimited
owners
Unlimited
personal
Partnership
agreement
Owners
income taxed
Partners have
equal
$120
liability for highly once management
business and recommended
partners
Limited Liability Unlimited Limited Articles of Profits & Established by $200 State
Company (LLC) number of Liability Operation, losses are operating Filing Fee. $50
members Operating passed agreement Certificate of
Agreement through to Publication , Plus
owners publishing
requirement
“S” Corporation Up to 75 Limited Articles of Profits & Board of $135 State
shareholde Liability Incorporation, losses are directors Filing Fee. Must
rs Bylaws, IRS & usually passed oversee officers purchase a
State S Corp through to Corporate Kit
Election shareholders (Generally
between $60
“C” Corporation Unlimited Limited Articles of Business Board of
number of Liability Incorporation taxed and directors and $80)
shareholde & Bylaws payroll taxed oversee officers
rs

Next Step: Ask your Account Manager about getting free legal assistance 10
STEP 5: SET UP YOUR BOOKEEPING

How will bookkeeping be done?

How / System? Cost? Benefits Drawbacks

Basic, Difficult to
Paper ledger $20 Inexpensive, basic.
generate reports.

Paperless, electronic, Difficult to

Excel ledger file $200
calculates numbers. generate reports.

Learning curve –
Accounting based on
Software Paperless, electronic, computer skill
$200 - scalable, customizable, level and
(QuickBooks, $600 generate detailed reports understanding of
Quicken, Microsoft in a flash. Bookkeeping /
Money) Accounting
principles.

Next Step: Sign up for a QuickBooks course at

an NYC Business Solutions Center near you. 11
STEP 5: SET UP YOUR BOOKEEPING

Determine your “Chart of Accounts” to classify transactions.

Each business transaction is classified as one of the following:

ACCOUNT INDICATES
1 Income Money in.
INCOME
2 Expenses Money out. STATEMENT

3 Assets Dollar value of what my business owns. BALANCE

SHEET
4 Liabilities Dollar value of what my business owes.

5 Equity Dollar value of your business.

12
STEP 6: GET PERMITS, LICENSING
AND INSURANCE

Next Step: Visit

http://www.nyc.gov/businessexpress 13
STEP 6: GET PERMITS, LICENSING
AND INSURANCE

There are three ways to use NYC Business Express to identify your business
requirements
Use the Wizard to create a customized list of requirements for each
1. unique business plan. Create an account to save your Wizard scenarios
and access them at a later point in time.

The Search tool allows the user to search for business requirements
2. by name or by topic

The Index allows users to search for business requirements by name,

3. agency or government level

14
STEP 6: GET PERMITS, LICENSING
AND INSURANCE

Description
Pages on NYC
Business Express
provide detailed,
step-by-step
information for
meeting business
requirements,
paying taxes, or
applying for
incentives.

15
STEP 6: GET PERMITS, LICENSING
AND INSURANCE

•The five categories displayed in

blue on the Wizard Results Page
identify the user’s requirements
for opening and operating a
business, while the categories
displayed in green include
optional information available to
support the business.

16
STEP 6: GET PERMITS, LICENSING
AND INSURANCE

Insurance is a necessary business expense to protect you and your business

from hazards such as fire, crime, general liability, and interruptions to your
overall business activities.

Types of Insurance
1. Property: For your office/warehouse, equipment, it is highly
advisable that you obtain some type of fire policy.
2. Casualty: For automobiles used in your business.
3. Life insurance: For retirement, purchase of partners’ shares,
cash value can be borrowed from the insurance company or
used as collateral.
4. Workers Compensation – All New York businesses are
required to obtain workers’ compensation
insurance. This type of insurance pays the benefits for
covered employees for job-related illnesses, injuries and
deaths.
5. Disability Insurance - You must obtain disability insurance if
you employ one or more employees for 30 days in a calendar
year. 17
STEP 7: REAL ESTATE

Know Your Market

Know Your Budget
Beware of the “Loss Factor”
• Commercial space typically 30% smaller than listed
Know the Expenses
Know What Matters Most

Next Step: Consult with your Account Manager

for a pro-bono legal review of your new property
leases and/or purchases.

18
STEP 8: Your Internet Presence

WHY DO YOU NEED A WEB SITE?

Having a web site is like having a business card.
Even a simple web site will:
• Act as a virtual storefront to sell your product or service
• Make your company more visible to a worldwide audience
• Position you as a resource for information
• Complement your other marketing efforts

HOW TO START BUILDING YOUR INTERNET PRESENCE

• Sites like smallbusiness.yahoo.com offer low cost web hosting and
easy to use templates to start your website
• Get listed in directories such as menupages.com, yellowpages.com
so customers can search for your contact information
• Make sure to look through customer web reviews for comments
about your business and/or your competitors so you can get an idea
on how to improve your product/service

19
STEP 9: PUT TOGETHER YOUR TEAM

Attorney - Setting up your legal structure

- Client and vendor contracts
- Partnership contracts
- Lease review

CPA - Setting up your books

- Filing your taxes

Business Banker - Business Bank Account

- Loans / Line of Credit

Insurance - Specific Insurance needs

- Pro-bono consultation

Next Step: Ask your Account Manager for advice on 20

selecting the professionals to help you start your business
 STEP 9: PUT TOGETHER YOUR TEAM

When hiring and managing your staff, you also need to consider the following -

Hiring Terminating

Keeping

• Hiring permanent • Federal and state regulations

employees vs. • Pay: minimum wage, on terminating employees
independent overtime pay,
contractors/temps appropriate pay
scales for skill sets Next Step: Ask your
• Defining the job Account Manager
description, job posting • Benefit options about how NYC
available
• Interviewing/Selecting Business Solutions can
• Federal and state help you hire and train
• Understanding anti-
regulations on pay employees
discrimination laws
and benefits
21
Step 10: Get Financing

Businesses generally go through three phases:

1) Starting - Formative time to create the business idea.
• Financing Options: Generally limited to informal sources, such as personal finances, friends, and family.
With significant collateral and experience, entrepreneurs may be able to access financing from more
formal sources.
• Action Steps: In order to get financing from alternative lenders or banks as a start-up, it is crucial to
develop a well-written business plan and demonstrate personal financial commitment to the business.

2) Operating – Establish the business as a viable entity and prove that the concept works.
• Financing Options: Businesses will likely use a combination of informal and formal financing sources.
Alternative lenders may be a good option at this point, as banks typically require that businesses be in
operation for 18 months before obtaining a loan.
• Action Steps: Work with an NYC Business Solutions Center Account Manager to help you identify
appropriate funding sources and prepare your loan application.

3) Expanding – Businesses that have been in operation for some time, have documented
revenues and expenses, and are looking to grow.
• Financing Options: Alternative lenders and banks.
• Action Steps: Maintain accurate financial records and make sure that you can demonstrate adequate
cash flow to support the size of the loan you hope to obtain. Work with an NYC Business Solutions
Center Account Manager to help you identify appropriate funding sources and prepare your loan
application.

22
STEP 10: GET FINANCING

A) Ask yourself how much money you need

B) Determine the type of lender you need: bank, agency, venture
capitalist, investor
C) Learn the rules of their loans
D) Request an application
E) Make an appointment
F) Convince the lender

Step 10 Solution: NYC Business Solutions Centers can

determine the right lender for you and help you package
your loan application. Once you’ve completed your
business plan, ask your Account Manager for advice on
how and where to get financing.
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STEP 10: GET FINANCING

Personal Financial Balance Sheet Income Cash Flow

Statement Statement Statement

Lenders/Investors Snapshot of
would examine what your Shows the
your own personal company owns money coming
financial health – Your company’s
(assets) into and going
report card
What you own And how much out of the
What you owe your company business
Your credit history owes (liabilities)

VERY IMPORTANT!
Important considerations
• Your start-up costs
• Projections: Based on how much you • How much money you need to
run the business
assume your company will grow • Financing you may need
• When your business will become
• Make realistic assumptions profitable
• How you will sustain growth
• The short and long-term financial
24
situation of your business
NYC Business Solutions
Attend one of our Business Planning Courses!
Business Planning Basics
Learn how to write a strong business
plan in just three hours! This course
will teach you business planning
basics including how to:
• Organize your business idea into a
structured plan
• Identify and promote your
business to potential customers
• Understand the legal requirements
of starting your business
• Develop your financial projections
Entrepreneurship Bootcamp
This comprehensive business course
includes 4 core sessions:
• Session 1 focuses on how to use
information about your 3Cs
(customers, competitive market
place and competitors) in
developing your 4Ps (price,
product, place and promotions)
• Session 2 covers your business
operations, human resources
considerations and legal
requirements
• Session 3 teaches you how to
develop financial projections
• Session 4 brings everything
together on how to secure
financing for your business
25
NYC Business Solutions
Ask your Account Manager about our services!
Regardless of your size or stage, we can help you access services that
meet your needs as you continue to grow and expand:
Business Courses that teach skills to reach
your business goals
Financing Assistance that identifies lenders,
helps you package your loan application and
increases the chances of successfully receiving a
loan
Hiring Assistance that provides access to a
ready pool of pre-screened job candidates
M/WBE Certification that provides access to
government contracts
Legal Review of Contracts and Leases
with our network of lawyers offering pro-
bono assistance
Navigating Government that helps you
understand regulations and meet
requirements for your business
Incentives that save you money as your
business relocates, expands or makes
capital improvements
Training Funds that improve entry-level
employee skills and increase the quality of
business operations
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