San Francisco and San Mateo Small Business Development Center “Your Source for Free Professional Consultants”: San Francisco and San Mateo Small Business Development Center “Your Source for Free Professional Consultants” U.J. Cozart,Jr., San Francisco Small Business Development Center


NorCal Small Business Development Center Network: The Premier Small Business Assistance Resource throughout the Bay Area: Free 1-on-1 Confidential Business Counseling Low cost Training Seminars 9 Geographic Service Centers from Monterey to Eureka including: San Francisco, Oakland, San Jose Regional Technology Advisory Program SBA funding thru Humboldt State University NorCal Small Business Development Center Network


SF Small Business Development Center: SF Small Business Development Center 22 Professional Contract Consultants Program of City College of San Francisco Offices at 300 Montgomery St., Suite 789 Training at SBA District Office (Market and 1st) Bayview Services at 1800 Oakdale (City College Southeast Campus) Satellite Center in San Mateo We coordinate with and refer to an array of small business resources.


SF SBDC Consulting Services Include: (415) 841-4050: SF SBDC Consulting Services Include: (415) 841-4050 Marketing Access-to-Capital (Loans and prep for Equity) Business Planning Financial Management and Analysis Bookkeeping and QuickBooks Human Resources Procurement and Contracting Distribution and Retail Web Design Technology Restaurants


Informative Seminars Include:: Informative Seminars Include: Procurement, Bonding & Financing Bookkeeping, Accounting & QuickBooks Business Planning Marketing & Sales Restaurant Series Human Resources Information Security & Technology


Start Your Own Small Business: Start Your Own Small Business Business Planning Small Business Lending Legal Structures Registration, Licensing, Other Required Offices


Two matters to consider when thinking about self employment?: Two matters to consider when thinking about self employment? Can you make money in this type of business doing it yourself? It is feasible? Can you generate enough interest in your services and then can you turn that interest into sales who will pay?


A Business Plan is for: A Business Plan is for You Clarifies your ideas Gets you organized Provides a roadmap A scorecard to measure your success Lenders Tells them your “story” Financials are key Employees Reasons to join your team


Why You Need a Business Plan: Why You Need a Business Plan Make your mistakes on paper not with your money Ask the questions up front What’s your product Who’s your target market How do you reach them What’s the competition How will you operate your business How will you structure your business How much money do you need When will you make money What are your success factors What’s your “end” game


Components of a Business Plan: Components of a Business Plan Executive Summary Product/Service Description Market Analysis Marketing Strategy Competition Pricing Strategy Budget to Start Financial Projections Exit Plan


Tell me about Interpreting and Translating Services? : Tell me about Interpreting and Translating Services? Timeframe availability Language capabilities Other capabilities (i.e. phone, sign) Travel capabilities Fee structure


Can you articulate the Benefits of your services?: Can you articulate the Benefits of your services? Accurate Timely Responsive Professional Reliable Confidential Cultural knowledgeable Deliver exact communication Expert


Your Target Market –Industry Groups: Your Target Market –Industry Groups Medical Legal Life Sciences Corporations Small/Medium Businesses Government Agencies Educational Institutions Sports Teams Non-Profits


Your Target Market-Geography: Your Target Market-Geography What are your geographical boundaries as to where you plan to offer your services? Local Regional Bay Area (9 counties) Northern CA


What is/are your Marketing Strategies? How Do You Reach your Target Market(s)?: What is/are your Marketing Strategies? How Do You Reach your Target Market(s)? Advertising Promotions Public Relations Website/Internet Trade Shows Speaking engagements Networking


The Marketing Funnel: The Marketing Funnel Target Market Those Who are Interested Those Who are Aware Customers $


Market and Competition Analysis: Market and Competition Analysis Market Segments Demographics Size % you need What needs are fulfilled Competition Who are they, how many, size How do they promote and price What are their weak points, their strengths How will you succeed against them There is always competition – If your product is unique, your competition is what your customer is doing now


Pricing-What Do You Charge? How Do You Charge?: Pricing-What Do You Charge? How Do You Charge? Fee Structure-by the hour, ¼ hour, minute, job? Collect at time of service or invoice? Methods of Payment i.e. credit cards, cash, checks? Other misc. items i.e. minimum charges, deposits, wait time charges, cancellation fees, mileage, travel time Market Rate documentation


Start-up Budget: Start-up Budget Itemize everything needed to get started and generate a total amount? Do you have that amount to get started?


Financial Plan: Financial Plan What assumptions do you make? General assumptions Economy, interest rates, market size, competition, etc. Business related Location, expenses (current and future), competitive responses, management skills, employees skills, partnerships/alliances, etc. Product related Current and future product/service features, functions and pricing Current and future selling and marketing techniques


Financial Plan: Financial Plan Sales Forecast Matches your Market & Competition Analysis Matches your Strategy & Implementation Plan Financial Forecast Three years needed First year forecast is monthly Financial reports needed Balance sheet Income and Expense statement Cash Flow statement Ratios Compare to Industry standards


Getting Ready for Financing: Getting Ready for Financing


Types of Financing: Types of Financing Personal Savings Friends and relatives Credit Cards Banks Alternative Financings Options Venture Capital Outside investors


SBA Role in Bank Financing for Small Business: SBA Role in Bank Financing for Small Business SBA not in competition with banks SBA guarantees bank loans (75%-85%) Applicants go directly to the bank Bank decides when to use the SBA Bank risk is offset by the SBA guaranty Bank gets paid if business fails Business remains liable for the debt


7a SBA Loan Program – Eligibility Issues: 7a SBA Loan Program – Eligibility Issues For profit businesses No probation or parole Must have green card for term of loan Meet Size Standards (see SBA web page) Equity Injection (no 100% financing) Repayment ability from the business


Eligible Use of Loan Proceeds: Eligible Use of Loan Proceeds All Legitimate Business Purposes Inventory Machinery & Equipment Working Capital Real Estate (owner occupied only) Debt repayment (limited to business only) Business Acquisitions Franchises


Let’s Hear From The Banker: Let’s Hear From The Banker


What Do I Need to Qualify?: What Do I Need to Qualify? Five C’s of Credit Capacity Cash & Capital Collateral Character Conditions


Capacity (most critical): Capacity (most critical) How will the loan be repaid? Can the business cover the debt payment plus provide for owner’s personal expenses? Are projections realistic? Contingent source of repayment?


Cash & Capital: Cash & Capital How much has the owner invested? What is the net worth of the business? What is the owner’s personal net worth? How much debt can the business carry? Does the business have adequate capital to cover any potential losses?


Collateral: Collateral Can lender get a 1st lien on the assets? Does the “liquidation value” of the assets secure the loan request? Are other assets available? Will all 20% and more owners provide a personal guaranty? SBA guaranty loans are not declined solely for lack of collateral


Character: Character What skills do you bring to the table? What do the personal credit reports of the owner’s look like? Are all taxes current? Is the business party to a law suit? Are questions answered? Deadlines met? Calls returned?


Conditions: Conditions What will the money be used for? Current business environment? High or low competition? Mature or growing industry? Be prepared to discuss your industry in detail and show you know your stuff!


What do I need to apply?: What do I need to apply? Description of the business Management Experience (resumé) PFS (for each 20% owners or more) Projected cash flow for loan repayment Current Financial Statements B/S & P/L Copies of 3 years of IRS returns both personal & business Collateral for the loan Business Plan


Supplemental Information: Supplemental Information Lease (or proposed lease) Purchase Agreement Articles of Incorporation Partnership Agreement Copy of business license Letters of Intent Contracts Franchise Agreement Itemized list of Use of Proceeds Listing of Collateral (any item worth more than $500)


Helpful Hints: Helpful Hints Make sure your tax returns are accurate! Don’t sign a lease before you get a loan Ask for assistance (SBDC and other resources are available) Scale back and start smaller if necessary Ask the bank what could be changed to make the deal happen


Legal Structures-How will set up your business from a legal standpoint?: Legal Structures-How will set up your business from a legal standpoint? Sole Proprietorship General Partnership LLC or LLP Corporation Sub Chapter S Corporation


Getting Business Started in San Francisco: Getting Business Started in San Francisco File fictitious business name 415-554-4950 Business Tax Registration 415-554-4400 If creating an LLC or Corp, you must file with State of CA @ Sec. of State’s office 415-904-2344 Fed Employer ID Number 800-829-4933


Thank you for your time!: …and remember… We Help You Grow Your Business…..FOR FREE! Thank you for your time! Marketing/Sales Management Finance Distribution and more…..