This document provides information and resources for entrepreneurs seeking financing for new businesses. It discusses private sources of financing like personal savings, family, and credit cards as well as public sources from programs like SBA loans, USDA grants, and state-level economic development agencies. The document provides details on specific loan and grant programs, guidelines for developing financial projections, and tips for starting the planning process through writing a business plan. Resources for additional small business assistance are also listed.

2. Bob Cohen
Braintree Business Development Center

3. Creating an entrepreneurial climate

4. Creating an entrepreneurial climate

6.  www.grants.gov
 SBIR and STTR programs
 USDA-ARS Technology Transfer Program
 USDA Rural Energy for America Program
(REAP)
 USDA Value Added Agricultural Producer Grant
 Ohio: Making Efficiency Work
 Branded Program: www.brandedprogram.org

7.  Feasibility Grant
 Energy Audit Grant
 Energy Efficiency Grant
 Energy Efficiency Loan Guarantee

8. Always start with the bank, that’s where the
client should begin and end.
Many other lending options or loan guarantee
programs all work in conjunction with bank
loans.
Things banks will want
 Application
 Collateral
 Credit
 Business plan
 Financials (historic and projections)

9. Private Money
 Examples
 Personal Savings
 Family and Friends
 Credit Cards
 Bank Loans
 Private Equity
 Pros & Cons
 Simple application
process (usually)
 Fast money (usually)
 Terms vary wildly
Public Money
 Examples
 Microlending
programs
 County or City CDBG
 SBA or ODOD
financing
 Pros & Cons
 Long application
process
 Slow money
 Low interest rates
available

10. SBA 504 loan
 40% of total project
cost
 Maximum $1.5
million
 1 job
creation/retention
per $65,000
 Temporary fee
reduction from
stimulus money
Ohio 166 loan
 40% of total project
cost
 Maximum $500,000
 1 job
creation/retention
per $50,000
 Prevailing wage
applies

11.  FSA offers direct loans and loan guarantees
 Beginning farmers
 Purchasing real estate or equipment
 Improvements
 Soil and water conservation projects
 Disaster recovery
 Operational financing
 Farm planning and counseling

12.  Loans up to $35,000 averaging $10-20k
 Eligible uses
 Equipment
 Inventory
 Working capital
 Debt restructure
 Short term projects
 Flexible terms
 Eligible business: Pre-venture, startup, and
existing
 Credit standards vary based on type of
business, loan amount, and use of funds.

13. Most SBA lending is a guarantee, not a direct
loan
 7a
 SBA Express
 SBA Patriot Express
 Community Express

14.  Ohio Treasurer's programs
 Ag-link
 Eco-link
 Grow Now
 Trade Adjustment
 GLTAAC
 Small Business Development Centers
 Ohio Employee Ownership Center at
Kent State University

15.  Employee Stock Ownership Planning
 Business Succession Planning Program
 Cooperative Development Center

17. www.entrepreneurohio.org
The Small Business Development Centers Network of Ohio is the
premier technical assistance program for Ohio‟s businesses. The
network is provided through a partnership between the Ohio
Department of Development, the U.S. Small Business Administration
and selected Ohio chambers of commerce, colleges and universities,
and economic development agencies. There are 36 funded Centers
throughout Ohio staffed by highly trained, Certified Business Advisors®.
Centers provide free, confidential, in-depth, one-on-one counseling for
existing businesses and entrepreneurs.

18. Quick Facts about starting a small business
• Of all small businesses
started today, 80% will
not be in operation in 5
years.
• If you need financing,
you will have to provide
5% - 50% of the total
funds.
• In order to get a small
business loan, you will
be required to
personally guarantee its
repayment.
• For bank loans, you
must have excellent
personal credit to
borrow money.
• It is normal to not earn
a profit in the first two
years of operation.
• The IRS can and will
seize personal and
business assets to
satisfy your business
taxes.

19. STEPS: Opportunity…Idea…Potential
1. Identifying a Business Opportunity
- There is a need for …
2. Creating a Business Idea
- I can fill that need by doing …
Business Concept: Idea for a new business that can be
tested.
3. Determine the Potential
- My research and financial data shows me that I should
be able to make …
Business planning process which will help you determine a
business idea’s potential and profitability.

20. 1. What is the need you fill or problem you solve? (Value
Proposition)
2. Who are you selling to? (Target Market)
3. How would you make money? (Revenue Model)
4. How will you differentiate your company from what is
already out there? (Competitive Advantage / Unique
selling proposition)
5. What are the barriers to entry? (Keep you from starting)
6. How many competitors do you have and of what quality
are they? (S.W.O.T. Analysis)
7. How big is your market in dollars? (Market Size)
8. How fast is the market growing or shrinking? (Market
Growth)
9. What percent of the market do you believe you could
gain? (Market Share)
10. How much would it cost to get started? (Start-up Costs)

21. In business, there are no guarantees.
There is simply no way to eliminate all
the risks associated with starting a small
business, but you can improve your
chances of success with good planning,
preparation, and insight. You can also
improve your chances of success by
understanding and avoiding some of the
pitfalls encountered by others.

22. PLANNING is critical before entering into any new
business, or venture.
The Business Plan is a “living” written document
which outlines the goals of the business and
describes how these goals will be achieved.
“A Business Plan tells a story. Hopefully, a story
with a happy ending.”

23. The BUSINESS PLAN should…
 Outline goals of company
 Define market
 Evaluate feasibility
 Road map
 Identify additional opportunities
 Clarify financial needs
 Necessary to obtain financing

24.  Section I: Executive Summary
 Section II: Business Description
 Section III: Background Information
 Section IV: Organizational Matters
 Section V: Marketing Plan
 Section VI: Financial Plan
 Section VII: Supporting Documentation

25.  Section I: Executive Summary
Complete this section after the rest of
the business plan and simply highlight
the most important aspects of the plan.

26.  Section II: Business Description
A. General Description of Business
1) What business are you in? What are the key products/services
of your business?
2) What market do you believe exists for these products or
services? (Describe your current market.)
3) What is the location of your business? Why is this
advantageous?
4) How do you operate your business? Who is involved in the
operations? How much of your time is spent in the business?
5) What state of development is your business in? (Development
stage, first year of operations, stable or mature business,
stagnant mature business, etc.)
6) Is growth a part of your plan for your business? If so describe
what kind of growth you are projecting, and how you think
that growth will occur (adding product or services, expanding
your market, changing your product or service mix, etc.)

27. B. Mission Statement
1) What is the vision for the future of your
business?
2) What is the purpose of your business,
internally and externally?
3) Include Your Mission Statement
C. Goals and Objectives
1) What are your short-term (within one
year)and long-term (two to five years)
goals and the objectives to reach your goals?

28.  Section III: Background Information
A. Industry Information
1) Identify your business industry
2) What are the current industry trends? Include
growth patterns, niche markets, and size of the
market.
3) What are the future industry trends?

29. B. Business History (if applicable)
1) Provide a brief history of your business,
including when it was founded, why
it was started, profitability and growth
patterns and how the business has changed
over time.
2) How does your business fall into the current and
future trends of the industry?

30.  Section IV: Organizational Matters
C. Business Structure
1) Describe the legal structure of your business. (Sole
proprietorship, Partnership, Corporation or Limited
Liability Company) Include in this the ownership of the
business.
2) Describe business licenses and permits you may need
as well as regulatory agencies that have jurisdiction over
your business.
D. Management Team
1) Describe your management team. Include key
positions and the qualifications (or needed qualifications)
of employees.

31. E. Personnel
1) Describe the positions in your company, the job
responsibilities and skills (or needed skills) of employees.
2) What is your plan for filling positions? Explain how you
will recruit and what training might be needed.
F. Outside Advisors
1) Describe what outside advisors you will use to enhance
your business. This should include the cost to your
business and what services they will provide. Examples
include: Accountant, Attorney, Insurance Agent &
Marketing Agent.
2) If you will use an advisory board, list potential members
and areas of expertise.

32. G. Risk Management
1) What types of insurance will you require, and what are
the costs? (Include proof of insurance or a quote)
2) What are your exit strategies, including succession
planning?
H. Process
1)Describe the process necessary to get your
product/service to your customer. This should include
your inputs, how do you add value, packaging an
delivery. Also, what types of labor inputs are
necessary?

33.  Section V. Marketing Plan
I. Products/Services
1) Describe each product/service you will sell. List each
separately.
2) What is special or unique about the product/service
you offer?
3) What benefit does the customer get from your
product/service?
4)Who will your primary suppliers be? Will you have
credit terms with them?
5) What will be the price points for these
products/services?

34. J. Customer Analysis
1) Describe the people buying or who are most likely to buy
product/service. (If you have more than one target market,
describe each). HINT: Resist the urge to say “everyone”.
Some people will use products/services more often or in
larger quantities than others.
2) Provide a customer profile including : gender, age,
income, occupation, education, geography, and family status
or if selling to other businesses provide an organizational
profile including, purchasing decisions and procedures for
buying and product usage. Are the people who purchase
your product also the ones that (directly) use it?

35. K. Competitive Analysis
1) List your strongest 3-5 competitors and where they are
located. What customer profiles are they targeting?
2) What are the strengths and weaknesses? Include the
following factors: products, price, quality, location, selection,
customer service, expertise, reliability, reputation, management,
and advertising.
3) What are your key competitive advantages? Explain why
customers will buy from you rather than your competition.

36. L. Marketing Potential
1) Describe your geographic trade area.
2) Describe the size of your market in terms of potential customers.
Include whether this market is growing, stable, declining and why.
3) What is your market potential in terms of total potential sales?
This should be based on market size, target market size, number
that will be actual customers, average order size, and number of
orders per year.

37. M. Pricing
1) How will you price products/services? If necessary,
include pricing strategy chart. Make sure you have
considered your cost of goods.
2) How does this pricing position you in the market?
N. Promotional Strategies
1) Advertising
a) What advertising tools will you use and why did
you choose these? Tools could include: newspaper,
magazines, direct mail, yellow pages, radio, TV,
Internet, business cards, and brochures.
b) How often and how much will you spend on your
advertising budget?

38. 2) Public Relations
a) Explain if you will use public relations, and what activities
this might include, as a part of your promotional strategies.
These activities might include trade shows, discounts, special
events, sponsorship, and customer service.
3) Personal sales
a) What part does personal sales play in the purchase of your
product/service?
b) Who will be responsible for selling?
c) What qualifications will your salespeople have to have?
d) What are your customer service policies?

39. Section VI. Financial Plan
This is the part that scares many clients the most.
Without realizing it, you have gathered most of the
information needed in this section just by
completing the previous sections. Your SBDC
counselor can help you pull it all together.

40. O. Pre-Start-up
1) How much money will it cost to get ready to open?
a) Building or remodeling costs
b) Equipment, furniture, and fixture costs
c) Inventory costs
d) Rent or mortgage, utilities, insurance, and
employees prior to opening
e) Pre-opening advertising
f) Attorneys, accountants, and other consultants prior
to opening

41. 2) How do you propose to finance this? How much will come from:
a) Personal savings
b) Bank Loans
c) Personal loans from family and friends
d) Outside investors
e) Other
P. Projections
1) What will your monthly sales be for the first year? What will your
sales be for years 2 and 3?
2) What will your monthly expenses be for the first year? What will your
expenses be for years 2 and 3?
3) Complete Monthly Income, Cash Flow, and Balance Sheet Projections
for Years 1, 2, and 3.
Be sure to include an explanation of how you came up with these numbers.
It is critical that you provide assumptions so that development of numbers
can be understood.

42. Guidelines for Financial Projections
Our experience in helping businesses has taught us
that certain things help significantly in generating
realistic and useful financial projections. What
follows is a list of suggestions:

43. VII. Supporting Documentation
* This is a list of some of the kinds of things that may be needed.
A. Personal financial statements for all owners (always needed)
B. Resumes of key personnel (always needed)
C. Employment contracts
D. Quotes from suppliers for: inventory, construction or
remodeling costs, furnishings, fixtures, equipment,
insurance, and advertising
E. Letters of intent from or contingent contract with:
property sellers, landlords, suppliers, customers,
prospective key employees
F. Partnership agreement or incorporation documents
G. Published facts, figures, and projections relevant to your
business
H. Historical Financial Information – if an existing business
I. Past 3-5 years personal Income Tax Returns

44. 1. Do not use straight-line projections if they do not reflect the
reality of your business. If you have seasonal fluctuations in your
income and expenses, reflect that in your cash flow. It may
materially affect the size of the loan that you need.
2. For expansions, if you reflect more than 10% growth in sales per
year, be prepared to justify why the amount you stated is valid.
3. Be sure that sales and inventory change in appropriate relation to
each other. For example, if you project increased sales volume;
make sure that you show increased purchases.
4. Be sure to include pricing information and how you arrived at
your prices. Include price per unit, number of units sold, number of
units produced, etc.
5. Overestimate your expenses and underestimate your income
(reasonably).

45. 6. Do not have substantial “other” category. If “other” becomes a
substantial amount, break it down into specific categories.
7. Include a narrative or footnote of your income and expenses. Explain
how you arrived at these numbers.
8. Include a salary for yourself so you don’t get too excited when your
projections show a “profit”. Use this figure to analyze your opportunity
cost. (How much could you earn – or not spend – doing something
else?)
9. Emphasize real world research. Call the phone company and see how
much the installation, monthly service charge and yellow page listings
will actually be. Talk to businesses in other communities similar to yours
and find out what start-up sales volumes you might expect. Look at
industry statistics and find out what percentage of gross sales you might
need to be spending on advertising.

46. Links to help entrepreneurs:
1st Stop Business Connection
http://development.ohio.gov/1ststop/onestop/index.cfm
• Provide a FREE, downloadable, business information kit which
will contain the basics all business must know and the state-
level regulations and forms specifically for your business.
Ohio Secretary of State Office
http://www.sos.state.oh.us/SOS/businessServices.aspx
• Click on NAME AVAILABILITY to determine if your business
name is available in the state of Ohio.
SBDC at Ohio University
www.ohio.edu/sbdc
• Free online training and worksheets for entrepreneurs

47. www.ohio.edu/sbdc

48. www.ohio.edu/sbdc

49. Other RESOURCES & PARTNERSHIPS
• Chambers of Commerce
• Economic Development Staff
• SBDC’s
• SCORE Chapters
• Commercial Lenders
• Educational Institutions (Colleges &
Universities)
• Other area business owners

50. Thank You,
SBDC at Ohio University
Shawn Mallett
Building 20, The Ridges, Suite 174
Athens, OH 45701-2979
740.593.0474 mallett@ohio.edu

51. Finance
What are my funding options as I
start my business?

52. Finance
•Grants
•Loans
• Traditional
• Banks
• Non-traditional
• Revolving Loan Fund (RLF)
• Small Business Administration (SBA)
• Venture Capital
• Micro Loans
M

53. Traditional Banks
Local banks, large banks, credit unions
• Upside:
- Existing customers tap into loyalty of local banks
- Many larger banks have small business departments
• Downside:
- Conservative lending practices
- Must be accountable to their stockholders
• Good for:
- Purchase of real estate
- Buildings
- Large equipment
• Difficult for:
- Working capital
- Start-ups
B

54. Revolving Loan Fund (RLF)
Payback through municipality or county government
• Example:
- jurisdictions can use for bridge (gap) financing
to entice startups or new business recruitment
• Upside:
- flexibility, direct tool for political leaders to use
• Downside:
- limited monies
- tax base supports funding at some level
- strict guidelines
- long process
• Good for:
- manufacturing, creation of full time jobs.
• Difficult for:
- retail
- restaurants
B

55. Small Business Administration (SBA)
SBA Loan - Government-backed bank financing
• Example:
- An extension of traditional bank financing;
banks are 'insured' if loan defaults so they take more risk.
• Upside:
- increases lending
• Downside:
- lots of hoops (regulations)
- low bank participation
- cautious of yearly renewal
• Good for:
- renewal loans
- existing businesses
• Difficult for:
- startups
M

56. Venture Capital
Private investor groups
- investors seeking high potential in exchange for
debt/equity in the company (Tech Columbus, SBIC‟s via SBA)
•Upside:
- fund where traditional banks won‟t
- lend credibility by virtue of „being on the board‟
- instant connections increases chances of success
•Downside:
- take controlling interest (voting power) & upside growth
- typically debt is convertible
•Good for:
- high potential
- high growth (technology, medical)
•Difficult for:
- retail
- restaurants or income based companies
M

57. Economic Development Strategies
 Retention and Expansion of Existing
Businesses
 Entrepreneurship Development
 Attraction of New Businesses
 Encouraging Additional Consumer
Spending in the Community
 Seeking Public Grants and Projects
Microenterprise
T

58. IS
 VERY small businesses,
with 1-5 employees
 Unable to access
traditional, commercial
credit
 <$35,000 (normally,
although standard
microenterprise cap is
changing to $50,000)
IS NOT
• Small businesses with more
than 5 employees
• Business/owner with access
to credit
• >$35,000 (although ECDI
can go to $100,000)
Microenterprise
T

59. - Addresses the credit gap
- Is an asset building
strategy
- Builds on entrepreneurial
culture
- Takes into account
economic and geographic
segregation
Microenterprise
- Technical assistance
- Lending
- Comprehensive
program to increase
opportunities for the
business AND the owner
Through:
T

60. Grants
Industry Specific
• Limited given current economic conditions
i.e. the well is dry.
• Use local grant writers to identify opportunities.
• Individual Development Accounts
 often a step toward building credit, loan qualification
 some type of earned income required
 financial literacy training required
 matched savings plans, used to do one of the following:
1. start a business
2. down payment on a home
3. post-secondary education
4. automobile purchase
B

61. Micro Loans
Small Loans to help start-ups with a specific need
• ECDI
- financial literacy and business plan training
- loans from $500 to $100,000
• Where are they?
- Working to identify all of the micro-programs in
Ohio over the next couple of months
- ECDI currently serves 18 counties in Central and Southwest Ohio
B

62. • Frequently need training and technical assistance,
especially one-on-one
• Do not have access to traditional/commercial lending
• Sometimes more social work than business development
• May need credit counseling
• Risky
Microenterprise
B

63.  Retention and expansion of existing businesses
 Entrepreneurship development
 Creation of new local businesses
 Creates jobs
 Diversifies economic base
 Supports local people
 Enhances local tax revenues
 Provides role models
 A process, not an event
 Where public policy and free enterprise intersect
Microenterprise
B

64.  Community action agencies
 Non-profit organizations
 Faith-based organizations
 Political jurisdictions
 Chambers of Commerce and CIC‟s
Microenterprise
T

65. Microenterprise
www.microenterpriseohio.org/
T

66. MOO's Mission is to:
 provide a practitioner support network
 share resources among microenterprise programs
 host a forum for the free exchange of best practices
 develop program standards in line with those being
developed on the national level
 conduct advocacy on behalf of Ohio's microenterprise
programs
Microenterprise
T

67. The “What do I do now?!?!?!?!” Moment
Angie Hawk Maiden
President/CEO
ACEnet & ACEnet Ventures
04 Columbus Road
Athens, OH 45701
740-592-3854
angiec@acenetworks.org
Jeff Siegler
Director of Revitalization
Heritage Ohio
846 ½ E. Main Street
Columbus, OH 43205
614-258-6200
jsiegler@heritageohio.org

68. It looked really nice on paper, but things got really complicated once it was
real.

69.  Furnishings – Embrace Gently Used vs. New
Red Flag Quote
“My shop looked great with all
the shiny new furnishings, but
I had no cash to buy things to
put on them.”
Green Flag Quote
“I checked out second hand
shops and yard sales to find
flexible items that I maximize
the space at a minimal
space.”

70.  Inventory–
 Consignment vs. Purchase
 Specialty vs. Commodity
Red Flag Quote
“I bought 500 pounds of tea to
save on shipping, but now I
can‟t pay my bills.”
Green Flag Quote
“I have worked with some
producers to exclusively
offer their high quality
products on a pilot basis.
You won‟t find this at
Walmart.”

73.  Inventory– So what is selling?
Red Flag Quote
“I plan on counting everything
once a month before I place
my order.”
Green Flag Quote
“I am using an inventory
system so I can adjust my
inventory based on what is
selling.”

74.  Finances– So…are you profitable?
Red Flag Quote
“I need to sit down with my
box of receipts and the
register tape, and then I will
get back to you…eventually.”
Green Flag Quote
“Let me print of a couple of
reports from my real time
system so we can analyze
the data.”

75.  The Great Marketing Dilemma –
How to let them know you exist?
 Collaborate with others
 Find intersections for your target
 Beware of the advertising
associates
 Evaluate what works
 Free ads
 ASK YOUR CUSTOMERS WHERE,
WHEN, AND WHAT THEY GET INFO

76.  The Business Dilemma
Your Convenience
Vs.
Consumer’s Convenience
The “But I like having my weekends off too”
syndrome

77.  Approach as a livelihood…
 Change your hours of operation…
 Be strategic about location…
 Be realistic about how, when, and who to
communicate…
 It is all about customer service and the value
proposition…

78. Della G. Rucker, AICP, CEcD
JACOBS | Urban Design + Planning
Heritage Ohio Entrepreneurship Training
November 3, 2010

80.  How much funding do you have?
 How many people do you have?
If you have limited time and money, you need
to focus on those entrepreneurial sectors that
offer the best potential to meet your
community’s objectives.

81.  What does your community need?
Jobs for residents?
Property taxes?
Improved reputation/ appearance?
Income/earnings taxes?
 What needs to happen?
Growth
Change in quality
Improved appearance
New jobs
 Build the consensus

82. What are these?
Provide/do/support better than
others.
Unique to your community.
How do you find them?
Analysis - high growth/high share
sectors.
Examine successful, similar places.
Ask your business owners, leaders,
residents.

84. What Potential Entrepreneurial
Sectors Fit Our Goals and Want
Our Assets?

85.  Quantitative
 Qualitative

86.  Talk to People: Local
Successful Businesses/
Successful Businesses in
nearby communities
 “What’s working?”
 “What do you think will
change in the next 5
years?”
 “What would you invest
in/get into if you were
starting over today?”

87.  Talk to People: Big Businesses
 “What suppliers do you use
locally?”
 “What suppliers or services
would you use if they were
local?”
 Do you anticipate any
significant changes to your
technology, suppliers, service
needs over the next 5 to 10
years?
 “If I gave you $100,000 to
invest in the local economy
today, what would you do
with it?”

88.  Talk to People: Subject Experts
 Bankers
 Business Professors
 “What business sectors do you
see growing in this area?”
 “What benefits do they derive
from being here?”
 “How do you think the local
economy (or your favorite
economic sector) will change in
the next 5 years?”
 “What’s the strongest
investment one could make in
the local economy today?”

89.  Read:
 Quarterly Reports:
 Jones Lang LaSalle
 Grubb & Ellis
 Other local realtors
 The Federal Reserve
 Yearly Outlooks
 But, remember…
 Their information = regional or
submarket.
 You might be special
 You might not be in one of their
regions

90.  Relative strength and price points of
broad sectors of local real estate
market.
 Ease of capital - challenges facing
small businesses in getting
construction and operating loans
 How markets and investors are
feeling about your broad area.

91.  Sources:
 www.census.gov (income
levels, age, home values)
 http://www.census.gov/econ
/geography.html (businesses
by sector)
 http://www.development.ohio.gov
/research/files/s0.htm (Ohio
County Profiles)
 www.claritas.com
(“psychographics”)

92.  Look for sectors that are growing
from one period to the next
 Look for sectors that line up with
your basic criteria, such as
income levels or business size
 Look at what types of consumer
characteristics your area appears
to have.

94.  How old is the data?
 How does the area you
want to study line up
with the area they are
presenting?
 What data have they
suppressed?
 What are _they_ not
seeing?

95.  List the sectors that the sources
identified as potential
 List all the characteristics of those
business sectors you can identify.
 Consider setting up as a series of
matrices to compare:
 Sectors compared to your priorities
 Sectors and their relationship to you
assets;
 Sectors and current market issues – cost
of property, cost of borrowing.

96. Trust
Your
Gut

98. Della G. Rucker, AICP, CEcD
JACOBS | Urban Design +
Planning
1880 Waycross Road
Cincinnati, OH 45240
Phone: 513-288-6613
Della.Rucker@Jacobs.com
www.dellarucker.wordpress.com
Twitter: @dellarucker