Blessings to Others, Inc. Life Skills Program Workshop

Transcription

1 Blessings to Others, Inc. Life Skills Program Workshop

2 Interest & Passion Exploration Job Creation Increase Personal Income Expand Skills Professional Freedom Address Community Need

3 Address Community Need Add new value to individuals or other companies

4 Interest & Passion Exploration Personal Joy & Satisfaction: Fulfillment w/ Work

5 Expand Skills Boost knowledge, capabilities, credibility

6 Professional Freedom Self-management, set own expectations

7 Job Creation Business will (likely) need to hire people to thrive!

8 Increase Personal Income Potential for HUGE $$ benefit

9 What is YOUR motivation?

10 Idea Creation & The Business Plan

11 Considerations Product & Company What need do I want to address? Will my solution(s) meet sustained value? Who is my target population?

12 Considerations Strategy Are my goals well-defined? Is my strategy appropriate? Can I execute the strategy? Is this the right window?

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14 Elements (Minimum) Cover Page Table of Contents Executive Summary The Organizational Plan The Marketing Plan Financial Documents Supporting Documents

15 Value Proposition A framework to easily summarize your idea Customer Target Need Why? From What? Name (of company/product) Category Product/Company Type Benefit Reason(s) to buy Alternative Competitors Bias Benefit Differentiating Factors (ideally they are measurable/quantifiable)

16 For [customer] who [need]. The [name] is a [category] that [benefit], and unlike [alternative], our product/service [bias benefit]

17 Informative Yet Concise Answers these questions: Who? What? Where? Why? When? How? How Much? Benefit to Customer? Key Differentiator?

18 A critical component to your business plan and to the success/early growth of your company

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20 Yourself/CoFounders ( Bootstrapping ) Financial Institution (Traditional Bank) Angel Investors Friends & Family Venture Capitalists

21 Benefits Risks Retain full Less money to operate ownership/control Learn to manage cash flow efficiently

22 Benefits Risks If you will need outside financing to begin, this is the easiest, quickest, and least expensive! VERY HIGH emotional/relationship risk if company fails If successful, this can build trust and future support

23 Benefits Risks Easiest way to borrow large sums of money without losing a lot of management freedom Will have to worry about consistent, timely repayments They will need to see your business plan prior to lending $$, so it gives you the opportunity to refine your plan and think critically about it They will charge interest

24 Benefits Risks Big investments w/out debt repayment They have their own goals with their money so they might be pushy and hard to work with Difficult to connect with if your network is limited

25 Benefits Risks Provide more reliable advice than an angel investor They seek a high rate of return on their investment to compensate for risk of investing Source of high investment In addition to financial compensation, will ask for some management ownership

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27 Your Credit History Demonstrate you re a good risk If you have an existing business, provide information on payment history Bring copies of documents that showcase above information!

28 Your Collateral (Assets) What are you willing to risk for your business? Ex: sometimes banks ask for your home as collateral

29 Ability to Meet Their Goals SHOW you appreciate their needs; SHOW you ve considered your company s ability to meet their financial goals HOWEVER, you do need to consider how well the VC fits your company you are evaluating their fit too!

30 Demand for Your Product/Service Evidence it is well-received by target market Demand is sustainable

31 Establishment of Proprietary Position Secured position in market in some manner Protect unique aspects of business

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33 Realistic Projections Based on current market shares Growth opportunities Realistic timetable of achieving goals Consider industry s practices & trends

34 Strength of Marketing Plan Awareness Convince Both short-term (sparking interest) & longterm (maintaining interest)

35 Different business structures have different tax and legal implications

36 Limited Liability Company Sole Proprietorship Partnership S-Corporation C-Corporation

37 Core Characteristics Simplest, Most Common: Unincorporated, Run by One Person No distinction between business & owner Taxes Business is NOT taxed separately

38 Advantages Easy & inexpensive to start Complete control of business Simplified tax preparation since business is NOT taxes separately Disadvantages Unlimited personal liability Difficulty raising $$ Heavy burden

39 Core Characteristics 2 or more people share ownership ESTABLISHING AN INITIAL PARTNSHIP AGREEMENT AT THE BEGINNING IS CRITICAL

40 General Types Limited Joint Ventures

41 Formation Register in secretary of state s office Name is given in initial partnership agreement Post-registration: must obtain licenses & permits

42 Taxes Register w/ IRS; register w/ state & local revenue agencies Annually file to report income, deductions, gains, losses Business itself does not pay income tax Partners include their respective share of partnership s income or loss on personal tax return

43 Advantages Easy & inexpensive Shared financial commitment Complimentary skills Disadvantages Both joint & individual liability Disagreements Possible Tension

44 Core Characteristics Independent legal entity owned by shareholders Complex Costly administrative fees Stock offerings

45 Formation File documents in secretary of state s office Establish business name, register legal name Post-registration: obtain licenses & permits

46 Taxes Federal, state, sometimes local taxes Register w/ IRS, state & federal revenue agencies Pay income tax on profits Sometimes profits are taxed 2x

47 Advantages Limited liability Ability to raise capital through sale of stock Attractive to prospective employees Disadvantages Time & money Double taxing Additional paperwork

48 Core Characteristics Tax Differences w/ C-Corp AVOIDS double taxation business itself is NOT taxed, just the shareholders on their personal tax return Formation: Must file as an S-Corp; shareholders must sign Form 2553 In Missouri, a company tax return is filed, but for informational purposes only

49 Advantages Tax savings Disadvantages Strict operational processes Business tax expense credits Business has independent life from shareholders Shareholder compensation requirements

50 Core Characteristics Hybrid that offers limited liability features of a corporation & tax efficiencies & operational flexibilities of a partnership Owners referred to as members

51 Formation Each state with slightly different regulations Business name rules Operating agreement Some states require formal announcement of business

52 Taxes Taxes are passed to members Must file as a corporation, partnership, or sole proprietorship tax return since it is not recognized as a business entity for taxation purposes

53 Advantages Disadvantages Limited liability Limited life Less recordkeeping Sharing of profits Self-employment taxes

54 Requesting S-Corp Status for your LLC From a legal standpoint, still considered an LLC For Tax purposes, treated as an S-Corp File election Form 2553 Get an attorney advise you on the pros and cons of this move for your business!

55 DIFFERENCE. -MARIE FORLEO TO MAKE A

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