Bing Bang! First Steps to Starting your Business
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The document provides a 6 step process for starting a business which includes developing an idea, assessing personal finances and credit, creating a business plan and budget, formally registering the business as a legal entity, and obtaining necessary licenses and permits. It also discusses factors for securing a loan like collateral, credit score, capital, character, and capacity to repay. The steps are described in detail providing guidance on tasks within each step.
Bing Bang! First Steps to Starting your Business
- 1. BING BANG! First Steps to Starting your Business
- 3. How to start your OWN Business?
- 5. 6 STEPS 1. IDEA 2. PERSONAL FINANCES 3. BUDGET 4. PLAN 5. FORMALIZE 6. MANAGEMENT
- 6. 1. IDEA Personal •What type of business do you want? •Am I ready for the investment of time and money? •Am I ready for the responsibility? • Impact in my life style • List of advantages and disadvantages
- 7. PERSONAL INVENTORY OF YOUR SKILLS AND EXPERIENCE What: I know, I should know, I need to learn • Product/Service • Industry • Operations • Promotions/Sales (Language) • Financial Records • Legal Aspects
- 9. Important Factors for Securing a Loan Collateral Credit Score Capital Character Capacity to repay Conditions
- 10. Credit Score • What is credit? – An asset that allows you to access many different resources, both financial and non-financial – A point system between 300-850 that reflects your history of repaying your debts and how you manage your credit • Why is credit so important? – Financial institutions use your credit score to determine if you qualify for a loan, the interest rate you will pay, and the term of the loan. Employers, educational institutions, and landlord are other parties that may use your credit report. – Your business partner’s credit report plays a role in securing financing
- 11. Payment History 35% Balance on Accounts 30% Length of History 15% New Debt 10% Types of credit 10%
- 12. Capacity • LEDC takes a holistic look at your ability to repay a microloan • If you are a start-up business, do you have an additional source of income that will support you during the initial start-up phase? • If you are an existing business, what does your historical data show and how will these profits be maintained? Do your business financials show positive cash flow and a positive net equity?
- 13. Capital and Collateral • Capital: How much of your own money have you invested in your business? (Your owner’s equity) • Your owner’s equity or contribution represents your commitment to the venture • Collateral: a third source of repayment. • LEDC secures loans with lien-free car titles and business assets
- 14. Character and Conditions Character • Thorough understanding of your business model • Clear articulation of size and purpose of loan • Straightforwardness about financial situation • Number of years of industry experience • Quality of references Conditions Current economic climate of industry in which business is operating
- 17. 4. PLAN • Write a business plan • Why? - Organize your ideas - Focus your efforts - Create a common vision (partner) - Ask for financing - Gain confidence of the viability of your business- sustainable - Maximize your chances of success
- 19. $10 martini-and-manicure special—which starts at 5 p.m. nightly and continues until 11 p.m. or later These fish can completely get rid of skin smear and aging cortex
- 21. 5. FORMALIZE 1. Register de business/Legal entity 2. Register with the IRS for taxes at the federal level 3. Register to pay state’s taxes 4. Licensing and permits
- 22. • REGISTER YOUR BUSINESS The Dept of Consumer and Regulatory Affairs www.dcra.dc.gov • 941 North Capitol Street, NE, Washington, DC 20002 • Tel: 202-442-4400 • GET A FEIN • Register your business with the IRS to pay taxes to the federal government and to open a bank account. For more information visit: www.irs.gov • STATE’S TAXES FOR DC • Register with OTR (Office of Tax &Revenue) www.otr.cfo.dc.gov • LICENSES AND PERMITS Department of Consumer and Regulatory Affairs www.dcra.dc.gov
- 24. 6. MANAGEMENT Insurance Consultants Update your abilities
- 25. • Marla Bilonick • mbilonick@ledcmetro.org • 202-540-7412 • Rossana Espinoza • respinoza@ledcmetro.org • 202-540-7416