Glad Tidings Community Development South Hayward

Glad Tidings Community Development
South Hayward Empowerment Week
July 23, 2014
Who is the SBDC?
Region
Northern California SBDC Locations
1.
2.
3.
4.
Alameda
Central Coast
Contra Costa
Humboldt
(lead)
5. Livermore
6. Napa
7. Marin
8. Mendocino
9. North Coast
10.San Francisco
11. San Mateo
12. Silicon Valley
13. Sonoma
14.Solano
Partnership
SBDCs stimulate sustainable economic
prosperity throughout coastal Northern
California and the greater San Francisco
Bay area.
Through world class, transformative
business counseling and training, we
assist entrepreneurs with solutions for
more profitable business management
to thrive in today’s global market
The purpose of the Oakland
Metropolitan Chamber of Commerce is
to promote commerce and industry, to
advance economic growth
Our Services
Free One-on-One
Consulting
Free & Low cost
Seminars
Seminar Examples
Access to Capital
Successful Business Plans
Starting a Business
Meet the Lenders
Social Media
Government Contracts
Marketing
Law for Entrepreneurs
Retailing
Buying a Business
Starting a Restaurant
Crowdfunding and Alternatives
Starting a Food Business
How to Pitch Your Company
Finding Your Core Customer
eMarketing
Website Development
Bookkeeping
Feeling like you are in it alone?
ACSBDC Consultants
Gerry Baranano
Technology
Bob Lane
Gov. Contracts
Dorian Webb
Dave Mitroff
Ecommerce/Retail
eMarketing
Carolyn Johnson
Bus. Planning
Ron Barrett
Loan Specialist
Deagon Williams
Food/Restaurants
ACSBDC Consultants
Ed Duarte
Construction
Dave Bokash
Web Technology
Don Stoneham
Procurement
Bob Komoto
Import/Export
Paula Mattisonsierrra
Retail
Henry Charlot
Bus. Planning
Deb Doyle
Branding
How to register for services
www.acsbdc.org
Technology Initiative
o Focuses on qualified technology
companies.
o Assists with the commercialization of
technology and preparing for fund
raising
o No fees for its services and takes no
ownership interest.
o Goal is to help technology companies
start, grow and thrive
Are we effective?
• SBDCs are required to track and
measure results
o
o
o
o
o
o
New Business Starts
Jobs Created
Jobs Retained
Increases in Sales
New Loans Secured
New Equity Capital Secured
ACSBDC 2012 – 2013 Economic Impact
3,485
1,085
Companies
Counseled
Seminar
Attendees
80
Business
Starts
266
Jobs
$12.8 MM
Revenue
Generated
$25.2 MM
Loans
Secured
$23.2 MM
Equity
Invested
Instructions for counseling sign-up
& presentation download
Carolyn Johnson (“CJ”)
Business and Entrepreneurship Educator
Adult Education
Community College Education
Featured Speaker
Business Owner
Consulting
Real Estate
Business Brokerage
Investment Banking
Lending
15
Lay the Foundation
Identify your personal goals
Spell out your business values
Describe your business idea
Identify your strategic position
Decide if you want partners, investors
Consider exit strategy
Discuss the impact of starting a business with your
family
Make an appointment with the SBDC
Identify your personal goals
What are your personal goals in growing
your business?
The four C’s
Creativity: leave your mark
Control; over ideas implemented/work & life
Challenge; problem solver & risk taker
Cash; trade offs
What type of business
do you want to start?
What is your
inspiration or motivation?
Describe your business idea
The ‘Business Idea’ includes:
a definition of the target audiences
the product features; benefits
and the unique business value it will
provide to all customers.
The ‘Business Idea’ also defines
strategies for successful launch into
the marketplace.
Pricing
Revenue
and distribution models
You can devise a wonderful new machine, but if it
doesn’t address some real and important need or desire;
people won’t buy it!
Describe your business idea cont...
Service, retail, manufacturing, distribution or Internet
business?
What industry?
What products or service do you sell?
What improved features/services or added value do you
provide?
What makes people say “WOW”?
Who do you see as your ideal customers/clients?
What’s your overall marketing and sale strategy?
Which companies do you think of as your competition?
What do you think will make customers buy from you
instead of your competitors?
What is your
Strategic positioning?
Identify your strategic position
Not enough any more to say
I sell shoes
I sell e-commerce technology
Need something unique
How to be different and meaningful
Separate you from your competition
Serve a specific niche
Unique features; no one else is doing but needed in the
marketplace
Exceptional customer service
Price
Convenience
Distinguishes you
What about partners?
- Types
- Need
- Roles and Responsibilities
Decide if you want partners, investors
Hewlett and Packard
Ben & Jerry’s
Define clear-cut responsibilities and
authority
Who, in the end, gets to call the
shots?
Same goals; complimentary skills
Careful going into business with a
friend; as you may lose a business
partner and a friend
What is an exit strategy?
Why is this important?
Consider exit strategy
Long term strategy for
transferring ownership of your
company to others.
Investors will want to know
Partners will need to plan;
friction or family changes
Helps you direct the growth of
your company
If acquired, target your product
development and marketing to
attract interest
Discuss the impact of starting a business with your
family
May need to make financial sacrifices
Less free time
Describe opportunities and potential risks
Ask for their input
More supportive; lend a hand
Change in family responsibilities
Create Your Company Identity
Choose a name
Set up your Legal Entity
Check out trademarks
Secure a domain name
Consider logos, taglines and colors
Meet with a graphic designer
What is your business
Name?
What’s in a Name?
What about the name tells your customers
what you do?
What about the name tells your customers
what they get?
Are the names already trademarked by
another business? www.uspto.org
Who likes the name?
What available domain name would work well
with the name?
What is your “Legal Entity”?
Why do you need this?
Forming a Legal Entity
In summary – It’s about Accountability
Taxes, fees, profit distributions
A legal entity is an “artificial person” you create by
filing certain documents with the California Secretary
of State
That artificial person can own or lease property, opens
bank accounts and enter into contracts just like a
natural person
Choice of Entity
External funding vs. internal
More flexibility vs. better established form
Build wealth vs. tax efficient cash flow
Forming a Legal Entity
Buying a domain name or filing a DBA (Doing
Business As) not the same thing as forming a separate
legal entity:
Domain name = Web address
www.GrovesLaw.com
DBA = business name
Groves Law Group
Neither gives liability protection
Error’s and Omission Insurance
Choice of Entity
Four basic types of legal entities
Sole Proprietor
Corporations (“C” and “S” types)
Limited Liability Companies
Limited Partnerships
Choice of Entity
Sole Proprietor
Happens by default
You are the also the company
No others are owners of the company
Entities can change over time as your business grows
No liability protection
What is “Liability Protection”?
Choice of Entity
To preserve liability protection
Personal and business assets must be kept separate
Business must not be used to fund personal expenses
There must be sufficient assets in business to cover
expenses
Choice of Entity
S Corporation:
Pass-through taxation (corp pays no tax)
Individual taxed directly for corp’s net income
Can sell securities to raise money
Can limit personal liability
Many rules to follow to stay in compliance
Limited number of shareholders
Most typically used by small business owners
Choice of Entity
C Corporation:
Most common form of for profit business entity
(Nike, IBM, Coca Cola, Starbucks, Intel, etc.)
Form generally required by outside investors
Many rules and regulations to follow
Dual taxation (revenue + salary)
Benefit of retained earnings in tax year
Can raise money by selling securities
Choice of Entity
Limited Liability Company (LLC):
Flexible form of legal entity, but not simple
Limited liability without double taxation
Can separate the management interest (vote) from
economic interest (collect money)
Can be very expensive to run
Best suited for joint ventures between two companies –
historically real estate ventures
Choice of Entity
Limited Partnership:
Similar to LLC
Pass-through taxation
Flexible; fewer legal formalities
Biggest drawback: General Partner has unlimited
liability
Most typically used by Real Estate and Venture Capital
investors
What is Intellectual Property?
Why is it important?
Intellectual Property
What is IP?
Intangible assets
Created by brain power
Highly specialized area of law
Can be difficult to protect your rights effectively
without consulting an attorney
Property Types
Three types of Property:
Real
Houses, Buildings & Land
Personal
Cars, Clothes & Furniture
Intellectual
Patents, Trademarks & Copyrights
www.uspto.gov & www.copyright.gov
Intellectual Property - Patents
Under US law, a patent can be granted for any new
and useful process, machine, manufacture or
composition of matter, or any new and useful
improvement thereof.
Intellectual Property - Patents
Things that have been patented:
Telephone, Light bulb, Safety Pin, Flag
Automobile, Steam Engine, Airplane
Stove and Fireplace, Computer, Monopoly
Amazon’s “one-click” checkout
Google’s search methodology
Electronically reproducing music
Intellectual Property - Patents
Patent gives owner exclusive right to license invention
to others in exchange for royalties = $
Also gives right to sue persons who use invention
without permission
US patents generally last for 20 years.
Intellectual Property - Patents
Not always the best way to go
Very Expensive $$$$ ($10,000 and more)
Patent application process generally results in public
disclosure of invention
Often creates competition
Disclosure can help competitors find slightly different
way of doing the same thing
Intellectual Property - Trademarks
Trademarks can be:
Name of a business or product (mark)
Logo used to market or package a business or product
Design and packaging of a product (trade dress)
Can’t be merely descriptive or generic (Mark Strength
= Aspirin, tissue, bandages)
Intellectual Property - Trademarks
Famous Trademarks:
Nike Swoosh = Logo
McDonald’s Golden Arches = Logo
Coca Cola formula = Trade Secret
IBM = Mark
Xerox = Mark
Layout of Starbuck’s stores = Trade Dress
Intellectual Property - Trademarks
Use of trademark creates exclusive right to use in
particular area - class
Trademark owner has right to stop use of any other
mark that creates “substantial likelihood of
confusion”
Delta Airlines
Delta Dental
Delta Plumbing
Intellectual Property - Copyright
Copyright protects tangible, original expressions of
ideas and concepts
Can be obtained for any “creative work”:
Songs, paintings, movies, pictures, sculptures, novels,
plays, websites, software programs, etc.
But must be fixed in tangible media
Intellectual Property - Copyright
Copyright holder controls all use: publication,
modification, performance and reproduction of
copyrighted work
Can License = $
Copyright term under US law:
Generally, life of author + 70 years
Reg = sue infringers, $100,000 in statutory damages,
costs and attorney fees
Website Legal Issues
Website Legal Issues
Create original images and text
Do not take or modify a third-party’s image or text
without their consent
Use licensed or free images, text and logos according to
license terms
Always confirm a work is in the public domain prior to
using it without permission
More Website Legal Issues
Perform a trademark search prior to selecting a domain
name (www.uspto.gov)
Godaddy.com is not enough
Consider a trademark for your domain
Post appropriate website terms of use and privacy
policy statements
Confirm a damaging statement about a person or
company is true before publishing it on the internet
Cut Through Red Tape
Deal with legal and licensing matters
Choose legal structure
Fictitious name statement
Apply for business licenses, permits
Discuss collecting sales tax
Draw up basic contracts and other legal agreements
Protect your intellectual property http://www.uspto.org/
Visit http://www.calgold.ca.gov/ to determine specific
permits, licensing and registration requirements
Get organized
Set up physical files
Set up computer files
Set up a contact management system
Keep track of your company’s vital
statistics
Keep track of expenses
What is Bookkeeping?
Bookkeeping
Bookkeeping is the recording of financial
transactions.
Transactions include
sales
purchases
income
receipts
payments
Why Keep the Books?
Keep track of profits
Avoid running out of cash
File taxes
Provide reports required by:
Bankers
Investors
Insurance Agencies
Do the numbers work?
Monitor your business financial statements on a
regular basis; budget
Develop a set of key performance indicators
Diversify your client base
Find out whether you're paying your employees
too much
Monitor your business' profit margin
Deal with Money Issues
Meet with an accountant
Learn the lingo
Take stock of your
personal financial situation
Clean up your credit
Setup your books
Establish your prices
Open a bank account
Consider accepting credit cards
Prepare simple financial forecasts
Fixing Your Credit
Pay your bills on time
If you fall behind or are having trouble, contact your
creditor!
Lower high balances
Do not close zero balance accounts
Open credit lines only when needed
But, don’t open too many in a short period of time
Fix mistakes
Get a copy of your credit report
Free Credit Counseling
Operation Hope (www.operationhope.org)
Consumer Credit Counseling of San Francisco
(www.cccssf.org/)
What are Operations?
Build your team and personnel
structure
Consider your support structure
Decide who you need on your team
Examine the use of independent contractors
Understand employment laws & consider personnel
policies
Consider your management style
Take Care of Facilities
Find and secure a location
Rent space
Setup home office
Office in your vehicle
Incubators; virtual office
Get Systems in Place
Choose a phone system
Choose software
Choose hardware
Get online
Attend SBDC-TAP technology classes
Develop a technology plan & budget
Establish Processes
Design procedures for handling
administrative tasks
General office management,
bookkeeping/accounting, order fulfillment
Operations manual & templates for forms
(invoices, statements, proposals)
Setup address book/groups
Stay in Compliance
Business Licenses
City and county
State: Business Transportation and Housing (916) 323-5400
Fictitious Business Name
Federal Self-Employment Tax
Local Fees
State Taxes
Seller’s Permit
Employer Identification Number
Worker’s Compensation Insurance
State/Federal Withholding
Business Insurance
Property – buy based on replacement value
Named peril
All-risks policy
Liability – damage to property to someone
Look at similar businesses/consult a professional
Professional Liability/Errors and Omissions
Employment Practices Liability Insurance
e.g., wrongful termination, sexual harassment, race, gender
Workers’ Compensation
Optional Medical/Dental/Vision
Do you have what it takes?
web.sba.gov/sbtn/sbat/index.cfm?Tool=4
Hayward Resources
http://www.hayward-ca.gov/BUSINESS/
California Resources
www.business.ca.gov
Online Courses
www.sba.gov/category/navigation-structure/counseling-training/online-small-business-training
www.sba.gov
Alameda County SBDC
Next steps:
Make an appointment with the SBDC
Find your focus
Gain feedback before you commit funds
Ensure you have budgeted wisely
Thank you!!!!!!!
Alameda County Small Business Development Center
475 14th Street, At the Oakland Chamber of Commerce
Oakland, CA 94612
510-208-0411
www.acsbdc.org/handouts