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LEAN BUSINESS 2100 MANAGEMENT PROGRAM
WELCOME TO MANAGEMENT LEVEL 3

Some Men See Things As They Are And Say "Why?"
I Dream Things That Never Were And Say "Why Not?"

George Bernard Shaw

1. Basic Facts About Small Business Startups
2. Who Is An Entrepreneur?
3. The Entrepreneurship Test
4. Evaluate Your Personal Business Management Knowledge
5. A One-Person Business Startup Process
6. Evaluate Basic Business Startup Factors
7. Make A Decision About Starting Your New Business
8. Select A Suitable Type Of Your New Business
9. Select A Suitable Legal Structure Of Your New Business
10. Sole Proprietorship
11. Regular C-Corporation
12. Sub-Chapter S Corporation
13. Limited Liability Company
14. Develop A Business Plan For Your New Business
15. New Business Plan Template From SBA
16. New Business Plan Template From SCORE
17. Arrange Funding For Your New Business
18. Additional Sources Of Funding
19. Develop Operational Facility For New Your Business
20. Organize Your New Business Operation
21. Initiate The Marketing And Sales Process For Your New Business
22. The Lean Business 2100 Management Program Promotion Online
23. Additional Information About This Program

1. BASIC FACTS ABOUT SMALL BUSINESS STARTUPS

DID YOU KNOW?

Did you know that the majority of people in business don't have business management education, while the majority of people with business management education are not in business?

If you ask all 27.9 million small and medium-sized business owners in the U.S., why they decided to go into business, they will tell you:


• "Because I want to be my own boss!"
"Because I want to make more money”
“Because I want to be financially independent!"


Not one of them will tell you: "Because I want to go bankrupt!"

However, the reality is quite different! According to the U.S. Small Business Administration (SBA) and the U.S. Bureau Of Labor Statistics:

About 70% of all small business startups fail after 12 years in business.

Moreover, according to Small Business Trends, five year survival rates for startups clearly indicate that thousands of business owners experience serious problems and struggle to survive.

One of the prime reasons for business failure is that many small business owners lack basic knowledge in business management and by the time they realize this, it is often too late. Unfortunately, 100% of these failed business owners did not use the Lean Business 2100 Management Program...


The main question is:


Are you really prepared to start and succeed in your business?

Please watch this short video: Dream.

2. WHO IS AN ENTREPRENEUR?

DEFINITION OF AN ENTREPRENEUR

Congratulations on your brave decision to become an entrepreneur!

The term "Entrepreneur" was introduced by Richard Cantillon, a French economist, in the 18th century. According to the Webster's Dictionary:

"Entrepreneur is one who organizes and directs a business undertaking, assuming the risk for the sake of profit."

This term also describes "people who are innovators and are prepared to take risks in developing and introducing new ideas, products, or services to society."

In fact, the majority of all new businesses throughout the entire world have been founded by entrepreneurs. Some of these businesses, such as Apple, Microsoft, Google, Facebook, and Yahoo!, are among the largest corporations in the world today.

Please listen to some of the famous entrepreneurs in the world:

Entrepreneurial Advice From Billionaires.

Richard Branson Advice For Entrepreneurs

Steve Jobs' Advice For Entrepreneurs.

3. THE ENTREPRENEURSHIP TEST

ARE YOU AN ENTREPRENEUR?

OK, so you would like to start a business - right? All you really need to get going, is to answer "Yes" to these three critical questions:

1. Am I really cut out for business success?
2. Do I have sufficient business management knowledge to start and succeed in     business?
3. Am I familiar with the nine-step business startup process?


If you are not sure about your answers to these questions, please watch this powerful Video: Your Biggest Strength Is In Your Belief, continue reading this program, and you will find your answers very shortly.

Thousands of people often start a small business without having full appreciation of what it really takes to become a successful entrepreneur or a small business owner. Many people simply assume that to start a new small business, all they really need to do is:

Decide about specific products or services to sell to other people or organizations.

Have a certain amount of money to invest into a new business.

Select a new business name.
Open a business checking account in a bank.

Develop a business plan.

Obtain a business license.

Lease a business office or a store.

Create a website.

In theory, if this was so simple, anybody with a good idea could start a small business without hesitation and become a successful small business owner. In reality, however, there are several critical factors which must be evaluated before any person decides to go into business.

THE ENTREPRENEURSHIP TEST

For starters, you should evaluate your personal suitability for business success and complete a free Entrepreneurship Test online before you decide about starting a business. You must be absolutely candid with yourself throughout this test to ensure the most accurate result. This test is not designed to turn you into a successful entrepreneur, but merely to assist you in your decision-making process before starting your new business venture. Hopefully, this test will provide you with an accurate answer regarding your personal suitability for business success in the future.

Upon completing the Entrepreneurship Test you should get a pretty good idea regarding your current suitability for starting a business. Hopefully, you received high scores, which would indicate that you have "what it takes" to succeed in business. In this case you should congratulate yourself and go to the next critical step by asking the following question:

How much do I really know about business management?

4. EVALUATE YOUR PERSONAL BUSINESS MANAGEMENT KNOWLEDGE

ARE YOU FAMILIAR WITH THE BASIC ELEMENTS OF BUSINESS MANAGEMENT?

Hopefully, results of the Entrepreneurship Test online indicate your strong potential for success in business. Now you need to find out how much you really know about business management before you proceed any further with your business startup. You don't have to be a business expert to start a business, but you certainly need to have some basic business knowledge. So, ask yourself a few simple questions outlined below.


Do I know how to develop and implement:


• A plan of management for my business startup?

• Marketing planning and control?

• Marketing research for my potential products or services?

• Target marketing process?
• Product and service strategies?

• Price strategies?
• Promotional strategies?

• Distribution strategies?

• Direct marketing procedures?

• Sales planning and control?

• Personal selling procedures?
• Human resources planning and control?

• Employee hiring and interviewing procedures?
• Employee compensation and motivation procedures?

• Operational planning and control?

• Operational facility planning and control?

• Financial planning and control?

• Income and expense budget?

• Cash flow budget?


PERSONAL EVALUATION WORKSHEET

At this stage you should complete a simple Personal Evaluation Worksheet and find out what you really know about business management. This worksheet will enable you to self-evaluate your personal business management knowledge and provide you with a plan of action to improve it. This will be a critical step in preparing you for a successful business startup. The importance of this step is similar to the necessity of finishing a high school with good SAT grades before applying for college.

Once you feel comfortable about your personal business management knowledge, you should become familiar with all nine steps in the business startup process discussed next.

5. A ONE-PERSON BUSINESS STARTUP PROCESS

A ONE-PERSON BUSINESS STARTUP PROCESS

Are you really ready to start your new business?

When you feel that you are ready, then you should proceed with this exciting venture and, if you will follow proper guidelines, you will enhance your chances for a long-term success in business.

A One-Person Business Startup Process entails nine steps which are summarized below. All you need to do is simply follow each step and remember that there are no short-cuts. The rest will be self-explanatory.

 

NINE STEPS IN A ONE-PERSON BUSINESS STARTUP PROCESS

Step 1: Evaluate Basic Business Startup Factors.

Step 2: Make A Decision About Starting Your New Business.

Step 3: Select A Suitable Type Of Your New Business.

Step 4: Select A Suitable Legal Structure Of Your New Business.

Step 5: Develop A Business Plan For Your New Business.

Step 6: Arrange Funding For Your New Business.

Step 7: Develop Operational Facility For Your New Business.

Step 8: Organize Your New Business Operation.

Step 9: Initiate The Marketing And Sales Process For Your New Business.
 

Once you become familiar with all nine steps in the business startup process, you should be ready to begin the evaluation of each factor related to your specific business startup. This process entails answering a series of important questions which are discussed next.

Note:

For additional information please go to:

Small Business Administration (SBA)
Internal Revenue Service (IRS)
Business USA
BizFilings

You may also consult with your accountant or CPA.

6. EVALUATE BASIC BUSINESS STARTUP FACTORS

BASIC BUSINESS STARTUP FACTORS

At this stage you must begin the implementation of the Business Startup Process by carefully evaluating all Basic Business Startup Factors. These factors are summarized in a Business Startup Worksheet online. From now on you are in the "driver seat" and your future success in business is really in your hands.

STEP 1: EVALUATE BASIC BUSINESS STARTUP FACTORS

1.

Evaluate Your Suitability For Business Success Based On Entrepreneurship Test Results.
Do you have strong personal potential to succeed in business, based on your Entrepreneurship Test results (61% and higher)?

2.

Evaluate Your Personal Business Knowledge Based On The Personal Evaluation Worksheet Results. Do you have sufficient business management knowledge and experience to succeed in business, based on your Personal Evaluation Worksheet results (61% and higher)?

3.

Evaluate Your Current Professional Knowledge And Experience Level.
Do you feel that you have enough professional knowledge and experience to successfully start a business?

4.

Evaluate Your Current Personal And Family Status.
Do you feel that you are "emotionally, professionally, and financially in the right place in your life" to start a business? Do you receive moral support from your spouse and immediate family regarding your desire to start a business?

5.

Evaluate Your Current Personal Financial Status.
Do you have enough savings to cover your family's regular living expenses for at least six months? Can you meet your overall financial responsibilities beyond your family's regular living expenses for at least six month?

6.

Evaluate Your Current Opportunities For Professional Growth At Work.
Do you feel that you are insufficiently compensated at your current job? Do you feel that you reached a ceiling in terms of your professional development at your current job?

7.

Evaluate Your Current Professional And Business Preferences.
Do you plan to start your business based on your current professional knowledge and experience? Do you want to start your business on a full-time?

8.

Evaluate Your Current Professional And Business Opportunities.
Do you believe that you will improve your professional opportunities and increase your earnings by starting a business? Do you believe that current market conditions and timing are suitable for you to start a business now?

9.

Evaluate Your Short-Term Professional And Business Objectives.
Did you formulate specific professional and business objectives related to your business startup for the next one to twelve months?

10.

Evaluate Your Medium- And Long-Term Professional And Business Objectives.
Did you formulate specific professional and business objectives related to your business startup for the next one to three years?

11.

Evaluate Your Abilities To Compete In The Marketplace.
Do you believe that you have unique professional and business abilities, skills and experience to successfully compete in the marketplace?

12.

Evaluate Financial Considerations Related To Your Business Startup.
Do you know how much money you will need to start and continue a business during the first six month? Will your spouse, extended family or friends provide you with financial support during your business startup? Do you have any additional sources of capital which may be available for your business startup?

13.

Evaluate Viability Of A Potential Partnership In Your Business Startup.
Do you intend to have a business partner in your business startup? Will your partner or partners provide positive professional, financial, and management contribution to your business startup?

7. MAKE A DECISION ABOUT STARTING YOUR NEW BUSINESS

STEP 2: MAKE A DECISION ABOUT STARTING YOUR NEW BUSINESS

To start a business or not to start a business? This is the question!

Upon evaluating all Basic Business Startup Factors, you will have clear answers to the following questions:

• Do I have strong personal potential for success in business?

• Am I “in the right place in my life” to start a business?

• Am I financially able to start a business?

• Do I know what type of business I want to start?

• Do I want to start the new business by myself or with a partner?

• Am I willing to sacrifice opportunities at my current workplace to start a business?

• Do I have adequate professional skills and experience to start a business?

• Do I have adequate business management skills and experience to start a business?

• Do I have specific preferences in starting a business?

• Am I aware of professional and financial opportunities by starting a business?

• Do I have clear short-term objectives related to my business startup?

• Do I have clear medium- and long-term objectives related to my business startup?

• Do I have professional and business abilities to compete in the marketplace?

• Do I have suitable sources of funding for my business startup?

• Do I have a suitable partner to join me in my business startup?

Once you are satisfied with your answers to the above questions, you are ready to proceed with the second task in the Business Startup Worksheet. This step entails making a decision about starting your business. You must take into account not only your personal needs, but also the needs of your entire family during your decision-making process. You must carefully evaluate your decision to ensure your family's financial and emotional well-being at present and in the future. You simply can't afford to make a mistake at this stage and for this reason you must exercise maximum prudence and remember this wise proverb:

"Measure seven times before you cut!"

Your ability to make good decisions will be of critical importance during your business startup period and thereafter. The key to an effective Decision-Making Process is not to look for correct answers, but, instead, to ask correct questions regarding your specific situation. It is essential that you understand the basic Principles Of Decision-Making, because this will ultimately become the foundation of your long-term success in business.

Finally, you must realize that starting a business always carries an element of a risk. However, if you do "your homework" right, you will be able to minimize that risk.

Remember that the biggest risk is not to take any risk at all!

Principles Of Decision-Making are introduced in Tutorial 1.

8. SELECT A SUITABLE TYPE OF YOUR NEW BUSINESS

STEP 3: SELECT A SUITABLE TYPE OF YOUR NEW BUSINESS

Upon making a firm decision to start a business, you should proceed with the third step in the Business Startup Process. This step is outlined in the Business Startup Worksheet and it addresses the following question:


What type of business should I start?


Fortunately, you have many different options to consider. All you need to do is click on various options below, carefully study each Business Type, identify suitable Business Opportunities, and select the most suitable option to meet your specific needs.


BUSINESS TYPES AND OPPORTUNITIES

Business Type Business Opportunities

Home-Based Business

Home-Based Business Opportunities

Internet-Based Business

Internet Business For Sale

eBay-Based Internet Business

eBay Businesses For Sale

Office-Based Business

Business Opportunities

Service Business

Service Business Opportunities

Retail Business

Retail Business Opportunities

Wholesale Business

Wholesale Business Opportunities

Manufacturing Business

Manufacturing Business Opportunities

Project Management Business

Project Management Opportunities

Contracting Business

Contracting Business Opportunities

Franchise Business

Franchise Business Opportunities

Network Marketing Business

Network Marketing Opportunities

Product Licensing

Product Licensing Opportunities

Self-Employed Independent Contractor

Self-Employment Opportunities

Buy An Existing Business

Business For Sale Opportunities

Join Existing Business As A Partner

Partnership Business Opportunities

 

It is of paramount importance that you select the most suitable type of business based not only on potential financial benefits, but also on your personal preferences. If you select a business that you can be really passionate about, this will provide you with a very important long-term advantage, which will help you in any competitive market environment. Finally, remember this:

Your business should become your favorite activity and not just a way of making money – then you will gladly work 25 hours per day, if necessary, and will always look forward to the next day! All you will need to do is just to get up one hour earlier in the morning…

Note:

For additional information please go to:

Small Business Administration (SBA)
Internal Revenue Service (IRS)
Business USA
LegalZoom
BizFilings

You may also consult with your accountant or CPA.

9. SELECT A SUITABLE LEGAL STRUCTURE OF YOUR NEW BUSINESS

STEP 4: SELECT A SUITABLE LEGAL STRUCTURE OF YOUR NEW BUSINESS

Once you have decided about your preferred type of business startup, you should proceed with the fourth step in the Business Startup Process. This step is outlined in the Business Startup Worksheet and it addresses the following question:


What should be the legal structure of my new business?


Since you plan to start a one-person business, you may consider three options outlined below.

 

BASIC FORMS OF BUSINESS ORGANIZATION FOR A ONE-PERSON BUSINESS

Sole
Proprietorship

Corporation

Limited
Liability
Company

 
 

A detailed comparison between Basic Forms Of Business Organizationis summarized next.

 

COMPARISON BETWEEN VARIOUS FORMS OF BUSINESS ORGANIZATION

Description
Legal Status Not a separate legal entity. Separate legal entity. Separate legal entity.
Risk Of Ownership Owners' personal resources are at stake. Limited to the value of investment in the corporation.

Limited to the value of investment in the company.
Duration Of Life Limited by desire or by death of the owner. Indefinite life span as long as the corporation is in good standing with authorities.

Limited by desire or by death of the members.

Transferability Of Ownership Owner can sell at any time, thereby creating new entity.

Each shareholder can sell his or her shares of stock to other shareholders or new shareholders.


Each member can sell at any time to the other members or to outsiders based on buy-sell agreements.
Accounting Method Separate economic and accounting entity. Separate economic and accounting entity. Separate economic and accounting entity.
 

You may also consider developing a business relationship with a particular organization as an Independent Contractor. For this reason you should evaluate the Independent Contractor Test to help you decide whether this type of business arrangement will meet your specific needs. Keep in mind that in this case you will be paid gross compensation for all your services and responsible for all your taxes at the end of each fiscal year, based on your 1099 earned income.


Basic Forms Of Business Organization are discussed in detail in Tutorial 3.


Note:

For additional information please go to:

Small Business Administration (SBA)
Internal Revenue Service (IRS)
Business USA
LegalZoom
BizFilings

You may also consult with your accountant or CPA.

10. SOLE PROPRIETORSHIP

SOLE PROPRIETORSHIP

A Sole Proprietorship is an unincorporated business formed and owned by one individual.

A sole proprietorship will provide you with exclusive control of operating activities and can be initiated in a relatively simple manner. Legally, this form of business represents the same economic entity as its owner. Consequently, you as the business owner are entitled to receive all profits from operations. However, you will also be personally liable for all losses and other obligations and taxes of your business. These taxes must be reported under your personal social security number and based on your Individual Income Tax Rates including:

Federal Income Tax Rates

State Income Tax Rates.


You can give your business any Fictitious Name, which is different from your personal name and it will be subject for approval by local business licensing authorities. Learn more about Registering Your Fictitious Or “Doing Business As” (DBA) Name online.

Note:

For additional information please go to:

Small Business Administration (SBA)
Internal Revenue Service (IRS)
Business USA
LegalZoom
BizFilings

You may also consult with your accountant or CPA.

11. REGULAR C-CORPORATION

REGULAR C-CORPORATION

A Corporation Or A Regular C-Corporation is a business entity that is legally separated from its owners.

A corporation is a separate legal entity in its own right with its own Tax Identification Number (TIN), similar to the Social Security Number issued to each individual in the U.S.

The ownership of a corporation is affected through owning Shares Of Stock by shareholders. Every ordinary corporation has certain distinguishing characteristics outlined below.

 

CHARACTERISTICS OF A REGULAR C-CORPORATION

1.

Continuous Life.
A corporation does not have to be dissolved upon retirement, bankruptcy, or death of any of its shareholders.

2.

Limited Liability.

A shareholder does not carry personal liability for the debts incurred by or claims against the corporation unless the shareholder co-signed, in personal capacity on behalf of the corporation, to be personally liable for corporation's liabilities.

3.

Free Transfer Of Shares.
Shareholders generally have the right to sell without restriction their shares of stock to any person, unless agreed otherwise between shareholders.

4.

Independent Management.

Shareholders elect a board of directors who manage the corporation for the benefit of the shareholders, unless it is a small corporation with one or few shareholders who manage the corporation by themselves.

5.

Federal Income Tax And Minimum Franchise Tax.

The corporation must file a Federal Income Tax return and it is liable for a Minimum Franchise Tax in most states in the U.S. In California, for example, the minimum franchise tax is $800 per year, which must be paid even if the business did not earn any profit during that fiscal year.

 

For tax purposes, there are two types of Corporations illustrated below.

 

TWO TYPES OF CORPORATIONS

 

Regular Corporation
Or
C-Corporation

 

Sub-Chapter S-Corporation
Or
S-Corporation

 
 

Note:

For additional information please go to:

Small Business Administration (SBA)
Internal Revenue Service (IRS)
Business USA
LegalZoom
BizFilings

You may also consult with your accountant or CPA.

12. SUB-CHAPTER S-CORPORATION

SUB-CHAPTER S-CORPORATION

Sub-Chapter S-Corporation Or S-Corporation is designed specifically for small business owners.


You may elect to have an ordinary corporation taxed as a Sub-Chapter S-Corporation. The S-Corporation is a separate legal entity in its own rights with its’ own Tax Identification Number (TIN), similar to a Regular C-Corporation.

The ownership of a corporation is affected through owning Shares Of Stock by shareholders. This type of corporation has certain distinguishing characteristics outlined below.

 

CHARACTERISTICS OF A SUB-CHAPTER S-CORPORATION

1.

Income Tax Is Paid By Individual Shareholders.
The S-Corporation status stipulates that net income earned by the corporation is to be taxed at the individual shareholder level. Shareholders report corporate income or loss in their personal income tax return and still enjoy all the benefits offered by an ordinary corporation.

2.

Limited Liability Protection Offered To Shareholders.

A shareholder does not carry personal liability for the debts incurred by or claims against the corporation, unless the shareholder co-signed in personal capacity on behalf of the corporation to be personally liable for corporation's liabilities.

3.

Federal Income Tax And Minimum Franchise Tax.
The S-Corporation must file a Federal Income Tax return but does not need to pay federal income tax on corporate level. However, the S-Corporation is liable for a Minimum Franchise Tax in most states in the U.S. In California, for example, the minimum franchise tax is $800 per year, which must be paid even if the business did not earn any profit during that fiscal year.

4.

Designed Specifically For Small Business Owners.

The S-Corporation status has been specifically designed to accommodate the needs of small and medium-sized organizations with no more than 35 shareholders.

 

Note:

For additional information please go to:

Small Business Administration (SBA)
Internal Revenue Service (IRS)
Business USA
LegalZoom
BizFilings

You may also consult with your accountant or CPA.

13. LIMITED LIABILITY COMPANY

LIMITED LIABILITY COMPANY (LLC)

A Limited Liability Company (abbreviated L.L.C. or LLC) is a legal form of business organization that provides limited liability to its owners in the vast majority of United States jurisdictions. Often incorrectly called a "Limited Liability Corporation" (instead of company), it is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many owners there are).

Limited Liability Company (LLC) is a type of organization whose owners and managers carry limited liability and usually receive tax benefits of an S-Corporation without having to conform to the S-Corporation restrictions. An LLC, although a separate legal business entity with its own Tax Identification Number (TIN), is a type of unincorporated association and is not a corporation. The primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation.

 

BENEFITS OF A LIMITED LIABILITY COMPANY (LLC)

The pass-through taxation, in fact, represents one of the biggest benefits of forming an LLC. This means that each member of an LLC reports their share of profit and loss in the company on their individual tax returns, and the IRS does not assess a tax on the LLC itself. This avoids what is commonly called "double taxation" of general corporations, where profits are taxed at the corporate level and then again at the shareholders’ level. The LLC is often more flexible than a corporation and it is well-suited for companies with one or preferably two or more owners.

Finally, an LLC must file a Federal Income Tax return and it is liable for a Minimum Franchise Tax in most states in the U.S. In California, for example, the minimum franchise tax is $800 per year, which must be paid even if the business did not earn any profit during that fiscal year.

Note:

For additional information please go to:

Small Business Administration (SBA)
Internal Revenue Service (IRS)
Business USA
LegalZoom
BizFilings

You may also consult with your accountant or CPA.

14. DEVELOP A BUSINESS PLAN FOR YOUR NEW BUSINESS

STEP 5: DEVELOP A BUSINESS PLAN FOR YOUR NEW BUSINESS

Once you have selected your type of business startup and its specific legal structure, you should proceed with the fifth step in the Business Startup Process. This step is outlined in the Business Startup Worksheet and it entails developing a Business Plan for your new business. This plan must address ten essential elements outlined below.


As a new business owner, you should know that Planning is the first essential managerial responsibility in every business organization. The Planning Process, therefore, represents the foundation of all operational activities within your new business. This process includes Strategic Planning (long-term planning) and Operational Planning (short-term planning). Moreover, this process entails general management planning, human resources planning, financial planning, operations planning, and marketing and sales planning.

The Planning Process is introduced in Tutorial 1.

 

TEN MAIN ELEMENTS OF A NEW BUSINES PLAN

1.

Executive Summary.
What is your new business all about? Briefly describe the nature and overall objectives of your new business and summarize your business mission statement.

2.

Company Summary And Objectives.
Specify your company's essential information - name, location, and type of business. What are the specific short-term objectives of your new business for the current fiscal year and long-term objectives for the next two to five years?

3.

Products And Services.

What type of products and/or services do you plan to offer to your prospective customers? What makes your products and /or services different in comparison with your competitors? How can you offer better value proposition to your prospective customers, i.e. better overall product and/or service value, based on quality, reliability, price, and delivery in comparison with your competitors?

4.

Marketing And Sales Plan.

Does your market analysis indicate favorable opportunities for your products and/or services in the marketplace? What are the market segments suitable for your products and /or services? What is the growth in each market segment and what are the trends in the marketplace? Who are your main competitors? Are you planning to offer your products and /services locally, nationally, or internationally? What are your company's pricing, promotional, and distribution strategies? What are the current and potential future opportunities and threats by competitors to your company's products and/or services in the marketplace?

5.

Strategic Implementation Plan.

How are you going to implement your specific marketing and sales plans and meet your company's objectives during the current fiscal year and the next two to five years? What is your operational management plan, including general management, human resources, financial, operations, and marketing and sales activities?

6.

Management And Personnel Requirements.

What type of management structure and how many employees will be required by your new business to meet its marketing and sales objectives during the current fiscal year and the next two to five years? What is the role of each manager and employee? What will be the cost of management and other employees?

7.

Facilities and Capital Equipment Requirements.

What type of facilities and equipment will be required by your new business to meet its marketing and sales objectives during the current fiscal year and the next two to five years? What will be the cost of these facilities and capital equipment?

8.

Financial Plan (Master Budget).

What are the sales budget projections for the current fiscal year and the next two to five years? What are the estimated operating costs which your new business may have to incur to meet its sales objectives during the same budget periods? How much additional capital will your new business require to meet the sales budget projections during the same budget periods and what will be the sources of funding? How will your new business be able to repay the borrowed capital to fund its operating costs during each budget period? The financial plan must include a balance sheet, an income statement (income and expense budget) and a cash flow statement (cash flow projection) for each budget period.

9.

Permits, Licenses, And Insurance.

What permits, licenses, insurance, and other business essentials will be required by your new business to meet its marketing and sales objectives during the current fiscal year and the next two to five years?

10.

Appendix.

Summarize additional supporting business documents and references which you must provide as an integral part of this business plan, including financial statements, professional licenses, legal, corporate, and other relevant documents.

 

SBA BUSINESS PLAN WEBINAR

Please watch this practical eight-part SBA Business Plan Webinar developed by a business planning expert Tim Berry:

Part 1: Introduction.
Part 2: Complete Business Analysis.
Part 3: Develop A Strategy For Your New Business.
Part 4: Develop A Plan For Implementing Your Strategy.
Part 5: Develop A Financial Plan.
Part 6: Prepare Sales Forecasts.
Part 7: Implement Your Business Plan
Part 8: Additional Information.

At this stage you may select one of these two useful New Business Templates online to complete your new business startup plan:

New Business Plan Template developed by U.S. Small Business Administration.

Business Plans And Financial Statements Templates developed by SCORE.

15. NEW BUSINESS PLAN TEMPLATE FROM SBA

NEW BUSINES PLAN TEMPLATE FROM SBA

Your first option in developing a new business startup plan is to use a New Business Plan Template developed by U.S. Small Business Administration. This template is available online free of charge. You may also find additional information in the Lean Business 2100 Management Program which could be useful in developing your new business plan.

 

DEVELOP YOUR NEW BUSINESS PLAN BASED ON TEMPLATE FROM SBA

New Business Plan
Template From SBA

Additional Information From The Lean
Business 2100 Management Program

1.

SBA Business Plan Template  

 

 

2.

Executive Summary 

Business Plan

3.

Business Description And Vision

The Planning Process

Strategic Planning

Operational Planning

4.

Definition Of The Market

Buying Behavior

Marketing Information And Research

Marketing Objectives

Target Marketing

Market Measurement And Forecasting

5.

Description Of Products And Services

The Purpose Of Products And Services

Product And Service Selection

Product And Service Design

6.

Organization And Management

Management Structure

Forms Of Business Organization

7.

Marketing And Sales Strategy

Marketing Strategies

Marketing Mix Strategies

Product Strategies

Pricing Strategies

Promotional Strategies

Distribution Strategies

Direct Marketing

Marketing Planning

Marketing Budget

Sales Plan And Budget

8.

Financial Management

Master Budget

Operating Budget

Capital Expenditure Budget

Cash Budget

Three Important Financial Statements

Balance Sheet

Accounting Period

Balance Sheet Example

Income Statement

Income Statement Example (Service Company)

Income Statement Example (Merchandising Company)

Statement Of Cost Of Goods Manufactured

Statement Of Cost Of Goods Manufactured Example

Income Statement Example (Manufacturing Company)

Statement Of Cash Flows

Statement Of Cash Flows Example

9.

Generate A Business Plan

Business Plan

© U.S. Small Business Administration 2013.

16. NEW BUSINESS PLAN TEMPLATE FROM SCORE

NEW BUSINES PLAN TEMPLATE FROM SCORE

Your second option in developing a new business startup plan is to use New Business Plan And Financial Statements Templates developed by SCORE. These templates are available online free of charge. You may also find additional information in the Lean Business 2100 Management Program which could be useful in developing your business plan.

 

DEVELOP YOUR NEW BUSINESS PLAN BASED ON TEMPLATE FROM SCORE

New Business Plan
Template From SCORE

Additional Information From The Lean
Business 2100 Management Program

Executive Summary

 

 

General Company Description

Business Plan

The Planning Process

Strategic Planning

Operational Planning

Forms Of Business Organization

Products And Services

 

The Purpose Of Products And Services

Product And Service Selection

Product And Service Design

Marketing Plan

Buying Behavior

Marketing Information And Research

Marketing Objectives

Target Marketing

Market Measurement And Forecasting

Marketing Strategies

Marketing Mix Strategies

Product Strategies

Pricing Strategies

Promotional Strategies

Distribution Strategies

Direct Marketing

Marketing Planning

Marketing Budget

Sales Plan And Budget

Operational Plan

Steps in The Operations Management Process

• Production

Classification Of Operational Activities

 

• Location

Facility Design, Location, And Organization

 

 

 

 

• Personnel

Job Descriptions And Job Specifications

Employee Planning And Forecasting

Employee Recruitment And Hiring

Employee Training

 

• Inventory

Inventory Management

 

• Suppliers

Supply Chain And Material Management

 

• Credit Policies

Credit Control

 

• Managing Accounts Receivable

Internal Control And Cash Management

 

• Managing Accounts Payable

Control Of Purchases And Disbursements

Management And Organization

Management Structure

Personal Financial Statement

Financial Statements

Startup Expenses

Master Budget

Financial Plan

Operating Budget

Capital Expenditure Budget

Cash Budget

Three Important Financial Statements

Balance Sheet

Accounting Period

Balance Sheet Example

Income Statement

Income Statement Example (Service Company)

Income Statement Example (Merchandising Company)

Statement Of Cost Of Goods Manufactured

Statement Of Cost Of Goods Manufactured Example

Income Statement Example (Manufacturing Company)

Statement Of Cash Flows

Statement Of Cash Flows Example

© U.S. Small Business Administration 2013.

17. ARRANGE FUNDING FOR YOUR NEW BUSINESS

STEP 6: ARRANGE FUNDING FOR YOUR NEW BUSINESS

Once you have completed your new business startup plan, you should proceed with the sixth step in the Business Startup Process. This step is outlined in the Business Startup Worksheet and it entails identifying and developing appropriate Sources Of Capital and arranging funding for your new business.


This important step should provide clear answers to the following questions:

1. How much capital will be required for our new business startup during the next twelve     months?
2. How much capital is available to us at present, based on our personal savings?
3. How much additional capital do we need to borrow from various sources?

4. Over what period of time do we need to borrow the additional capital?
5. What collaterals can we provide to secure the additional capital?

6. How are we going to use the borrowed capital?

7. How are we going to repay the borrowed capital?

There are two main Methods Of Financing commonly used by small business owners as described below.

 

TWO MAIN METHODS OF FINANCING

 

Debt
Financing

 

Equity
Financing

 
 

DEBT FINANCING

 

Debt Financing essentially means borrowing money from outside sources or creditors at pre-arranged repayment conditions. Such conditions represent four essential factors in debt financing illustrated below.

• The length of the loan period
• Rate of interest
• Repayment procedures
• Penalties on late payments

The Debt Financing Method has several advantages and disadvantages as outlined below.

 

DEBT FINANCING ADVANTAGES AND DIDSADVANTAGES

Advantages

Disadvantages

1.

The cost of interest can be estimated in advance in accordance with the prevailing prime bank lending rate.

The cost of interest creates a constant burden on the company's cash flow and decreases its profitability.

2.

Creditors do not have any claim on the future earnings of the company.

Debt is not permanent capital and must be repaid accurately and in a timely manner to avoid penalties and a deteriorated credit rating.

3.

Debt may be used to produce an additional return on shareholders' equity (this is known as "leverage" and discussed below).

Additional loans must be arranged to pay existing creditors if current debts cannot be paid upon maturity.

4.

The cost of interest is an operating expense which is tax-deductible, subject to IRS allowances.

Debt may require a pledge of the company shareholders' assets to creditors, i.e. personal guarantees, thereby restricting shareholders' control over their company and placing their personal assets at risk.

 

EQUITY FINANCING

Equity Financing means acquisition of the company's stock by its shareholders. By investing their personal capital into the company, shareholders acquire additional interest, or Equity, in the business. The major difference between equity financing and debt financing is that equity financing is provided by the shareholders without pre-arranged repayment conditions.

The Equity Financing Method also has several advantages and disadvantages as outlined below.

 

EQUITY FINANCING ADVANTAGES AND DIDSADVANTAGES

No. Advantages Disadvantages

1.

Equity financing does not incur a fixed cost since interest payment procedure on the invested capital is regulated by shareholders.

Equity financing by additional investors reduces the nominal value of stock held by an individual shareholder, i.e. it “dilutes” the nominal value of each share by injecting additional equity capital.


2.

Equity financing in the form of stock provides permanent capital which usually does not have to be paid back.

Since equity capital is not tax deductible when repaid in the form of dividends to shareholders, it has a higher cost in comparison with debt financing.


3.

A higher level of equity enables shareholders to raise additional capital through debt financing.

Equity financing provides investors with additional control over the business.

Sources Of Capital are introduced in Tutorial 3.

18. ADDITIONAL SOURCES OF FUNDING

SOURCES OF FUNDING

Additional Sources Of Financing for new business startups may include:


SBA Loans.

Small Business Investment Company (SBIC).

Certified Development Company (CDC).

Venture Capital.

Angel Capital.

Capital Leasing.

Finance Or Capital Leasing.

 

SBA LOANS

The U.S. Small Business Administration (SBA) offers federally guaranteed SBA Loans to small business owners all over the U.S. These loans are quite popular among small business owners since they are offered at reasonable rates with very user-friendly loan collateral requirements and conditions for loan repayment. The company may arrange a special loan from SBA provided the company qualifies for it.

SBA loans are usually offered to smaller companies for startup and development purposes. These loans are made by local banks or other lending institutions, and guaranteed by the SBA. On rare occasions SBA provides direct finance to companies.

You can obtain additional information about the SBA Loan Programs and loan application requirements provided by Small Business Administration online:


SBA General Small Loan Program.

SBA Microloan Program.

SBA Real Estate And Equipment Loan: The CDC/504 Loan Program.

Women-Owned Businesses.

Business Loan Checklist.

SBA Loan Application Checklist.

SMALL BUSINESS INVESTMENT COMPANY (SBIC)

Small Business Investment Company (SBIC) may be another source for providing startup or development capital to small companies with relatively favorable terms and repayment conditions.

SBICs are privately owned finance companies operating under the umbrella of the Small Business Administration. There are hundreds of SBIC firms in the U.S. and their locations may be found by contacting the local SBA office.


You can obtain additional information about the Small Business Investment Company (SBIC) provided by Small Business Administration online and check whether the SBIC Loan is suitable for your needs.

 

CERTIFIED DEVELOPMENT COMPANIES (CDC)

Certified Development Companies (CDC) represent an additional source of obtaining finance at relatively user-friendly terms and conditions of repayment. CDCs also operate under the umbrella of the Small Business Administration, providing a 504 Loan Program. This program, in essence, provides a long-term (10 - 20 Years) source of finance, based on favorable fixed-rate loan repayment conditions.

CDC Loans are used primarily to help small business owners finance the purchase of capital assets, such as land and buildings. Certified Development Companies usually work with local banks or other financial institutions and provide a finance package which may typically include 40% from the CDC, 50% from the local lender, and 10% from the owner. The purchased property is used as collateral for completing the financial transaction.

There are hundreds of CDCs around the country and they may be located through the local SBA office, by inquiring about the 504 Loan Program.


You can obtain additional information about the SBA Real Estate And Equipment Loan: The CDC/504 Loan Program provided by Small Business Administration online.

 

VENTURE CAPITAL

Venture capital firms specialize in providing Venture Capital, typically to medium-sized and larger companies which may offer potentially high annual returns - 25% or higher to investors.

Since Venture Capital Financing is a highly risky proposition for investors they are extremely selective in terms of approving loan requests. Usually only 2% to 3% of such requests are actually approved, and each deal may involve a very large sum of money. Because of the difficulties in obtaining fast approval for financing by venture capital firms, small business owners usually don’t rely on this form of financing as a popular financing method.

You can obtain additional information about the Venture Capital For Startups And High Growth Technology Companies provided by Small Business Administration and many other companies online at vFinance, Inc.

 

ANGEL CAPITAL

Angel Capital represents another important method of raising capital by small business owners.

The Angel Capital Financing is provided by people who are called "Angels" because they are generally wealthy ex-entrepreneurs who are keen to help other small business owners in fulfilling their dreams by lending money at favorable terms and conditions of repayment.

In addition to being motivated to help other entrepreneurs, some Angels may also be interested in being involved in one way or another in a specific business project, or simply to invest a portion of their capital and to earn a potentially high return on investment.

Additional information about Angels in a particular geographic location may be provided by various financial organizations, local banks, Chambers of Commerce, State Department of Commerce, and online:


Angel Capital Association

Angel Resource Institute

 

FINANCE OR CAPITAL LEASING

Finance Or Capital Leasing is a long-term financing method that enables the company to obtain the right to use expensive capital equipment without paying full price to the supplier upfront. In accordance with this arrangement, the purchaser may derive immediate benefits from leasing equipment and generate additional revenues as a result of its usage.

The ownership of Leased Equipment remains with the supplier. However, the purchaser may enjoy additional tax benefits since all leasing payments are fully tax deductible if the equipment is leased to a company.

Once the equipment is fully paid for, then the Lessor (the leasing company) may release the title (right of ownership) to the Lessee (the user-company) by a prior agreement, for a nominal residual buy-back fee of, say, $1, and the user-company may become the new owner of such equipment.

Once the title changes and the user-company becomes the owner of the formerly leased equipment, the IRS will allow this company to charge its operating expense account with equipment operating costs and depreciation. This may further help the company to reduce its tax liability for each operating period.

This may also apply to vehicles, airplanes, boats and other capital assets which IRS may approve as reasonably necessary equipment for continuing business operations.

Additional information about finance and capital leasing is available online:

• Leasing News.

• National Equipment Finance Association.

• Equipment Leasing And Finance Association.

• National Association Of Leasing Brokers.

• Equipment Leasing And Finance Foundation.

Sources Of Capital are introduced in Tutorial 3.

19. DEVELOP OPERATIONAL FACILITY FOR YOUR NEW BUSINESS

STEP 7: DEVELOP OPERATIONAL FACILITY FOR YOUR NEW BUSINESS

Once you have arranged funding for your new business, you should proceed with the seventh step in the Business Startup Process. This step is included in the Business Startup Worksheet and it entails developing an operational facility for your new business. The type of facility you require will depend primarily on the type of business you have selected earlier as illustrated below.

 

OPERATIONAL FACILITY REQUIREMENTS ARE BASED ON YOUR BUSINESS TYPE

Business Type Your Options
Home Office Retail
Store
Facility
• Home-Based Business V      
• Internet-Based Business V V    
• E-Bay Internet Based Business V V   V
• Office-Based Business   V    
• Service Business V V V V
• Retail Business     V  
• Wholesale Business V V   V
• Manufacturing Business       V
• Project Management Business V V   V
• Contracting Business V V V  
• Franchise Business     V  
• Network Marketing Business V      
• Product Licensing V      
• Self-Employed And Independent    Contractor V      
• Buy An Existing Business   V V V
• Join Existing Business As A Partner V V V V
 

You should also become familiar with various aspects of facility design, location, and organization to ensure an efficient overall performance of your new business.

 

ISSUES RELATED TO FACILITY DESIGN, LOCATION, AND ORGANIZATION

1.

Facility Design.
Facility design entails consideration of a broad range of factors such as present and future accommodation needs, operational requirements, budget limitations, and time parameters.

2.

Facility Selection.
The facility selection process is usually based on such considerations as inter-company integration, availability and cost of labor, services, materials and transportation, expansion potential, cost of land, and living conditions.

Facility Design, Location, And Organization are discussed in detail in Tutorial 4.

At this stage you should open a Business Startup Plan Of Action Worksheet, summarize all tasks which are required for your business startup and specify planned completion dates.

20. ORGANIZE YOUR NEW BUSINESS OPERATION

STEP 8: ORGANIZE YOUR NEW BUSINESS OPERATION

Once you have developed the operational facility for your new business startup, you should proceed with the eighth step in the Business Startup Process. This step is included in the Business Startup Worksheet and it entails organizing all facets of the business operation in your new business startup.

As a new business owner, you should know that Organizing is the second essential managerial responsibility after Planning of various operational activities in every business organization. The implementation of the Organizing Process, therefore, represents a vital step in converting your new business startup plan into reality.


If the planning process is designed to provide answers as to where your new business is heading (strategic planning), what needs to be accomplished by your new business and when it needs to be accomplished (operational planning), then the organizing process is designed to provide answers on how your new business plans will accomplish these tasks through a specific organizational structure.

Since you are a one-person business, you should learn how to "wear various management hats": one as a general manager, one as a financial manager, one as an operations manager, and one as marketing and sales manager.

 

The Organizing Process is introduced in Tutorial 1.

21. INITIATE THE MARKETING AND SALES PROCESS FOR YOUR NEW BUSINESS

STEP 9: INITIATE THE MARKETING AND SALES PROCESS FOR YOUR NEW BUSINESS

The ninth and final step in the Business Startup Process requires the actual start of your "business engine". This step is included in the Business Startup Worksheet and it entails initiating the marketing and sales process by your new business.


According to the American Marketing Association:

"Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives." (1)

Marketing Management entails analysis, planning, implementation, and control of activities designed to develop and maintain a productive exchange of ideas, products, and services in the marketplace to meet personal and corporate goals.


One of the most notable experts on marketing management, Philip Kotler, defines Marketingas:

Marketing is the delivery of customer satisfaction at a profit” and "A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others". (2)


In simplified terms, illustrated below, the Marketing Process may be presented as a flow of products and services from product and service providers through market intermediaries to the end-users, in exchange for money.

 

THE FLOW OF PRODUCTS AND SERVICES IN THE MARKETPLACE

Product And Service Providers

Market Intermediaries

End-Users
 

CONNECTION BETWEEN MARKETING AND SALES MANAGEMENT

Many business owners often confuse Marketing Management with Sales Management. Although these two functions are strongly interrelated, they do differ in purpose and description.


Harvard professor Theodore Levitt defines the difference between these two functions as follows:


"Selling focuses on the need of the seller; marketing on the needs of the buyer. Selling is preoccupied with the seller's need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with the creating, delivering and finally consuming it". (5)

A well-known management expert, Peter F. Drucker, suggests that:


"Selling and marketing are antithetical rather than synonymous or even complementary. There will always, one can assume, be a need for some selling, but the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself." (6)

The Marketing Management Process and The Sales Management Process are discussed in detail in Tutorial 5.

Finally, you should complete all tasks in the Business Startup Plan Of Action Worksheet and specify actual completion dates related to each task.

22. THE LEAN BUSINESS 2100 MANAGEMENT PROGRAM PROMOTION ONLINE

WELCOME TO THE LEAN BUSINESS 2100
MANAGEMENT PROGRAM PROMOTION ONLINE

You can receive the following benefits from the Current Promotion of the Lean Business 2100 Management Program online:

Free membership in Lean Business Club for one year.

Free access to 25 check points in the Lean Business 2100 Management Program online.

Savings up to 43% on the Lean Business 2100 Management Program subscription online.

Free or low-cost services provided by Lean Business Club.

Free Entrepreneurship Test online.

Free Business IQ Test online.

GIFT CERTIFICATE

We are confident that you will not find anything else like the Lean Business 2100 Management Program and we are prepared to offer you a $100 Gift Certificate, if you can prove otherwise. You may use this certificate exclusively as a credit toward your subscription to the Lean Business 2100 Management Program online.

Please bookmark the Lean Business 2100 Management Program for your future reference: www.LeanBusinessClub.com.

WHAT SHOULD I DO NEXT?

1.

Complete the Entrepreneurship Test online and find out to what extent you are really "cut out" for business success.

2.

Apply for your Free First-Year Membership in Lean Business Club today. You can cancel your membership at any time for any reason whatsoever without any obligation.

3.

Try out the Personal Evaluation Worksheet online, find out your personal evaluation grade and receive your personal plan of action.*

4.

Try out the Business Startup Worksheet online and find out what you really need to know before starting your new business.*

5.

Try out the Business Startup Plan Of Action Worksheet online and get ready to start your new business in a professional way.*

6.

When you are ready to improve your business knowledge, complete your Subscription to the Lean Business 2100 Management Program online, and save up to 43% off the subscription rate.

7.

Finally, join our Affiliate Program and share the Lean Business 2100 Management Program online with your business associates and friends.

 
* Note:
 
All worksheets in the Lean Business 2100 Management Program are available exclusively to Lean Business Club Members.
25 Check Points from the Lean Business 2100 Management Program are available for free viewing online. However, the remaining 75 check points are available by Subscription only.
If you are a U.S. Veteran, your Membership in Lean Business Club and your Subscription to the Lean Business 2100 Management Program online will always remain free of charge for an unlimited period.

23. ADDITIONAL INFORMATION ABOUT THIS PROGRAM

ADDITIONAL INFORMATION ABOUT
THE LEAN BUSINESS 2100 MANAGEMENT PROGRAM

You may learn more about the entire Lean Business 2100 Management Program online by viewing any of the Five Tutorials and 20 Check Points included in each tutorial:

Tutorial 1 – General Management.

Tutorial 2 – Human Resources Management.  

Tutorial 3 – Financial Management.   

Tutorial 4 – Operations Management.  

Tutorial 5 – Marketing And Sales Management.


Additional information about the Lean Business 2100 Management Program and a wide range of benefits offered to Lean Business Club members is available at Frequently Asked Questions.


Hopefully, you will recognize the potential benefits, offered by the Lean Business 2100 Management Program in meeting your professional objectives, and become a Lean Business Club Member. Our main goal is to make this your Lean Business Club so that you will never feel lonely at the top again!

 

LESSON FOR TODAY:
The Most Successful Man In Life Is The Man Who Has The Best Information!
Benjamin Disraeli