October 19, 2010

ROANOKE REGIONAL

ADVENTURE TOURISM

WORKSHOP

Are you sure?

What Do These

Entrepreneurs Have in

Common?

Confidence?Competitiveness?

An Idea?

Drive?

Identified Market Need?

A Planof

Action?

Willing to take Risks?

Focused?

Goal & Objective?

A successful enterprise

Remember as a start-upyour place in the food chain

GET PREPARED…DO YOUR HOMEWORK OR……..

Small Business in Virginia

Virginia is for Business Lovers

Small Businesses constitute 97% of all Virginia businesses.

Small Businesses create over 75% of all new jobs.

Small Businesses account for half of the Commonwealth of Virginia’s contribution to the U.S. Gross Domestic Product - a whopping $160 billion.

Virginia is for Business Lovers• Virginia ranked #1 state for business by

Forbes.com last four years.• Ranked #1 most business friendly state by

Pollina Corporate Real Estate, Inc. last two years.• Named #1 best states for business by CNBC.• Virginia among top 10 list of states friendly to

small business.

Virginia Business Start-ups

Source: Virginia Employment Commission,Quarterly Census of Employment and Wages (QCEW)

How to Start and Operate A Business

Success FormulaSuccess Formula

+ GM

GP

+ D + ECS

= $$©

© RRSBDC 2010

Will Your New Businessor Expansion Idea Work?Will Your New Business

or Expansion Idea Work?

• Write a business plan and see if the idea makes sense

• Open up a business or start a new product or service and hope you made the correct decision

Guess which one has thegreatest chance of success?

© RRSBDC 2009

Business Success RatesBusiness Success Rates

© RRSBDC 2009

66%

44%

31%

0%

10%

20%

30%

40%

50%

60%

70%

After 2 Yrs After 4 Yrs After 7 Yrs

Yrs in Operation

Percentage of Businesses Still Operating

Writing a business plan increases

your chances of success by 25%.

Why do I need a Business PlanWhy do I need a Business Plan

• Forces you to do the necessary research

– About your business idea

– About your business expansion idea

• Gives you a written plan of action for future

• Required for investorsor bank

© RRSBDC 2009

Why do I need a Business PlanWhy do I need a Business Plan

The Business Plan is:

– Not just for start up businesses

– Not just for businesses looking for capital

– Every business should do oneevery year

© RRSBDC 2009

What goes into a Business PlanWhat goes into a Business Plan

• Executive Summary *• Description of Business• Definition of Products and/or Services• Market Analysis and Marketing Plan *• Organization and Management Team• Operational Plan• Financial Statements and Projections *• Appendix* Most Important

© RRSBDC 2009

Marketing Research – 9 Step ProcessMarketing Research – 9 Step Process

1. What is the (new) product or service you want to sell?

2. Is there a demand for this product?

3. What is the state of the industry? (product life cycle)

4. Who are your competitors? (do a competitive analysis also called SWOT)

© RRSBDC 2009

Marketing Research – 9 Step ProcessMarketing Research – 9 Step Process

5. Who is your target market? (Demographics & Psychographics)

6. How will you position yourself in the market?

7. How will you price your product?

8. Where will you do business?

9. How will you reach your market? (specific marketing, advertising & marketing calendar)

© RRSBDC 2009

Creating Your FinancialsCreating Your Financials

What you will need:

• Income Statement Projections– 3 years

• Cash Flow Projections – 3 years

• Balance Sheet – 3 years

• Break-Even Analysis

• Start-up Expenses

© RRSBDC 2009

Steps to Openingand Operating a Business

Steps to Openingand Operating a Business

© RRSBDC 2009

Steps to Opening a BusinessSteps to Opening a Business1. Determine legal entity

2. Check name availability with SCC (trademarks also)

3. Check to see if a URL is available (www.internic.net – click on whois)

4. Register with the SCC your corporation, LLC or/and fictitious name (www.scc.virginia.gov)

5. Get your FEIN with the IRS (www.irs.gov)

6. Register with VA Dept of Tax and V.E.C. (www.tax.virginia.gov)

© RRSBDC 2009

7. Check with Dept of Professional & Occupational Regulation to see if you need any special permits. (www.dpor.virginia.gov)

8. Obtain Business License from local Commissioner of Revenue

• Other permits/licenses – ABC, Health Dept, Meals/Lodging/Entertainment taxes

• Local fictitious name registration with courthouse

• Insurance – liability, workman’s comp, etc.• Trademarks, Service Marks, Patents,

Copyrights• MAKE TONS OF MONEY© RRSBDC 2009

Steps to Opening a BusinessSteps to Opening a Business

Reasons Why Businesses FailReasons Why Businesses Fail

• Insufficient Capital: lack of cash flow

• Inexperience in the business

• Poor customer service

• Lack of a business, financial and marketing plan

• Ignorance of the market and competition

• Failure to adjust to the market

• Change in economic conditions

• Failure to properly maintain records

• Poor location

Financial ManagementFinancial Management

• Use a computerized bookkeeping system• Separate bank account for trust fund taxes• Run Financial Statements monthly

– Balance Sheets and Profit & Loss• Analyze statements each month

– Compare period to period – benchmark to other businesses

– Look out for major discrepancies– Check your pricing & competitors regularly

• Don’t let one person do all accounting– Send bank statement to home – leave unopened

• Make tax deposits & tax filings on time– Estimated tax payments

• Don’t try to do it all yourself

Maintaining the Entity Integrity• Setup before business starts• Setup separate bank account• Do not mix personal & business funds or

bills• Sign all contracts & leases in entity name• Sign everything as owner/president etc.• Put insurance in company name• If corporation have annual meeting and

maintain minute book

© RRSBDC 2009

Choosing the Right Legal EntityChoosing the Right Legal Entity

Liability Protection Exclusions

• Personal Guarantees – notes, leases, vendors

• Negligence• Failure to pay IRS payroll taxes• Fraud

© RRSBDC 2009

Choosing the Right Legal EntityChoosing the Right Legal Entity

Facts about Small Business LoansFacts about Small Business Loans

• You will need good credit• There is no such thing as 100% Financing

• You will need to put in 10-40% cash• The bank will require a personal guarantee• Startup businesses are hard to finance• The process is not quick• Most business grants are myths• The SBA does not lend money• 75% of all new businesses starts with capital from owner/friends/relatives

¨ Must be for profit¨ Not engaged in lending, real-estate

development, ¨ investments or speculation

¨ Must have a sound business purpose¨ Good Credit www.annualcreditreport.com¨ REASONABLE Equity Investment

SBA General Eligibility Criteria

Financial Assistance Financial Assistance

U.S. Small Business Administration

U.S. Small Business Administration• 7(a) Loan Program

¨ Express Loans – up to $350,000¨ Community Express Loans – Borrego

Springs Bank. www.borregospringsbank.com up to $50K

¨ Patriot Express – up to $500,000¨ Term Loans – up to $2,000,000

• 504 Loan Program¨ Real Estate and Fixed Assets

• Micro-Loan Program¨ Up to $35,000¨ Handled locally by Business Seed (TAP)

• Roanoke Regional Small Business Development Center

• Mission – Provide no-cost professional business counseling, training & information resources to help start, grow and strengthen Virginia Businesses.

• Staffed by paid full-time Professional Counselors

© RRSBDC 2009

How Can Our Services Benefit YouHow Can Our Services Benefit You

How Can Our Services Benefit YouHow Can Our Services Benefit You

Through one-on-one Counseling, we can help you with…

• Development of Business Plan

• Market Research

• Development of Marketing Plan

• Workshops

• Government Procurement

© RRSBDC 2009

Through one-on-one Counseling, we can help you with…

• Technology

• Loan Application

• Source of Business Financing

• Financial Analysis

• Permits, Licenses and Taxes

• Counseling is at No Cost

© RRSBDC 2009

How Can Our Services Benefit YouHow Can Our Services Benefit You

Local OfficeLocal Office

Roanoke Regional SmallBusiness Development Center

210 South Jefferson StreetRoanoke, VA 24011

(located inside the Roanoke RegionalChamber of Commerce building)

540-983-0717www.rrsbdc.org

Growing Your Business/Marketing

Strategies

Tourism Business Development &Marketing Assistance

Randy RoseDevelopment Specialist – Partnership Marketing

Virginia Tourism Corporationrrose@virginia.org

276-322-2044

www.vatc.org (industry)www.virginia.org (consumer)

• Virginia Tourism Corporation Overview• Tourism Business Opportunities• Marketing Your Small Business

Impact of Tourism in VA - 2008

• 19.2 billion in revenue• supported 210,620 jobs• provided $1.28 billion in state and local tax revenue

Virginia Tourism Corp. Services

• Advertising• Customer Service & Industry Relations• Electronic Marketing• Film Office• Marketing & Promotion• Public Relations• Research• Tourism Development• Others

• Planning Assistance• Marketing Guidance• Workshops• Marketing/Advertising

Benefits

Business Assistance

Development & Partnership Marketing

• Wilderness Road Heritage Trail• Virginia Coal Heritage Trail• ‘Round the Mountain• Heartwood • Spearhead Trails• Crooked Road• Fish Virginia First

Locality Tourism Planning

• Franklin County• Roanoke County• Craig County• Patrick County• Floyd County

• Pulaski County

• City of Radford• Giles County• Tazewell County• Carroll County

Funding

• Marketing Leverage Program

Tourism Business Opportunities

•Canoe Rentals and Tours •Fishing and Boating Rentals •Bicycle Tours and Outfitters •Adventure/Nature Camps

Agri-tourism

•Wineries/Vineyards•Corn Maze •Pumpkin Patch •Pick Your Own •Animal Parks•Herb/Flower Farms •Christmas Trees Farms

Unique Lodging Opportunities

•Bed & Breakfast Inns •Cabins and Cottages •Lodges •Campgrounds •Horse Campgrounds •Horse Stables/Barns •House Boats•Green Lodging

•Music/Theater Venues •Artisan Studios/Galleries •Heritage Sites •Tea Rooms •Breweries/Pubs•Eclectic Restaurants •Shopping •Spas

Attractions

Supporting Businesses

Caterers Cleaning Services Food/Drink Distributors ElectriciansRestaurant Equipment Plumbers Security Systems Pool MaintenanceConvenient Stores Lawn Care Web Site Designers Auto RepairAd Agencies Events PlannersTravel Agencies FloristsMotorcoach Companies Linen Services

Car Rental Offices

Learn More About VTC Services

• Visit www.vatc.org & www.virginia.org • Sign up for the Dashboard e-newsletter• Attend at VTC Help Desk event• Establish relationships with all VTC divisions –

tap into our services (i.e. marketing, advertising, research, etc.)

Now, let’s talk about marketing your small business

Can you answer thesetwo questions?

• What is Marketing?• What is the difference between Marketing and

Advertising?

6 Questions You Should Answer

• What are you trying to accomplish?• Who is your target audience?• What message will move your audience?• What vehicles do you have to deliver the message?• What are your resources?• How do you measure your performance/success?

Marketing Plan

What are you trying to accomplish?

• What is your mission and vision?• Are you the largest, cheapest, best service, best quality?• Sales goals?

Marketing Planning

Who is your target audience?

• by demographics• by geography• by needs and wants• now and in the future

Marketing Planning

What message will move your audience?

• Your brand• Your tagline/slogan/message• What do you want people to say about your business?

Marketing Planning

What vehicles do you have to deliver the message?

• Website • E-mail• Advertising• Public Relations

• Social Media• Tradeshows• Newsletters

Marketing Planning

What are your resources?

• Budget/Money• Owner/Employee Skills • Friends/Family• Partnerships• Local/State/Federal Assistance• Chambers of Commerce, Business Associations, etc.

Marketing Planning

How will you measure your marketing performance?

• Electronic Marketing Tools• Data Collection• Research Mechanisms• Surveys• Informal Questioning• Sales Data

Marketing Planning

Have a Calendar/Schedule Include:• Anticipated Ad Placement• Press Releases• Social Media Updates/Posts• Promotions• Other Scheduled Strategies

Marketing Planning

Marketing Plans Change • Because of business growth• Because of research• Because of economic factors• Because of technology (social media)• Because there is always change

Marketing Planning

Virginia’s Recent Ad Campaign

Traditional Methods

Marketing Tips

• Direct Mail • Sales/Promotions• Referrals• Phone Calls

Branding (it’s not just a logo)

Marketing Tips

Customer Service

Marketing Tips

• Train and Empower Staff• Gauge Performance• Have Customer Service Plan (Goals, Objectives)

Electronic Marketing

Marketing Tips

• Website• E-mail• E-newsletters• E-ads

Targeting Niches & Groups By Interest

Marketing Tips

• Traditional Music (Crooked Road)• Cultural Heritage (Coal Heritage Trail)• Anglers (Fish Virginia First)• Outdoor Enthusiasts • Weddings/Meetings/Group Tours

Public Relations

Marketing Tips

Marketing Tips

• Determine Ways to Stand Out /Be Unique• Be Creative• Have Fun!

Tourism Business Development &Marketing Assistance

Kitty BarkerDevelopment Specialist – Partnership Marketing

Virginia Tourism Corporationrrose@virginia.org

276-322-2044

www.vatc.org (industry)www.virginia.org (consumer)

Financing & Managing Resources

Helpful Hints for FinancingYour Business Matthew Churchill

Principal Business Relationship Manager/Vice President

Roanoke Business Banking

Wachovia Bank

© 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.

Helpful Hint #1

Get Your Financial House In Order

Obtain a copy of your personal credit report.• Check for any inaccuracies or mistakes.• Make certain that all accounts are current and there are

no outstanding judgments or liens.• If there is any derogatory information, be proactive and

prepare to explain the problems and why the problem is not likely to occur again.

Gather personal and/or business records• For the past three years, including:

• Tax returns, financial statements with schedules and attachments, and interim year-to-date financial statements.

• Any other financial documents that might help a lender.

• Neatly photocopy all of the documents and prepare them for your presentation.

77© 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.

Helpful Hint #2

Understand What Your Lender is looking for

Be specific in what you are asking for• Know how much you need• Be prepared to support all costs with estimates, invoices,

or contracts• Never tell a lender that you want to borrow as much

money as possible. Primary source of repayment

• Be able to demonstrate how you will pay back the loan • Debt Service Coverage = Earnings before Interest, Taxes,

and Depreciation / Total Debt Service• Debt to Income= Debt service / Income available to

service debt

Secondary source of repayment (back up plan)• Be prepared to be able to demonstrate how your lender

will be paid back if income falls short• Be prepared to have guarantors and possible collateral

78© 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.

Helpful Hint #3

Recognize Your Strengths And Weaknesses Bank underwriters are paid to identify risk

• Business owners tend to be optimistic• Be prepared for scrutiny• Address your strengths and challenges realistically &

honestly

Most common weaknesses lenders find are: • Inability to demonstrate repayment ability• Insufficient collateral• Lack of management experience• Insufficient cash injection• Poor personal credit

Don't get scared; just get prepared• Depending on the severity of any particular weakness,

you can often overcome it if you are prepared with a particularly noteworthy and compensating strength.

79© 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.

Types of Deals Financed

Acquisition of Owner Occupied Real Estate Financing available up to $9MM

Refinance of Existing Debt Up to $2MM

Must cut payments by 10% or more

Business Acquisition Individual or corporate buyers

Partner or Management Buy-Outs

Loans up to $1.75MM

Start Ups Require 30% equity

80© 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.

Why Wells Fargo SBA Lending

Largest lender in United States Closed over $900MM in 2009 – three times nearest

competitor

Experienced Lenders and Underwriters

Preferred SBA Lender

Growing while others contract 2010 Goal - $1.2B

It’s a marathon not a sprint We don’t sell our loans

81© 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.

Matthew ChurchillWachovia Bank

© 2009 Wells Fargo Bank, N.A. All rights reserved. For public use.

(540) 563-7675matthew.churchill@wachovia.com

Other Business Resources

Sandy Ratliff, Business Services ManagerVirginia Department of Business Assistance

276-676-3768sandy.ratliff@vdba.virginia.gov

www.vdba.virginia.govwww.vastartup.org

The Virginia Department of Business Assistance

VDBA supports economic development in the Commonwealth by working with new and existing businesses to provide business and economic development communities with:

• workforce incentives• financing• business information and counseling• state procurement assistance• educational opportunities

www.vdba.virginia.gov

Ask VBIC = 866-248-8814

Formula for Success

- Critical information for decision

making- Well trained and plentiful

workforce- Appropriate capital structure

Business Information Services

To help businesses get started and to grow.

Formation Assistance Virginia Business Information Center (VBIC) 1-866-248-8814

Bridges the 26 state agencies, over 110 regulatory programs and over 300 forms that may touch a Virginia business

Virginia Central Business Portal (www.business.virginia.gov)

Covers registration, taxation, licensingInteractive business plan available online at www.vdba.virginia.gov or www.vastartup.org

5 Step process to a business plan

Are you starting a business?Virginia’s Business One Stop system can help you determine your business formation requirements and can pre-fill your business registration forms.

Visit http://www.virginia.gov/bos/index.html to access the Business One Stop System.

Create a Business One Stop account. Answer a few brief questions about your business. Receive a list of action items and pre-filled business

registration forms.

Questions? Contact the Virginia Business Information Center1-866-248-8814 (804) 371-0438 vbic@vdba.virginia.gov

Virginia’s Business One Stop

Winner of the 2009

Governor's Technology

Awards

Ask VBIC = 866-248-8814

Ask VBIC = 866-248-8814

Governor’s Executive Order 33

$5 billion market Access to buyers from 171 state

agencies Additional $5 billion from local

governments 575 localities using eVA system.

Small Business Goal – 40% Over 44,994 registered suppliers Over 13,065 participating

buyers

Growing Your $ales - State

• Examples of Purchasing:– Instant Ice Tea

• 01/01/2009 – 12/31/2009 = $23,455.71 - 46 PO’s– Novelty – Specialty Advertising Products

• 01/01/2009 – 12/31/2009 = $152,905.34 - 152 PO’s– Grounds Maintenance: Mowing, Edging, Plant (Not Tree) Trimming,

etc. • 01/01/2009 – 12/31/2009 = $14,566,567.94 - 1150 PO’s

– Tires and Tubes, Passenger Vehicles • 01/01/2009 – 12/31/2009 = $72,103.64 - 7 PO’s

– Concessions, Catering, Vending: Mobile and Stationary • 01/01/2009 – 12/31/2009 = $6,187,712.31- 11,757 PO’s

– Building Maintenance• 01/01/2009 – 12/31/2009 = $90,611,650.85 - 9285 PO’s

– Earth Moving Equipment Rental• 01/01/2009 – 12/31/2009 = $8,573,333.24 -621 PO’s

– Cleaning Services, Steam & Pressure• 01/01/2009 – 12/31/2009 = $3,358,694.55- 303 PO’s

One–on-One Counseling SessionsNeed Based:

– Accessing New Markets/Sales Growth– Tailored Sales Development Solutions– Financing Resources– Social Media for Your Business

To schedule an appointment, contact:

Sandy Ratliff, Business Services Manager276-676-3768

Email: sandy.ratliff@vdba.virginia.gov

Entrepreneur Workshops

• Launched October 2006• Partnership with Service

Providers and localities• Provide information on

available resources to start and grow a business

• Statewide Program• Free – ½ Day Session• Over 8,000 reached• www.vastartup.org

Growing Your $ales Workshops

Business Sales Growth Program Market Research and Expansion Financing Growth Management

Partnered events for SWAM certification and eVA registration

Networking with businesses and government buyers

Social Media WorkshopsYou-Link-Twit-Face

It’s FREE But

Takes Commitme

nt

Connect to Large

Audience

Keep in Touch with Customers

Build Brand Awareness Facebook – 500

mTwitter – 200 mLinkedin – 75 m

YouTube – 2 billion

viewed/day

Why Social Media

Upcoming Events:•November 1 - Floyd•November 16 – Bristol•March 10, 2011 = Christiansburg

Virginia Jobs Investment Program

• Workforce recruiting and training– Create minimum 25 net new jobs within 12 months

and capital investment of at least $1,000,000– Minimum entry-level wage of $10.00/hr required.

Only full-time jobs are eligible.

• Small business workforce recruiting and training– 250 employees or less, hiring at least 5 new full

time employees within 12 months of operation and capital investment of at least $100,000

– Minimum entry-level wage of $10.00/hr required. Only full-time jobs are eligible.

• Retraining– Small businesses that are retooling and installing

new technologies– Company must retrain minimum 10 full-time

employees.

Financing Programs• Direct Lending: In partnership with banks and other

lenders, we provide direct loans in economic development transactions. We also provide direct loans under specific programs designed to promote environmental stewardship and assist licensed daycare centers and family home providers.

• Indirect Lending: We provide loan guarantees or other types of credit enhancements to commercial banks in order to increase access to capital for businesses.

• Conduit Financing: We are the statewide conduit issuer of tax-exempt industrial development bonds for manufacturers and 501c3 organizations.

OTHER AVAILABLE RESOURCES

• Virginia Department of Labor – Apprenticeship Program– Combination of on-the-job training and classroom instruction.– Advantage of skilled workforce and reduced turnover.– http://www.doli.virginia.gov

• Virginia Department of Agriculture & Consumer Affairs– Virginia’s Finest Trademark = Marketing program that promotes foods and foods

products grown in Virginia. – Facilitates expansion of agricultural businesses.

http://www.vdacs.virginia.gov

Turn to SCORE Counselors for Small Business Advice

OTHER AVAILABLE RESOURCES

Visit the SCORE Small Business Web Site: www.score.org

How-to Advice & InfoAsk SCORE for business advice onlineFind SCORE to locate any chapter in the country2,000 pages of content for small business ownersHow-to articles offer practical business tips

OTHER AVAILABLE RESOURCES

Virginia Business Incubator– 7 Available in Southwest Virginia– 29 Within Commonwealth– Business Incubator Benefits

• Facility designed to assist businesses to become established and sustainable

• Benefits– Shared premises and business services– Business advice and mentoring assistance

– More details - http://www.vbia.org/

Business Incubator

Light Manufacturing Space Commercial KitchenShared Amenities

OTHER AVAILABLE RESOURCES

Virginia Economic Bridge, Inc.– Non-profit organization to promote the economic vitality of

SWVA and the Commonwealth.– Virginia’s Business Pipeline – Online searchable database

of more than 24,000 Virginia based companies, business to business marketing & RFP resourcewww.VirginiaBusiness.org

– Virginia’s Linked Workforce Showcase – Designed to create business partnerships yielding contracts between SWVA and Northern Virginia by connecting companies in specific industry sectors. www.LinkedWorkforceShowcase.org

Starting and Growing a Business

• Business Formation Assistance– Small Business Development Center Network = www.virginiasbdc.org– SCORE = www.score.org– Virginia Business Information Center = 866-248-8814– Virginia Central Business Portal = www.business.virginia.gov– Virginia Business Incubator Association = http://www.vbia.org/

Marketing Resources

• SCORE = www.score.org• Virginia Tourism Corporation = www.vatc.org• Virginia Economic Bridge, Inc. = www.virginiabusiness.org• Virginia Department of Agriculture – Virginia’s Finest

Trademark = www.vdacs.virginia.gov

Financing Resources• Virginia Small Business Financing Authority =

www.vdba.virginia.gov• Small Business Development Center =

www.virginiasbdc.org• Small Business Administration = www.sba.gov• Local Economic Development Office or Chamber of

Commerce

“If you always do what you’ve always done, You will always get what you’ve always got!”

Lets Connect:Sandy Ratliff

The Virginia Department of Business Assistance276-676-3768

sandy.ratliff@vdba.virginia.gov

Online:Twitter: http://twitter.com/sandyratliff

Facebook: http://www.facebook.com/sandy.ratliffLinkedIn - http://www.linkedin.com/in/sandyratliff

YouTube - http://www.youtube.com/user/vastartup

Survey Completions

Please take a moment to complete our survey!

Help is Available……Just a click away……

CONTACTS

• Sandy Ratliff, Virginia Department of Business Assistance = 276-676-3768 or VBIC = 866-248-8814

• Randy Rose, Virginia Tourism Corporation = 276-322-2044

• Tom Tanner, Roanoke SBDC = 540-983-0717 • Matthew Churchill, Wachovia Bank = 276-563-

7675