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Invention to Venture Idaho State University February 18, 2014 Rick Paul, Entrepreneurship Instructor, College of Technol

Invention to Venture Idaho State University February 18, 2014 Rick Paul, Entrepreneurship Instructor, College of Technology. Enterprise Formation. Pro-Forma Sales Forecasting Using Your Pro-Forma Sales Forecast to Determine Units Sold Per Hour Resources: Personnel Space Equipment

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Invention to Venture Idaho State University February 18, 2014 Rick Paul, Entrepreneurship Instructor, College of Technol

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  1. Invention to VentureIdaho State UniversityFebruary 18, 2014Rick Paul, Entrepreneurship Instructor, College of Technology

  2. Enterprise Formation • Pro-Forma Sales Forecasting • Using Your Pro-Forma Sales Forecast to Determine Units Sold Per Hour • Resources: • Personnel • Space • Equipment • Legal Structure • Small Business vs Entrepreneur • Financial • Debt vs Equity Financing • Typical Resources for Financing Small Businesses • Entrepreneurial Funding vs Stage of Venture • Entrepreneurial Financing

  3. Pro-Forma Sales Forecast

  4. Use Your Pro-Forma Sales Forecast to Determine Units Sold Per Hour

  5. Resources - Personnel Resources based upon sales levels, break down your monthly pro-forma sales forecast into units per hour to determine your needs. • Personnel • manufacturing or production • sales staff • office staff • other staff, shipping, receiving, janitorial, etc.

  6. Resources – Personnel Per Hour

  7. Resources - Space Resources based upon sales levels, break down your monthly pro-forma sales forecast into units per hour to determine your needs. • Space • How much room do you need for • incoming supplies / inventory storage • your production area • outgoing / shipping • retail / showroom area • offices • break room • restrooms • parking

  8. Resources - Space

  9. Resources - Equipment Resources based upon sales levels, break down your monthly pro-forma sales forecast into units per hour to determine your needs. • Equipment • List the equipment you will need for • production • equipment #1 • equipment #2 • vehicles • shipping • storage • retail / showroom area • offices • break room

  10. Resources – Equipment Per Hour

  11. Resources - Legal Forms of Your Venture • Criteria for Deciding the Legal Form of Your Venture • Limited Liability – the ability to protect yourself and your personal assets from lawsuits in case of slip and fall, product/service liability, professional omissions, malpractice, etc. • Ownership – percent of the business you will actual own? • Control – who can make decisions about the business? • Fund Raising – the more people involved equals more potential capital raised. • Life of the Business – a contract, the life of the owner, or indefinite? • Taxation – do you want to get taxed once or twice on your income?

  12. Legal Form of Ownership Comparison

  13. Small Business vs Entrepreneur • A small business is replacement income for the owner so they do not have to work for someone else. These businesses are focused on local opportunities, not national. These small businesses account for 95% of all start-ups. • An entrepreneur has the intent of going national with their product or service. True entrepreneurs account for about 5% of all start-ups. Most small business owners and entrepreneurs start in the same place. It’s the long-term goals that differ in the start-up stage.

  14. Resources - Financial • Debt financing • Pros • Maintain ownership • Certain % of debt helps return on equity • Cons • Monthly interest and principle payments • Too much debt will limit ability to raise more capital and hurt your credit rating • Equity financing • Pros • Raise capital with no monthly payments • Attract investors and management skills • Cons • Gives up ownership in the business in order to raise capital.

  15. Resources - Financial Typical funding sources for start-up or pre-seed to seed stage businesses: • trade credit • your bank accounts • your home equity • your IRA • your credit cards • your family and friends • a line of credit at your local bank (how good is your credit rating?) • social lending or crowd funding debt financing / loans • micro loan (SBA) • bank loan • SBA Guaranteed Loan Programs at a participating bank • a partner and their assets • a partner’s family and friends.

  16. Summary • Pro-Forma Sales Forecasting • Using Your Pro-Forma Sales Forecast to Determine Units Sold Per Hour • Resources: • Personnel • Space • Equipment • Legal Structure • Small Business vs Entrepreneur • Financial • Debt vs Equity Financing • Typical Resources for Financing Small Businesses • Entrepreneurial Funding vs Stage of Venture • Entrepreneurial Financing

  17. Additional Resources: For a copy of this PowerPoint presentation please go to: http://businessinformationisu.wordpress.com For a copy of The Experienced Entrepreneur please go to: http://www.amazon.com/The-Experienced-Entrepreneur-Rick-Paul/dp/0970020600 If I can be of further assistance, please start a conversation at: https://www.facebook.com/experiencedentrepreneur For the College of Technology Entrepreneurship class information please go to: http://www.isu.edu/ctech/business_information/ For the College of Technology please go to: http://www.isu.edu/ctech/index.shtml Or visit the College of Technology at the Pocatello - Chubbuck Chamber of Commerce Business After Hours on 2/20 from 5:00 to 7:00 pm at the Clarion Inn, Pocatello, Idaho.

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