Simple Steps to Start Your Small Business

Simple Steps to Start Your Small Business

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RON LUNSFORD: Good afternoon. I'm Ron Lunsford.   Glad that you're here. We had a few more sign up  that maybe they'll drift in a little bit later. SCORE is a national organization. We were founded  in 1964 and we've worked with right on a million   clients over our history. Wichita SCORE is one of  300 chapters and we have 35 members. Nationally we   have 10,000 volunteers who are available to talk  to you to help you get your small business started   or improve a small business aspect if  that's what you need. John, slides please?

Our program today is Simple Steps to Starting Your  Own Business. I sent to those that had registered   early, I sent a list of the modules out so that  they could see what is available. If you go to   www.SCORE s-c-o-r-e-dot-org in the search  box, if you'll just type in "simple steps,"  

it'll pull up the five modules and  you're able to one, download a workbook   and two, to go through the modules one  through five in that order if you choose to. Thank you, John. Today we're talking about  startup basics, which is session one. Next. About SCORE. As I mentioned, we've got ten  thousand volunteers. These are... most of   these people are people have been in business and  retired and that's how the term SCORE got started:   Service Corps of Retired Executives. About 15  years ago they took a survey and found that   30 percent of us are still working  so it just... simplified to SCORE. We put on seminars and workshops to educate you:   people who are interested in starting your own  business. We offer free mentoring one-on-one,  

be face-to-face once the COVID thing is over but  currently we will do email, phone, or virtual.   We can also do like we're doing  today, virtual conferencing. Next. This is our address we're located in the SBA  office, Page Court down in the Garvey Center tower   complex. The office is closed now due to COVID but  we will respond. If you just call, leave a message   and we'll give you a hand with your business  ideas. Thanks, next. What you'll learn:  

we'll talk about myths and realities, some of  the critical success factors, know your option,   components of the business ownership, making  it legal, funding and cash management. And   also get into the... the very basics of  business plans. We won't be able to spend   enough time on it to really do a thorough  job but that's coming up next month. Next.

This is the roadmap that goes with startup basics.  They're simple steps. We're starting in section   one... season -- the session one, it goes into  business concept, marketing, financial funding,   and then after you put it down on paper you sit  down and decide if you want to go ahead with it   or if you find that it's not the best  business decision. We're glad to work  

with you and see if we can improve that  and build a better business plan. Next. Next. And some of the myths. "All I need is a good idea  to be a successful entrepreneur." Sorry, you need   a whole lot more than just a great idea. Myth two:  "if you go out on your own, you won't have to work   so hard or such long hours." Average, a small  business person probably works 65 hours a week.  

That's not a... you know, it's not a 40-hour job  for that you experience when you're working on   somebody else's payroll. You've got things to take  care of, you've got you've got employees, you've   got them to take care of, you've got customers  to satisfy, you may have suppliers to work with   making sure that your shelves are covered. Myth  number three: "you'll be able to deduct everything  

so you don't have to pay taxes." Sorry, we all pay  taxes. If the business does... in some cases the   business will pay taxes and then you will pay  taxes on what you get from the business. Next. Myth number four: "if you work independently,  you won't have to report to a boss."   Well, if you're wearing hats of small  business person you'll soon find that   you've got all sorts of bosses. Some  of them start before you leave home.   Spouse says take care of this and you need  to take care of it. If you've got employees,   they've got needs and you'll have to help them.  You've got suppliers need to be taken care of.  

And first and foremost, you've got customers  that need assistance, have questions about   your product, want to understand how  you have that unique selling proposition   that is not available online or from a competitor  a couple towns over. Myth number five: "business   owners get to do the work they want to when they  want to and only what they find interesting."   Sorry, it's not true. You get to work  on everything that everybody wants.   Myth number six: "if you choose to  be self-employed, you'll be limited   in what you can achieve since you'll be working  alone." Fortunately, that is a myth. You are not   limited into what you can achieve, only what you  choose to do as a small business person. Next.

Proper planning is key. We... we at SCORE  highly recommend that you do a business plan.   Those that spend three hours or longer  with the SCORE mentor working on business   plans so on and so forth are 40 percent  more successful than those that don't.   This is an old statistic but it shows that  three-quarters of the people are still successful   after two years if they've got  two or more employees. Next.

After three years, almost two-thirds  are still successful. Next. And after five, it's about even as to those that  succeed and continue in business and those that   struggle for one reason or another. Next. Do you have what it takes? What  are your critical success factors?   Are you able to make a good choice of time and  locations? Do you have adequate capital? Do you   have the ability to manage and multitask? Are you  experienced in the field that you're trying to   compete in? Strong work... work ethic?  Are you effective in your time management  

and do you... are you willing  to take input from others? Next. Know your options. We're going to talk  about the different business structures.   One is you can start it out all on your own.  The advantage is you're not hampered by previous   images. You can choose location, name, logo. You  can explore new markets, see your dreams come   true. The disadvantages of a new business: you  have no base, you have to build all new. Think  

of it as a green field and you're building a...  a business just like you build a house. There   are greater risks involved because if you stub  your toe in one area, it can cost you elsewhere.   No track record. If the banker... if your  lender... if you go approach a lender asking   for financing, one of the things he's going to  be looking at is whether you've got experience.   And if you lack the experience, he's going to  be less enthusiastic about giving you the loan.   And unfortunately if you have a bad experience,  you may see your dream become a nightmare. Next.

You can buy a business and in fact this is  something I've encouraged several clients. Coronavirus has been very hard on some businesses.  Some business owners are up at the point where   they'd like to retire. If you see a business  that you think you'd like to be involved with,  

talk with the owner. He may be willing to carry  the loan and help you out for the first three to   five years making sure your... you understand  the business and know what you need... get to   know what you need to know. Advantages: it has an  established clientele, suppliers, location. It's   a known quantity. In fact, you can... you can use  the bank... your tax forms and show the banker has  

been profitable for several years. The owner can  be helpful in terms of starting and running the   business and it's easier to obtain financing. The  disadvantages: there may be some hidden issues.   The owner may not disclose all  the debts that the company owns.  

It... that poor reputation that the company has  will carry on no matter whose name is on the door.   Out of date inventory and transfer  issues can be a problem. And there's   no guarantee that success will continue.  So that's it for buying a business. Next. Buying a franchise. The advantages: a proven image  and product and service. Not all franchises are   fast food, hair salons, or things like  that. In fact if you give us a call,   we've got FranNet coming in next week to talk to  us about "am I interested in doing a franchise?"   Franchises give you lots of marketing and sales  power. It can make up for limited experience.  

It... they provide training, professional  guidance. Even McDonald's has a McDonald's   University. They teach you how to put the  ketchup and the mustard on the hamburgers.   Continued consulting relationship, you can  talk to others if they're having problems,   they can help you. They may be able to  explain what they did in the particular   case. The disadvantage: you don't have full  control, you're not always your own boss.   You may owe the franchise  royalties and other fees.   In fact in some cases, they may say, "Here is  your product, you sell it." McDonald's has its own  

supply chain providing hamburger patties and  buns, so on for the for each of their stores.   In a franchise you may have to consider what  are your boundaries: do you have the whole   state of Kansas for example or do you have just  the block that you're sitting on? It's a binding   contract between you and the franchisor and if  they have a problem, you have a problem. Next. Home-based business: very attractive,  convenient workflow, work location,   it's at least less expensive,  you get a flexible schedule,   and you have some tax advantage in terms of based  on the square footage of your home how much it   can be used for... how much you designate for  business use and a percentage of the utilities.   Disadvantage: you can't have a UPS truck driving  up every hour and picking up merchandise and   dropping off new. Some homeowners associations  take a dim view of it as do the building codes   people. If you're running a home business, you're  isolated from others so if you're a social type,  

that may not be the best one for you. And  frequently you have time.... difficulty   getting financing because the experience...  bank lender's experience has not been good.   If you've got kids at home... well, even any type  of family at home, this can be a distraction from   trying to get your business done. And home-based  businesses are subject to IRS scrutiny.   If you go along three or four years without making  a profit, they may determine that it's a hobby and   none of your business expenses are allowed.  Looking at non-profit and two months out,  

Cindy Miles is going to be talking  about business plans for non-profits.   The big thing about nonprofits: you have to  figure out where you're going to get your   grants or financing, how are you going to keep  the doors open, pay the individuals. Advantages:   it allows an operation in a not-for-profit status.  You don't have owners, owners don't get... and the  

money is hard to get out of the nonprofit. You  may qualify for government foundation grants.   There's protect... you can purchase  liability insurance for directors   and employees and you can pay salaries  based on what the competitive wage is.  

Disadvantage is the 501(c)3, 501(c)4 focus on  educational charitable purposes. Cannot profit.   Those who create the organization, all  profits stay inside the organization.   And after you file for corporate  status at the state level,   then you file a form with the IRS  requesting 501(c)3 status and they   evaluate it and it may take a couple months  before you find out an answer on that. Next.

Online business probably the most  attractive has the lower standard costs,   geographic reach is worldwide if you want to go  that way. Convenience, accessibility, and it's   very flexible. The disadvantage is it  has very low conversion sales rates.   There's low barriers to entry  so there's lots of competition.   Visitors have expectations and  those expectations need to be   closely defined so that you and the... the  customer are agreeing as to what's being done. You   have no personal contact and you only get limited  sensory information from your customers. Next.

Entrepreneur characteristics. Next. Here are some of the things that you need to be   a small business person. You can read them. I  will highlight the one at the bottom: supporting   family. If you're getting ready to start your  business, be sure your family's in agreement.   You know that spring break trip that vacation that  you love to do? You may be... in small business   you may have to work that time and not be able to  go with your family. There will be times when you   be working even holidays, kids out of school  and mom's ready to pull her hair out. Next.

How many hats will you wear? The question has  to do with do the things that you feel specially   qualified for, that you enjoy, and if there  are things that you don't particularly enjoy,   consider hiring that work done. For example, if  you don't like to do accounting, bookkeeping,   that service is readily available and it's a much easier, for example, to have somebody  do the accounting and when you... at the end   of the day you can close the door go home and  somebody else is taking care of it. Otherwise,  

it can all pile up for the weekend and take  your weekends away as you try to catch up. Next. Marketing is a strategy used  to create desire to purchase.   It has to do with creating your company image so  that people will identify you. Anything you do   to get and keep a customer. It's 10 times easier  to try to keep an existing customer than it is   to go out and get a new customer. Also, your  product or service will not sell itself. Next. Sales is part of marketing.  

You're looking at customer contact work, you're  finding prospects. It might even include cold   calling. You're making presentations, preparing  bids, and especially closing deals. And after   you've got the deal closed, you're following up to  be sure that the order process is through. Next. [coughs] Excuse me. Product or service: definition of what you're  offering to your customer. What... you know, what   is its functionality, how's it going to be  packaged, what kind of quality level will you do,   how is your product differentiated between  you and the competitors? Questions are   who needs it, why do they need it, how  is it better than the competition? Next.

Position has another aspect of marketing:  location, location, location. McDonald's is   not in the fast food business, somebody told me.  They're in the real estate business so look to   see where their stores are located: prime real  estate. If you're interested in a particular   target market, see if you can find a niche  that the rest of the competitors are not   addressing. You'll be more successful. Take  a look at the competition, the distribution   and how are they merchandizing it,  how can you do that better? Next. Branding. This has to do with your product being  recognized in that vast world of confusion out  

there. Does it have name recognition, what kind  of quality of product or service is offered,   what is your market identity, what  is your unique selling proposition?   What kind of advertising are  you using to promote it? Next. Price: another aspect of marketing.  You're looking at consumer reaction. If...   you're looking at cost, competition, credit terms  and discount. When I look at a particular thing   offered online, I'm saying, you know,  that's a little bit less than what I   can get down to... and get over here at  the local store but if I have problems,  

I can go to the local store and ask them questions  about it and they'll help me figure it out. I may   not be so lucky if I get on the customer  service line and have to wait three hours.   So price has to be determined in terms  of what's included in your product. Next.

Competition. You're small, probably  starting out. What's the size and operate...   size of operation and number of  employees of your competitors?   What are... what is their price like and what's  their quality level? It is much easier to sell   a premium product at a higher price. If your  price is higher but it's of the same quality,   what incentive has the customer got to come to  you? What kind of services are you providing?   What's your reputation? Do a SWOT analysis: that's  strengths, weaknesses, opportunities, and threats   and you can google that and it'll give you lots  of information on it. Competition. You're going   to get a chance when you're considering starting  a business to go out and visit the competition,   see what the customers... and see  what their customers look like,  

make your own observations about what you could do  better or if it's a great idea, what you can copy.   Who are their suppliers and contractors? And  who are the other businesses in the area?   Sometimes parking can be a real hassle for some  clients, but if it's at the same time of... that a   saloon or bar is open next door, your hours  are not going to compete with each other,   Making it legal -- I'll point out right here  the... the green line,, that's   the Kansas small business portal and it's very  helpful. If you need any help on navigating that,  

let me know and I'd be glad  to walk you through it. Next. What type of business organization are you  interested in? Sole proprietorship? If that's   the case, just notify the state that you're  going into business and hang your shingle up.   You can start doing business. You can start  a partnership. For those that are... there's  

a limited liability company a, "C" corp and "S"  corp which is a sub-chapter of the "C" corp. Next. Keep it simple. Sole proprietor or partnership.   If liability or taxation is a concern, then  look at the LLC: limited liability corp. Next.

Any time you hold yourself out as a business,  you do have insurance considerations.   They include property, liability  -- and in liability I'll mention   this some of you may have heard of what  they call an umbrella liability policy.   That's a situation where you work with  your insurance agent and you get it...  

you get insurance on your car, insurance  on your home and insurance on your business   and maybe these are all at the same level:  300,000 or 500,000 liability then you put an   overarching umbrella over the top of it for  5 million if you like and that insurance is   very inexpensive because they expect that the  lower policies to take care of most of the   incidents. Worker's comp. If you've got employees,  you're going to need worker's comp insurance.   Health insurance. Life insurance on the owner  is... is definitely a consideration because if   something happens to the owner,  then you're going to need   some insurance to take care of the business  and your personal responsibilities.  

And finally, you might want to consider  business interruption insurance. We're   subject to tornadoes here. You get down along the  gulf for ocean and hurricanes are a consideration.   Talk to your insurance agent or broker and find  out what's available, what they'd recommend   and go from there. Next. Government regulations play a big part in  business. Some business licenses... some  

require business licenses and maybe approvals.  If you're offering a contracting service,   they may even ask you to get  a certification or a bond.   If there are labor laws that... and immigration  laws. IRS, social security, withholding payments.   The list goes on and you're responsible when you  get your own intro... start your own business for  

each of these. We do recommend that you have a  separate banking account and some even go so far   as to put their tax liability in a separate  banking account from that so that when the bookkeeper says it's time to write a check  for such and such, the money's there. Next. Every business owner needs a team to help  him do his or her business. B.A.I.L. is an   easy way to remember it. You're talking about  a banker or a lender, you're talking about an   accountant or a bookkeeper, talking about an  insurance agent or broker, you don't necessarily   have to have a lawyer on retainer but at least  have somebody that's familiar with your business   that you can turn to if you have a question. And  we strongly recommend that you have a business  

mentor such as SCORE to help you anticipate  and get through some of the tough times. Next. Funding and cash management. Next. When you're starting to look up and look at your  finances, remember: unless you've got a sec...   unless you've got a primary job, this business is  going to be responsible for providing with your   cost of living. That's to put food on the table,  roof over your head, wheels in the driveway.   So take a look at your personal finances,  look at areas where you could cut back.   Can you eliminate some of your outstanding  debt? What amount have you got in savings?   What would be the total amount to cover  your startup expenses for six to 12 months?   Businesses are not profitable after the first  month usually. Frequently it's three, four,  

maybe even six months before they start breaking  even. So startup cash. This is stuff that you have   to buy, you have to spend before you even  open the door. You need to put in tools,   equipment. You may be able to talk your... if  you're renting space, you may be able to talk your owner into doing some leasehold improvements  at his expense and then raising the rent   just a little bit but it's better than  you having to pay for the whole thing.   If you've got licenses or permits that you  have to purchase, if you've got insurance   that you need to prepay, advertising perhaps  prepay, if you've got any professional fees.  

If you're selling out of a storefront,  what's your initial inventory   and what kind of working capital  reserve are you going to have? Next. Operating cash: once you've opened the  door, then the expenses start adding up.   Are you paying salaries, rent, insurance,   loan interest and principal, utilities, and  maybe you've got maintenance on the building   that you're responsible for. All of these have  to be figured into your cash flow analysis.   Where are you going to get this money? A lot  of the time that comes from personal savings.   If you're wanting to go out for a loan, lenders  tend to think that you have... you should

carry 20 percent of the business skin in the  game if you will. You're investing your own money   before the lender agrees to come on board so  you'd look to see where can you get the money,   what have you got in terms of personal  savings, what... how about family and friends,   what about family equity. Maybe...  maybe you own a a home that's got   15-20,000 value in it that's not encumbered by a  loan. That can be pledged towards a lender's...

you also look to see if you need a partner, what  those partner's contributions are going to be   and what the partner is going to be responsible  for. I... we strongly recommend if you do take a   partner, that you have a partnership agreement  and the last paragraph reads something like,   "in case you agree to disagree, here's how we're  going to split the the business up." You can,   as the business makes money, retain the profits  and help the.... that's a major source of capital. Debt does not signify ownership. Banks, credit  unions, community express micro loans, these are  

all these can usually be guaranteed by the SBA,  Small Business Administration. SBA does not loan   money but the lenders go to the SBA and say, "We'd  like the SBA to guarantee a portion of the loan." And if SBA takes a look at your  business plan and says, "Yep," then the bank can offer you a loan. It will  be at a little higher interest,  

maybe a percent and a half or two percent  above what their best prime customers can get. Also, we do not recommend using credit cards.   Many credit cards have 20, 22, 25 percent  interest on them and it can you can really   dig yourself in a deep hole using credit  cards to finance your business. Next.

Lenders have their own way of looking at  people and sometimes it's referred to as the   five Cs or the six Cs, but they're interested  in your character, your commitment,   your ability to repay the loan,  what kind of credit rating you got.   If your FICO score is below 700, you're  probably going to encounter some resistance.   They're going to want to see how your cash  is going to flow, how they're going to get   repaid for providing that. What kind of collateral  capital are you willing to invest in the company? What's your industry knowledge,  what's your personal investment? Also, they'll look at your last three years  of income statement, see what your financial   history is. We mentioned FICO. They're going  to look at those financial projections and   have questions about... why they are what they  are. They're going to look at you as the manager  

saying, "What management skills have you got and  how do you compare to the competition?" Next. Cash is king. It's been said time and time again.  It's your most important small business asset.   Open a separate bank account for your  business. Deposit all the receipts. Now,   "all" is in bold and caps. You want  every nickel, every penny to go into the   account, into the bank account. If you need small  amounts of cash, then use a petty cash fund.   Separate the sales receipts on your books,  the sales tax receipts because those tax...  

that taxes are not... do not belong  to you, they belong to the state.   Hang on the cash as long as possible, reconcile  your bank account monthly. Again if you're really   busy, you might... you could use the services  of a bookkeeper or a C.P.A. to do this for you.

If it's a C.P.A., he may even have a few  recommendations on how to improve things. Hang on to the cash as long as possible.  Have adequate cash and reserve fund at the   start of the business. You know you're not  going to be profitable for a couple months   and so you're going to be dipping into that  reserve fund until you start to show a profit.   Prepare and maintain a cash forecast  for at least six months in the future.  

We recommend on the business plans that you do a  cash projection month by month for the first year,   quarter by quarter of the second year,  and then a third year projection.   And as you finish one month, look at  the actuals and compare that to the...   your projection. Does it need to be adjusted  for future months or are you on track? Next.

Business plan basics. Next. It gives you an objective view. You'll find when  you're sitting down, sit down and write it out   that it you ask yourself a lot of questions and  it then becomes the foundation for doing your   planning. It is a very powerful management  tool, it tells key people like your banker,   your partners and people like that, your  family what you expect to happen and when   and then you can compare to what actually happens.  It communicates your owner's ideas. Basic plan...   excuse me, business plan: contents... table  of contents, executive summary usually half   page to two pages. Anything more than two pages  and most bankers, lenders will just simply say,  

"I'm not interested in reading a book."  Section one talks about the business,   section two is financial forecasts, and section  three are the supporting data that you might   need. If you're starting a store, you may have  a floor plan sketched out, you may have a...   a sample lease agreement on property that you  want to lease. Any number of things that...   and also in supporting data goes your resume  and any other key management resumes. Next.

The executive summary. Like I say, keep  it short, sweet. It says summary, please.   Brief description of the business, how much  do you want to borrow, how will it be used,   will you... whether you'll seek a loan  or you're going to go to investors like   crowdfunding, angel investors, things like that.  And a big one: when will you repay the loans,   when will you start repaying them and when  do you think you will have it paid off. Next. This is the section on business.  It's a description of your business,   your product, your service. How  you identify the market need,  

where you're going to be located whether it's  going to be at home or it's going to be in a...   a nice location, who's the competition. And you'd  preferably not like to be next door to them. Who are the key management and personnel   involved with this business and how are  you going to use the new funds? Next. Target market. Is it large enough  to be profitable? How is your   product/service differ better? What  is your unique selling proposition? How does a customer identify your product  in relationship to the competitors? How   is the market reached? That gets into actually  developing a market plan and saying here's who...  

these are the type people that are my customers  and this is how I'm going to get there. What   costs are involved in reaching those customers?  What is the required pricing to make a profit?   Your old buddy Joe comes in  says, "I can get it for 10,   15 percent less down the street."  How are you going to respond? Who are your competitors, where are they located,  what are their pricing marketing tactics? Can you   do better in some, can you do better in  both... in all of them? Good luck. Next. [coughs] Market plan data sources. And John's going to  carry the ball on this one in a little bit but   data you need is most likely available. And  the trick is there's a lot of noise out there  

and you've got to sift through that to find  the key data points that you're looking for.   You can contact your chambers of commerce.  Banks are a great source of information.   Civic organizations. U.S. Census data has  gone overboard in trying to work with us.   There's a small business portal that'll help  you find the information you're looking at.  

Internet. If you're going to be working online  business, google the heck out of the competition   so you know what... what's out there, what are  their policies, things like that. Libraries are   a wonderful source of... of information and as I  said, John'll cover that shortly. Also if you're  

in a particular trade, if you're in the restaurant  business, the hotel business, if you're in any... any organization that  has... excuse me -- [coughs] -- a national or state association, they can  be a very good source of information. Next. Financial forecasts. What are you going  to need in terms of capital equipment?   What are the income and expenses  associated with your business? How...   what kind of assets and liabilities and  equity? These are things that you put together   perhaps with the help of a bookkeeper or C.P.A.  or... any way to get your business identified  

and show that you know what you're  doing in terms of making a profit.   Probably do a break-even calculation and we  can help you with that. Historical records... has to do with... if you... if it's an  existing business, you can look at the  

last three years. Beware: look to see what  the owner has taken out of the the business   and is he going to continue to do so  if if he carries the loan on it? Next. Review. We've buzzed through this. We've  talked about the myths, we've talked the   business opportunities, assessing your  own journey. What do you... how do you   see you... how do you see yourself in three or  five or ten years? What kind of organization,   what kind of insurance, what kind of regulations  are you going to have to be conversant in? Do you   have opportunities to find funding and what's  your experience in terms of cash management? Business and marketing plans are key. If you  put it down in writing, then you can come back  

and compare to it and that customer that comes in  says I can get it 15 percent less down the street,   you'll know what that does to you in  terms of your making a profit or not.   If it's not, maybe you want to  buy from the guy down the street,   who knows? And we also talked a  little bit about next steps. Next. Now what? Okay, next.

We've gone through the startup basics  module rather hurriedly I will mention, and   you can go back and look at the recording  of this presentation or number two,   you can go out to, search for "simple  steps" and it'll bring these five modules up   so you can watch them in the convenience  of your home. It comes with its own   student workbook and a couple examples on  business plans and things like that. Next. This URL will take you straight to the  link to handouts, workshop materials,   and lots of other additional resources.  SCORE... also has a number of   financial templates that you can download. Many of  them have already got links built in them so you  

and put a number in one place and it pops  into... into several different areas. Next. We've got more workshops coming up this spring  and we're going to cover those shortly. Next. Okay. At the library, next month we'll be talking  about the essentials of your business plan.   You're welcome to attend and the  reservation line is open already   and we'll go into more depth  in terms of business plans. March 27, we talk about  business plans for non-profits.  

They're a little different and we have  a a new mentor, Cindy Miles, who's the   executive director of Kansas non-profits  will be presenting this and she has a lot   of non-profit expertise to share. Finally,  we'll get into talking about marketing 101. Each of these at the Library includes an  overview on the Library's research and   small business reference databases and John  Cleary does a very fine job providing that. Also coming... these these are organized...  these workshops are organized because we used   to do them face-to-face and we continue to keep  that format because back when we scheduled them,   we were expecting that COVID would be behind  us. But we're going to continue doing Zoom   format probably for this next six months.  Hopefully we'll be able to resume the  

in-person. Derby, okay, and Simple Steps  series. We're actually going to do the   same workshop that we did now as well as the one  in defining your business, the market research and   planning, financial projections, funding sources,  and... and we'll have a representative from SBA   there to talk about access to capital.  You can register through Maize rec or   ultimately we'll be advertising it and  we'll be sending out information on them. Next.

Cowley County has come on strong this December  and January and has asked us to do a number of   workshops in their area. These are Zoom  workshops still and so you're welcome to   sign up for them and participate. Coming  on February... February 4, "Am I an Ideal   Candidate for Franchising," will be... Megan  Stanek from Kansas City will be presenting that  

and she'd like for people if they're interested in  franchising to go ahead and take the professional   franchise assessment and she can discuss that in  more... more detail February 4 and February 8.   Bill Ellison will be talking about  marketing and competitive spaces   and then we'll have on the 24th, business  structure and tax considerations. It's heavily... structured towards Kansas but the same business  structure applies throughout the United States. And next. And one more, John.

JOHN:   All right, thank you Ron very much for  your information. SCORE is a wonderful   partner to the Library providing these free  workshops and I heavily recommend that you   contact Ron or one of the other  SCORE mentors that can help you   through your path, your journey through your  business startup and growing your business   and help you avoid the pitfalls and so  please, please make use of their experience. RON: There was one question in the chat and  said would the PPT be available after the class?   The class is being recorded and the Library will  make that available in their YouTube in the very   near future. I put on the chat if you want to  do a copy paste, this is the latest on the... PPP, the SBA payroll protection program if  anybody was interested in that. Thank you, John. JOHN: Yes, are there any other   questions in the chat that we need to  address before we switch gears here? Okay, then I'll continue. My name is John Cleary.  I'm one of the business librarians here, been   working with small businesses for over 25 years  helping find market research information and help   fill out their business plans. The Wichita Public  Library has both print and digital resources for  

all aspects of small business. This is going to  include books on starting your business, business   plans, marketing, accounting, management and all  other aspects of business. We also have some great   electronic databases for business. We're  going to be looking at the AtoZ database,   the Small Business Reference Center, and Business  Source Premier. And then library staff is   available to apply their knowledge in helping  you with market research for your business,   helping find lists of competitors, lists of  potential customers, sales leads, sample business   plans. We have some great business directories  and can get you detailed business profiles.   We also can help you find business articles from  trade journals and industry magazines. So we have  

a wealth of information and we encourage you to  use it. If you don't have a library card, I highly   recommend you get one. They're free, you can  get one at any library location around the city.   With that library card, it'll have a library  barcode on the back and with that and the last   four digits of your phone number you'll have  access to all of our electronic resources.   And I'm going to spend the last 30 minutes or  so here showing you those resources and how   they can help you find market research, business  plan information specifically for your business.   So here's the Research Tools at the top of the  Library page. So when you click on Research Tools,  

it'll take you a list of all of the  Library's databases. Scroll down to   where it says "view all databases" and you'll  have an alphabetical list of them and there's   several dozen databases we have available, but  the ones I want to focus on are our business   databases today and AtoZdatabases. AtoZ is a  company out of Omaha, Nebraska that compiles   business information as well as consumer  information and they repackage it and put   it in a nice, searchable database for customers  to research. At this point when you're clicking   on the AtoZdatabases link, it's going to ask you  for your library card number and the last four   digits of your phone number and when you do that,  it'll take you straight to the AtoZ database.

This is the main search screen and  you'll see you can search for a business.   They contract with so they have career  and job searching available as well. It also has   all the phone directories all across the country  so you can search for people by name, by address,   by telephone number. Some of their other services  they offer is a residential database which covers  

240 million residents. Information is valuable,  especially when you're starting a business.   Google compiles all kinds of information on  individuals. Whenever you fill out a warranty   card, it compiles information, puts them into  databases. So lots of information, anything...   any time you purchase something from,  gets tracked and put into these market databases   and AtoZ compiles all that and makes them  available for searching for business purposes. So  

you can also use this tool as a business  search lead so you can get sales leads,   find new customers, and grow your business by  finding which new businesses are opening up,   when new movers have come to your area, also  new homeowners and you can look for existing   businesses that could become your customers,  so business to business opportunities.   You can outreach to your local community so  you can find out all the businesses that are   in your neighborhood or nearby. All of your  competition as well. If you're looking to   open or expand locations, AtoZ can help you find  the best location by finding nearby competitors,   finding the area population, income, and  where the new businesses are popping up.   You can also form business alliances using this  tool so you can find other businesses and see if   you want to partner with them, find out common  markets and common locations and you can get a   complete list and contact information using this  database. So let's take a look at how this would  

work with the 240 million residents.  We'll go ahead and click "get started"   and we'll pick a geographic location. We'll go  with Wichita so we'll pick our state, Kansas and we'll select Wichita. Add that to our selection criteria.  And for example, if you have a... insurance sales business and you're  trying to target certain individuals,   you can search by age so if you want  to target everybody 65 and older,   you can click the "65 to 69," "70  to 74," and "over 75" categories.  

And just to get an idea of how many people are  in Wichita for... for insurance sales purposes,   we'll click on "update count" and it finds  over 78,705 individuals that meet that criteria   and when you hit "search," it brings  up a list of all of those individuals.   You might want to go into this database and put  your name in here and see what it says about you.   When you click on the person's name, it's going  to give you their full name, their address,   a Google link, maps and directions so you can  see a picture of their house and their their   front yard, flowers. It also gives their  telephone number if they have a listed landline.  

Unfortunately, cell phone numbers are  not available. Those are are not publicly   available and released by Verizon and some of  the other large cell phone companies. It has   the length of residencies so it tells you how long  they've lived there and also gives you their age   and then it gives some census information over  here, what their estimated household income is,   their home value, also lists their neighbors as  well. So again you can go into this, put your   name in here and find out who your neighbors are  and all the things that AtoZ has available on you. If you want to revise your  search, you can just go back   and you can search by any of these parameters. You  can search by estimated household income so if you  

want to target high net worth individuals, you  can do that. You can search by homeowner status,   whether they're homeowners or renters, that's  an option. You can search by marital status   and one of the neat things I like is interest  hobbies and lifestyles. You can go in and have   a list of all kinds of interests, hobbies that  people are into and really track where where   these people are at. I've used this tool to help  customers find all the motorcycle owners in their   zip code or all of the people that are pet owners  for dogs and cats. You can do that under animals   here. So you can really narrow down just about any  kind of interest or hobby or product or service  

and find out exactly where those people are at,  not only here locally but all over the country.   So this is a very powerful tool. It takes  advantage of all that information that   Google compiles and Amazon compiles and puts  this into a searchable consumer database.   We're going to go back to the home screen. I also  mentioned new movers and new homeowners. If you   have a product or service in your business that  would benefit somebody that just recently moved,   you can get over 350,000 new movers and  homeowners that are added weekly to this database.   If your product or service could benefit a new  business, somebody's just started in business,   if you have a bookkeeping service and somebody  needs bookkeeping help, you could target   the new businesses this way. Over two million new  businesses are added throughout this database.  

If you have a product or service that could  benefit the medical field or a health care   professional, there's a specialized database  of 12 million health care professionals   and you can search by specialty -- whether  they're surgeons or dentists or psychologists   or chiropractors -- this will have their state of  licensures and... and all of the information about   the health care professions. And then finally  here is the 30 million businesses that have   mailing lists, sales leads, emails, and it allows  advanced searching. We'll take a look at that. Here on the left side is all of the different  parameters that you can search by and I'll do   a couple of sample searches so you can  see what a business profile looks like.   Let's take a look at...

we'll go to keywords and put in "auto  wrecking" for auto wrecking and towing business and let's do that here for  Wichita so we'll select Kansas. Wichita. And get a list of some of the auto wrecking  and towing businesses here in Wichita.  

So if you are getting into the towing business  and wanted to find out who your competition   is, you could use this as a tool to find out  more about them and how big the market is.   So here it has their name, the owner or  manager's name, the address of the business,   telephone of the business, and what their sales  revenue is. And if you go into an individual   business like Bud Roat Towing and Repair  here, this is what a typical detailed   profile is going to look like on each of these  30 million businesses that are in this database.   So it'll have the formal business name,  where they're physically located as   well as a Google map link so you can find  directions to them, their telephone number.  

Gives you the owner's name is Mr. Bud Roat.  Their main line of business: auto service and   repair shops and they do tows all over Wichita.  Takes you to their website,   Also gives you their number of employees, so  they have approximately 80 employees and their   sales revenue last year was around $780,000. This  business has been in business since 1978 and they  

are a private business. This database has both  private companies as well as public corporations.   It includes a business credit rating so if you do  any business, you can find out whether they pay   their bills on time. In this case, they have an  excellent credit rating so they pay their bills.   Ron mentioned industry... industry codes and  this is very useful when you're trying to   find out who your competition is and find  out how big your market is and doing your   market research. So S.I.C. codes, that stands  for standard industrial classification codes.  

What these are are four digit industry codes  that represent all lines of business so 7539   represents automotive service and repair shops.  7699 represents locks and locksmiths so they'll   help you get your... in your car when you locked  yourself out. And then 5015 is automobile wrecking   so they'll tow your your vehicle as well. So these  are where you'll get your industry codes and you   can search from that advanced search screen by  industry code to find out all of the businesses   that are in your industry so that way you can  find out what the market... how big the market is,   how much sales revenue is involved in that  market so a good way to do your market research   and build your... flesh out your business  plan. The codes right below that, the NAICS  

codes they call them are the North American  Industry Classification System codes. They're   a little bit longer number, it's fairly similar to  S.I.C. codes but they include a lot of the newer   businesses, especially web-based businesses  that have happened in the last 20 or 25 years   so things like your Googles, your Amazons, your  eBays, those kinds of online database or online   companies are included in the NAICS system.  Also in the profile you'll have a Q.R. code   so you can quickly add this contact business to  your tablet or your telephone, your cell phone.   Next is your area competitors so this  goes into some of the other towing and   auto repair businesses that are competitors of  Bud Roat. And again you can go into each one of   these to get their detailed profiles and find  out more information about those businesses.  

Over here is your historical sales revenue  trend, so you can see the towing and repair   business has been good over the last four or five  years. We've got steadily increasing revenues   shown and also gives a sales growth percentage so  if you are getting into this business it will give   you what the sales growth percentages are for your  business plan. Likewise with the employee trends,   they have hot... been hiring employees over  the years so this is a growing business,   growing industry and it shows the percentage of  employee growth over the years. One of the other   tools that use this is nearby businesses so if  you have an existing business that you have, you   can find out who the... nearby businesses are that  you may want to partner with or you can also do... reciprocal sales with the  businesses around you as well.  

And then finally down here it has the estimated  annual expenditures for the business and all   of these major account business areas  so things like accounting -- this is   approximately an estimate of how much they  spend annually on accounting -- advertising;   business insurance; their legal expenses;  their office equipment; their annual rent;   how much they spend on PCs and technology, their  telecom, and their utilities. So you can use some   of these numbers as rough guides if this is a  similar business to what you're wanting to start   as to what you could put on your business plan  on what your expenditures might be for the year. Over here on the bottom, it gives the  owner's name. Sometimes it will give the  

email addresses for different owners  and managers and executives as well.   And this is a fairly new area, this internet  presence but if they have a website, Facebook   page, Instagram, something of that nature,  they'll have the links to those links there.   So that's what a typical profile  looks like. At any time you can   download to a flash drive, you can print  these, you can email these results to yourself.   So very, very detailed information  and a good way to do market research So let's go back to the results.  I'll show you quickly how you could  

take this list, you would check at the very top  here to select all the records, come over here   to email, put in your email address, what the  file name is so this could be towing businesses.   It allows you to send it in either  PDF format like we just looked at   or you can put it in Excel format so if you  wanted to total all of the sales revenues   for example to get a total market value for  here in Wichita, you could do that with the   Excel format. And then the comma delimited  version puts it into something like Google   Sheets or some other spreadsheet format formula  other than Excel. You can do the results view   which is what we're seeing here on the screen:  nine results, or you can do the detailed view on   each one of these so the detailed profile or you  can choose your own custom level of detail on...   if you just want the sales revenue and number of  employees for example. So that's how you can email  

them, you can also print them, and again download  to a flash drive. Let's do another search. Again, here's the different parameters you can  do geographically by state, city, metro area,   county. You can even narrow it down to zip  code and address. You can also do what's   called a map-based search so if you want to  have all the businesses in a certain zip code   or within a certain radius of where you  live if you have a home-based businesses,   you can do a map-based search. Business keyword  is just what it means. It's similar to the yellow  

pages. You can look up any kind of keyword or  business type here. You can also look up industry   groups, home-based businesses and then these are  the S.I.C. codes and NAICS codes that I mentioned.   That's where you can put in your four-digit  code or your five-digit NAICS code   and bring up all of the other similar businesses  to yours. You can also search by business name,  

whether they have email in the profile listing or  not, you can search by employee size. So if you   want to hit all the mom and pop businesses, you  can choose one to four employees, five to nine.   If you want to target mid-sized businesses, you  might look at a hundred to five hundred employees.   Or you can search very large companies, ten  thousand or more. Those are going to be your  

large public corporations. Likewise, you can  search by sales revenue so if you want to hit   small companies, usually sales from zero  to a hundred to... a half million a year,   half a million to one million a  year, or your very large companies:   500 million to one billion and more. So a  lot of different ways to search the database.  

If you have a women's specific product or  service you can search by women owned businesses   or you can... if you're targeting men, you  can exclude women owned so just target the men   owned businesses. So if you have a product that  targets women or men owned, that's an option.   Public or private companies: if you want  to deal just with private companies and no   public corporations, you can choose that as  a selector. You can select a small business   indicator, whether it's a small business or not.  Also whether it's a franchise or business or not.  

And then some of the other ways you can search are  how long the business has been in business so if   you want to target new ones or ones that have been  in business for 15 years or more, you can do that.   The estimated annual expenditures. If you have  a PC business and want to find out how many   computers they have, that's an option. You  can search by credit rating, so poor, fair,   excellent credit ratings. You can target Fortune  1000 companies if you want to hit the big   public corporations around the country. This  also allows you to search for non-profit   organizations so if you're working with the  American Red Cross or the Kansas Food Bank or   any of the local non-profits, you can use this as  a delimiter. You can search by county population,  

find out where the people are at. Manufacturing  indicator, whether this is a wholesaler in   manufacturing. You can also look at either import  or export businesses. What the gender is of the   executive of the business. Whether they have a web  presence and a web URL on the detailed profile.   Website name, square footage of the business  and then number of PCs. So really the sky is  

the limit as far as searching this database and  how you could use it for your product or service   both to do your market research and  to flesh out your business plan.   I'll show you another tool that I've used  here. I'm going to put in the attorneys,   so I'll select "attorneys" from the list and  again I'll go with Wichita. I had a company that   was starting a janitorial services and they wanted  to focus on all of the attorneys here in Wichita,   so we used this tool to quickly find   a list of all of the attorneys and market the  services directly to them. So once you have   your attorneys in your business type and your  geographic location, you can update count and   it finds 821 attorney firms and it's going  to rank those by largest to smallest here.  

So here you have a ready-made marketing list  to market all of your janitorial services to.   So Stinson Leonard with between 100 and 500  million is going to be the largest in town.   Foulston Seifken is another large attorney firm  here in town. But again, a way to create your   own custom database would be to select these so it  selects the first 25, then you can go to page two,   select the next 25, so on and so forth.  And once you have all the results you want, then you can again save them to your flash  drive, download them to your computer.   You can print them if you want a hard copy  or you can email the results to yourself.  

So it's a great tool to do marketing  leads and sales leads list.   If you're doing business to business sales  leads, just a wonderful tool for that. We'll go back and look at the home screen and  tell you a little bit about the data quality,   where they get their information. I mentioned  a little bit about companies like Google and   Amazon that track what you buy and what you  search for and what you're interested in,   your hobbies when you're looking at pets and dogs  and cat videos, that sort of thing. They take   all of that information but they also use annual  reports that are put out by public corporations,   the S.E.C. -- Securites and Exchange  Commission -- has the EDGAR database   filings which is public information for  detailed business information on corporations.  

Corporate registers and directories.  Public records so things like your   public deeds office and court records. They  also use the national directory assistance data,   thousands of yellow and white pages listings,   and also business directories that are marketed to  libraries that we have a lot of in our collection.   They do a lot of telephone verification so on  over 80 percent of these businesses, they will   call and talk to the manager or owner to verify  the information before they publish it. They   also do what's called deep web mining so they'll  do... search websites, they'll search databases  

to dig out that information to add to  the database. They're also connected to   the national change of address system which is  when you fill out a card with the post office,   when you're changing addresses, that's how they  compile new addresses for both apartment movers   and people that have moved to new homes.  The database information on the residents,   they get that information from sources like  the national directory assistance data,   real estate deed and tax information for when you  purchase a home. Voter registration data is also   public and can be put into these databases. Mail  order data, whenever you fill out a mail order,   that gets put in. Warranty cards. If you buy a  product like a appliance and you fill out the   warranty card, a lot of that is compiled and also  put into these databases. So that's where they get  

the hobbies, interest, and lifestyles area where  they know whether you're into motorcycles, boats,   dog/cat owners, gardening, all of that information  is compiled and put into these types of databases.   Also the jobs database, they partner with so they have current job listings   for part-time work, full-time work, temporary  positions and contract work. So if you don't have  

enough experience in... in your business and want  to get some experience you may want to look at the   job section first before you plunge into business  ownership. New businesses with... that register   with the secretary of state, that's where they  compile the information on new businesses so you   can find out who has opened up a business in the  last year or two if you have a product or service   that would benefit a new business. The new movers  and new homeowners that are added weekly again are   done by the post office change of address system  and also the public register of deeds when people   purchase new homes. That's why when you move into  a new home, you'll always get lots of mail for  

lawn mowing services and snow shoveling services  and homeowners insurance and car insurance.   That's where they get this information, find out  that you've just purchased a new home and need   services and products. And then the healthcare  databases, all healthcare professionals are...   required to do state licensing filings. There's  also information with the United States D.E.A.  

information and the national provider directory  files for all doctors, chiropractors, health care   people in general. So that's where the 12 million  listings for the doctors and physicians come from.   Also they have introduction videos so this talks  a little bit about what I've talked to you on   this particular program, but you can view the  introduction videos on helps and tips to search   the database. They also have frequently asked  questions if you have questions about where they   get their data, how to do a better search.  During the week they'll have a little chat   icon in the top right corner here which allows you  real time chat to talk with an expert from AtoZ   that will answer any question you have during your  searches or how to have more productive searches.   They also do AtoZ university live training  webinars so six times a week you can register   for a training session if you want more in-dept

2021-01-29 09:07

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