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3.03 Starting a Business

Objective 3.03 Understand the procedures and requirements for starting a business.

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Entrepreneurship

  • The process of starting and running one’s own business.
  • This involves a considerable amount of risk

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Starting a Business

  • Develop a Business Plan

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  • Acquire Finances

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  • Meet Legal Requirements

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Develop a Business Plan

  • A detailed proposal that describes a new business
  • Presented to potential investors and lenders
  • Most business plans are 30 pages or more.

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Purposes of a business plan

  • To obtain financing
    • Banks and potential lenders require a business plan
  • Helps organize and analyze data critical to the new business
  • To provide a start-up proposal
    • Provides an outline to follow when starting the business

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The components of a business plan

  • Executive summary: brief one- to two-page description of the key points of each section of the business plan
  • Product/service plan: presents
    • Product or service being offered
    • Unique features of product or service
  • Management team plan:
    • Qualifications of the entrepreneur
    • Qualifications of any partners who may be involved in the business venture

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The components of a business plan

  • Industry/market analysis analyzes the:
    • Customers
    • Competition
    • Industry
    • Demographic, geographic, and economic data

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  • Operational plan: includes all processes involved in producing and/or delivering the product or service to the customer

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The components of a business plan

  • Organizational plan:
    • Management philosophy of the business
    • Key management personnel
    • Key employment policies
  • Marketing plan: Describes
    • How the business will make its customers aware of its products or services
    • The market being served
    • Marketing strategies
    • Promotional plan
    • Marketing budget

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The components of a business plan

  • Growth plan: The growth plan presents plans for future expansion of the business
  • Financial plan: includes financial statements that will help forecast the future financial health of the business

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Finance the Business

    • Identify family and friends who are potential investors.
    • Are there other businesses that would be probable investors?
    • Seek Employees

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Finance the Business

    • Contact financial agencies for loans, grants and assistance:
      • Small Business Administration
      • Banks
      • Credit Unions
      • Insurance companies

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The Legal Environment

  • Permits or licenses
    • Building Permits
    • Cosmetology license
    • First aid certification
  • Contracts
    • Between partners
    • Between owner and clients
  • Zoning laws
  • Taxes

Additional legal requirements for some businesses:

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The Legal Environment

(Protect Your Business)

  • Trademarks: Protect business’ name or logo
  • Patents: Protect invention of products or processes from theft
  • Copyright: Protect creative works:
    • Literary
    • Musical
    • Dramatic
    • Artistic work