Jerry Cochran Silicon Valley Small Business Development Center

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Jerry CochranSilicon Valley Small Business
Development Center

• Is small business right for you?
• How to choose your business structure
• How to write initiate a practical business
  plan
• How to handle financial and management issues

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Is Small Business Right for You?

• If you have to ask that question,
• the answer is probably
• NO !!

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Is Small Business Right for You?

• If you believe anyone else has a responsibility
  for your success The answer is NO
• If you believe a good business idea is enough to
  insure success The answer is NO
• If money is the most important reason for your
  business The answer is NO

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Is Small Business Right for You?

• If you can get up every day and face the risks of
  taking your familys future in your own hands
• If you can rely on your own planning, initiative
  and efforts to insure your business success
• If you have an absolute passion for the
  challenges and independence of your own
  business,
• THE ANSWER MAY BE YES!

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How to choose your business structure

• Choosing a business structure is like choosing a
  good suit.
• It should be selected to fit your needs,
• and then
• tailored to fit your particular business

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Choosing your business structure

• Sole Proprietorship Simple, but no protection
  of your non-business assets
• Partnership Like a marriage, all partners are
  responsible for everything that happens
• Limited Liability Company (LLC) not as
  limited as you may think
• S-Corporation - passes corporate taxes through
  to personal income taxes
• C-Corporation standard invisible person form

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Structuring Your Business

• The Unstructured Organization is a dangerous
  business myth
• A properly designed Structure must be firm
  without being inflexible
• Structure does NOT mean strangulation

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Structuring Your Business

• Accountability is the keystone to a successful
  organizational structure
• Business owners must constantly manage two
  complex resources Money and People
• Of the two Money is the simpler to manage

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The Accountability Structure









































































































ACCOUNTABILITY
PEOPLE
Variance Analysis
Evaluation Criteria
Performance Standards
Reporting System
Job Definitions
Sales Adjusted Budget
Task Allocation
Planning Budget
Functions
Goals/Objectives
Chart of Accounts
Mission
Cash Flow
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After Accountability
-

ACCOUNTABILITY
REWARDS
RETRAINING
GONE !!
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The Practical Business Plan

• Why Have a Business Plan?
• Organizing and Financing
• Continuing Operations
• P7 Proper Prior Planning Prevents Painfully
  Poor Performance
• The plan is nothing, but the planning is
  everything Napoleon

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The Practical Business Plan
The worst General looses the battle. The second
worst General wins the battle. The best General
never fights the battle, because his strength and
planning makes the battle unnecessary. Sun
Tsu -- 2500 years ago
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The Practical Business Plan

• The Four Major Areas Venture Capitalists Look for
  in Scanning a Business Plan
• The Management Team
• The Market
• The Technology (or the Operations Concept)
• The Financials
• per John Doerr of Kliener Perkins Caufield
  Byers

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Writing a READABLE Business Plan

• Content is the important thing
• Communicate your excitement about the business
  to the reader
• Lead the reader through your plan by making it
  an integrated whole --- not a bunch of
  disconnected pieces
• AVOID verbal fat !!

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How Long Should a Business Plan Be?

• The Mini-Skirt Rule for Documents
• It should be LONG enough to adequately cover the
  subject
• and SHORT enough to hold peoples attention

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The Executive Summary

• The most important part to potential investors
• Limit it to two pages
• It is much harder to write two pages than it is
  to write twenty
• Tell your story before the reader can loose
  interest You wont get him back

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The Format of the Business Plan

• There is no single format for a good business
  plan
• Sources of Sample Business Plans
• Commercial Software
• Libraries (such as the Business Information
  Center at the San Jose Entrepreneur Center)
• On-line links such as http//sbdcnet.utsa.edu
• Classes such as SCORE _at_ the E-Center

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Focus of the Business Plan

• We need to tell people how we are going to build
  a business.
• Everyone has a product.
• Gil Amelio, President
• AmTech Venture Capital

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Some Additional Considerations

• You cant think of everything in the business
  plan, but the act of planning will help avoid
  some of the unpleasant surprises
• Be optimistic -- but be realistic in your
  projections
• If you need help in developing the plan or after
  you are in business, the Small Business
  Development Center can provide consulting help

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A Record of Failure

• Age 22 --- Failed in Business
• Age 23 --- Defeated for the Legislature
• Age 24 --- Failed in Business Again
• Age 26 --- Sweetheart Died
• Age 27 --- Had Nervous Breakdown
• Age 28 --- Elected to Legislature
• Age 29 --- Defeated for Speaker
• Age 31 --- Defeated for Elector
• Age 39 --- Defeated for Congress
• Age 46 --- Defeated for Senate
• Age 47 --- Defeated for Vice-President
• Age 49 --- Defeated for Senate

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A Record of Failure?

• After all that,
• At Age 51 --- Abraham Lincoln was elected
• PRESIDENT of the UNITED STATES

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Is Small Business for You?

• Only you can determine the answer to that.
• Small Business is the most exciting game in the
  world.
• The risks are real, but proper planning can make
  them more manageable.
• Failure is possible, but not permanent.
• If you are afraid to loose, you are also
  afraid to WIN !!

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Is Small Business for You?

• YOU CANT WIN
• IF YOU DONT PLAY !!