Startup Boot Camp

Kick Starting Success for California’s Retail, Restaurant and Service Entrepreneurs!

Day 1 — Session 1

WELCOME/INTRODUCTIONS

"The best way to predict the future is to create it."

— Peter Drucker

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Goals

Designed specifically for entrepreneurs in the early stages of developing service, retail or restaurant businesses

Test your business idea– Is It feasible given your goals, values, income requirements, and

finances?

Understand and execute basic business planning concepts– Determine what information is important and how to get it– Determine what questions need to be asked

Develop an action plan

Link to free and low-cost resources that can help

Expectations

Attend entire program

Complete all of the work

Add your expertise to the discussions

Become an SBDC client for one-on-one counseling upon completion of program to refine and complete your business plan

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Caveat

Like drinking out of a fire hose

Exposure to many concepts

Will touch on a wide variety of issues affecting startups, but concentrate on producing deliverables for the elements necessary to create a well-thought out business plan

At the end of the program, you should become an SBDC client to refine your business plan and build-out your support network/systems.

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One-Minute Introductions Identify yourself

Describe your business idea

Tell us about prior experience that is relevant to your business idea

State one or two specific questions that you hope to answer as a result of the Boot Camp

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XXXXXXXXX SBDC

Basics

Business counseling, training

Training free or low cost/counseling free

Any stage of business growth

Founded during Carter administration

Oversight by federal Small Business Administration (SBA)

Over 1,100 nationwide

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What Is An SBDC?

Assists “business ready” entrepreneurs and existing small business owners who are ready to start, retain or expand their business

Focuses on businesses with potential to produce economic impact for the local community:

Provides no-cost, one-on-one business counseling Offers no- or low-cost training, workshops and business forums Measures and validates (through client surveys) success against 6

criteria– Business starts– Jobs created – Jobs retained– Sales increased– Capital investment received– Loans obtained

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What Is An SBDC (cont’d)

Experienced, independent Business Advisors

Generalists and specialists (examples)– Business planning– Market research, marketing, advertising– Loan assistance/financial management– Human Resources– Procurement/minority certification– Technology

Part of local economic development community providing referrals to qualified small-business resources

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KIMCO KEYS PROGRAM

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KEYS Program

North America’s Largest Owner & Operator of

Neighborhood & Community Shopping Centers.

History Started in 1958 | IPO that initiated modern REIT era;

NYSE-listed for ~20 years | S&P 500 Index (2006)

Dividend $0.76 annually, ~3.9% yield (3/31/12)

Shopping Center Properties 946 properties; 138.1M / 89.5M sq. ft. (gross/pro-rata)

Geographic Footprint 44 states, Puerto Rico, Canada, Mexico and South America

Occupancy (pro-rata) 5-year average: 93.9% | High: 96.3% (12/31/07) / Low: 92.3% (6/30/09)

Enterprise Value $13.2B (3/31/12)

Credit Rating Investment Grade BBB+ | BBB+ | Baa1 (S&P | Fitch | Moody’s)

Who is Kimco?

• Kimco Entrepreneurs Year Start (KEYS) is a business incubator program for qualified startup entrepreneurs.

• Approved applicants receive: • Resources and services • One year of free rent (must pay NNN expenses only)

• This incentive accelerates the growth of their new businesses in shopping centers owned by Kimco and its joint venture partners.

Kimco Entrepreneurs What is KEYS?

Year Start

Westlake Shopping Center - Daly City, CA

Redhawk Towne Center – Temecula, CA

Kimco Entrepreneurs Year Start

• Qualified KEYS applicants will benefit from: • Substantially lower monthly overhead expenses • Lease term flexibility • Assistance of a Kimco counselor

• Counselor will advise and guide potential tenant through the lease, store selection and planning process, if desired.

• After Tenant’s initial first year lease term, the tenant has choice to exercise a four-year lease option for the existing store.

• Also, the lease provides for an easy exit with no long term obligation to Kimco if the startup entrepreneur finds the business unworkable.

What does KEYS offer?

• Currently, there are approximately: • 100 available stores • All under 2,500 square feet in size • Located in Kimco’s demographically diversified California portfolio

• Of the 100 available units, there is a mixture of both retail, service, and former restaurant build-outs.

Kimco Entrepreneurs How many spaces are available?

Year Start

Larwin Square Shopping Center – Tustin, CA

KEYS Locations

The District at Tustin Legacy – Tustin, CA

Kimco Entrepreneurs Year Start

• KEYS is open to: • New startup retail ventures • Service operations • Restaurants

• The entrepreneur should have the training, skill, enthusiasm, and adequate funding to launch a new business.

• Franchisees or product license agreement participants may not apply to the program.

Who can apply to KEYS?

• There is NO catch!

• Kimco benefits by bringing new and exciting tenants to its vacancies, while new entrepreneurs benefit from lower startup costs, favorable lease terms, and the help of a counselor, if desired.

• Studies found that 87% of ‘incubator graduates’ stayed in business, in contrast to 44% of all firms.

Kimco Entrepreneurs What’s the catch?

Year Start

The District at Tustin Legacy – Tustin, CA

Kimco Entrepreneurs Year Start

• Applicants can submit their business plan online at http://www.KimcoKeys.com

How do I get started?

• Applicants may also apply by calling 1-888-668-1690

• A printable application form can be found online by clicking here

Westlake Shopping Center - Daly City, CA

THE BASICS

The Textbook “Entrepreneur” Recognition of available

opportunities

The long-term will, motivation, and endurance to stick with it to deliver a product or service to capitalize on the identified opportunities

Identification of the resources needed

Ability to acquire resources required but not currently controlled

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The Real World Entrepreneur

Many Responsibilities

• Bookkeeping• Record Retention• Reporting• Bill Paying• Regulations• Tax filing• Employees• Administration• Customer service• etc., etc., etc.

Many Benefits• Do what you enjoy• Do what you’re

good at• Freedom• Be in control• Be your own boss• Make more money• Build an asset for

retirement• Be the decision

maker

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Understand the tasks that need to be performed

To the extent possible, focus on the “drivers” of your growth and profitability

When possible, hire professionals to handle other tasks (e.g., bookkeeping, taxes, insurance, etc.)

Know your customer

Know your competition

Plan, act, assess . . . Adjust plan, act, assess . . . repeat

Constantly innovate (do something different that can positively impact your business)

Watch cash flow constantly

The Owner’s Mindset

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Your Commitment — You . . .

May need to make financial sacrifices

Will have less free time

Must understand the opportunities and risks

Need to involve your family – it’s their commitment too!

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Is This The Right Path For You? Are You:

– Comfortable taking risks?– Independent?– Persuasive?– Able to negotiate?– Creative?– Supported by others?

If interested, numerous self-assessment tools can be found on the Internet

– Google “entrepreneurship self assessment” to find some– A sample: http://www.youronestopcenter.com/entrepreneur-

test.php

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A Couple Interesting Quotes

“I’m proud of what I’ve done.But I’m most proud of what I

decided not to do.”

Steve Jobs Michael Jordan

“I've failed over and over and over again in my life

and that is why I succeed.”

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20 Starting Questions Why am I starting a business?

What kind of business do I want?

Who is my ideal customer?

What products or services will my business provide?

Am I prepared to spend the time and money needed to get my business started?

What differentiates my business idea and the products or services I will provide from others in the market?

Where will my business be located?

How many employees will I need?

What types of suppliers do I need?

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20 Starting Questions (cont’d)

How much money do I need to get started?

Will I need to get a loan?

How soon will it take before my products or services are available?

How long do I have until I start making a profit?

Who is my competition?

How will I price my product compared to my competition?

How will I set up the legal structure of my business?

What taxes do I need to pay?

What kind of insurance do I need?

How will I manage my business?

How will I advertise my business?

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LET’S GET STARTED

Get legal advice when . . . .– Determining the business structure– Adding your first employee– Reviewing leases and other agreements/contracts– Protecting intellectual property (e.g., trademarks)

At A Minimum . . .

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Sole Proprietorship: – Owned and operated by one person– Easy to start (report income and loss on Schedule C)– High personal liability

Partnership:– Multiple owners– Partnership agreement defines control– Pass through of profits and loss to personal tax return (Form k-1)

Business Structures

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Business Structures (cont’d) Corporation:

– Structured and formal– Complex filing with state– Bylaws govern operations and annual meetings – Strictly limits liability – Two forms:

• C Corp: unlimited shareholders, double taxation• S Corp: less than 100 shareholders, profit and loss pass through

Limited Liability Company– Any number of owners– Structure protects personal liability– Pass through of profits and losses

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Business Structure (cont’d)

Factors to consider:– Number one consideration is YOUR PERSONAL

LIABILITY– Outsider investors– Cost – Ease of formation– Taxes

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Additional Considerations Business Licenses Required: city, county, state Federal Employer Identification Number (EIN)

– Only required if you have employees, but should be considered for all businesses

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Fictitious Business Name

DBA (“doing business as”)– Not necessary if doing business under own name– Allows use of descriptive name for business– Prevent others from using your name in business– Can use assumed name for bank accounts, credit cards,

telephone listings, etc.

Process– Confirm name is available– File with county clerk

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Taxes

Self-employment tax– Social Security and Medicare

Income taxes

State and local taxes

Property tax

Unemployment taxes

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Sale of Tangible Goods Apply for seller’s permit through the Board of

Equalization– California state sales tax of 8.25%– Additional local sales taxes may apply

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Business Insurance Property – buy based on replacement value

– Named peril– All-risks policy

Liability – damage to property or injury to someone– Look at similar businesses

– Consult a professional insurance agent

Professional Liability/Errors and Omissions

Employment Practices Liability Insurance– e.g., wrongful termination, sexual harassment, race, gender

Workers’ Compensation

Optional Medical/Dental/Vision

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Checklist

Be Legal– Seek the advice of an attorney when necessary

Know your Tax Responsibilities– Determine what taxes your are responsible for

Determine insurance needs

Hire qualified professionals to help

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Reference

Three great resources– www.sba.gov– www.business.ca.gov– (Insert local SBDC website here!)

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Reference (cont’d) Business structure:

http://www.taxes.ca.gov/Income_Tax/incbus.shtml

Trademarks and service marks: http://www.sos.ca.gov/business/ts/

Business name search: http://kepler.sos.ca.gov/

Registering a fictitious business name: http://business.ca.gov/StartaBusiness/RegisteringaBusiness/FictitiousBusinessName.aspx

Insert url for local licensing and permits here

Starting a business overview: http://business.ca.gov/StartaBusiness.aspx

Board of equalization: http://business.ca.gov/StartaBusiness/OperatingaBusiness/SellingMerchandise.aspx

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Reference (cont’d) Business permits, licenses and registration requirements in

California: http://www.calgold.ca.gov/

Business incentives: http://business.ca.gov/Portals/0/RelocateExpand/Docs/%5BCalBIS%5D%20Investment%20Guide%206-12.pdf

Tools for business: (others as appropriate) http://alamedacowib.toolsforbusiness.info/california/0b/?CFID=20047345&CFTOKEN=48228e477ea10bf9-CBBF2EC4-080A-5D4F-FD33E2DE24B108AC

Basic information on employees: http://business.ca.gov/StartaBusiness/AdministeringEmployees.aspx

Apply for an EIN: http://www.irs.gov/businesses/small/article/0,,id=102767,00.html

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SUCCESSFUL BUSINESS PLANS

“If you don't know where you are going, any road will take you there.”

— Lewis Carroll

Purpose: Business Plan

Secure capital

Roadmap to success

Negotiate deals with landlords and channel partners

Written execution plan

Solidifies thinking

Makes “vision” in your head realThe 3 C’s: Clear, Compelling, Concise

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Simplicity is Key

“People don’t read anymore; Make it easy for them!”

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Success Factors

10 or fewer written pages Plus financials and supporting documents Formula works for all companies At any stage of development Easy to customize

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WHAT IS YOUR MISSION?

Define your Mission

Summary of your business and your plan?– Short and Sweet.– 100 words, hopefully less.– Think of it as “your reason for being.”

Clearly define your market and your role in it.

How are your different from your competition?

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Answer these Questions

What will your company do?

Who is your core customer?

How will your reach them?

Why are you better than the competition?

What are your product benefits?

What are your key features?

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Example Take out a blank piece of paper Assume this Day Spa is your business:

Take 3 minutes and write a Mission Statement for your business

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Sample Mission Statement

Our mission is to run a profitable business by providing high-end therapeutic massage and aesthetician services in a caring, upscale, professional environment. We offer massage in a variety of styles – traditional Swedish Massage, Sports Massage, Deep Tissue work, Sports Massage, Hot Stone Massage, Reflexology, and others. Our licensed aestheticians offer the latest in skin treatments, body treatments and anti-aging therapies.

Our goal is to tailor the client’s experience based on initial interview information, as well as feedback during the treatments, to ensure the client’s comfort and satisfaction, and to increase repeat business. We are mindful of the overall experience – using only the finest oils and lotions, beauty treatments and aromatherapies. Special lighting, music, decor, and textiles are used throughout the spa to complete the comfortable, plush environment and enhance the client’s overall spa experience.

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Write Down Your Mission

Take out a sheet of paper and write “Mission” on it.– Write down your first draft of your business’ mission statement– Make it great!

Remember . . . .– Short and Sweet.– 100 words, hopefully less.– Think of it as “your reason for being.”

Does it define your market and your role in it? Does it define how you differ from your

competition? Write it and rewrite it over time as you gather

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Startup Boot Camp — LUNCH

Ask not what you can do for your country. Ask what's for lunch.

– Orson Welles

WHO IS YOUR CUSTOMER?

“I don't know the key to success, but the key to failure is trying to

please everybody.”— Bill Cosby

Customer Definition Specifies your market AND your role in it

Identifies your customers and why they will buy from you

Defines your “target” consumer

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Types Of Customer Information Demographic Information - The study of

human populations:– Size– Density and location– Age and gender– Race– Occupation, Income and other statistics

Psychographic Information - Dividing a market into different groups based on:– Social class– Lifestyle– A personality characteristic

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Market Segmentation The process of dividing the total market into a

subgroup which consist of customers who share a similar set of needs and/or wants.

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Market Segmentation Simple segmentation scheme

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Identify Your Heavy User Group

Specialty chocolate and women between 25 and 44

Domestic beer and blue collar males

Imported beer and white collar males

Any Others Come To Mind?

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Example Take out a blank sheet of paper.

Assume this is your bicycle shop:

Take 3 minutes and write down everything you know about your target consumer.

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Example

Is this your customer?

How about this?

Or is this your customer?

Or this?

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Example

If this is your customer, what do we know/can we find out about him/her?

• Age? • Income?• Other Activities?• What do they watch/read?• Where do they get product information?• Who influences their decisions?• What brands do they like?

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Identify Your Customer

Take out a sheet of paper and write “Customer” on it.

Take 3 minutes and write down everything you think you know about your customer.

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WHAT IS YOUR PRODUCT/SERVICE?

What is this?

Capturing Memories!

A Camera!

What is its purpose!

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Product

What is it?

What does it do? What problem does it solve?– If you can explain in 3 steps = you are golden!

Create a competitive product matrix and show what the others are missing

Demonstrate your added value

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Example

Take out a blank sheet of paper and over the next 2 minutes list sample features of a camera.

Remember: Features don’t sell Products; Benefits sell Products!

fea⋅ture: noun. a prominent or conspicuous part or characteristic– 8x Optical Zoom with 28mm Wide-Angle Lens– Optical Image Stabilizer – 720p HD Video – Lithium-ion Battery – Warranty/Customer support

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Example ben⋅e⋅fit: noun. something that is advantageous or

good; an advantage– Better sports pictures– Quality images– Longer time between charges– Affordability– Easy return policy

Marketing and sales: Think . . . .

Feature → Advantage → BENEFIT!Remember to ask Yourself: What problem

are you solving for your customer?

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More On Benefits

The most compelling product benefits are those that provide:– Emotional rewards, or– Financial rewards.

Example: It’s not the brighter smile that the toothpaste offers; it’s what the smile

might bring you (e.g. friends, a better job, etc.).

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Services

Can a service have benefits?

Of course! Name 5 potential features/benefits for a dentist.– Years in practice: “The dentist knows what he/she is

doing”– Name dental school: “They are smart and, therefore,

better”– Location: “No hassle, saves time”– Parking: “Convenient, saves time”– In Network, Preferred provider: “Saves money and

hassle”

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Define your Product/Service Take out a sheet of paper and write

“Product/Service” on it.

Take 3 minutes and write down your product/service and the associated features and benefits.

Create a competitive matrix and show what your competitors are missing that you offer

“Anything that won't sell, I don't want to invent. Its sale is proof of utility, and utility is success.”

— Thomas Edison

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