Description
This publication is provided to you as an informational guide for both the inexperienced small business owner or the experienced owner who is preparing for expansion of an existing business.
A Guide to
Starting or Expanding a Business
Prepared by: Jim Goldsmith, Ed.D
Professor
Community Resource Development Educator
Juneau County UWExtension
211 Hickory Street, Mauston, WI 53948
6088479329
Layout and Production: Nancy MinshallZobal
Offered in print-based format, online, and PDF formats.
www.uwex.edu/ces/cty/juneau/index.html
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A Guide to Starting or Expanding a Business
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· Preface - Pg. 3
Guide structure & purpose
· Section 1 - Pg. 4 - 8
Why people go into business: starting / expanding a business. Is it a perfect fit for you?
Business Checklist—Identifying your needs and wants
Business Support Forms
How to do a Breakeven Analysis
· Section 2 - Pg. 9-15
Starting a business do’s and don’ts
Why a business fails
Business Hints and Tips
· Section 3 - Pg. 16-17
Creating a Business Plan—Why you need to write a Business Plan
· Section 4 - Pg. 18-20
Business Check List—Planning know-how
· Section 5 - Pg. 21-23
County, State, Federal requirements
· Section 6 - Pg. 24-25
Business Checklist-Timeline
· Section 7 - Pg. 26-30
Finances - County, State, Federal Requirements
Loan and Grant programs
· Section 8 - Pg. 31-35
Glossary of terms
· Section 9 - Pg. 36-37
References, Recommended Reading & Websites
About the presenter
The only time you mustn't fail is the last time you try.
~Charles F. Kettering
An EEO/Affirmative employer, UWExtension provides equal opportunities in employment and programming, including Title IX and ADA requirements.
Requests for reasonable accommodations for disabilities or limitations should be made prior to date of program or activity for which it is needed. Please do so as early as
possible prior to program or activity so proper arrangements can be made. Requests are confidential.
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A Guide to Starting or Expanding a Business
Structure of this guide:
· This publication is designed to lead the inexperienced business owner through a step–by–step
outline.
· The outline highlights the process from the initial desire to become a business owner through
the ending results of ownership.
· Through the use of this guide, each new entrepreneur’s ambition can become clearer and the
needed foundation for a successful and profitable business can be put into place, making your
dreams a reality.
· You will find throughout this guideline positive and timely used methods that will assist you in
gaining a solid understanding on how and what to expect as a new business owner.
· Throughout this publication you will be provided the most up to date information.
Purpose:
This publication is provided to you as an informational guide for both the inexperienced small
business owner or the experienced owner who is preparing for expansion of an existing business.
The publication is a combination of tips, guidelines, timelines, requirements, resources, contacts,
and general information. It is hoped that with this publication, you will be better informed as to
how better to succeed in you business venture.
The author, has used his personal experiences as a small business owner as well as the valuable
resources of many local, state and federal organizations to better prepare you for your journey.
This publication is provided as a stand alone guide as well as a resource to be used for small business
workshops.
This publication has also been provided free of charge to small business development centers,
financial institutions, economic development organizations, educational institutions and the
Wisconsin Department of a Commerce to name a few.
Upon request this publication will also be provided on a compact disk CD for your computer use.
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The first question you should answer when you are thinking of going into
business is:
"Am I the type?"
Many times a person’s desire to become a business owner starts from the need for personal
independence, to showcase their creative skills, financial independence, time frame, and personal
achievements and goals.
You will be your most important employee. It is more important that you rate yourself
objectively than how you rate any prospective employee. Appraise your strengths and your weak-
nesses. As a prospective operator of your own business, acknowledge that you are weak in certain
areas and cover the deficiency by either retraining yourself or hiring someone with the necessary
skill.
Characteristics among "successful" small business managers are:
· Drive
Is composed of responsibility, vigor, initiative, persistence and health.
· Thinking ability
Consists of original, creative, critical, and analytical thinking.
· Competency in human relations
Means emotional stability, sociability, good personal relations, consideration, cheerfulness,
cooperation. and tactfulness.
· Communications skills
Include verbal comprehension oral, and written communications.
· Technical knowledge
Is the manager's comprehension of the physical process of producing goods or services, and the
ability to use the information purposefully.
· Motivation
Long has been considered as having an important effect on performance. Psychologists now
claim you can increase the motivation and the personal capacities that will improve your
effectiveness and increase your chances for success. Much of the development of such
achievement motivation depends on setting the right kind of goals for yourself.
I know the price of success:
dedication, hard work, and an unremitting devotion to the things you want to see happen.
~ Frank Lloyd Wright
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IDENTIFYING YOUR REASONS
As a first and often overlooked step, ask yourself why you want to own your own business.
· Freedom from the 9-5 daily work routine?
· Being your own boss?
· Doing what you want when you want to do it?
· Improving your standard of living?
· Boredom with your present job?
· Having a product or service for which you feel there is a demand?
A Self-Analysis of Personal Characteristics
· Are you a leader?
· Do you like to make your own decisions?
· Do you like people?
· Do others turn to you for help in making decisions?
· Do you enjoy competition?
· Do you have will power and self discipline?
· Do you plan ahead?
· Do you get along well with others?
Your Personal Conditions
· Are you aware that running your own business may require working 12-16 hours a day, six days a
week and maybe even Sundays and holidays?
· Do you have the physical stamina to handle the workload and schedule?
· Do you have the emotional strength to withstand the strain?
· Are you prepared if needed, to temporarily lower your standard of living until your
business is firmly established?
· Is your family prepared to go along with the strains they too must bear?
· Are you prepared to lose your savings?
Finding a Niche —Is Your Idea Feasible?
· Identify and briefly describe the business you plan to start.
· Identify the product or service you plan to sell.
· Does your product or service satisfy an unfilled need?
· Will your product or service serve an existing market in which demand exceeds supply?
· Will your product or service be competitive based on its quality, selection, price or
location?
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A Guide to Starting or Expanding a Business
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Personal Skills and Experience
· Do you know what basic skills you will need in order to have a successful business?
· Do you possess those skills?
· When hiring personnel, will you be able to determine if the applicants' skills meet the
requirements for the positions you are filling?
· Have you ever worked in a managerial or supervisory capacity?
· Have you ever worked in a business similar to the one you want to start?
· Have you had any business training in school?
· If you discover you don't have the basic skills needed for your business will you be
willing to delay your plans until you've acquired the necessary skills?
Market Analysis
· Do you know who your customers will be?
· Do you understand their needs and desires?
· Do you know where they live?
· Will you be offering the kind of products or services that they will buy?
· Will your prices be competitive in quality and value?
· Will your promotional program be effective?
· Do you understand how your business compares with your competitors?
· Will your business be conveniently located for the people you plan to serve?
· Will there be adequate parking facilities for the people you plan to serve?
When people keep telling you that you can't do a thing, you kind of like to try it.
~MARGARET CHASE SMITH
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A Guide to Starting or Expanding a Business
Cash on hand $
Savings account
Stocks, bonds, securities
Accounts/notes receivable
Real estate
Life insurance (cash value)
Automobile/other vehicles
Other liquid assets
Table 1: Personal Financial Statement
Assets List amount
Accounts payable $
Notes payable
Contracts payable
Taxes
Real estate loans
Other liabilities
Table 2: Personal Financial Statement
Liabilities List Amount
Table 3: Start-up Cost Estimates
Liabilities____ List amount
Table 4: Estimate of (1) monthly expenses
Estimated cost List amount
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Decorating, remodeling $
Fixtures, equipment
Installing fixtures, equipment
Services, supplies
Beginning inventory cost
Legal, professional fees
Licenses, permits
Telephone utility deposits
Insurance
Signs
Advertising for opening
Unanticipated expenses
Your living costs $
Employee wages
Rent
Advertising
Supplies
Utilities
Insurance
Taxes
Maintenance
Delivery/transportation
Miscellaneous
Financial Analysis
· A profit-and-loss forecast
This is a month-by-month projection of your business's net profit from operations.
· A cash flow projection
This shows you how much actual cash you'll have, month by month, to meet your expenses.
· A start-up cost estimate
This is the total of all the expenses you'll incur before your business opens.
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How to Prepare a Break-Even Analysis
To perform a break-even analysis, you'll have to make educated guesses about your expenses and
revenues. You should do some serious research -- including an analysis of your market -- to
determine your projected sales volume and your anticipated expenses. Business plan books and
software can teach you how to make reasonable revenue and cost estimates.
· Fixed costs
Fixed costs (sometimes called "overhead") don't vary much from month to month. They
include rent, insurance, utilities, and other set expenses. It's also a good idea to throw a little
extra, say 10%, into your break-even analysis to cover miscellaneous expenses that you can't
predict.
· Sales revenue
This is the total dollars from sales activity that you bring into your business each month or
year. To perform a valid break-even analysis, you must base your forecast on the volume of
business you really expect -- not on how much you need to make a good profit.
· Average gross profit for each sale
Average gross profit is the money left from each sales dollar after paying the direct costs of a
sale. (Direct costs are what you pay to provide your product or service.) For example, if
Ann pays an average of $100 for goods to make dresses that she sells for an average of $300,
her average gross profit is $200.
· Average gross profit percentage
This percentage tells you how much of each dollar of sales income is gross profit. To calculate
your average gross profit percentage, divide your average gross profit figure by the average
selling price. For example, if Ann makes an average gross profit of $200 on dresses that she
sells for an average of $300, her gross profit percentage is 66.7% ($200 divided by $300).
· Calculating Your Break-Even Point
Once you've calculated the numbers above, it's easy to figure out your break-even point.
Simply divide your estimated annual fixed costs by your gross profit percentage to determine
the amount of sales revenue you'll need to bring in just to break even.
For example, if Ann fixed costs are $6,000 per month, and her expected profit margin is
66.7%, her break-even point is $9,000 in sales revenue per month ($6,000 divided by .667).
In other words, Ann must make $9,000 each month just to pay her fixed costs and her direct
(product) costs. (Note that this number does not include any profit, or even a salary for Ann.)
· If your break-even point is higher than your expected revenues, you'll need to decide whether
certain aspects of your plan can be changed to create an achievable break-even point.
· If you tinker with the numbers and your break-even sales revenue still seems like an
unattainable number, you may need to scrap your business idea. If that's the case, take heart
in the fact that you found out before you invested your (or someone else's) money in the idea.
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Imagination is more important than knowledge.
Knowledge is limited. Imagination encircles the world.
- Albert Einstein
The Do's of Starting a Business
· Limit your liability to your investment in your company by incorporating your
business or organizing it as a limited liability company.
· Disclose everything to your attorney about your proposed business venture and past business
experiences, both positive and negative.
· Discuss with your attorney the advantages and disadvantages of the various forms of business
entities.
· Discuss with your attorney the "corporate formalities" to which you must adhere in order to
preserve the limited liability afforded to you by virtue of having incorporated your business.
· Apply for a federal tax identification number for your business (necessary for almost all businesses).
· Talk to a tax professional and budget for taxes. and invest in technology.
· Prepare a detailed written business plan.
· Seek advice from organizations such as Small Business Development Centers
(www.sba.gov/sbdc/sbdcnear.html) and the Service Corps of Retired Executives (SCORE)
(www.score.org).
· Get to know your customers and suppliers, network.
· Live frugally and begin saving up money to put into your own business.
· Learn how to start your intended type of business by working for someone else in the same line of
business first.
· Consider the benefits of starting a business on the side of your main-paying job first, such as after
hours, so you can still eat and pay rent while learning how to be successful in your business.
· Consider the advantages of starting a family business. (24/7 help, cheap labor, employee trust, etc...)
· Objectively measure your skills and training against potential competition before you start your
own business.
· If you're starting a business manufacturing a product, consider subcontracting to low-cost suppliers.
· Test market your product or service before putting any substantial money into the business, even
when just expanding.
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A Guide to Starting or Expanding a Business
The Do's of Starting a Business (Continued)
· Make your own "pros" and "cons" list, describing all the positive and negative changes to you and
to your bottom line, including everything you can think of related to the specific business you are
considering starting.
· Talk to lots of people in your intended industry for advice before starting a business. Sometimes
sub-suppliers to your industry have good advice, too. Make a serious comparative analysis of all
opportunities you are considering.
The Don'ts of Starting a Business
· Print your stationary, business cards, and promotional materials until you have had a trade-
mark attorney conduct a search of existing state and federal trademarks and pending trade-
mark applications.
· Ask or permit your employees to breach confidentiality or non-competition agreements with
their previous employers.
· Spend money required to be set aside for employee and other withholding taxes.
· Sign company contracts in your individual capacity. Rather, sign them on behalf of the
company as an officer of the company.
· Put off buying insurance.
· Pass up opportunities for free publicity.
· Try to do everything yourself. Setting up a business is complicated, and a business law
attorney can assist you in making and implementing the right decisions.
· Don't think about leaving your job until you have started to see some monetary
results and fully completed your full start-up plans for the new business.
· Don't consider starting a business in a field you do not enjoy.
· Don't risk all of your assets. Limit your liabilities to a predetermined amount when
starting a business. It can be a percentage of your worth of a dollar amount, but the
point is to pick it from the start and to never cross that line.
· Don't compete with your employer when you start your own business, especially
when moonlighting!
· Don't be in too much of a hurry to get your business started. When learning how to
start most any business, there are no real penalties for missed opportunity.
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The Don'ts of Starting a Business (Continued)
· Don't start a business that involves too high a risk, or has to major a hurdle. Take
on ten 2-foot hurdles, never one 20-foot hurdle!
· Never start a business in which you must have the lowest price to succeed,
established competition can always under-price once it's in their best interest.
· Don't be afraid to learn about the negative aspects of your intended business when
you are first learning how to start it. You can't start a business with blinders on.
· Don't let your entrepreneur self-confidence outweigh careful diligence.
· Don't let the promise of a conceptual high reward deter reality testing. You can
never guess what people will actually pay for anything until they do so.
Why a Business Fails
The U.S. Small Business Administration has seen lots of small businesses come and,
unfortunately, go. According to the SBA, over 50% of small businesses fail in the first five
years. Why? What goes wrong? These figures aren't meant to scare you, but to prepare you for
the rocky path ahead. Underestimating the difficulty of starting a business is one of the big-
gest obstacles entrepreneurs face. However, success can be yours if you are patient, willing to
work hard, and take all the necessary steps.
On the Upside, it's true that there are many reasons not to start your own business. But for
the right person, the advantages of business ownership far outweighs the risks. You will be
your own boss. Hard work and long hours directly benefit you, rather than increasing profits
for someone else. Earning and growth potential are far greater. A new venture is as exciting as
it is risky.
According to the Small Business Administration, two-thirds of new businesses survive for at
least two years, and only 44 percent survive at least four years. Why some businesses fail and
why some succeed is a matter of debate, although there are some common mistakes that can
sink a business in no time.
Success is not the key to happiness. Happiness is the key to success.
If you love what you are doing, you will be successful.
~ ALBERT SCHWEITZER
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A Guide to Starting or Expanding a Business
Why a Business Fails (Continued)
· Overexpansion
Wanting to be the first to market with a new product, taking on added overhead, and the
need to demonstrate revenue growth to anxious investors can all induce businesses to
over- extend themselves financially. Rather than head down this path, start with realistic
goals and allow yourself to grow.
· Poor capital structure
Look at the businesses that fail and you'll find that many of them took on too much debt.
Learn to pay strict attention to your finances and keep careful records of all money
coming in and going out. Even if everything's coming up roses today, trouble can still be
right around the corner.
· Overspending
Many startups spend their seed money before cash has begun to flow in at a positive
rate. This often happens because of misconception about how business operates. If you're
just starting out in business, seek out seasoned veterans you can bounce your ideas off of
prior to making big financial commitments.
· Lack of reserve funds
Failing to prepare for volatile markets and uncontrollable costs like energy-rate increases,
materials, labor, natural disasters, and the like is another top reason many businesses fail.
Make sure you protect your investment and keep enough reserve cash to carry you
through market downtrends and seasonal slowness.
· Bad business location
Don't let a cheap lease tempt you into opening your doors in the wrong neighborhood.
Key factors: competition (how many similar businesses are located nearby?) and accessi-
bility (is it served by freeways, public transportation, and foot traffic?).
· Poor execution and internal controls
Poor customer service, accounting controls, and overall employee incompetence can all
combine to bring down the ship. Make sure you and your employees place a premium on
customer service to generate repeat business. Establish protocols for how tasks should be
accomplished, and remain continually aware.
· An inadequate business plan
Your business plan is your blueprint for success. A well-thought-out business plan forces
you to think about the future and the challenges you'll face. It also forces you to consider
your financial needs, your marketing and management plans, your competition, and your
overall strategy for coming out on top.
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A Guide to Starting or Expanding a Business
Why a Business Fails (Continued)
· Failure to change with the times
The only constant in business is change. Once mighty behemoths fall to earth while un-
known upstarts rise to prominence. The ability to recognize opportunities and be flexible
enough to adapt to changing times are key ingredients to surviving and even prospering in
the toughest business climate. Therefore, learn how to wear multiple hats and to generate
new interests and areas of expertise.
· Ineffective marketing and self-promotion
Customers can't walk through your front door if they don't know you're there. Learn how
to cost-effectively advertise and promote your business through such tried-and-true
methods as direct mail, ads in local newspapers, Web sites, blogs, even by sponsoring a
local little league team. The number of advertising and promotional ideas that exist is only
limited by your own creativity.
· Underestimating the competition
Consumer loyalty doesn't just happen; you have to earn it. If you don't take care of your
customers, your competition will. Watch your competition as closely as you do your own
employees.
What do Bill Gates, Harry Truman, and Walt Disney all have in common?
Their first business venture was a flop, but they didn't let it defeat them.
Entrepreneurs know that business survival statistics aren't in their favor, but that's all part of
the game.
One-third of all new businesses fail by the two-year mark, and almost 60% fold within four
years, according to a 2005 Monthly Labor Review study.
But resilience can be rewarded. So can keeping a positive perspective.
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A Guide to Starting or Expanding a Business
Additional Tips to Jump Start a New Business
· Create a brand
Spend a little money to create a professional logo, business card and stationery. Present a
professional image.
· Ramp up Online
Make creating a Web site a top priority. A Web site is today’s calling card. You really
shouldn’t do without one. Give people a place to go to learn about your business.
· Make Your First Sale
This is key. Get that first sale even if it’s friends or family at a discounted rate. This counts as
getting started, so go for it.
· Promote Testimonials
Get testimonials from your first sales. Start building credibility for your business from day
one.
· Build Buzz
Be creative. Look for a special promotion, big event, email campaign or something out of the
norm for your business to get people talking about you, your product or service.
Tips for Breaking the 5 Barriers to Starting a Business
· No Money
Having enough money to start a business is claimed by many entrepreneur wannabees to
thwarting their dreams. The reality of a successful business is to bootstrap it in the beginning
and accomplish the most critical mission of any startup… finding a customer. Forget the fancy
office, the cool CEO chair, or glossy four color brochures. It doesn’t take big dollars to start a
small business. Over 48% of the Inc. 500 started their business with less than $20,000.
· No Time
Working a full-time job, raising a family, and enjoying a weekend out is the common time-
filled life when you work in cubeville. Time is a resource we can control. If you’re going to be a
successful business owner, mastering time is key. Startups require sacrifices. You have to be
willing to give up the weekends to build momentum.
· No Benefits
Let’s face it, stepping out of the corporate world without benefits can feel like walking a
trapeze without a safety net. It can be easier for a younger, healthy worker to forgo the
health benefits offered by a company. For the Baby Boomer startup entrepreneur, health
benefits remain a top concern. Think through your decision, use your spouses plan or
consider the optional HSA’s (Health Savings Account).
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A Guide to Starting or Expanding a Business
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Additional Tips to Jump Start a New Business (Continued)
· No Family Support
It’s difficult enough to give up the comforts of the corporate world to start a business. With-
out the support of your family and friends the journey can be challenging. To win the support
of your family take the time to explain the business and build a solid business plan. If others
can see how you have taken the time to think it through and minimize the risks, they will be
more supportive.
· No Courage
Dig deep enough and you will often find the reasons for not starting a business are excuses.
The biggest barrier to overcome is yourself. Fear is present in all entrepreneurs. It’s a matter
of learning to accept fear as a silent companion you can beat everyday. Departing from the
cube life takes dedication, guts, and a little chutzpa. Millions of business owners have
succeeded. Take the plunge today and join the entrepreneurial revolution.
"Don't let the fear of the time it will take to accomplish something stand in the way of your
doing it. The time will pass anyway? we might just as well put that passing time to the best
possible use."
- Earl Nightingale, speaker, author
16
A Guide to Starting or Expanding a Business
5 Reasons For Writing A Business Plan
The business plan is the blueprint for your business. Starting a business without a business plan
is just foolish and, your business plan for any business will change over time as the business
develops, and any particular business may have multiple business plans as its objectives change.
· To test the feasibility of your business idea
Writing a business plan is the best way to test whether or not an idea for starting a business is
feasible, other than going out and doing it. In this sense, the business plan is your safety net;
writing a business plan can save you a great deal of time and money if working through the
business plan reveals that your business idea is untenable. Often, an idea for starting a
business is discarded at the marketing analysis or competitive analysis stage, freeing you to
move on to a new (and better) idea.
· To give your new business the best possible chance of success
Writing a business plan will ensure that you pay attention to both the broad operational and
financial objectives of your new business and the details, such as budgeting and market plan-
ning. Taking the time to work through the process of writing a business plan will make for a
smoother startup period and fewer unforeseen problems as your business becomes established.
· To secure funding, such as bank loans
You're going to need both operating and startup capital to start a new business and you have
little hope of getting any money from established financial institutions such as banks without
a well developed business plan. Established businesses often need money, too, to do things
such as buy new equipment or property, or because of market downturns. Having a business
plan gives you a much better chance of getting the money you need to keep operating or to
expand.
· To make business planning manageable and effective
A business plan is essential if you are thinking of starting a business, but it is also an impor-
tant tool for established businesses. Viable businesses are dynamic; they change and grow.
The company's original business plan needs to be revised, as new goals are set. Reviewing the
business plan can also help you see what goals have been accomplished, what changes need to
be made, or what new directions your company's growth should take.
· To attract investors
Whether you want to shop your business to venture capitalists, or attract angel investors, you
need to have a solid business plan. A presentation may pique their interest, but they'll need a
well-written document they can take away and study before they'll be prepared to make any
investment commitment. Be prepared for your business plan to be scrutinized; both venture
capitalists and angel investors will want to conduct extensive background checks and
competitive analysis to be certain that what's written in your business plan is indeed the case.
Writing a business plan is time-consuming, but it's essential if you want to have a successful
business that's going to survive the startup phase. If your business doesn't have one, maybe
it's time to start working on one. The process of writing a business plan can do wonders to
clarify where you've been and where you're going.
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A Guide to Starting or Expanding a Business
Avoid Fatal Business Planning Mistakes
Many factors comprise an outstanding business plan. However, to create a superb document, it
takes time and many revisions. Unfortunately, inexperienced entrepreneurs often send business
plans to potential investors before they are ready to be shared. Below are a few of the key
mistakes commonly found in business plans for startup companies.
· Unrealistic financial projections
Investors expect to see a business plan that paints a realistic financial picture of the antici-
pated growth of the company. If the plan is overly aggressive and not consistent with
growth in the industry, the plan may be shelved. It is best to be realistic with your financial
projections. You need to be prepared to defend and explain all important assumptions con-
cerning your projections.
· Not having a defined target audience
No business will appeal to "everyone." You must clearly define your market and you must
present a clear picture of your potential customers —why will they purchase your product
or service?
· Over-hype
Too much hype and the overuse of superlatives can be the downfall of an otherwise sound
business plan. Wow them with the business idea, not hype or buzz words.
· Poor research
In an effort to get a business plan together hastily, many business owners do not double-
check and substantiate their claims. Make sure your research is accurate, up-to-date, and
verifiable.
· No focus on your competition
Some business plans state that there will be "no competition," while others indicate only
what the competition has done wrong. Investors reading a business plan expect to see such
competition and how you plan to compete in the market. You cannot ignore competition or
paint an inaccurate picture. If your idea is a good one and you truly do not have competi-
tion today, you will tomorrow. Guaranteed.
· Other errors are
Include dry writing, inconsistencies from section to section, and making the plan too
lengthy. It is important to take time to carefully review each section of your business plan.
When you finish, ask several other sets of eyes to scrutinize it before sharing it with
investors.
Dreams and dedication are a powerful combination.
- William Longgood
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A Guide to Starting or Expanding a Business
Planning Your Start-up
So far this checklist has helped you identify questions and problems you will face converting
your idea into reality and determining if your idea is feasible. Through self-analysis you have
learned of your personal qualifications and deficiencies and through market analysis you have
learned if there is a demand for your product or service. The following questions are grouped
according to function. They are designed to help you plan your business startup.
Name and Legal Structure
· Have you chosen a name for your business?
· Have you chosen to operate as sole proprietorship, partnership or corporation?
Your Business and the Law
A person in business is not expected to be a lawyer but each business owner should have a basic
knowledge of laws affecting the business.
Here are some of the legal matters you should be acquainted with
· Do you know which licenses and permits you may need to operate your business?
· Do you know the business laws you will have to obey?
· Do you have a lawyer who can advise you and help you with legal papers?
Are you aware of?
· Occupational Safety and Health Administration (OSHA) requirements?
· Regulations covering hazardous material?
· Local ordinances covering signs snow removal etc.?
· Federal Tax Code provisions pertaining to small business?
· Federal regulations on withholding taxes and
· Social Security?
· State Workmen's Compensation laws?
Protecting Your Business
It is becoming increasingly important that attention be given to security and insurance
protection for your business. There are several areas that should be covered. Have you exam-
ined the following categories of risk protection?
· Fire
· Theft
· Robbery
· Vandalism
· Accident Liability
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A Guide to Starting or Expanding a Business
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Business Premises and Location
· Have you found a suitable building in a location convenient for your customers?
· Can the building be modified for your needs at a reasonable cost?
· Have you considered renting or leasing with an option to buy?
· Will you have a lawyer check the zoning regulations and lease?
Merchandise
· Have you decided what items you will sell or produce or what service (s) you will
provide?
· Have you made a merchandise plan based upon estimated sales to determine the
amount of inventory you will need to control purchases?
· Have you found reliable suppliers who will assist you in the start-up?
· Have you compared the prices quality and credit terms of suppliers?
Business Records
· Are you prepared to maintain complete records of sales income and expenses accounts
payable and receivables?
· Have you determined how to handle payroll records tax reports and payments?
· Do you know what financial reports should be prepared and how to prepare them?
Finances
A large number of small businesses fail each year. There are a number of reasons for these fail-
ures but one of the main reasons is insufficient funds. Too many entrepreneurs try to start and
operate a business without sufficient capital (money).
To avoid this dilemma you can review your situation by analyzing these three questions:
· How much money do you have?
· How much money will you need to start your business?
· How much money will you need to stay in business?
Happiness is not in the mere possession of money?
it lies in the joy of achievement, in the thrill of creative effort.
~FRANKLIN D. ROOSEVELT
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A Guide to Starting or Expanding a Business
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Don't be afraid to give your best to what seemingly are small jobs.
Every time you conquer one it makes you that much stronger.
If you do the little jobs well, the big ones will tend to take care of themselves.
~Dale Carnegie
Forecasting the finances
Estimating the finances of your business may seem intimidating or difficult, but in reality it's
not so bad. Good planning consists of making educated guesses as to how much money you'll take
in and how much you'll need to spend -- and then using these estimates to calculate whether your
business will be profitable.
Here are some Questions your Lender may ask
· Can the business repay the loan? (is cash flow greater than debt service?)
· Can you repay the loan if the business fails? (is collateral sufficient to repay the loan?)
· Does the business collect its bills?
· Does the business control its inventory?
· Does the business pay its bills?
· Are the officers committed to the business?
· Does the business have a profitable operating history?
· Does the business match its sources and uses of funds?
· Are sales growing?
· Does the business control expenses?
· Are profits increasing as a percentage of sales?
· Is there any discretionary cash flow?
· What is the future of the industry?
· Know your competition, their strengths, and weaknesses?
Credit Counseling
If you have had credit problems in the past, you may want to work with a Credit Counseling
Service. These organizations help to get your finances in order, set up a budget, or arrange to
pay accounts. They are often available at low cost. Contact the Wisconsin Department of
Financial Institutions (DFI) to see if the organization is properly licensed in Wisconsin or visit
the DFI website: www.wdfi.org/wca/consumer_credit/credit_problems.htm (608)261-9555
Department of Commerce Financial Programs
For more information on the different grants and financial assistance programs available through
the Wisconsin Department of Commerce call the business helpline and request the free publica-
tion Financial Resources for Businesses and Communities. 1-800-HELP-BUSiness
21
A Guide to Starting or Expanding a Business
Each township or city in Juneau County has different codes, and requirements for businesses.
You should contact each community’s local government agency to receive a complete listing of
their policies.
Mauston City Hall
303 Mansion Street Mauston, WI 53948-1329
Phone: (608) 847-6676
Village of Camp Douglas
304 Center Street Camp Douglas, WI 54618
Phone: (608) 427-3355
Village of Hustler
111 E. Main Street Hustler, WI 54637
Phone: (608) 427-6575
Village of Wonewoc
200 West Street Wonewoc, WI 53968
Phone: (608) 464-3114
Elroy City Hall
225 Main Street Elroy, WI 53929
Phone: (608) 462-2400
City of New Lisbon
232 W. Pleasant St. New Lisbon, WI 53950
Phone: 608-562-5213
Village of Lyndon Station
116 Lemonweir Street Lyndon Station, WI 53944
(608) 666-2500
Village of Necedah
101 Center Street Necedah, WI 54646
Phone: (608) 565-2261
Village of Union Center
339 High Street
Union Center, WI 53962
(608) 462-8810
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A Guide to Starting or Expanding a Business
State Requirements
Many types of businesses and professions must be licensed to operate in Wisconsin. Wisconsin
offers two key online resources to assist entrepreneurs in obtaining state license and permit
information. Both resources can be a tremendous time-saver in locating state agency contacts,
application forms, and license requirements.
· www.wisconsin.gov
Select the “Business Wizard.” In addition to the online resources, you may also receive related
information from the Commerce helpline. 1-800-HELP-BUSiness 1-800-435-7287
· What are Wisconsin's Requirements
Depending on what you plan to do, where you plan to do it, and how it will be done, local,
state and federal licenses, and permits may be necessary. Unlike some other states, Wisconsin
does not issue a "general business license" or a "small business license.”
· Local Requirements
For compliance information on building codes, local permits, tax assessment, zoning and other
regulations, contact the county and/or municipal agencies listed in the government section of
your local phone directory.
· Tax Requirements
Information on the tax requirements for the Business Tax Registration, Seller’s Permit, Use
Tax Permit, Use Tax Certificate, Tax ID (WEIN), Sales and Use Tax Certificate, Machinery
and Equipment Property Tax Exemption, Corporation Income or Franchise Tax, or the
Business Income Tax is available from the Department of Revenue (DOR). (608)266-2776
www.dor.state.wi.us
· Wisconsin Tax Forms and Publications
www.dor.state.wi.us/html/ pubs.html. (608)266-1961. The following Department of
Revenue Offices provide assistance Monday through Friday, 7:45am - 4:30 pm. Appleton
(920)832-2727 Eau Claire (715)836-2811 Madison (608)266-2776 Milwaukee (414)227-4444
Other offices that provide limited weekly assistance are available at: www.dor.state.wi.us/
faqs/address.html E-mail questions to: [email protected]. DOR has a Tax Practioner
News E-Mailing Listcalled DORnews. For information, go to: www.dor.state.wi.us/taxpro/
dornews.html
· Tax Identification Numbers
Any business having employees MUST have both a Federal Employer Identification Number
(FEIN) and a Wisconsin Employer Identification Number (WEIN) to collect federal and state
withholding taxes. Income tax withholding is the withholding of a portion of employee wages
for state and federal income tax purposes. To receive a FEIN, you'll need to complete a SS-4
form from the Internal Revenue Service (IRS). The SS-4 application can be obtained by call-
ing the IRS or downloading the form from their website. www.irs.gov/pub/irs-pdf/p1635.pdf.
1-877-777-4778 Visit our web site athttp://www.commerce.state.wi.us -8 You can apply for
the WEIN by completing a Business Tax Registration application that can be obtained
through any DOR office or by downloading the application. www.dor.state.wi.us/forms/sales/
btr-101.pdf
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A Guide to Starting or Expanding a Business
Federal Start-Up Requirements for Small Businesses
Before a small business can legally begin, it needs to take care of a number of pesky require-
ments with governmental agencies, from the city to the state to the federal government. None of
these requirements are difficult or even terribly time-consuming. But finding out what you need
to do can be like putting together a jigsaw puzzle without knowing what it will look like. Below,
we set out a general outline of these requirements at the federal level.
Why Am I Filling Out All These Forms?
The various permit and license requirements for new businesses have three main purposes:
· To identify your business and make sure you're accountable for your actions
· To protect the public health and safety, and
· To keep track of your finances for tax purposes.
· Tax Registrations
You should know about two kinds of federal tax registrations. The first is the Application for an
Employer Identification Number (EIN), Form SS-4, which is available free at www.irs.gov. All corpo-
rations, limited liability companies (LLCs), and partnerships, as well as sole proprietors who will hire
employees, need to apply for EINs. Although using an EIN is a good way to keep your business and
personal affairs separate, the IRS doesn't like to give an EIN to a sole proprietor without employees.
In that case, you will probably use your own Social Security number rather than a separate EIN.
Second, if your business is a corporation and you want to elect status as an S corporation (for special
tax treatment), you need to file Form 2553, Election by a Small Business Corporation, also available
at www.irs.gov.
· Licenses for Regulated Businesses
You’re not likely to need a federal license or permit unless your business activity or product is super-
vised by a federal agency, such as: public transportation and trucking (the Motor Carrier Safety
Administration) investment advice (the Securities and Exchange Commission) preparation of meat
products or production of drugs (the Food and Drug Administration), or tobacco products, alcohol and
firearms (the Bureau of Alcohol, Tobacco and Firearms in the U.S. Treasury Department).
· Environmental Regulations
It’s possible that you’ll become involved with environmental regulations at the federal level (overseen
by the Environmental Protection Agency, or EPA). For example, you may buy a piece of contami-
nated industrial property that needs cleaning up, or you may need a license to dispose of toxic by-
products from your manufacturing process. For more information, go to the EPA's Small Business
Gateway at www.epa.gov/smallbusiness.
· Securities Registration
If you're starting out your business as a corporation, a limited liability company or a limited partner-
ship, and you'll be sharing ownership with people who will not be actively working in the business,
you may need to comply with federal (as well as state) securities laws. Securities laws are meant to
protect investors from unscrupulous business owners. They require businesses to register the sale of
certain kinds of ownership interests with the federal Securities and Exchange Commission (SEC). This
registration takes time. It typically involves extra legal and accounting fees. www.sec.gov/info/
smallbus/qasbsec.htm.
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A Guide to Starting or Expanding a Business
When the world says, "Give up," Hope whispers, "Try it one more time."
~Author Unknown
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Time Line for Starting a Business
This is a guideline. Not all businesses need to undertake all activities. The time period may
vary from business to business, but these activities are generally undertaken in start-up. This
should serve as a reminder and framework for budgeting time to lay a solid foundation for a
new business.
9-12 MONTHS PRIOR TO START-UP
· Choose a business based on your skills and interests.
· Choose business name, verify right to use name, register the name.
(Not necessary to register business name in Wisconsin.)
· Determine the amount of time required to obtain business permits.
· Research the idea.
· Identify helpful membership organizations
(e.g. Chamber of Commerce, Builders Assoc., etc.)
· Visit with others in your network: attorneys, bankers, CPA’s, consultants, competition.
· Check out community amenities (real estate, schools, etc.).
· Subscribe to local papers.
· Decide on business location.
· Obtain licenses (city, county, state, industry).
· Prepare preliminary business plan and budget.
· Interview bankers.
· Determine when phone book is printed.
6-9 MONTHS PRIOR TO START-UP
· Check zoning ordinances.
· Check utility requirements.
· Prepare leasehold improvement plan.
· Determine office and plant layout and design.
· Choose advisors: attorney, CPA, consultant, insurance agents and brokers.
· Review leases and contracts with attorney and advisors.
· Obtain bids on major business equipment.
· Arrange delivery of equipment.
4-6 MONTHS PRIOR TO START-UP
· Complete business plan including marketing plan.
· Decide on form of business organization and file papers.
· Select Board of Directors for corporation.
· Prepare advertisements.
· Prepare final budget and review with banker. Order business systems: receivables, check
disbursements, payroll system.
· Order sign for office.
.
25
A Guide to Starting or Expanding a Business
0-4 MONTHS PRIOR TO START-UP
· Make sure business filings and license
· Applications are complete (trademark, patents, copyright).
· Arrange for insurance (business and health).
· Arrange for telephone service installation.
· Open checking accounts.
· Sign up for credit card systems at local bank.
· Arrange for business announcement ads in local papers.
· Order announcements for office opening.
· Arrange to give talks to community groups.
· Consider membership in civic and church organizations.
· Arrange for movers, start setting up office & determine business hours.
· Contact State Department of Workforce Development.
· Prepare job descriptions for employees.
· Write policy manual for office employees.
· Check local resources for personnel.
· Begin screening process for new personnel.
· Contact IRS for booklets (apply for Federal Employment ID number).
· Apply for state ID number.
· Find out about workers’ compensation if you will have employees.
· Apply for seller’s permit.
· Contact state for tax forms and employer’s requirements.
· Obtain payroll withholding booklets from tax authorities.
· Review tax requirements with your accountant.
· Arrange for janitorial service, waste removal, laundry service, grass mowing.
· Order supplies: appointment cards, business cards, stationery, deposit stamp for checks,
telephone message pads.
· Interview and select collection agency.
· Determine pricing schedule.
· Order publications (price lists, brochures, receipt forms, etc.)
· Purchase office equipment and furniture.
· Schedule utilities to be turned on.
· Hire and train office personnel.
· Establish petty cash fund.
· Prepare press release and begin advertisement, mail announcement & Plan an open
house.
· Call everyone you know and let them know you are in business
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A Guide to Starting or Expanding a Business
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FI NANCI NG ALTERNATI VES - LOAN AND GRANT PROGRAMS
Lender Program Description Contact
SBA
(Small Business
Administration)
www.sba.gov/
financing
LowDoc
Loan
guarantee
Targeted toward startup and expanding businesses.
The existing business has no more than 100 employees
85% guarantee on loans up to $150,000 Interest rates
negotiable, can be fixed or variable rate (range from
2.25% to 4.75% over prime) depending upon amount
of loan and maturity 1% guarantee fee on guaranteed
portion of loan All loans subject to .5% annualized
servicing fee applied to outstanding balance of guaran-
teed portion Good credit history and character deter-
mine loan eligibility 1 page application, 36-hour turn-
around
Acuity Bank
Dave Taylor
(608) 374-5138
Bank of Mauston
Mike Lindert
(608) 847-6200
Bank of Wonewoc
Bruce Schroeder
(608) 464-3210
Farmer’s State Bank
Janet Bladl
(608) 489-2621
7 (a)
Loan
Guarantee
Purchase of real estate to house the business
operations, construction, renovation or leasehold
improvements, acquisition of furniture, fixtures,
machinery and equipment, purchase of inventory and
working capital Guarantee up to $1,000,000 85% guar-
antee for loans up to $150,000 and 75% for loans over
$150,000 Interest rates negotiable, can be fixed or
variable rate (range from 2.25% to 4.75% over prime)
depending upon amount of loan and maturity 1%-
3.5% guarantee fee on guaranteed portion of loan (rate
depends on amount of loan) All loans subject to .5%
annualized servicing fee applied to outstanding bal-
ance of guaranteed portion Repayment ability from
cash flow, character, management capability, collat-
eral, & owner’s equity determine loan eligibility
M & I Bank
Paul Schaller or
Lynn Erickson
(608) 847-6000
Necedah Bank
Duane Weed
(608) 565-2296
Royal Bank
Jack Heding
(608) 462-8401
504 loan
Certified
Develop-
ment Com-
pany
(CDC)
Purchase land, construct or buy building, renovation,
street improvements, utilities, parking lots, landscap-
ing, and equipment (fixed asset projects only)
Maximum SBA debenture is $1,000,000 Fixed interest
rate for 10 or 20 years
Wisconsin Business
Development
Dan Timm
(715) 343-9082
Impact Seven
(715) 357-3334
www/
impactseven.org
Microloan
Program
Provides very small loans to start-up, newly estab-
lished or growing businesses Available through non-
profit, community-based lenders (intermediary)
Maximum of $35,000 (average is $10,500) Interest
rates vary, generally prime rate to prime + 2%
Intermediaries require collateral, business/personal
assets, and/or co-signer/guarantor
Impact Seven
(715) 357-3334
www/impactseven.org
WWBIC
(414) 263-5450
www.wwbic.com
Coulee CAP
(Community Action
Program)
(608) 796-2926
27
A Guide to Starting or Expanding a Business
WHEDA
(Wisconsin Housing
and Economic Devel-
opment Authority)
www.wheda.com
Small
Business Loan
Guarantee
Expand or acquire a small business, can also be
used to start a day care business. Purchase or
improvement of land, buildings, equipment, in-
ventory, and working capital Maximum guaran-
tee is the lesser of 80% or $80,000 on loans up to
$250,000 Interest is set by lender – variable
prime rate may not exceed Prime +2.75% $200
application fee, 1.75% closing fee and an annual
servicing fee of .25% Guarantee can be used for
most financing needs including working capital
and refinancing of business notes and credit card
debt Must result in creation or retention of jobs
Agribusiness guarantee available (similar terms)
Closing fee is 1% of guaranteed amount on loans
of $150,000 or less OR 2% of guaranteed amount
on loans greater than $150,000
Arlene Scalzo
800 334-6873,
ext. 623
LiDL (Linked
Deposit Loan
Program)
Women and minority (can be start-up)
Must have gross annual sales of less than
$500,000, business must show financial need,
and must create or retain jobs Can be used for
land, buildings and equipment $50 application
fee Slight reduction in interest rate (prime rate
minus 1% possible) Subsidy can range from
$10,000-$99,000
Arlene Scalzo
800 334-6873,
ext. 623
Utility Companies
Loan
Guarantee
Located in utility’s service area, create or retain
jobs
Land, building, improvements, machinery,
equipment, inventory, and working capital
Not eligible: debt refinancing, speculative pro-
jects
$10,000-$200,000 guarantee, no fee
Turnaround depends on size of guarantee
Jerry Bloom
Oakdale Electric
Cooperative
(608) 372-4131
Bruce Kepner
Alliant Energy
(608) 458-5753
Revolving Funds
(community-based
loans)
Many counties
and cities
Formed to improve local economy. Must create
jobs and contribute to economic growth. Loan
size of $10,000-$70,000 typical, micro loans of
$300 - $6,999 available Fixed rate, low interest
rate. Each project requires minimum of 10%
owner’s equity. Gap financing Couple of weeks
turnaround
Jim Goldsmith
University of
Wisconsin-
Extension,
Juneau County
(608) 847-9329
Wisconsin Dept. of
Commerce
www.commerce.stat
e.wi.us
Early
Planning
Grant (EPG)
Monies for eligible project include start-up and
expansion. Used for paying 3
rd
party business
plan consultants. Planning expenses only maxi-
mum funding available is 75% of eligible project
costs up to $3,000
25% cash match required. Job creation or sig-
nificant economic impact
Deb Clements
(715) 344-1381
www.commerce.st
ate.wi.us
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Lender Program Description Contact
28
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Lender Program Description Contact
Wisconsin
Dept. of
Commerce
(cont.)
www.comm
erce.state.
wi.us
Early
Training
Grant
(ETG)
Early Training Grant Program can provide applicants with a
grant to help cover a portion of the cost of attending the Small
Business Development Center Entrepreneurial Training
Course. Upon completion of the course, entrepreneurs will
have a comprehensive business plan that fully evaluates the
feasibility of the proposed start-up or expansion.
Jan Gallagher
Small Business
Development
Center
(608) 785-8782
Capital
Financing
Below market rate financing (typically 4%) for businesses will-
ing to make a firm commitment to invest in Wisconsin. Com-
merce is never the primary lender. Participation is based on
an analysis of the project. Refinancing is not eligible.
Deb Clements
(715) 344-1381
www.commerce.
state.wi.us
Technology
Develop-
ment
The Technology Development programs are designed to assist
businesses and entrepreneurs that are researching new tech-
nologies, products or manufacturing processes that could have
a significant impact on Wisconsin’s economy. Funding is
available for eligible research and development costs or to as-
sist in bringing the new technology to market.
Deb Clements
(715) 344-1381
www.commerce.
state.wi.us
Employee
Training
The Customized Labor Training Program assists companies
investing in new technologies or processes by providing a
grant of up to 50% of the cost of training employees on the
new technologies. Companies of less than 50 employees can
also apply for ISO certification training. Eligible costs include
trainee wages, training materials and trainer costs.
The Best Program provides tuition reimbursement grants for
costs associated with training full-time employees.
Eligible companies must have 25 or fewer employees or annual
sales of less than $2.5 million in targeted industrial clusters.
Maximum funding is up to 75% of eligible project cost not to
exceed $1,000 per full-time employee trained and $5,000 per
business.
Deb Clements
(715) 344-1381
www.commerce.
state.wi.us
Rural
Economic
Develop-
ment
(RED)
Program
Fewer than 50 employees, business is, or will be, located in a
city, town or village with a population of 6,000 or less OR lo-
cated in a county with a population density of less than 150
persons per square mile Funds available for construction
and expansion, working capital, acquisition and existing busi-
nesses, land, buildings and equipment
Can provide up to 50% of eligible costs (maximum $100,000)
Deb Clements
(715) 344-1381
www.commerce.
state.wi.us
Minority
Business
Dev. Loan
Program
(MBD)
Must be certified by Wisconsin Department of Commerce as
being at least 51% owned and controlled by a minority
Must have comprehensive business plan. If no business plan,
the Early Planning Grant (EPG) program may be able to pro-
vide you with a grant to develop it Eligible project costs are
limited to fixed asset financing and working capital. Exam-
ples include land, construction, purchase of existing business,
equipment purchase and working capital interest rate is below
market interest (typically 4%)
Deb Clements
(715) 344-1381
www.commerce.
state.wi.us
29
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Lender Program Description Contact
Wisconsin
Dept. of
Commerce
(cont.)
www.commere.st
ate.wi.us
Economic
Impact
Loan
Program
(EIL)
Designed to offset any impact gaming has had upon
Wisconsin’s Business community Recognizes that
some businesses may have difficulty accessing capi-
tal. EIL will cover a portion of the cost associated
with modernizing and/or improving the business
operations. It is hoped that such improvements
will increase revenues Must have comprehensive
business plan. If no business plan, the Early Plan-
ning Grant (EPG) program may be able to provide
you with a grant to develop it Eligible project costs
are limited to fixed asset financing such as land,
new construction, remodeling, furniture and fix-
tures, equipment. Applicants will be required to
provide a cash match of at least 25%
Deb Clements
(715) 344-1381
www.commerce.state.wi.
us
DVR Grant
When funds available, some businesses may be
available for business funds
RJ Halley
Division of Voc.
Rehabilitation
(608) 847-4899
Day Care Grant
To be announced Family Resources
(608) 784-8125
Agriculture De-
velopment &
Diversification
Grant (ADD)
www.
datcp.state.wi.us
Grants Grants up to $50,000 may be awarded to offer assis-
tance for feasibility studies, demonstration projects,
product development, or market research/
development. Research or marketing site must be
located in Wisconsin. Eligible uses of funds include
development of new agricultural technologies, alter-
native enterprises, value-added processes, market
research and development, new market techniques
and production and processing methods to stimu-
late agricultural development and diversification in
Wisconsin.
Wisconsin Dept. of
Agriculture, Trade &
Consumer Protection
Marketing Division –
ADD
Mike Bandli
Director
P.O. Box 8911
Madison, 53708-8911
(608) 224-5136
www.datcp.state.wi.us
United States
Dept. of
Agriculture
(USDA)
Loans Intermediary Relending Program
Business & Industry Guaranteed Loan Program (B
& I Guar.) Rural Economic Development Loans
Rural Business
Cooperative Service
(715) 345-7600
www.ruraldev.usda.gov
Isadore
Community De-
velopment Loan
Fund
Microloan Funded by the Wisconsin Farmers Foundation
Provides small loans to farm families and other
rural entrepreneurs for the capitalization or expan-
sion of micro enterprises. Must be farm-related
and/or small businesses, new product development
or sustainable agricultural technologies. Loan
maximum is $7,500 over four years with an interest
rate not to exceed 8%. Loan requirements include
a sound business plan, collateral is required
CAP Services, Inc.
Jeff Hudson
(715) 343-7136
30
A Guide to Starting or Expanding a Business
Veterans
Loans and
Services
Veterans may apply for any of the SBA loan programs
(www.sba.gov/vets)
The Veterans Administration has created a Center for
Veterans Enterprise in Washington to act as a clear-
inghouse of information for veterans who are entrepre-
neurs or who plan to start their own businesses
(www.vetbiz.gov or 1-866-584-2344)
Vernon Lovely
Juneau County
Veterans Service
Office
(608) 847-9385
JCEDC
(Juneau
County
Economic
Development
Corporation)
Tri-County
Development
Zone Tax
Credits,
Resource
Assistance for
Inventors &
Entrepreneurs,
Assistance
with Angel
Investors &
Government
Contracting
Available State Income Tax Credits of $3,000-$5,000,
per job created for new business, business expansion,
or relocation of a business to Wisconsin. Tax credits
are based on the number of jobs created, the wage
level, and the benefit package offered. Tax credits of
up to 50% of all your environmental remediation
costs. Support tailored to meet your individual busi-
ness needs. Assistance with gaining government con-
tracts. Assistance with locating Angel Investors
Terry Whipple
Executive Director
of Juneau County
Economic Develop-
ment Corporation
608) 427-2070
Email:
[email protected]
http://
www.juneaucounty.c
om
Lender Program Description Contact
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(WTCZ)
Western
Wisconsin
Technology
Zone
Tax credits The business is located in and its expansion or invest-
ment is occurring in one of the seven counties that
make up the Western Wisconsin Technology Zone.
The business is making an investment of at least
$50,000 involving any of the following: expansion of
existing facilities; purchase of new equipment, or
retaining, creating or significantly upgrading two or
more jobs. Jobs being created, retained or signifi-
cantly upgraded are receiving an average hourly wage
of 200% of minimum wage. Presently this would be
$10.30 an hour with minimum wage at $5.15. The
business completes the Western Wisconsin Technology
Zone application. A business must provide satisfac-
tory evidence in their application that they are
engaged in the activities of research, development, or
manufacturing of advanced products or utilize ad-
vanced technology production processes, system or
equipment, or provide knowledge based services.
Knowledge-based businesses possess some, if not all
the following attributes: highly skilled/highly
educated workforce, high level of research and devel-
opment activities, strong export orientation, high per-
centage of intangible assets, and products/materials
with short life expectations and high gross margins.
In addition, knowledge-based businesses are consid-
ered more likely to use and/or develop advanced tech-
nologies and be innovative in their products, services
or processes. The business is primarily engaged in one
of the following Standard Industrial Classifications:
1) Manufacturing, 2) communications, 3) Computer
Programming, Data Processing, and Software; 4)
Medical and Dental Laboratories; and 5) Research,
Development and Testing Services.
Jim Goldsmith
Juneau
UW-Extension
(608) 847-9329
31
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Juneau County Revolving Loan Fund
A Business Loan Program designated to facilitate creation of new permanent employment
retention and expansion of existing businesses while leveraging new private investment in
Juneau County. Through its participation in the Wisconsin Development Fund (WDF) Pro-
gram has retained funds for the establishment of a Business Revolving Loan Fund (RLF).
This fund is designated to make direct business loans on a companion basis with other financ-
ing sources (public sector loans, governmental loans/grants, equity, etc.)
Eligible Activities:
· These include the following uses:
· Acquisition of land, buildings, equipment and fixed assets
· New construction, expansion or remodeling of buildings
· Working capital
Ineligible Activities:
Loans will not be made for:
· Refinancing
· Specialized equipment not essential to business operation
· Professional services such as: feasibility and marketing studies, design, promotional activi-
ties and legal fees
Minimum Requirements for RLF Loan:
To be eligible, the proposed project must meet all of the following requirements:
· Private Fund Leveraging - Must leverage at least one dollar of private funds for every dol-
lar of RLF funds requested.
· Job Creation - At least one permanent full-time equivalent (FTE) position must be created
or retained for every $20,000 of RLF funds requested.
· Feasibility - Applicant must demonstrate that the proposed project is viable and that
there is ability to repay the funds.
· Employment - At least 51 percent of the jobs created or retained must be made available
to persons of low to moderate income (LMI) as defined by the Federal government.
· Location - Activities financed under the RLF must be located within Juneau County. Cor-
porate headquarters may be located elsewhere.
Projects shall be completed within 24 months of loan approval.
· Loan Amount - Loan amounts are always subject to availability of funds. There is no set
minimum or maximum but generally loans should be for amounts greater than $10,000.
· Interest Rate - The rate may be fixed or graduated on a fixed schedule. In no case shall
the rate be less than four percent.
· Term - In no case will the term of the loan be longer than the term of private financing.
Maximum terms are: Real Estate 12 years
(amortization up to 20 years)
Equipment 10 years
Working Capital 7 years
32
A Guide to Starting or Expanding a Business
Juneau County Revolving Loan Fund Conditions
· Collateral - Adequate security will be required. This will entail liens on all assets pur-
chased with RLF funds as well as liens on other assets as necessary. Personal guar-
antees of the principal owners (more than 20 percent of the firm) will be required.
· Collateral Subordination - The RLF is willing to take a subordinate position if it is
justified in the loan proposal.
· Repayment - The repayment schedule shall be monthly. Interest and/or principle
payments may be deferred one year, if justified in the loan proposal.
APPLI CATI ON
Applications may be submitted at any time and will be processed in the order received,
with a one time, non-refundable fee of $25.
Applications and fee should be submitted to the Juneau County Auditor / Accounting
Department located at:
220 E. State Street, Room 203 Mauston, WI 53948. (608) 847-9309.
Your application should include the following items:
· Application Form - Information on the project and documentation of need.
· Business Plan - Includes company history, industry trends, marketing/sales plans,
identification of customers, suppliers and competitors.
· Information on Principles - Resumes and personal financial statements for all princi-
pal owners.
· Financial History - Profit and Loss Statements and balance sheets for the preceding
three year period (and interim periods, as necessary)
· Financial Projections - Must submit two sets of Profit and Loss and Cash Flow State-
ments for the next three years. One set shall specify Revolving Loan Fund (RLF)
participation and the other shall specify no RLF funding.
· Commitments for Private Sources - There shall be documentation of commitments
from all private and/or public lenders making loans to the project. Documentation
shall include loan conditions and terms (amount, interest rate, term and security re-
quired).
· Environmental Assessment - Mandated by National Environmental Policy Act
(NEPA) for all projects which are not exempt or categorically excluded.
· Other - Specific information will be submitted on assets to be acquired, construction
contracts, etc.
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"Only those who dare to fail greatly can ever achieve greatly."
— Robert F. Kennedy
33
A Guide to Starting or Expanding a Business
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Juneau County Revolving Loan Fund Conditions
Review Process
· The loan application review will include:
· Preliminary Review -The administrator or their designee will review the application for
completeness, eligibility, accuracy and credit worthiness.
· Formal Review - The Revolving Loan Fund Committee will normally review the com-
pleted application within 30 days of submittal.
· Final Approval - Accepted proposals will be forwarded to the County Board.
· Closing - if application approved, a closing will be scheduled to execute loan documents.
For More Information or to obtain an Application
Contact:
Lori Chipman, Auditor/Accountant
220 E. State Street, Room 203
Mauston WI 53948
(608) 8479309
or
Jim Goldsmith, CRD Educator
UWExtension
211 Hickory Street
Mauston WI 53948
(608) 8479329
34
A Guide to Starting or Expanding a Business
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A
· ACCOUNTS PAYABLE
Trade accounts of businesses representing obligations to pay for goods and services received.
· ACCOUNTS RECEIVABLE
Trade accounts of businesses representing moneys due for goods sold or services rendered evidenced by notes,
statements, invoices, or other written evidence of a present obligation.
B
· BANKRUPTCY
A condition in which a business cannot meet its debt obligations and petitions a federal district court for either
reorganization of its debts or liquidation of its assets. In the action the property of a debtor is taken over by a
receiver or trustee in bankruptcy for the benefit of the creditors. This action is conducted as prescribed by the
National Bankruptcy Act, and may be voluntary or involuntary.
· BREAKEVEN POINT
The breakeven point in any business is that point at which the volume of sales or revenues exactly equals total
expenses - the point at which there is neither a profit nor loss - under varying levels of activity. The breakeven
point tells the manager what level of output or activity is required before the firm can make a profit; reflects the
relationship between costs, volume, and profits.
· BUSINESS PLAN
A comprehensive planning document which clearly describes the business developmental objective of an
existing or proposed business applying for assistance in SBA's 8(a) or lending programs. The plan outlines what
and how and from where the resources needed to accomplish the objective will be obtained and utilized.
C
· CAPITAL
Assets less liabilities, representing the ownership interest in a business; a stock of accumulated goods, especially
at a specified time and in contrast to income received during a specified time period; accumulated goods devoted
to the production of goods; (4) accumulated possessions calculated to bring income.
· CASH FLOW
An accounting presentation showing how much of the cash generated by the business remains after both
expenses (including interest) and principal repayment on financing are paid. A projected cash flow statement
indicates whether the business will have cash to pay its expenses, loans, and make a profit. Cash flows can be
calculated for any given period of time, normally done on a monthly basis.
· COLLATERAL
Something of value - securities, evidence of deposit, or other property- pledged to support the repayment of an
obligation.
· COLLATERAL DOCUMENT
A legal document covering the item (s) pledged as collateral on a loan, i.e., note, mortgages, assignment, etc.
D
· DEFAULTS
The nonpayment of principal and/or interest on the due date as provided by the terms and conditions
of the note.
· DEFERRED LOAN
Loans whose principal and or interest installments are postponed for a specified period of time.
·
35
A Guide to Starting or Expanding a Business
E
· EARNING POWER
The demonstrated ability of a business to earn a profit, over time, while following good accounting
practices. When a business shows a reasonable profit on invested capital after fully maintaining the
business property, appropriately compensating its owner and employees, servicing its obligations,
and fully recognizing its costs, the business may be said to have demonstrated earning power. Dem-
onstrated earning power is the foremost test of the business risk in pressing upon an application for a
loan.
· EMPLOYEE ASSISTANCE PROGRAM (EAP) COORDINATOR
Coordinates the activities of Central Office or regional counselors, maintains a community resource
list of available professional assistance to troubled employees, and a current roster of EAP counselors
for the area of his/her jurisdiction.
· EQUITY
An ownership interest in a business.
· EQUITY FINANCING
The provision of funds for capital or operating expenses in exchange for capital stock, stock purchase
warrants, and options in the business financed without any guaranteed return, but with the opportu-
nity to share in the company's profits. Equity financing includes long-term subordinated securities
containing stock options and/or warrants. Utilized in SBIC financing activities.
F
· FINANCIAL REPORTS
Reports commonly required from applicants request for financial assistance, e.g.:
Balance Sheet - A report of the status of a firm's assets, liabilities and owner's equity at a
given time. Income Statement - A report of revenue and expense which shows the results of
business operations or net income for a specified period of time. Cash Flow -A report
which analyzes the actual or projected source and disposition of cash during a past or future
accounting period.
· FRANCHISING
A continuing relationship in which the franchisor provides a licensed privilege to the franchi-
see to do business and offers assistance in organizing, training, merchandising, marketing,
and managing in return for a consideration. Franchising is a form of business by which the
owner (franchisor) of a product, service, or method obtains distribution through affiliated
dealers (franchisees). The product, method, or service being marketed is usually identified by
the franchisor's brand name, and the holder of the privilege (franchisee) is often given exclu-
sive access to a defined geographical area.
G
· GUARANTEED LOAN
A loan made and serviced by a lending institution under agreement that a governmental agency will
purchase the guaranteed portion if the borrower defaults.
H
· HAZARD INSURANCE
Insurance required showing lender as loss payee covering certain risks on real and personal property
used for securing loans.
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36
A Guide to Starting or Expanding a Business
I
· INSOLVENCY
The inability of a borrower to meet financial obligations as they mature or having insufficient assets
to pay legal debts.
· INVERSE ORDER OF MATURITY
When payments are received from borrowers that are larger than the authorized repayment sched-
ules, the overpayment is credited to the final installments of the principal, which reduces the matur-
ity of the loan and does not affect the original repayment schedule.
J
· JOB DESCRIPTION
A written statement listing the elements of a particular job or occupation, e.g., purpose, duties
equipment used, qualifications, training, physical and mental demands, working conditions, etc.
·
JUDGMENT
Judicial determination of the existence of an indebtedness or other legal liability.
·
JUDGMENT BY CONFESSION
The act of debtors permitting judgment to be entered against them for a given sum with a state-
ment to that effect, without the institution of legal proceedings.
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· LEASE
A contract between the owner (leassor) and the tenant (leassee) stating the conditions under which
the tenant may occupy or use the property.
·
LIEN
A charge upon or security interest in real or personal property maintained to ensure the satisfaction
of a debt or duty ordinarily arising by operation of law.
·
LOAN AGREEMENT
Agreement to be executed by borrower, containing pertinent terms, conditions, covenants, and
restrictions.
·
LOAN PAYOFF AMOUNT
The total amount of money needed to meet a borrower's obligation on a loan. It is arrived at by
accruing gross interest for one day and multiplying this figure by the number of days that exist be-
tween the date of the last repayment and the date on which the loan is to be completely paid off.
This amount, known as accrued interest, is combined with the latest principal and escrow balances
that are applicable to what is now referred to as the loan payoff amount. In the case where prepaid
interest exceeds the accrued interest, the latter is subtracted from the former and the difference is
used to reduce the total amount owed. Recent five years to the total average loans outstanding for
the comparable 5-year period.
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· MORTGAGE
An instrument giving legal title to secure the repayment of a loan made by the mortgagee (lender).
In legal contemplation there are two types: (1) title theory - operates as a transfer of the legal title
of the property to the mortgagee, and (2) lien theory - creates a lien upon the property in favor of
the mortgagee.
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A Guide to Starting or Expanding a Business
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· NET WORTH
Property owned (assets), minus debts and obligations owed (liabilities), is the owner's equity (net
worth).
· NOTES AND ACCOUNTS RECEIVABLE
A secured or unsecured receivable evidenced by a note or open account arising from activities
involving liquidation and disposal of loan collateral.
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· OBLIGATIONS
Technically defined as "amount of orders placed, contracts awarded, services received, and similar
transactions during a given period which will require payments during the same or a future pe-
riod."
· ORDINARY INTEREST
Simple interest based on a year of 360 days, contrasting with exact interest having a base year of
365 days.
· OUTLAYS
Net disbursements (cash payments in excess of cash receipts) for administrative expenses and for
loans and related costs and expenses (e.g., gross disbursements for loans and expenses minus loan
repayments, interest and fee income collected, and reimbursements received for services performed
for other agencies).
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· PRIME RATE
Interest rate which is charged to business borrowers having the highest credit ratings for short
term borrowing.
· PRO-Net
An Internet-based database of information of small, disadvantaged, 8(a), and women-owned busi-
nesses seeking procurement contracts.
· PRODUCT LIABILITY
Type of tort or civil liability that applies to product manufacturers and sellers.
· PROPRIETORSHIP
The most common legal form of business ownership; about 85 percent of all small businesses are
proprietorships. The liability of the owner is unlimited in this form of ownership.
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· RETURN ON INVESTMENT
The amount of profit (return) based on the amount of resources (funds) used to produce it. Also the
ability of a given investment to earn a return for its use.
· REQUEST FOR PROPOSALS
Solicitations for offerings for competitive negotiated procurements when it is impossible to draft an
invitation for bids containing adequate detailed description of the required property and services.
There are 15 circumstances in the Federal Acquisition Regulations (FAR) which permit negotiated
procurements.
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A Guide to Starting or Expanding a Business
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· SMALL BUSINESS DEVELOPMENT CENTERS (SBDC)
The SBDC is a university-based center for the delivery of joint government, academic, and private
sector services for the benefit of small business and the national welfare. It is committed to the devel-
opment and productivity of business and the economy in specific geographical regions.
· SERVICE CORPS OF RETIRED EXECUTIVES (SCORE)
Retired and working successful business persons who volunteer to render assistance in counseling,
training, and guiding small business clients.
· SECONDARY MARKET
Those who purchase an interest in a loan from an original lender, such as banks, institutional inves-
tors, insurance companies, credit unions, and pension funds.
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· TURNOVER (Business)
Turnover is the number of times that an average inventory of goods is sold during a fiscal year or
some designated period. Care must be taken to ensure that the average inventory and net sales are
both reduced to the same denominator; that is, divide inventory at cost into sales at cost or divide
inventory at selling price into sales at selling price. Do not mix cost price with selling price. The turn-
over, when accurately computed, is one measure of the efficiency of a business.
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· UNIFORM COMMERCIAL CODE
Codification of uniform laws concerning commercial transactions. In SBA parlance, generally refers
to a uniform method of recording and enforcing a security interest or charge upon existing or to be
acquired personal property.
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· VENTURE CAPITAL
Money used to support new or unusual commercial undertakings; equity, risk, or speculative capital.
This funding is provided to new or existing firms that exhibit above-average growth rates, a signifi-
cant potential for market expansion, and the need for additional financing for business maintenance
or expansion.
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· WORKERS' COMPENSATION
A state-mandated form of insurance covering workers injured in job-related accidents. In some states
the state is the insurer; in other states insurance must be acquired from commercial insurance firms.
Insurance rates are based on a number of factors, including salaries, firm history, and risk of
occupation.
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"If one advances confidently in the direction of his dreams, and endeavors to live the life
which he has imagined, he will meet with a success unexpected in common hours…
If you have built castles in the air, your work need not be lost? that is where they should be.
Now put foundations under them."
- Henry David Thoreau
39
A Guide to Starting or Expanding a Business
Websites
www.articlealley.com www.usgovinfo.about.com www.microcreditnh.org www.nolo.com
www.bsorchecklist.org www.amazon.com www.sba.com www.liraz.com
www.agentz.com www.arkilite.com www.allbusiness.comhttp://sbinfocanada.about.com
www.starting a business publication\Forbes_comhttp://images.businessweek.com/ss/06/08/failures/index_01.htm
Organizations
UW-Extension Centers
Juneau County Economic Development Corporation (JCEDC)
Small Business Association (SBA)
Small Business Development Center
State and Local Banks
Alliant Energy
Oakdale Electric Cooperative
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Resources
Small Business Books
Small Business Management: An Entrepreneurial Emphasis (with CD-ROM and InfoTrac®) (Hardcover)
by Justin G. Longenecker (Author), Carlos W. Moore (Author), J. William Petty (Author), Leslie E.
Palich (Author)
Start Your Own Business (Entrepreneur Magazine's Start Up) (Paperback) by Rieva Lesson
Business Plans For Dummies (Paperback) by Paul Tiffany (Author), Steven D., PhD Peterson (Author)
Small Business Opportunities [MAGAZINE SUBSCRIPTION]
How to Really Start Your Own Business: (Paperback) (In cooperation with SCORE, Sponsored by VISA)
by David E.Gumpert (Author)
The Business Planning Guide, Creating a Plan for Success in Your Own Business, New and Revised 8th
Edition: (Paperback) by David H Bangs, Jr. (Author)
Business Plans that Work: (Paperback) by Joan Gillman with Sarah White (Authors)
40
A Guide to Starting or Expanding a Business
Juneau County Economic Development Corporation (JCEDC) developed a small busi
ness assistance model called the Inventors and Entrepreneurs Club. It brings people to
gether to teach them the proper steps to explore their ideas, to motivate each other, edu
cate each other, tap into each other networks and get them to the resources they need as
soon as possible. If we have a base of people like this. they have the ability to grasp and
explore any opportunity they can imagine. This club is a grassroots feeder system into
all the great resources that Wisconsin provides.
UWExtension plays a critical partnership role in this club. Jim Goldsmith shares his
business expertise as he teaches the How to Start a Business Class, offered to all mem
bers of the Inventors and Entrepreneurs Club. At least forty five business have received
assistance through this partnership, growing our communities from within.
The purpose and mission of Juneau County’s Inventors and Entrepreneurs Club, Inc. is
educating inventors and entrepreneurs to develop successful businesses while giving
back to new members, entrepreneurs and the betterment of the community. Terry
Whipple, Executive Director of Juneau County Economic Development Corp, is the
brainchild behind the club. His goal was to create a contagious entrepreneurial environ
ment in which persons wishing to investigate the potential of their ideas could do so
within a supportive group of like minded individuals, and it worked.
The I&E Club holds meetings the last Thursday of every month. The meetings are held
at Lemonweir Valley Telephone Company, 127 US Hwy 12, Camp Douglas, WI.
Everyone is welcome.
Terry Whipple
Juneau County EDC Executive Director
122 Main St Camp Douglas WI 54618
608 4272070 http://www.juneaucounty.com
41
A Guide to Starting or Expanding a Business
Jim Goldsmith Juneau County University of Wisconsin Extension Community
Resource Development educator has developed a workshop utilizing his personal
experiences as a small business owner, and through research and information
provided by local, state and federal organizations. Jim has achieved a Bachelor
Degree in Economics, a Masters Degree in Personnel Services, and a Doctorate in
Administration.
Having 30 years administrative experience at the University and Technical level,
along with 25 years of teaching experience in Leadership Supervision and Management supple-
mented with his ten years of ownership of three small businesses, has enabled Jim to share his
knowledge and experience with others.
Jim currently is an educator with the University of Wisconsin Extension-Juneau County focusing
on Community Resource Development and specializing in business and economic development.
Jim provides a free to the public workshop on “How to Start a Small Business”. In the workshop
individuals with an interest in starting or purchasing a small business will gain knowledge from
information provided through an interactive format.
Information provided in the workshop:
· Self-examination; are you and business friends or foe’s
· Business Checklist
· Business Plan writing tools and samples
· Business Do’s and Don’ts
· Local-State- Federal business requirements
· Learning how to approach banks and other sources of funding
· Reference materials
· Personal experiences
Once you have completed a draft of your Business Plan, Jim offers to you a free one-on-one review
and gives insight on the Business Plans workability.
Through your attendance at the workshop, you will be provided a foundation utilizing hands on
skills, personal business experiences, and a abundance of reference materials that Jim infuses into
the program from which a new business can be built or from which an expansion of a current busi-
ness can be fulfilled. As a current or new business owner you will leave the workshop with the tools
to kick start or enhance your current business goals.
For registration dates and information, contact our office at the following location.
Juneau County UW-Extension
211 Hickory St., Room 301
Mauston, WI 53948
608-847-9329
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doc_452328923.pdf
This publication is provided to you as an informational guide for both the inexperienced small business owner or the experienced owner who is preparing for expansion of an existing business.
A Guide to
Starting or Expanding a Business
Prepared by: Jim Goldsmith, Ed.D
Professor
Community Resource Development Educator
Juneau County UWExtension
211 Hickory Street, Mauston, WI 53948
6088479329
Layout and Production: Nancy MinshallZobal
Offered in print-based format, online, and PDF formats.
www.uwex.edu/ces/cty/juneau/index.html
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· Preface - Pg. 3
Guide structure & purpose
· Section 1 - Pg. 4 - 8
Why people go into business: starting / expanding a business. Is it a perfect fit for you?
Business Checklist—Identifying your needs and wants
Business Support Forms
How to do a Breakeven Analysis
· Section 2 - Pg. 9-15
Starting a business do’s and don’ts
Why a business fails
Business Hints and Tips
· Section 3 - Pg. 16-17
Creating a Business Plan—Why you need to write a Business Plan
· Section 4 - Pg. 18-20
Business Check List—Planning know-how
· Section 5 - Pg. 21-23
County, State, Federal requirements
· Section 6 - Pg. 24-25
Business Checklist-Timeline
· Section 7 - Pg. 26-30
Finances - County, State, Federal Requirements
Loan and Grant programs
· Section 8 - Pg. 31-35
Glossary of terms
· Section 9 - Pg. 36-37
References, Recommended Reading & Websites
About the presenter
The only time you mustn't fail is the last time you try.
~Charles F. Kettering
An EEO/Affirmative employer, UWExtension provides equal opportunities in employment and programming, including Title IX and ADA requirements.
Requests for reasonable accommodations for disabilities or limitations should be made prior to date of program or activity for which it is needed. Please do so as early as
possible prior to program or activity so proper arrangements can be made. Requests are confidential.
3
A Guide to Starting or Expanding a Business
Structure of this guide:
· This publication is designed to lead the inexperienced business owner through a step–by–step
outline.
· The outline highlights the process from the initial desire to become a business owner through
the ending results of ownership.
· Through the use of this guide, each new entrepreneur’s ambition can become clearer and the
needed foundation for a successful and profitable business can be put into place, making your
dreams a reality.
· You will find throughout this guideline positive and timely used methods that will assist you in
gaining a solid understanding on how and what to expect as a new business owner.
· Throughout this publication you will be provided the most up to date information.
Purpose:
This publication is provided to you as an informational guide for both the inexperienced small
business owner or the experienced owner who is preparing for expansion of an existing business.
The publication is a combination of tips, guidelines, timelines, requirements, resources, contacts,
and general information. It is hoped that with this publication, you will be better informed as to
how better to succeed in you business venture.
The author, has used his personal experiences as a small business owner as well as the valuable
resources of many local, state and federal organizations to better prepare you for your journey.
This publication is provided as a stand alone guide as well as a resource to be used for small business
workshops.
This publication has also been provided free of charge to small business development centers,
financial institutions, economic development organizations, educational institutions and the
Wisconsin Department of a Commerce to name a few.
Upon request this publication will also be provided on a compact disk CD for your computer use.
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The first question you should answer when you are thinking of going into
business is:
"Am I the type?"
Many times a person’s desire to become a business owner starts from the need for personal
independence, to showcase their creative skills, financial independence, time frame, and personal
achievements and goals.
You will be your most important employee. It is more important that you rate yourself
objectively than how you rate any prospective employee. Appraise your strengths and your weak-
nesses. As a prospective operator of your own business, acknowledge that you are weak in certain
areas and cover the deficiency by either retraining yourself or hiring someone with the necessary
skill.
Characteristics among "successful" small business managers are:
· Drive
Is composed of responsibility, vigor, initiative, persistence and health.
· Thinking ability
Consists of original, creative, critical, and analytical thinking.
· Competency in human relations
Means emotional stability, sociability, good personal relations, consideration, cheerfulness,
cooperation. and tactfulness.
· Communications skills
Include verbal comprehension oral, and written communications.
· Technical knowledge
Is the manager's comprehension of the physical process of producing goods or services, and the
ability to use the information purposefully.
· Motivation
Long has been considered as having an important effect on performance. Psychologists now
claim you can increase the motivation and the personal capacities that will improve your
effectiveness and increase your chances for success. Much of the development of such
achievement motivation depends on setting the right kind of goals for yourself.
I know the price of success:
dedication, hard work, and an unremitting devotion to the things you want to see happen.
~ Frank Lloyd Wright
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A Guide to Starting or Expanding a Business
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IDENTIFYING YOUR REASONS
As a first and often overlooked step, ask yourself why you want to own your own business.
· Freedom from the 9-5 daily work routine?
· Being your own boss?
· Doing what you want when you want to do it?
· Improving your standard of living?
· Boredom with your present job?
· Having a product or service for which you feel there is a demand?
A Self-Analysis of Personal Characteristics
· Are you a leader?
· Do you like to make your own decisions?
· Do you like people?
· Do others turn to you for help in making decisions?
· Do you enjoy competition?
· Do you have will power and self discipline?
· Do you plan ahead?
· Do you get along well with others?
Your Personal Conditions
· Are you aware that running your own business may require working 12-16 hours a day, six days a
week and maybe even Sundays and holidays?
· Do you have the physical stamina to handle the workload and schedule?
· Do you have the emotional strength to withstand the strain?
· Are you prepared if needed, to temporarily lower your standard of living until your
business is firmly established?
· Is your family prepared to go along with the strains they too must bear?
· Are you prepared to lose your savings?
Finding a Niche —Is Your Idea Feasible?
· Identify and briefly describe the business you plan to start.
· Identify the product or service you plan to sell.
· Does your product or service satisfy an unfilled need?
· Will your product or service serve an existing market in which demand exceeds supply?
· Will your product or service be competitive based on its quality, selection, price or
location?
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Personal Skills and Experience
· Do you know what basic skills you will need in order to have a successful business?
· Do you possess those skills?
· When hiring personnel, will you be able to determine if the applicants' skills meet the
requirements for the positions you are filling?
· Have you ever worked in a managerial or supervisory capacity?
· Have you ever worked in a business similar to the one you want to start?
· Have you had any business training in school?
· If you discover you don't have the basic skills needed for your business will you be
willing to delay your plans until you've acquired the necessary skills?
Market Analysis
· Do you know who your customers will be?
· Do you understand their needs and desires?
· Do you know where they live?
· Will you be offering the kind of products or services that they will buy?
· Will your prices be competitive in quality and value?
· Will your promotional program be effective?
· Do you understand how your business compares with your competitors?
· Will your business be conveniently located for the people you plan to serve?
· Will there be adequate parking facilities for the people you plan to serve?
When people keep telling you that you can't do a thing, you kind of like to try it.
~MARGARET CHASE SMITH
7
A Guide to Starting or Expanding a Business
Cash on hand $
Savings account
Stocks, bonds, securities
Accounts/notes receivable
Real estate
Life insurance (cash value)
Automobile/other vehicles
Other liquid assets
Table 1: Personal Financial Statement
Assets List amount
Accounts payable $
Notes payable
Contracts payable
Taxes
Real estate loans
Other liabilities
Table 2: Personal Financial Statement
Liabilities List Amount
Table 3: Start-up Cost Estimates
Liabilities____ List amount
Table 4: Estimate of (1) monthly expenses
Estimated cost List amount
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Decorating, remodeling $
Fixtures, equipment
Installing fixtures, equipment
Services, supplies
Beginning inventory cost
Legal, professional fees
Licenses, permits
Telephone utility deposits
Insurance
Signs
Advertising for opening
Unanticipated expenses
Your living costs $
Employee wages
Rent
Advertising
Supplies
Utilities
Insurance
Taxes
Maintenance
Delivery/transportation
Miscellaneous
Financial Analysis
· A profit-and-loss forecast
This is a month-by-month projection of your business's net profit from operations.
· A cash flow projection
This shows you how much actual cash you'll have, month by month, to meet your expenses.
· A start-up cost estimate
This is the total of all the expenses you'll incur before your business opens.
7
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How to Prepare a Break-Even Analysis
To perform a break-even analysis, you'll have to make educated guesses about your expenses and
revenues. You should do some serious research -- including an analysis of your market -- to
determine your projected sales volume and your anticipated expenses. Business plan books and
software can teach you how to make reasonable revenue and cost estimates.
· Fixed costs
Fixed costs (sometimes called "overhead") don't vary much from month to month. They
include rent, insurance, utilities, and other set expenses. It's also a good idea to throw a little
extra, say 10%, into your break-even analysis to cover miscellaneous expenses that you can't
predict.
· Sales revenue
This is the total dollars from sales activity that you bring into your business each month or
year. To perform a valid break-even analysis, you must base your forecast on the volume of
business you really expect -- not on how much you need to make a good profit.
· Average gross profit for each sale
Average gross profit is the money left from each sales dollar after paying the direct costs of a
sale. (Direct costs are what you pay to provide your product or service.) For example, if
Ann pays an average of $100 for goods to make dresses that she sells for an average of $300,
her average gross profit is $200.
· Average gross profit percentage
This percentage tells you how much of each dollar of sales income is gross profit. To calculate
your average gross profit percentage, divide your average gross profit figure by the average
selling price. For example, if Ann makes an average gross profit of $200 on dresses that she
sells for an average of $300, her gross profit percentage is 66.7% ($200 divided by $300).
· Calculating Your Break-Even Point
Once you've calculated the numbers above, it's easy to figure out your break-even point.
Simply divide your estimated annual fixed costs by your gross profit percentage to determine
the amount of sales revenue you'll need to bring in just to break even.
For example, if Ann fixed costs are $6,000 per month, and her expected profit margin is
66.7%, her break-even point is $9,000 in sales revenue per month ($6,000 divided by .667).
In other words, Ann must make $9,000 each month just to pay her fixed costs and her direct
(product) costs. (Note that this number does not include any profit, or even a salary for Ann.)
· If your break-even point is higher than your expected revenues, you'll need to decide whether
certain aspects of your plan can be changed to create an achievable break-even point.
· If you tinker with the numbers and your break-even sales revenue still seems like an
unattainable number, you may need to scrap your business idea. If that's the case, take heart
in the fact that you found out before you invested your (or someone else's) money in the idea.
9
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Imagination is more important than knowledge.
Knowledge is limited. Imagination encircles the world.
- Albert Einstein
The Do's of Starting a Business
· Limit your liability to your investment in your company by incorporating your
business or organizing it as a limited liability company.
· Disclose everything to your attorney about your proposed business venture and past business
experiences, both positive and negative.
· Discuss with your attorney the advantages and disadvantages of the various forms of business
entities.
· Discuss with your attorney the "corporate formalities" to which you must adhere in order to
preserve the limited liability afforded to you by virtue of having incorporated your business.
· Apply for a federal tax identification number for your business (necessary for almost all businesses).
· Talk to a tax professional and budget for taxes. and invest in technology.
· Prepare a detailed written business plan.
· Seek advice from organizations such as Small Business Development Centers
(www.sba.gov/sbdc/sbdcnear.html) and the Service Corps of Retired Executives (SCORE)
(www.score.org).
· Get to know your customers and suppliers, network.
· Live frugally and begin saving up money to put into your own business.
· Learn how to start your intended type of business by working for someone else in the same line of
business first.
· Consider the benefits of starting a business on the side of your main-paying job first, such as after
hours, so you can still eat and pay rent while learning how to be successful in your business.
· Consider the advantages of starting a family business. (24/7 help, cheap labor, employee trust, etc...)
· Objectively measure your skills and training against potential competition before you start your
own business.
· If you're starting a business manufacturing a product, consider subcontracting to low-cost suppliers.
· Test market your product or service before putting any substantial money into the business, even
when just expanding.
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A Guide to Starting or Expanding a Business
The Do's of Starting a Business (Continued)
· Make your own "pros" and "cons" list, describing all the positive and negative changes to you and
to your bottom line, including everything you can think of related to the specific business you are
considering starting.
· Talk to lots of people in your intended industry for advice before starting a business. Sometimes
sub-suppliers to your industry have good advice, too. Make a serious comparative analysis of all
opportunities you are considering.
The Don'ts of Starting a Business
· Print your stationary, business cards, and promotional materials until you have had a trade-
mark attorney conduct a search of existing state and federal trademarks and pending trade-
mark applications.
· Ask or permit your employees to breach confidentiality or non-competition agreements with
their previous employers.
· Spend money required to be set aside for employee and other withholding taxes.
· Sign company contracts in your individual capacity. Rather, sign them on behalf of the
company as an officer of the company.
· Put off buying insurance.
· Pass up opportunities for free publicity.
· Try to do everything yourself. Setting up a business is complicated, and a business law
attorney can assist you in making and implementing the right decisions.
· Don't think about leaving your job until you have started to see some monetary
results and fully completed your full start-up plans for the new business.
· Don't consider starting a business in a field you do not enjoy.
· Don't risk all of your assets. Limit your liabilities to a predetermined amount when
starting a business. It can be a percentage of your worth of a dollar amount, but the
point is to pick it from the start and to never cross that line.
· Don't compete with your employer when you start your own business, especially
when moonlighting!
· Don't be in too much of a hurry to get your business started. When learning how to
start most any business, there are no real penalties for missed opportunity.
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A Guide to Starting or Expanding a Business
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The Don'ts of Starting a Business (Continued)
· Don't start a business that involves too high a risk, or has to major a hurdle. Take
on ten 2-foot hurdles, never one 20-foot hurdle!
· Never start a business in which you must have the lowest price to succeed,
established competition can always under-price once it's in their best interest.
· Don't be afraid to learn about the negative aspects of your intended business when
you are first learning how to start it. You can't start a business with blinders on.
· Don't let your entrepreneur self-confidence outweigh careful diligence.
· Don't let the promise of a conceptual high reward deter reality testing. You can
never guess what people will actually pay for anything until they do so.
Why a Business Fails
The U.S. Small Business Administration has seen lots of small businesses come and,
unfortunately, go. According to the SBA, over 50% of small businesses fail in the first five
years. Why? What goes wrong? These figures aren't meant to scare you, but to prepare you for
the rocky path ahead. Underestimating the difficulty of starting a business is one of the big-
gest obstacles entrepreneurs face. However, success can be yours if you are patient, willing to
work hard, and take all the necessary steps.
On the Upside, it's true that there are many reasons not to start your own business. But for
the right person, the advantages of business ownership far outweighs the risks. You will be
your own boss. Hard work and long hours directly benefit you, rather than increasing profits
for someone else. Earning and growth potential are far greater. A new venture is as exciting as
it is risky.
According to the Small Business Administration, two-thirds of new businesses survive for at
least two years, and only 44 percent survive at least four years. Why some businesses fail and
why some succeed is a matter of debate, although there are some common mistakes that can
sink a business in no time.
Success is not the key to happiness. Happiness is the key to success.
If you love what you are doing, you will be successful.
~ ALBERT SCHWEITZER
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A Guide to Starting or Expanding a Business
Why a Business Fails (Continued)
· Overexpansion
Wanting to be the first to market with a new product, taking on added overhead, and the
need to demonstrate revenue growth to anxious investors can all induce businesses to
over- extend themselves financially. Rather than head down this path, start with realistic
goals and allow yourself to grow.
· Poor capital structure
Look at the businesses that fail and you'll find that many of them took on too much debt.
Learn to pay strict attention to your finances and keep careful records of all money
coming in and going out. Even if everything's coming up roses today, trouble can still be
right around the corner.
· Overspending
Many startups spend their seed money before cash has begun to flow in at a positive
rate. This often happens because of misconception about how business operates. If you're
just starting out in business, seek out seasoned veterans you can bounce your ideas off of
prior to making big financial commitments.
· Lack of reserve funds
Failing to prepare for volatile markets and uncontrollable costs like energy-rate increases,
materials, labor, natural disasters, and the like is another top reason many businesses fail.
Make sure you protect your investment and keep enough reserve cash to carry you
through market downtrends and seasonal slowness.
· Bad business location
Don't let a cheap lease tempt you into opening your doors in the wrong neighborhood.
Key factors: competition (how many similar businesses are located nearby?) and accessi-
bility (is it served by freeways, public transportation, and foot traffic?).
· Poor execution and internal controls
Poor customer service, accounting controls, and overall employee incompetence can all
combine to bring down the ship. Make sure you and your employees place a premium on
customer service to generate repeat business. Establish protocols for how tasks should be
accomplished, and remain continually aware.
· An inadequate business plan
Your business plan is your blueprint for success. A well-thought-out business plan forces
you to think about the future and the challenges you'll face. It also forces you to consider
your financial needs, your marketing and management plans, your competition, and your
overall strategy for coming out on top.
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A Guide to Starting or Expanding a Business
Why a Business Fails (Continued)
· Failure to change with the times
The only constant in business is change. Once mighty behemoths fall to earth while un-
known upstarts rise to prominence. The ability to recognize opportunities and be flexible
enough to adapt to changing times are key ingredients to surviving and even prospering in
the toughest business climate. Therefore, learn how to wear multiple hats and to generate
new interests and areas of expertise.
· Ineffective marketing and self-promotion
Customers can't walk through your front door if they don't know you're there. Learn how
to cost-effectively advertise and promote your business through such tried-and-true
methods as direct mail, ads in local newspapers, Web sites, blogs, even by sponsoring a
local little league team. The number of advertising and promotional ideas that exist is only
limited by your own creativity.
· Underestimating the competition
Consumer loyalty doesn't just happen; you have to earn it. If you don't take care of your
customers, your competition will. Watch your competition as closely as you do your own
employees.
What do Bill Gates, Harry Truman, and Walt Disney all have in common?
Their first business venture was a flop, but they didn't let it defeat them.
Entrepreneurs know that business survival statistics aren't in their favor, but that's all part of
the game.
One-third of all new businesses fail by the two-year mark, and almost 60% fold within four
years, according to a 2005 Monthly Labor Review study.
But resilience can be rewarded. So can keeping a positive perspective.
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A Guide to Starting or Expanding a Business
Additional Tips to Jump Start a New Business
· Create a brand
Spend a little money to create a professional logo, business card and stationery. Present a
professional image.
· Ramp up Online
Make creating a Web site a top priority. A Web site is today’s calling card. You really
shouldn’t do without one. Give people a place to go to learn about your business.
· Make Your First Sale
This is key. Get that first sale even if it’s friends or family at a discounted rate. This counts as
getting started, so go for it.
· Promote Testimonials
Get testimonials from your first sales. Start building credibility for your business from day
one.
· Build Buzz
Be creative. Look for a special promotion, big event, email campaign or something out of the
norm for your business to get people talking about you, your product or service.
Tips for Breaking the 5 Barriers to Starting a Business
· No Money
Having enough money to start a business is claimed by many entrepreneur wannabees to
thwarting their dreams. The reality of a successful business is to bootstrap it in the beginning
and accomplish the most critical mission of any startup… finding a customer. Forget the fancy
office, the cool CEO chair, or glossy four color brochures. It doesn’t take big dollars to start a
small business. Over 48% of the Inc. 500 started their business with less than $20,000.
· No Time
Working a full-time job, raising a family, and enjoying a weekend out is the common time-
filled life when you work in cubeville. Time is a resource we can control. If you’re going to be a
successful business owner, mastering time is key. Startups require sacrifices. You have to be
willing to give up the weekends to build momentum.
· No Benefits
Let’s face it, stepping out of the corporate world without benefits can feel like walking a
trapeze without a safety net. It can be easier for a younger, healthy worker to forgo the
health benefits offered by a company. For the Baby Boomer startup entrepreneur, health
benefits remain a top concern. Think through your decision, use your spouses plan or
consider the optional HSA’s (Health Savings Account).
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A Guide to Starting or Expanding a Business
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Additional Tips to Jump Start a New Business (Continued)
· No Family Support
It’s difficult enough to give up the comforts of the corporate world to start a business. With-
out the support of your family and friends the journey can be challenging. To win the support
of your family take the time to explain the business and build a solid business plan. If others
can see how you have taken the time to think it through and minimize the risks, they will be
more supportive.
· No Courage
Dig deep enough and you will often find the reasons for not starting a business are excuses.
The biggest barrier to overcome is yourself. Fear is present in all entrepreneurs. It’s a matter
of learning to accept fear as a silent companion you can beat everyday. Departing from the
cube life takes dedication, guts, and a little chutzpa. Millions of business owners have
succeeded. Take the plunge today and join the entrepreneurial revolution.
"Don't let the fear of the time it will take to accomplish something stand in the way of your
doing it. The time will pass anyway? we might just as well put that passing time to the best
possible use."
- Earl Nightingale, speaker, author
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A Guide to Starting or Expanding a Business
5 Reasons For Writing A Business Plan
The business plan is the blueprint for your business. Starting a business without a business plan
is just foolish and, your business plan for any business will change over time as the business
develops, and any particular business may have multiple business plans as its objectives change.
· To test the feasibility of your business idea
Writing a business plan is the best way to test whether or not an idea for starting a business is
feasible, other than going out and doing it. In this sense, the business plan is your safety net;
writing a business plan can save you a great deal of time and money if working through the
business plan reveals that your business idea is untenable. Often, an idea for starting a
business is discarded at the marketing analysis or competitive analysis stage, freeing you to
move on to a new (and better) idea.
· To give your new business the best possible chance of success
Writing a business plan will ensure that you pay attention to both the broad operational and
financial objectives of your new business and the details, such as budgeting and market plan-
ning. Taking the time to work through the process of writing a business plan will make for a
smoother startup period and fewer unforeseen problems as your business becomes established.
· To secure funding, such as bank loans
You're going to need both operating and startup capital to start a new business and you have
little hope of getting any money from established financial institutions such as banks without
a well developed business plan. Established businesses often need money, too, to do things
such as buy new equipment or property, or because of market downturns. Having a business
plan gives you a much better chance of getting the money you need to keep operating or to
expand.
· To make business planning manageable and effective
A business plan is essential if you are thinking of starting a business, but it is also an impor-
tant tool for established businesses. Viable businesses are dynamic; they change and grow.
The company's original business plan needs to be revised, as new goals are set. Reviewing the
business plan can also help you see what goals have been accomplished, what changes need to
be made, or what new directions your company's growth should take.
· To attract investors
Whether you want to shop your business to venture capitalists, or attract angel investors, you
need to have a solid business plan. A presentation may pique their interest, but they'll need a
well-written document they can take away and study before they'll be prepared to make any
investment commitment. Be prepared for your business plan to be scrutinized; both venture
capitalists and angel investors will want to conduct extensive background checks and
competitive analysis to be certain that what's written in your business plan is indeed the case.
Writing a business plan is time-consuming, but it's essential if you want to have a successful
business that's going to survive the startup phase. If your business doesn't have one, maybe
it's time to start working on one. The process of writing a business plan can do wonders to
clarify where you've been and where you're going.
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A Guide to Starting or Expanding a Business
Avoid Fatal Business Planning Mistakes
Many factors comprise an outstanding business plan. However, to create a superb document, it
takes time and many revisions. Unfortunately, inexperienced entrepreneurs often send business
plans to potential investors before they are ready to be shared. Below are a few of the key
mistakes commonly found in business plans for startup companies.
· Unrealistic financial projections
Investors expect to see a business plan that paints a realistic financial picture of the antici-
pated growth of the company. If the plan is overly aggressive and not consistent with
growth in the industry, the plan may be shelved. It is best to be realistic with your financial
projections. You need to be prepared to defend and explain all important assumptions con-
cerning your projections.
· Not having a defined target audience
No business will appeal to "everyone." You must clearly define your market and you must
present a clear picture of your potential customers —why will they purchase your product
or service?
· Over-hype
Too much hype and the overuse of superlatives can be the downfall of an otherwise sound
business plan. Wow them with the business idea, not hype or buzz words.
· Poor research
In an effort to get a business plan together hastily, many business owners do not double-
check and substantiate their claims. Make sure your research is accurate, up-to-date, and
verifiable.
· No focus on your competition
Some business plans state that there will be "no competition," while others indicate only
what the competition has done wrong. Investors reading a business plan expect to see such
competition and how you plan to compete in the market. You cannot ignore competition or
paint an inaccurate picture. If your idea is a good one and you truly do not have competi-
tion today, you will tomorrow. Guaranteed.
· Other errors are
Include dry writing, inconsistencies from section to section, and making the plan too
lengthy. It is important to take time to carefully review each section of your business plan.
When you finish, ask several other sets of eyes to scrutinize it before sharing it with
investors.
Dreams and dedication are a powerful combination.
- William Longgood
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A Guide to Starting or Expanding a Business
Planning Your Start-up
So far this checklist has helped you identify questions and problems you will face converting
your idea into reality and determining if your idea is feasible. Through self-analysis you have
learned of your personal qualifications and deficiencies and through market analysis you have
learned if there is a demand for your product or service. The following questions are grouped
according to function. They are designed to help you plan your business startup.
Name and Legal Structure
· Have you chosen a name for your business?
· Have you chosen to operate as sole proprietorship, partnership or corporation?
Your Business and the Law
A person in business is not expected to be a lawyer but each business owner should have a basic
knowledge of laws affecting the business.
Here are some of the legal matters you should be acquainted with
· Do you know which licenses and permits you may need to operate your business?
· Do you know the business laws you will have to obey?
· Do you have a lawyer who can advise you and help you with legal papers?
Are you aware of?
· Occupational Safety and Health Administration (OSHA) requirements?
· Regulations covering hazardous material?
· Local ordinances covering signs snow removal etc.?
· Federal Tax Code provisions pertaining to small business?
· Federal regulations on withholding taxes and
· Social Security?
· State Workmen's Compensation laws?
Protecting Your Business
It is becoming increasingly important that attention be given to security and insurance
protection for your business. There are several areas that should be covered. Have you exam-
ined the following categories of risk protection?
· Fire
· Theft
· Robbery
· Vandalism
· Accident Liability
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A Guide to Starting or Expanding a Business
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Business Premises and Location
· Have you found a suitable building in a location convenient for your customers?
· Can the building be modified for your needs at a reasonable cost?
· Have you considered renting or leasing with an option to buy?
· Will you have a lawyer check the zoning regulations and lease?
Merchandise
· Have you decided what items you will sell or produce or what service (s) you will
provide?
· Have you made a merchandise plan based upon estimated sales to determine the
amount of inventory you will need to control purchases?
· Have you found reliable suppliers who will assist you in the start-up?
· Have you compared the prices quality and credit terms of suppliers?
Business Records
· Are you prepared to maintain complete records of sales income and expenses accounts
payable and receivables?
· Have you determined how to handle payroll records tax reports and payments?
· Do you know what financial reports should be prepared and how to prepare them?
Finances
A large number of small businesses fail each year. There are a number of reasons for these fail-
ures but one of the main reasons is insufficient funds. Too many entrepreneurs try to start and
operate a business without sufficient capital (money).
To avoid this dilemma you can review your situation by analyzing these three questions:
· How much money do you have?
· How much money will you need to start your business?
· How much money will you need to stay in business?
Happiness is not in the mere possession of money?
it lies in the joy of achievement, in the thrill of creative effort.
~FRANKLIN D. ROOSEVELT
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A Guide to Starting or Expanding a Business
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Don't be afraid to give your best to what seemingly are small jobs.
Every time you conquer one it makes you that much stronger.
If you do the little jobs well, the big ones will tend to take care of themselves.
~Dale Carnegie
Forecasting the finances
Estimating the finances of your business may seem intimidating or difficult, but in reality it's
not so bad. Good planning consists of making educated guesses as to how much money you'll take
in and how much you'll need to spend -- and then using these estimates to calculate whether your
business will be profitable.
Here are some Questions your Lender may ask
· Can the business repay the loan? (is cash flow greater than debt service?)
· Can you repay the loan if the business fails? (is collateral sufficient to repay the loan?)
· Does the business collect its bills?
· Does the business control its inventory?
· Does the business pay its bills?
· Are the officers committed to the business?
· Does the business have a profitable operating history?
· Does the business match its sources and uses of funds?
· Are sales growing?
· Does the business control expenses?
· Are profits increasing as a percentage of sales?
· Is there any discretionary cash flow?
· What is the future of the industry?
· Know your competition, their strengths, and weaknesses?
Credit Counseling
If you have had credit problems in the past, you may want to work with a Credit Counseling
Service. These organizations help to get your finances in order, set up a budget, or arrange to
pay accounts. They are often available at low cost. Contact the Wisconsin Department of
Financial Institutions (DFI) to see if the organization is properly licensed in Wisconsin or visit
the DFI website: www.wdfi.org/wca/consumer_credit/credit_problems.htm (608)261-9555
Department of Commerce Financial Programs
For more information on the different grants and financial assistance programs available through
the Wisconsin Department of Commerce call the business helpline and request the free publica-
tion Financial Resources for Businesses and Communities. 1-800-HELP-BUSiness
21
A Guide to Starting or Expanding a Business
Each township or city in Juneau County has different codes, and requirements for businesses.
You should contact each community’s local government agency to receive a complete listing of
their policies.
Mauston City Hall
303 Mansion Street Mauston, WI 53948-1329
Phone: (608) 847-6676
Village of Camp Douglas
304 Center Street Camp Douglas, WI 54618
Phone: (608) 427-3355
Village of Hustler
111 E. Main Street Hustler, WI 54637
Phone: (608) 427-6575
Village of Wonewoc
200 West Street Wonewoc, WI 53968
Phone: (608) 464-3114
Elroy City Hall
225 Main Street Elroy, WI 53929
Phone: (608) 462-2400
City of New Lisbon
232 W. Pleasant St. New Lisbon, WI 53950
Phone: 608-562-5213
Village of Lyndon Station
116 Lemonweir Street Lyndon Station, WI 53944
(608) 666-2500
Village of Necedah
101 Center Street Necedah, WI 54646
Phone: (608) 565-2261
Village of Union Center
339 High Street
Union Center, WI 53962
(608) 462-8810
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A Guide to Starting or Expanding a Business
State Requirements
Many types of businesses and professions must be licensed to operate in Wisconsin. Wisconsin
offers two key online resources to assist entrepreneurs in obtaining state license and permit
information. Both resources can be a tremendous time-saver in locating state agency contacts,
application forms, and license requirements.
· www.wisconsin.gov
Select the “Business Wizard.” In addition to the online resources, you may also receive related
information from the Commerce helpline. 1-800-HELP-BUSiness 1-800-435-7287
· What are Wisconsin's Requirements
Depending on what you plan to do, where you plan to do it, and how it will be done, local,
state and federal licenses, and permits may be necessary. Unlike some other states, Wisconsin
does not issue a "general business license" or a "small business license.”
· Local Requirements
For compliance information on building codes, local permits, tax assessment, zoning and other
regulations, contact the county and/or municipal agencies listed in the government section of
your local phone directory.
· Tax Requirements
Information on the tax requirements for the Business Tax Registration, Seller’s Permit, Use
Tax Permit, Use Tax Certificate, Tax ID (WEIN), Sales and Use Tax Certificate, Machinery
and Equipment Property Tax Exemption, Corporation Income or Franchise Tax, or the
Business Income Tax is available from the Department of Revenue (DOR). (608)266-2776
www.dor.state.wi.us
· Wisconsin Tax Forms and Publications
www.dor.state.wi.us/html/ pubs.html. (608)266-1961. The following Department of
Revenue Offices provide assistance Monday through Friday, 7:45am - 4:30 pm. Appleton
(920)832-2727 Eau Claire (715)836-2811 Madison (608)266-2776 Milwaukee (414)227-4444
Other offices that provide limited weekly assistance are available at: www.dor.state.wi.us/
faqs/address.html E-mail questions to: [email protected]. DOR has a Tax Practioner
News E-Mailing Listcalled DORnews. For information, go to: www.dor.state.wi.us/taxpro/
dornews.html
· Tax Identification Numbers
Any business having employees MUST have both a Federal Employer Identification Number
(FEIN) and a Wisconsin Employer Identification Number (WEIN) to collect federal and state
withholding taxes. Income tax withholding is the withholding of a portion of employee wages
for state and federal income tax purposes. To receive a FEIN, you'll need to complete a SS-4
form from the Internal Revenue Service (IRS). The SS-4 application can be obtained by call-
ing the IRS or downloading the form from their website. www.irs.gov/pub/irs-pdf/p1635.pdf.
1-877-777-4778 Visit our web site athttp://www.commerce.state.wi.us -8 You can apply for
the WEIN by completing a Business Tax Registration application that can be obtained
through any DOR office or by downloading the application. www.dor.state.wi.us/forms/sales/
btr-101.pdf
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23
A Guide to Starting or Expanding a Business
Federal Start-Up Requirements for Small Businesses
Before a small business can legally begin, it needs to take care of a number of pesky require-
ments with governmental agencies, from the city to the state to the federal government. None of
these requirements are difficult or even terribly time-consuming. But finding out what you need
to do can be like putting together a jigsaw puzzle without knowing what it will look like. Below,
we set out a general outline of these requirements at the federal level.
Why Am I Filling Out All These Forms?
The various permit and license requirements for new businesses have three main purposes:
· To identify your business and make sure you're accountable for your actions
· To protect the public health and safety, and
· To keep track of your finances for tax purposes.
· Tax Registrations
You should know about two kinds of federal tax registrations. The first is the Application for an
Employer Identification Number (EIN), Form SS-4, which is available free at www.irs.gov. All corpo-
rations, limited liability companies (LLCs), and partnerships, as well as sole proprietors who will hire
employees, need to apply for EINs. Although using an EIN is a good way to keep your business and
personal affairs separate, the IRS doesn't like to give an EIN to a sole proprietor without employees.
In that case, you will probably use your own Social Security number rather than a separate EIN.
Second, if your business is a corporation and you want to elect status as an S corporation (for special
tax treatment), you need to file Form 2553, Election by a Small Business Corporation, also available
at www.irs.gov.
· Licenses for Regulated Businesses
You’re not likely to need a federal license or permit unless your business activity or product is super-
vised by a federal agency, such as: public transportation and trucking (the Motor Carrier Safety
Administration) investment advice (the Securities and Exchange Commission) preparation of meat
products or production of drugs (the Food and Drug Administration), or tobacco products, alcohol and
firearms (the Bureau of Alcohol, Tobacco and Firearms in the U.S. Treasury Department).
· Environmental Regulations
It’s possible that you’ll become involved with environmental regulations at the federal level (overseen
by the Environmental Protection Agency, or EPA). For example, you may buy a piece of contami-
nated industrial property that needs cleaning up, or you may need a license to dispose of toxic by-
products from your manufacturing process. For more information, go to the EPA's Small Business
Gateway at www.epa.gov/smallbusiness.
· Securities Registration
If you're starting out your business as a corporation, a limited liability company or a limited partner-
ship, and you'll be sharing ownership with people who will not be actively working in the business,
you may need to comply with federal (as well as state) securities laws. Securities laws are meant to
protect investors from unscrupulous business owners. They require businesses to register the sale of
certain kinds of ownership interests with the federal Securities and Exchange Commission (SEC). This
registration takes time. It typically involves extra legal and accounting fees. www.sec.gov/info/
smallbus/qasbsec.htm.
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24
A Guide to Starting or Expanding a Business
When the world says, "Give up," Hope whispers, "Try it one more time."
~Author Unknown
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Time Line for Starting a Business
This is a guideline. Not all businesses need to undertake all activities. The time period may
vary from business to business, but these activities are generally undertaken in start-up. This
should serve as a reminder and framework for budgeting time to lay a solid foundation for a
new business.
9-12 MONTHS PRIOR TO START-UP
· Choose a business based on your skills and interests.
· Choose business name, verify right to use name, register the name.
(Not necessary to register business name in Wisconsin.)
· Determine the amount of time required to obtain business permits.
· Research the idea.
· Identify helpful membership organizations
(e.g. Chamber of Commerce, Builders Assoc., etc.)
· Visit with others in your network: attorneys, bankers, CPA’s, consultants, competition.
· Check out community amenities (real estate, schools, etc.).
· Subscribe to local papers.
· Decide on business location.
· Obtain licenses (city, county, state, industry).
· Prepare preliminary business plan and budget.
· Interview bankers.
· Determine when phone book is printed.
6-9 MONTHS PRIOR TO START-UP
· Check zoning ordinances.
· Check utility requirements.
· Prepare leasehold improvement plan.
· Determine office and plant layout and design.
· Choose advisors: attorney, CPA, consultant, insurance agents and brokers.
· Review leases and contracts with attorney and advisors.
· Obtain bids on major business equipment.
· Arrange delivery of equipment.
4-6 MONTHS PRIOR TO START-UP
· Complete business plan including marketing plan.
· Decide on form of business organization and file papers.
· Select Board of Directors for corporation.
· Prepare advertisements.
· Prepare final budget and review with banker. Order business systems: receivables, check
disbursements, payroll system.
· Order sign for office.
.
25
A Guide to Starting or Expanding a Business
0-4 MONTHS PRIOR TO START-UP
· Make sure business filings and license
· Applications are complete (trademark, patents, copyright).
· Arrange for insurance (business and health).
· Arrange for telephone service installation.
· Open checking accounts.
· Sign up for credit card systems at local bank.
· Arrange for business announcement ads in local papers.
· Order announcements for office opening.
· Arrange to give talks to community groups.
· Consider membership in civic and church organizations.
· Arrange for movers, start setting up office & determine business hours.
· Contact State Department of Workforce Development.
· Prepare job descriptions for employees.
· Write policy manual for office employees.
· Check local resources for personnel.
· Begin screening process for new personnel.
· Contact IRS for booklets (apply for Federal Employment ID number).
· Apply for state ID number.
· Find out about workers’ compensation if you will have employees.
· Apply for seller’s permit.
· Contact state for tax forms and employer’s requirements.
· Obtain payroll withholding booklets from tax authorities.
· Review tax requirements with your accountant.
· Arrange for janitorial service, waste removal, laundry service, grass mowing.
· Order supplies: appointment cards, business cards, stationery, deposit stamp for checks,
telephone message pads.
· Interview and select collection agency.
· Determine pricing schedule.
· Order publications (price lists, brochures, receipt forms, etc.)
· Purchase office equipment and furniture.
· Schedule utilities to be turned on.
· Hire and train office personnel.
· Establish petty cash fund.
· Prepare press release and begin advertisement, mail announcement & Plan an open
house.
· Call everyone you know and let them know you are in business
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A Guide to Starting or Expanding a Business
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FI NANCI NG ALTERNATI VES - LOAN AND GRANT PROGRAMS
Lender Program Description Contact
SBA
(Small Business
Administration)
www.sba.gov/
financing
LowDoc
Loan
guarantee
Targeted toward startup and expanding businesses.
The existing business has no more than 100 employees
85% guarantee on loans up to $150,000 Interest rates
negotiable, can be fixed or variable rate (range from
2.25% to 4.75% over prime) depending upon amount
of loan and maturity 1% guarantee fee on guaranteed
portion of loan All loans subject to .5% annualized
servicing fee applied to outstanding balance of guaran-
teed portion Good credit history and character deter-
mine loan eligibility 1 page application, 36-hour turn-
around
Acuity Bank
Dave Taylor
(608) 374-5138
Bank of Mauston
Mike Lindert
(608) 847-6200
Bank of Wonewoc
Bruce Schroeder
(608) 464-3210
Farmer’s State Bank
Janet Bladl
(608) 489-2621
7 (a)
Loan
Guarantee
Purchase of real estate to house the business
operations, construction, renovation or leasehold
improvements, acquisition of furniture, fixtures,
machinery and equipment, purchase of inventory and
working capital Guarantee up to $1,000,000 85% guar-
antee for loans up to $150,000 and 75% for loans over
$150,000 Interest rates negotiable, can be fixed or
variable rate (range from 2.25% to 4.75% over prime)
depending upon amount of loan and maturity 1%-
3.5% guarantee fee on guaranteed portion of loan (rate
depends on amount of loan) All loans subject to .5%
annualized servicing fee applied to outstanding bal-
ance of guaranteed portion Repayment ability from
cash flow, character, management capability, collat-
eral, & owner’s equity determine loan eligibility
M & I Bank
Paul Schaller or
Lynn Erickson
(608) 847-6000
Necedah Bank
Duane Weed
(608) 565-2296
Royal Bank
Jack Heding
(608) 462-8401
504 loan
Certified
Develop-
ment Com-
pany
(CDC)
Purchase land, construct or buy building, renovation,
street improvements, utilities, parking lots, landscap-
ing, and equipment (fixed asset projects only)
Maximum SBA debenture is $1,000,000 Fixed interest
rate for 10 or 20 years
Wisconsin Business
Development
Dan Timm
(715) 343-9082
Impact Seven
(715) 357-3334
www/
impactseven.org
Microloan
Program
Provides very small loans to start-up, newly estab-
lished or growing businesses Available through non-
profit, community-based lenders (intermediary)
Maximum of $35,000 (average is $10,500) Interest
rates vary, generally prime rate to prime + 2%
Intermediaries require collateral, business/personal
assets, and/or co-signer/guarantor
Impact Seven
(715) 357-3334
www/impactseven.org
WWBIC
(414) 263-5450
www.wwbic.com
Coulee CAP
(Community Action
Program)
(608) 796-2926
27
A Guide to Starting or Expanding a Business
WHEDA
(Wisconsin Housing
and Economic Devel-
opment Authority)
www.wheda.com
Small
Business Loan
Guarantee
Expand or acquire a small business, can also be
used to start a day care business. Purchase or
improvement of land, buildings, equipment, in-
ventory, and working capital Maximum guaran-
tee is the lesser of 80% or $80,000 on loans up to
$250,000 Interest is set by lender – variable
prime rate may not exceed Prime +2.75% $200
application fee, 1.75% closing fee and an annual
servicing fee of .25% Guarantee can be used for
most financing needs including working capital
and refinancing of business notes and credit card
debt Must result in creation or retention of jobs
Agribusiness guarantee available (similar terms)
Closing fee is 1% of guaranteed amount on loans
of $150,000 or less OR 2% of guaranteed amount
on loans greater than $150,000
Arlene Scalzo
800 334-6873,
ext. 623
LiDL (Linked
Deposit Loan
Program)
Women and minority (can be start-up)
Must have gross annual sales of less than
$500,000, business must show financial need,
and must create or retain jobs Can be used for
land, buildings and equipment $50 application
fee Slight reduction in interest rate (prime rate
minus 1% possible) Subsidy can range from
$10,000-$99,000
Arlene Scalzo
800 334-6873,
ext. 623
Utility Companies
Loan
Guarantee
Located in utility’s service area, create or retain
jobs
Land, building, improvements, machinery,
equipment, inventory, and working capital
Not eligible: debt refinancing, speculative pro-
jects
$10,000-$200,000 guarantee, no fee
Turnaround depends on size of guarantee
Jerry Bloom
Oakdale Electric
Cooperative
(608) 372-4131
Bruce Kepner
Alliant Energy
(608) 458-5753
Revolving Funds
(community-based
loans)
Many counties
and cities
Formed to improve local economy. Must create
jobs and contribute to economic growth. Loan
size of $10,000-$70,000 typical, micro loans of
$300 - $6,999 available Fixed rate, low interest
rate. Each project requires minimum of 10%
owner’s equity. Gap financing Couple of weeks
turnaround
Jim Goldsmith
University of
Wisconsin-
Extension,
Juneau County
(608) 847-9329
Wisconsin Dept. of
Commerce
www.commerce.stat
e.wi.us
Early
Planning
Grant (EPG)
Monies for eligible project include start-up and
expansion. Used for paying 3
rd
party business
plan consultants. Planning expenses only maxi-
mum funding available is 75% of eligible project
costs up to $3,000
25% cash match required. Job creation or sig-
nificant economic impact
Deb Clements
(715) 344-1381
www.commerce.st
ate.wi.us
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Lender Program Description Contact
28
A Guide to Starting or Expanding a Business
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Lender Program Description Contact
Wisconsin
Dept. of
Commerce
(cont.)
www.comm
erce.state.
wi.us
Early
Training
Grant
(ETG)
Early Training Grant Program can provide applicants with a
grant to help cover a portion of the cost of attending the Small
Business Development Center Entrepreneurial Training
Course. Upon completion of the course, entrepreneurs will
have a comprehensive business plan that fully evaluates the
feasibility of the proposed start-up or expansion.
Jan Gallagher
Small Business
Development
Center
(608) 785-8782
Capital
Financing
Below market rate financing (typically 4%) for businesses will-
ing to make a firm commitment to invest in Wisconsin. Com-
merce is never the primary lender. Participation is based on
an analysis of the project. Refinancing is not eligible.
Deb Clements
(715) 344-1381
www.commerce.
state.wi.us
Technology
Develop-
ment
The Technology Development programs are designed to assist
businesses and entrepreneurs that are researching new tech-
nologies, products or manufacturing processes that could have
a significant impact on Wisconsin’s economy. Funding is
available for eligible research and development costs or to as-
sist in bringing the new technology to market.
Deb Clements
(715) 344-1381
www.commerce.
state.wi.us
Employee
Training
The Customized Labor Training Program assists companies
investing in new technologies or processes by providing a
grant of up to 50% of the cost of training employees on the
new technologies. Companies of less than 50 employees can
also apply for ISO certification training. Eligible costs include
trainee wages, training materials and trainer costs.
The Best Program provides tuition reimbursement grants for
costs associated with training full-time employees.
Eligible companies must have 25 or fewer employees or annual
sales of less than $2.5 million in targeted industrial clusters.
Maximum funding is up to 75% of eligible project cost not to
exceed $1,000 per full-time employee trained and $5,000 per
business.
Deb Clements
(715) 344-1381
www.commerce.
state.wi.us
Rural
Economic
Develop-
ment
(RED)
Program
Fewer than 50 employees, business is, or will be, located in a
city, town or village with a population of 6,000 or less OR lo-
cated in a county with a population density of less than 150
persons per square mile Funds available for construction
and expansion, working capital, acquisition and existing busi-
nesses, land, buildings and equipment
Can provide up to 50% of eligible costs (maximum $100,000)
Deb Clements
(715) 344-1381
www.commerce.
state.wi.us
Minority
Business
Dev. Loan
Program
(MBD)
Must be certified by Wisconsin Department of Commerce as
being at least 51% owned and controlled by a minority
Must have comprehensive business plan. If no business plan,
the Early Planning Grant (EPG) program may be able to pro-
vide you with a grant to develop it Eligible project costs are
limited to fixed asset financing and working capital. Exam-
ples include land, construction, purchase of existing business,
equipment purchase and working capital interest rate is below
market interest (typically 4%)
Deb Clements
(715) 344-1381
www.commerce.
state.wi.us
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Lender Program Description Contact
Wisconsin
Dept. of
Commerce
(cont.)
www.commere.st
ate.wi.us
Economic
Impact
Loan
Program
(EIL)
Designed to offset any impact gaming has had upon
Wisconsin’s Business community Recognizes that
some businesses may have difficulty accessing capi-
tal. EIL will cover a portion of the cost associated
with modernizing and/or improving the business
operations. It is hoped that such improvements
will increase revenues Must have comprehensive
business plan. If no business plan, the Early Plan-
ning Grant (EPG) program may be able to provide
you with a grant to develop it Eligible project costs
are limited to fixed asset financing such as land,
new construction, remodeling, furniture and fix-
tures, equipment. Applicants will be required to
provide a cash match of at least 25%
Deb Clements
(715) 344-1381
www.commerce.state.wi.
us
DVR Grant
When funds available, some businesses may be
available for business funds
RJ Halley
Division of Voc.
Rehabilitation
(608) 847-4899
Day Care Grant
To be announced Family Resources
(608) 784-8125
Agriculture De-
velopment &
Diversification
Grant (ADD)
www.
datcp.state.wi.us
Grants Grants up to $50,000 may be awarded to offer assis-
tance for feasibility studies, demonstration projects,
product development, or market research/
development. Research or marketing site must be
located in Wisconsin. Eligible uses of funds include
development of new agricultural technologies, alter-
native enterprises, value-added processes, market
research and development, new market techniques
and production and processing methods to stimu-
late agricultural development and diversification in
Wisconsin.
Wisconsin Dept. of
Agriculture, Trade &
Consumer Protection
Marketing Division –
ADD
Mike Bandli
Director
P.O. Box 8911
Madison, 53708-8911
(608) 224-5136
www.datcp.state.wi.us
United States
Dept. of
Agriculture
(USDA)
Loans Intermediary Relending Program
Business & Industry Guaranteed Loan Program (B
& I Guar.) Rural Economic Development Loans
Rural Business
Cooperative Service
(715) 345-7600
www.ruraldev.usda.gov
Isadore
Community De-
velopment Loan
Fund
Microloan Funded by the Wisconsin Farmers Foundation
Provides small loans to farm families and other
rural entrepreneurs for the capitalization or expan-
sion of micro enterprises. Must be farm-related
and/or small businesses, new product development
or sustainable agricultural technologies. Loan
maximum is $7,500 over four years with an interest
rate not to exceed 8%. Loan requirements include
a sound business plan, collateral is required
CAP Services, Inc.
Jeff Hudson
(715) 343-7136
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A Guide to Starting or Expanding a Business
Veterans
Loans and
Services
Veterans may apply for any of the SBA loan programs
(www.sba.gov/vets)
The Veterans Administration has created a Center for
Veterans Enterprise in Washington to act as a clear-
inghouse of information for veterans who are entrepre-
neurs or who plan to start their own businesses
(www.vetbiz.gov or 1-866-584-2344)
Vernon Lovely
Juneau County
Veterans Service
Office
(608) 847-9385
JCEDC
(Juneau
County
Economic
Development
Corporation)
Tri-County
Development
Zone Tax
Credits,
Resource
Assistance for
Inventors &
Entrepreneurs,
Assistance
with Angel
Investors &
Government
Contracting
Available State Income Tax Credits of $3,000-$5,000,
per job created for new business, business expansion,
or relocation of a business to Wisconsin. Tax credits
are based on the number of jobs created, the wage
level, and the benefit package offered. Tax credits of
up to 50% of all your environmental remediation
costs. Support tailored to meet your individual busi-
ness needs. Assistance with gaining government con-
tracts. Assistance with locating Angel Investors
Terry Whipple
Executive Director
of Juneau County
Economic Develop-
ment Corporation
608) 427-2070
Email:
[email protected]
http://
www.juneaucounty.c
om
Lender Program Description Contact
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(WTCZ)
Western
Wisconsin
Technology
Zone
Tax credits The business is located in and its expansion or invest-
ment is occurring in one of the seven counties that
make up the Western Wisconsin Technology Zone.
The business is making an investment of at least
$50,000 involving any of the following: expansion of
existing facilities; purchase of new equipment, or
retaining, creating or significantly upgrading two or
more jobs. Jobs being created, retained or signifi-
cantly upgraded are receiving an average hourly wage
of 200% of minimum wage. Presently this would be
$10.30 an hour with minimum wage at $5.15. The
business completes the Western Wisconsin Technology
Zone application. A business must provide satisfac-
tory evidence in their application that they are
engaged in the activities of research, development, or
manufacturing of advanced products or utilize ad-
vanced technology production processes, system or
equipment, or provide knowledge based services.
Knowledge-based businesses possess some, if not all
the following attributes: highly skilled/highly
educated workforce, high level of research and devel-
opment activities, strong export orientation, high per-
centage of intangible assets, and products/materials
with short life expectations and high gross margins.
In addition, knowledge-based businesses are consid-
ered more likely to use and/or develop advanced tech-
nologies and be innovative in their products, services
or processes. The business is primarily engaged in one
of the following Standard Industrial Classifications:
1) Manufacturing, 2) communications, 3) Computer
Programming, Data Processing, and Software; 4)
Medical and Dental Laboratories; and 5) Research,
Development and Testing Services.
Jim Goldsmith
Juneau
UW-Extension
(608) 847-9329
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Juneau County Revolving Loan Fund
A Business Loan Program designated to facilitate creation of new permanent employment
retention and expansion of existing businesses while leveraging new private investment in
Juneau County. Through its participation in the Wisconsin Development Fund (WDF) Pro-
gram has retained funds for the establishment of a Business Revolving Loan Fund (RLF).
This fund is designated to make direct business loans on a companion basis with other financ-
ing sources (public sector loans, governmental loans/grants, equity, etc.)
Eligible Activities:
· These include the following uses:
· Acquisition of land, buildings, equipment and fixed assets
· New construction, expansion or remodeling of buildings
· Working capital
Ineligible Activities:
Loans will not be made for:
· Refinancing
· Specialized equipment not essential to business operation
· Professional services such as: feasibility and marketing studies, design, promotional activi-
ties and legal fees
Minimum Requirements for RLF Loan:
To be eligible, the proposed project must meet all of the following requirements:
· Private Fund Leveraging - Must leverage at least one dollar of private funds for every dol-
lar of RLF funds requested.
· Job Creation - At least one permanent full-time equivalent (FTE) position must be created
or retained for every $20,000 of RLF funds requested.
· Feasibility - Applicant must demonstrate that the proposed project is viable and that
there is ability to repay the funds.
· Employment - At least 51 percent of the jobs created or retained must be made available
to persons of low to moderate income (LMI) as defined by the Federal government.
· Location - Activities financed under the RLF must be located within Juneau County. Cor-
porate headquarters may be located elsewhere.
Projects shall be completed within 24 months of loan approval.
· Loan Amount - Loan amounts are always subject to availability of funds. There is no set
minimum or maximum but generally loans should be for amounts greater than $10,000.
· Interest Rate - The rate may be fixed or graduated on a fixed schedule. In no case shall
the rate be less than four percent.
· Term - In no case will the term of the loan be longer than the term of private financing.
Maximum terms are: Real Estate 12 years
(amortization up to 20 years)
Equipment 10 years
Working Capital 7 years
32
A Guide to Starting or Expanding a Business
Juneau County Revolving Loan Fund Conditions
· Collateral - Adequate security will be required. This will entail liens on all assets pur-
chased with RLF funds as well as liens on other assets as necessary. Personal guar-
antees of the principal owners (more than 20 percent of the firm) will be required.
· Collateral Subordination - The RLF is willing to take a subordinate position if it is
justified in the loan proposal.
· Repayment - The repayment schedule shall be monthly. Interest and/or principle
payments may be deferred one year, if justified in the loan proposal.
APPLI CATI ON
Applications may be submitted at any time and will be processed in the order received,
with a one time, non-refundable fee of $25.
Applications and fee should be submitted to the Juneau County Auditor / Accounting
Department located at:
220 E. State Street, Room 203 Mauston, WI 53948. (608) 847-9309.
Your application should include the following items:
· Application Form - Information on the project and documentation of need.
· Business Plan - Includes company history, industry trends, marketing/sales plans,
identification of customers, suppliers and competitors.
· Information on Principles - Resumes and personal financial statements for all princi-
pal owners.
· Financial History - Profit and Loss Statements and balance sheets for the preceding
three year period (and interim periods, as necessary)
· Financial Projections - Must submit two sets of Profit and Loss and Cash Flow State-
ments for the next three years. One set shall specify Revolving Loan Fund (RLF)
participation and the other shall specify no RLF funding.
· Commitments for Private Sources - There shall be documentation of commitments
from all private and/or public lenders making loans to the project. Documentation
shall include loan conditions and terms (amount, interest rate, term and security re-
quired).
· Environmental Assessment - Mandated by National Environmental Policy Act
(NEPA) for all projects which are not exempt or categorically excluded.
· Other - Specific information will be submitted on assets to be acquired, construction
contracts, etc.
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"Only those who dare to fail greatly can ever achieve greatly."
— Robert F. Kennedy
33
A Guide to Starting or Expanding a Business
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Juneau County Revolving Loan Fund Conditions
Review Process
· The loan application review will include:
· Preliminary Review -The administrator or their designee will review the application for
completeness, eligibility, accuracy and credit worthiness.
· Formal Review - The Revolving Loan Fund Committee will normally review the com-
pleted application within 30 days of submittal.
· Final Approval - Accepted proposals will be forwarded to the County Board.
· Closing - if application approved, a closing will be scheduled to execute loan documents.
For More Information or to obtain an Application
Contact:
Lori Chipman, Auditor/Accountant
220 E. State Street, Room 203
Mauston WI 53948
(608) 8479309
or
Jim Goldsmith, CRD Educator
UWExtension
211 Hickory Street
Mauston WI 53948
(608) 8479329
34
A Guide to Starting or Expanding a Business
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· ACCOUNTS PAYABLE
Trade accounts of businesses representing obligations to pay for goods and services received.
· ACCOUNTS RECEIVABLE
Trade accounts of businesses representing moneys due for goods sold or services rendered evidenced by notes,
statements, invoices, or other written evidence of a present obligation.
B
· BANKRUPTCY
A condition in which a business cannot meet its debt obligations and petitions a federal district court for either
reorganization of its debts or liquidation of its assets. In the action the property of a debtor is taken over by a
receiver or trustee in bankruptcy for the benefit of the creditors. This action is conducted as prescribed by the
National Bankruptcy Act, and may be voluntary or involuntary.
· BREAKEVEN POINT
The breakeven point in any business is that point at which the volume of sales or revenues exactly equals total
expenses - the point at which there is neither a profit nor loss - under varying levels of activity. The breakeven
point tells the manager what level of output or activity is required before the firm can make a profit; reflects the
relationship between costs, volume, and profits.
· BUSINESS PLAN
A comprehensive planning document which clearly describes the business developmental objective of an
existing or proposed business applying for assistance in SBA's 8(a) or lending programs. The plan outlines what
and how and from where the resources needed to accomplish the objective will be obtained and utilized.
C
· CAPITAL
Assets less liabilities, representing the ownership interest in a business; a stock of accumulated goods, especially
at a specified time and in contrast to income received during a specified time period; accumulated goods devoted
to the production of goods; (4) accumulated possessions calculated to bring income.
· CASH FLOW
An accounting presentation showing how much of the cash generated by the business remains after both
expenses (including interest) and principal repayment on financing are paid. A projected cash flow statement
indicates whether the business will have cash to pay its expenses, loans, and make a profit. Cash flows can be
calculated for any given period of time, normally done on a monthly basis.
· COLLATERAL
Something of value - securities, evidence of deposit, or other property- pledged to support the repayment of an
obligation.
· COLLATERAL DOCUMENT
A legal document covering the item (s) pledged as collateral on a loan, i.e., note, mortgages, assignment, etc.
D
· DEFAULTS
The nonpayment of principal and/or interest on the due date as provided by the terms and conditions
of the note.
· DEFERRED LOAN
Loans whose principal and or interest installments are postponed for a specified period of time.
·
35
A Guide to Starting or Expanding a Business
E
· EARNING POWER
The demonstrated ability of a business to earn a profit, over time, while following good accounting
practices. When a business shows a reasonable profit on invested capital after fully maintaining the
business property, appropriately compensating its owner and employees, servicing its obligations,
and fully recognizing its costs, the business may be said to have demonstrated earning power. Dem-
onstrated earning power is the foremost test of the business risk in pressing upon an application for a
loan.
· EMPLOYEE ASSISTANCE PROGRAM (EAP) COORDINATOR
Coordinates the activities of Central Office or regional counselors, maintains a community resource
list of available professional assistance to troubled employees, and a current roster of EAP counselors
for the area of his/her jurisdiction.
· EQUITY
An ownership interest in a business.
· EQUITY FINANCING
The provision of funds for capital or operating expenses in exchange for capital stock, stock purchase
warrants, and options in the business financed without any guaranteed return, but with the opportu-
nity to share in the company's profits. Equity financing includes long-term subordinated securities
containing stock options and/or warrants. Utilized in SBIC financing activities.
F
· FINANCIAL REPORTS
Reports commonly required from applicants request for financial assistance, e.g.:
Balance Sheet - A report of the status of a firm's assets, liabilities and owner's equity at a
given time. Income Statement - A report of revenue and expense which shows the results of
business operations or net income for a specified period of time. Cash Flow -A report
which analyzes the actual or projected source and disposition of cash during a past or future
accounting period.
· FRANCHISING
A continuing relationship in which the franchisor provides a licensed privilege to the franchi-
see to do business and offers assistance in organizing, training, merchandising, marketing,
and managing in return for a consideration. Franchising is a form of business by which the
owner (franchisor) of a product, service, or method obtains distribution through affiliated
dealers (franchisees). The product, method, or service being marketed is usually identified by
the franchisor's brand name, and the holder of the privilege (franchisee) is often given exclu-
sive access to a defined geographical area.
G
· GUARANTEED LOAN
A loan made and serviced by a lending institution under agreement that a governmental agency will
purchase the guaranteed portion if the borrower defaults.
H
· HAZARD INSURANCE
Insurance required showing lender as loss payee covering certain risks on real and personal property
used for securing loans.
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A Guide to Starting or Expanding a Business
I
· INSOLVENCY
The inability of a borrower to meet financial obligations as they mature or having insufficient assets
to pay legal debts.
· INVERSE ORDER OF MATURITY
When payments are received from borrowers that are larger than the authorized repayment sched-
ules, the overpayment is credited to the final installments of the principal, which reduces the matur-
ity of the loan and does not affect the original repayment schedule.
J
· JOB DESCRIPTION
A written statement listing the elements of a particular job or occupation, e.g., purpose, duties
equipment used, qualifications, training, physical and mental demands, working conditions, etc.
·
JUDGMENT
Judicial determination of the existence of an indebtedness or other legal liability.
·
JUDGMENT BY CONFESSION
The act of debtors permitting judgment to be entered against them for a given sum with a state-
ment to that effect, without the institution of legal proceedings.
L
· LEASE
A contract between the owner (leassor) and the tenant (leassee) stating the conditions under which
the tenant may occupy or use the property.
·
LIEN
A charge upon or security interest in real or personal property maintained to ensure the satisfaction
of a debt or duty ordinarily arising by operation of law.
·
LOAN AGREEMENT
Agreement to be executed by borrower, containing pertinent terms, conditions, covenants, and
restrictions.
·
LOAN PAYOFF AMOUNT
The total amount of money needed to meet a borrower's obligation on a loan. It is arrived at by
accruing gross interest for one day and multiplying this figure by the number of days that exist be-
tween the date of the last repayment and the date on which the loan is to be completely paid off.
This amount, known as accrued interest, is combined with the latest principal and escrow balances
that are applicable to what is now referred to as the loan payoff amount. In the case where prepaid
interest exceeds the accrued interest, the latter is subtracted from the former and the difference is
used to reduce the total amount owed. Recent five years to the total average loans outstanding for
the comparable 5-year period.
M
· MORTGAGE
An instrument giving legal title to secure the repayment of a loan made by the mortgagee (lender).
In legal contemplation there are two types: (1) title theory - operates as a transfer of the legal title
of the property to the mortgagee, and (2) lien theory - creates a lien upon the property in favor of
the mortgagee.
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A Guide to Starting or Expanding a Business
N
· NET WORTH
Property owned (assets), minus debts and obligations owed (liabilities), is the owner's equity (net
worth).
· NOTES AND ACCOUNTS RECEIVABLE
A secured or unsecured receivable evidenced by a note or open account arising from activities
involving liquidation and disposal of loan collateral.
O
· OBLIGATIONS
Technically defined as "amount of orders placed, contracts awarded, services received, and similar
transactions during a given period which will require payments during the same or a future pe-
riod."
· ORDINARY INTEREST
Simple interest based on a year of 360 days, contrasting with exact interest having a base year of
365 days.
· OUTLAYS
Net disbursements (cash payments in excess of cash receipts) for administrative expenses and for
loans and related costs and expenses (e.g., gross disbursements for loans and expenses minus loan
repayments, interest and fee income collected, and reimbursements received for services performed
for other agencies).
P
· PRIME RATE
Interest rate which is charged to business borrowers having the highest credit ratings for short
term borrowing.
· PRO-Net
An Internet-based database of information of small, disadvantaged, 8(a), and women-owned busi-
nesses seeking procurement contracts.
· PRODUCT LIABILITY
Type of tort or civil liability that applies to product manufacturers and sellers.
· PROPRIETORSHIP
The most common legal form of business ownership; about 85 percent of all small businesses are
proprietorships. The liability of the owner is unlimited in this form of ownership.
R
· RETURN ON INVESTMENT
The amount of profit (return) based on the amount of resources (funds) used to produce it. Also the
ability of a given investment to earn a return for its use.
· REQUEST FOR PROPOSALS
Solicitations for offerings for competitive negotiated procurements when it is impossible to draft an
invitation for bids containing adequate detailed description of the required property and services.
There are 15 circumstances in the Federal Acquisition Regulations (FAR) which permit negotiated
procurements.
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A Guide to Starting or Expanding a Business
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· SMALL BUSINESS DEVELOPMENT CENTERS (SBDC)
The SBDC is a university-based center for the delivery of joint government, academic, and private
sector services for the benefit of small business and the national welfare. It is committed to the devel-
opment and productivity of business and the economy in specific geographical regions.
· SERVICE CORPS OF RETIRED EXECUTIVES (SCORE)
Retired and working successful business persons who volunteer to render assistance in counseling,
training, and guiding small business clients.
· SECONDARY MARKET
Those who purchase an interest in a loan from an original lender, such as banks, institutional inves-
tors, insurance companies, credit unions, and pension funds.
T
· TURNOVER (Business)
Turnover is the number of times that an average inventory of goods is sold during a fiscal year or
some designated period. Care must be taken to ensure that the average inventory and net sales are
both reduced to the same denominator; that is, divide inventory at cost into sales at cost or divide
inventory at selling price into sales at selling price. Do not mix cost price with selling price. The turn-
over, when accurately computed, is one measure of the efficiency of a business.
U
· UNIFORM COMMERCIAL CODE
Codification of uniform laws concerning commercial transactions. In SBA parlance, generally refers
to a uniform method of recording and enforcing a security interest or charge upon existing or to be
acquired personal property.
V
· VENTURE CAPITAL
Money used to support new or unusual commercial undertakings; equity, risk, or speculative capital.
This funding is provided to new or existing firms that exhibit above-average growth rates, a signifi-
cant potential for market expansion, and the need for additional financing for business maintenance
or expansion.
W
· WORKERS' COMPENSATION
A state-mandated form of insurance covering workers injured in job-related accidents. In some states
the state is the insurer; in other states insurance must be acquired from commercial insurance firms.
Insurance rates are based on a number of factors, including salaries, firm history, and risk of
occupation.
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"If one advances confidently in the direction of his dreams, and endeavors to live the life
which he has imagined, he will meet with a success unexpected in common hours…
If you have built castles in the air, your work need not be lost? that is where they should be.
Now put foundations under them."
- Henry David Thoreau
39
A Guide to Starting or Expanding a Business
Websites
www.articlealley.com www.usgovinfo.about.com www.microcreditnh.org www.nolo.com
www.bsorchecklist.org www.amazon.com www.sba.com www.liraz.com
www.agentz.com www.arkilite.com www.allbusiness.comhttp://sbinfocanada.about.com
www.starting a business publication\Forbes_comhttp://images.businessweek.com/ss/06/08/failures/index_01.htm
Organizations
UW-Extension Centers
Juneau County Economic Development Corporation (JCEDC)
Small Business Association (SBA)
Small Business Development Center
State and Local Banks
Alliant Energy
Oakdale Electric Cooperative
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Resources
Small Business Books
Small Business Management: An Entrepreneurial Emphasis (with CD-ROM and InfoTrac®) (Hardcover)
by Justin G. Longenecker (Author), Carlos W. Moore (Author), J. William Petty (Author), Leslie E.
Palich (Author)
Start Your Own Business (Entrepreneur Magazine's Start Up) (Paperback) by Rieva Lesson
Business Plans For Dummies (Paperback) by Paul Tiffany (Author), Steven D., PhD Peterson (Author)
Small Business Opportunities [MAGAZINE SUBSCRIPTION]
How to Really Start Your Own Business: (Paperback) (In cooperation with SCORE, Sponsored by VISA)
by David E.Gumpert (Author)
The Business Planning Guide, Creating a Plan for Success in Your Own Business, New and Revised 8th
Edition: (Paperback) by David H Bangs, Jr. (Author)
Business Plans that Work: (Paperback) by Joan Gillman with Sarah White (Authors)
40
A Guide to Starting or Expanding a Business
Juneau County Economic Development Corporation (JCEDC) developed a small busi
ness assistance model called the Inventors and Entrepreneurs Club. It brings people to
gether to teach them the proper steps to explore their ideas, to motivate each other, edu
cate each other, tap into each other networks and get them to the resources they need as
soon as possible. If we have a base of people like this. they have the ability to grasp and
explore any opportunity they can imagine. This club is a grassroots feeder system into
all the great resources that Wisconsin provides.
UWExtension plays a critical partnership role in this club. Jim Goldsmith shares his
business expertise as he teaches the How to Start a Business Class, offered to all mem
bers of the Inventors and Entrepreneurs Club. At least forty five business have received
assistance through this partnership, growing our communities from within.
The purpose and mission of Juneau County’s Inventors and Entrepreneurs Club, Inc. is
educating inventors and entrepreneurs to develop successful businesses while giving
back to new members, entrepreneurs and the betterment of the community. Terry
Whipple, Executive Director of Juneau County Economic Development Corp, is the
brainchild behind the club. His goal was to create a contagious entrepreneurial environ
ment in which persons wishing to investigate the potential of their ideas could do so
within a supportive group of like minded individuals, and it worked.
The I&E Club holds meetings the last Thursday of every month. The meetings are held
at Lemonweir Valley Telephone Company, 127 US Hwy 12, Camp Douglas, WI.
Everyone is welcome.
Terry Whipple
Juneau County EDC Executive Director
122 Main St Camp Douglas WI 54618
608 4272070 http://www.juneaucounty.com
41
A Guide to Starting or Expanding a Business
Jim Goldsmith Juneau County University of Wisconsin Extension Community
Resource Development educator has developed a workshop utilizing his personal
experiences as a small business owner, and through research and information
provided by local, state and federal organizations. Jim has achieved a Bachelor
Degree in Economics, a Masters Degree in Personnel Services, and a Doctorate in
Administration.
Having 30 years administrative experience at the University and Technical level,
along with 25 years of teaching experience in Leadership Supervision and Management supple-
mented with his ten years of ownership of three small businesses, has enabled Jim to share his
knowledge and experience with others.
Jim currently is an educator with the University of Wisconsin Extension-Juneau County focusing
on Community Resource Development and specializing in business and economic development.
Jim provides a free to the public workshop on “How to Start a Small Business”. In the workshop
individuals with an interest in starting or purchasing a small business will gain knowledge from
information provided through an interactive format.
Information provided in the workshop:
· Self-examination; are you and business friends or foe’s
· Business Checklist
· Business Plan writing tools and samples
· Business Do’s and Don’ts
· Local-State- Federal business requirements
· Learning how to approach banks and other sources of funding
· Reference materials
· Personal experiences
Once you have completed a draft of your Business Plan, Jim offers to you a free one-on-one review
and gives insight on the Business Plans workability.
Through your attendance at the workshop, you will be provided a foundation utilizing hands on
skills, personal business experiences, and a abundance of reference materials that Jim infuses into
the program from which a new business can be built or from which an expansion of a current busi-
ness can be fulfilled. As a current or new business owner you will leave the workshop with the tools
to kick start or enhance your current business goals.
For registration dates and information, contact our office at the following location.
Juneau County UW-Extension
211 Hickory St., Room 301
Mauston, WI 53948
608-847-9329
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