Simple Steps to Start Your Small Business
RON LUNSFORD: Good afternoon. I'm Ron Lunsford. Glad that you're here. We had a few more sign up that maybe they'll drift in a little bit later. SCORE is a national organization. We were founded in 1964 and we've worked with right on a million clients over our history. Wichita SCORE is one of 300 chapters and we have 35 members. Nationally we have 10,000 volunteers who are available to talk to you to help you get your small business started or improve a small business aspect if that's what you need. John, slides please?
Our program today is Simple Steps to Starting Your Own Business. I sent to those that had registered early, I sent a list of the modules out so that they could see what is available. If you go to www.SCORE s-c-o-r-e-dot-org in the search box, if you'll just type in "simple steps,"
it'll pull up the five modules and you're able to one, download a workbook and two, to go through the modules one through five in that order if you choose to. Thank you, John. Today we're talking about startup basics, which is session one. Next. About SCORE. As I mentioned, we've got ten thousand volunteers. These are... most of these people are people have been in business and retired and that's how the term SCORE got started: Service Corps of Retired Executives. About 15 years ago they took a survey and found that 30 percent of us are still working so it just... simplified to SCORE. We put on seminars and workshops to educate you: people who are interested in starting your own business. We offer free mentoring one-on-one,
be face-to-face once the COVID thing is over but currently we will do email, phone, or virtual. We can also do like we're doing today, virtual conferencing. Next. This is our address we're located in the SBA office, Page Court down in the Garvey Center tower complex. The office is closed now due to COVID but we will respond. If you just call, leave a message and we'll give you a hand with your business ideas. Thanks, next. What you'll learn:
we'll talk about myths and realities, some of the critical success factors, know your option, components of the business ownership, making it legal, funding and cash management. And also get into the... the very basics of business plans. We won't be able to spend enough time on it to really do a thorough job but that's coming up next month. Next.
This is the roadmap that goes with startup basics. They're simple steps. We're starting in section one... season -- the session one, it goes into business concept, marketing, financial funding, and then after you put it down on paper you sit down and decide if you want to go ahead with it or if you find that it's not the best business decision. We're glad to work
with you and see if we can improve that and build a better business plan. Next. Next. And some of the myths. "All I need is a good idea to be a successful entrepreneur." Sorry, you need a whole lot more than just a great idea. Myth two: "if you go out on your own, you won't have to work so hard or such long hours." Average, a small business person probably works 65 hours a week.
That's not a... you know, it's not a 40-hour job for that you experience when you're working on somebody else's payroll. You've got things to take care of, you've got you've got employees, you've got them to take care of, you've got customers to satisfy, you may have suppliers to work with making sure that your shelves are covered. Myth number three: "you'll be able to deduct everything
so you don't have to pay taxes." Sorry, we all pay taxes. If the business does... in some cases the business will pay taxes and then you will pay taxes on what you get from the business. Next. Myth number four: "if you work independently, you won't have to report to a boss." Well, if you're wearing hats of small business person you'll soon find that you've got all sorts of bosses. Some of them start before you leave home. Spouse says take care of this and you need to take care of it. If you've got employees, they've got needs and you'll have to help them. You've got suppliers need to be taken care of.
And first and foremost, you've got customers that need assistance, have questions about your product, want to understand how you have that unique selling proposition that is not available online or from a competitor a couple towns over. Myth number five: "business owners get to do the work they want to when they want to and only what they find interesting." Sorry, it's not true. You get to work on everything that everybody wants. Myth number six: "if you choose to be self-employed, you'll be limited in what you can achieve since you'll be working alone." Fortunately, that is a myth. You are not limited into what you can achieve, only what you choose to do as a small business person. Next.
Proper planning is key. We... we at SCORE highly recommend that you do a business plan. Those that spend three hours or longer with the SCORE mentor working on business plans so on and so forth are 40 percent more successful than those that don't. This is an old statistic but it shows that three-quarters of the people are still successful after two years if they've got two or more employees. Next.
After three years, almost two-thirds are still successful. Next. And after five, it's about even as to those that succeed and continue in business and those that struggle for one reason or another. Next. Do you have what it takes? What are your critical success factors? Are you able to make a good choice of time and locations? Do you have adequate capital? Do you have the ability to manage and multitask? Are you experienced in the field that you're trying to compete in? Strong work... work ethic? Are you effective in your time management
and do you... are you willing to take input from others? Next. Know your options. We're going to talk about the different business structures. One is you can start it out all on your own. The advantage is you're not hampered by previous images. You can choose location, name, logo. You can explore new markets, see your dreams come true. The disadvantages of a new business: you have no base, you have to build all new. Think
of it as a green field and you're building a... a business just like you build a house. There are greater risks involved because if you stub your toe in one area, it can cost you elsewhere. No track record. If the banker... if your lender... if you go approach a lender asking for financing, one of the things he's going to be looking at is whether you've got experience. And if you lack the experience, he's going to be less enthusiastic about giving you the loan. And unfortunately if you have a bad experience, you may see your dream become a nightmare. Next.
You can buy a business and in fact this is something I've encouraged several clients. Coronavirus has been very hard on some businesses. Some business owners are up at the point where they'd like to retire. If you see a business that you think you'd like to be involved with,
talk with the owner. He may be willing to carry the loan and help you out for the first three to five years making sure your... you understand the business and know what you need... get to know what you need to know. Advantages: it has an established clientele, suppliers, location. It's a known quantity. In fact, you can... you can use the bank... your tax forms and show the banker has
been profitable for several years. The owner can be helpful in terms of starting and running the business and it's easier to obtain financing. The disadvantages: there may be some hidden issues. The owner may not disclose all the debts that the company owns.
It... that poor reputation that the company has will carry on no matter whose name is on the door. Out of date inventory and transfer issues can be a problem. And there's no guarantee that success will continue. So that's it for buying a business. Next. Buying a franchise. The advantages: a proven image and product and service. Not all franchises are fast food, hair salons, or things like that. In fact if you give us a call, we've got FranNet coming in next week to talk to us about "am I interested in doing a franchise?" Franchises give you lots of marketing and sales power. It can make up for limited experience.
It... they provide training, professional guidance. Even McDonald's has a McDonald's University. They teach you how to put the ketchup and the mustard on the hamburgers. Continued consulting relationship, you can talk to others if they're having problems, they can help you. They may be able to explain what they did in the particular case. The disadvantage: you don't have full control, you're not always your own boss. You may owe the franchise royalties and other fees. In fact in some cases, they may say, "Here is your product, you sell it." McDonald's has its own
supply chain providing hamburger patties and buns, so on for the for each of their stores. In a franchise you may have to consider what are your boundaries: do you have the whole state of Kansas for example or do you have just the block that you're sitting on? It's a binding contract between you and the franchisor and if they have a problem, you have a problem. Next. Home-based business: very attractive, convenient workflow, work location, it's at least less expensive, you get a flexible schedule, and you have some tax advantage in terms of based on the square footage of your home how much it can be used for... how much you designate for business use and a percentage of the utilities. Disadvantage: you can't have a UPS truck driving up every hour and picking up merchandise and dropping off new. Some homeowners associations take a dim view of it as do the building codes people. If you're running a home business, you're isolated from others so if you're a social type,
that may not be the best one for you. And frequently you have time.... difficulty getting financing because the experience... bank lender's experience has not been good. If you've got kids at home... well, even any type of family at home, this can be a distraction from trying to get your business done. And home-based businesses are subject to IRS scrutiny. If you go along three or four years without making a profit, they may determine that it's a hobby and none of your business expenses are allowed. Looking at non-profit and two months out,
Cindy Miles is going to be talking about business plans for non-profits. The big thing about nonprofits: you have to figure out where you're going to get your grants or financing, how are you going to keep the doors open, pay the individuals. Advantages: it allows an operation in a not-for-profit status. You don't have owners, owners don't get... and the
money is hard to get out of the nonprofit. You may qualify for government foundation grants. There's protect... you can purchase liability insurance for directors and employees and you can pay salaries based on what the competitive wage is.
Disadvantage is the 501(c)3, 501(c)4 focus on educational charitable purposes. Cannot profit. Those who create the organization, all profits stay inside the organization. And after you file for corporate status at the state level, then you file a form with the IRS requesting 501(c)3 status and they evaluate it and it may take a couple months before you find out an answer on that. Next.
Online business probably the most attractive has the lower standard costs, geographic reach is worldwide if you want to go that way. Convenience, accessibility, and it's very flexible. The disadvantage is it has very low conversion sales rates. There's low barriers to entry so there's lots of competition. Visitors have expectations and those expectations need to be closely defined so that you and the... the customer are agreeing as to what's being done. You have no personal contact and you only get limited sensory information from your customers. Next.
Entrepreneur characteristics. Next. Here are some of the things that you need to be a small business person. You can read them. I will highlight the one at the bottom: supporting family. If you're getting ready to start your business, be sure your family's in agreement. You know that spring break trip that vacation that you love to do? You may be... in small business you may have to work that time and not be able to go with your family. There will be times when you be working even holidays, kids out of school and mom's ready to pull her hair out. Next.
How many hats will you wear? The question has to do with do the things that you feel specially qualified for, that you enjoy, and if there are things that you don't particularly enjoy, consider hiring that work done. For example, if you don't like to do accounting, bookkeeping, that service is readily available and it's a much easier, for example, to have somebody do the accounting and when you... at the end of the day you can close the door go home and somebody else is taking care of it. Otherwise,
it can all pile up for the weekend and take your weekends away as you try to catch up. Next. Marketing is a strategy used to create desire to purchase. It has to do with creating your company image so that people will identify you. Anything you do to get and keep a customer. It's 10 times easier to try to keep an existing customer than it is to go out and get a new customer. Also, your product or service will not sell itself. Next. Sales is part of marketing.
You're looking at customer contact work, you're finding prospects. It might even include cold calling. You're making presentations, preparing bids, and especially closing deals. And after you've got the deal closed, you're following up to be sure that the order process is through. Next. [coughs] Excuse me. Product or service: definition of what you're offering to your customer. What... you know, what is its functionality, how's it going to be packaged, what kind of quality level will you do, how is your product differentiated between you and the competitors? Questions are who needs it, why do they need it, how is it better than the competition? Next.
Position has another aspect of marketing: location, location, location. McDonald's is not in the fast food business, somebody told me. They're in the real estate business so look to see where their stores are located: prime real estate. If you're interested in a particular target market, see if you can find a niche that the rest of the competitors are not addressing. You'll be more successful. Take a look at the competition, the distribution and how are they merchandizing it, how can you do that better? Next. Branding. This has to do with your product being recognized in that vast world of confusion out
there. Does it have name recognition, what kind of quality of product or service is offered, what is your market identity, what is your unique selling proposition? What kind of advertising are you using to promote it? Next. Price: another aspect of marketing. You're looking at consumer reaction. If... you're looking at cost, competition, credit terms and discount. When I look at a particular thing offered online, I'm saying, you know, that's a little bit less than what I can get down to... and get over here at the local store but if I have problems,
I can go to the local store and ask them questions about it and they'll help me figure it out. I may not be so lucky if I get on the customer service line and have to wait three hours. So price has to be determined in terms of what's included in your product. Next.
Competition. You're small, probably starting out. What's the size and operate... size of operation and number of employees of your competitors? What are... what is their price like and what's their quality level? It is much easier to sell a premium product at a higher price. If your price is higher but it's of the same quality, what incentive has the customer got to come to you? What kind of services are you providing? What's your reputation? Do a SWOT analysis: that's strengths, weaknesses, opportunities, and threats and you can google that and it'll give you lots of information on it. Competition. You're going to get a chance when you're considering starting a business to go out and visit the competition, see what the customers... and see what their customers look like,
make your own observations about what you could do better or if it's a great idea, what you can copy. Who are their suppliers and contractors? And who are the other businesses in the area? Sometimes parking can be a real hassle for some clients, but if it's at the same time of... that a saloon or bar is open next door, your hours are not going to compete with each other, Making it legal -- I'll point out right here the... the green line, ksbiz.kansas.gov, that's the Kansas small business portal and it's very helpful. If you need any help on navigating that,
let me know and I'd be glad to walk you through it. Next. What type of business organization are you interested in? Sole proprietorship? If that's the case, just notify the state that you're going into business and hang your shingle up. You can start doing business. You can start a partnership. For those that are... there's
a limited liability company a, "C" corp and "S" corp which is a sub-chapter of the "C" corp. Next. Keep it simple. Sole proprietor or partnership. If liability or taxation is a concern, then look at the LLC: limited liability corp. Next.
Any time you hold yourself out as a business, you do have insurance considerations. They include property, liability -- and in liability I'll mention this some of you may have heard of what they call an umbrella liability policy. That's a situation where you work with your insurance agent and you get it...
you get insurance on your car, insurance on your home and insurance on your business and maybe these are all at the same level: 300,000 or 500,000 liability then you put an overarching umbrella over the top of it for 5 million if you like and that insurance is very inexpensive because they expect that the lower policies to take care of most of the incidents. Worker's comp. If you've got employees, you're going to need worker's comp insurance. Health insurance. Life insurance on the owner is... is definitely a consideration because if something happens to the owner, then you're going to need some insurance to take care of the business and your personal responsibilities.
And finally, you might want to consider business interruption insurance. We're subject to tornadoes here. You get down along the gulf for ocean and hurricanes are a consideration. Talk to your insurance agent or broker and find out what's available, what they'd recommend and go from there. Next. Government regulations play a big part in business. Some business licenses... some
require business licenses and maybe approvals. If you're offering a contracting service, they may even ask you to get a certification or a bond. If there are labor laws that... and immigration laws. IRS, social security, withholding payments. The list goes on and you're responsible when you get your own intro... start your own business for
each of these. We do recommend that you have a separate banking account and some even go so far as to put their tax liability in a separate banking account from that so that when the bookkeeper says it's time to write a check for such and such, the money's there. Next. Every business owner needs a team to help him do his or her business. B.A.I.L. is an easy way to remember it. You're talking about a banker or a lender, you're talking about an accountant or a bookkeeper, talking about an insurance agent or broker, you don't necessarily have to have a lawyer on retainer but at least have somebody that's familiar with your business that you can turn to if you have a question. And we strongly recommend that you have a business
mentor such as SCORE to help you anticipate and get through some of the tough times. Next. Funding and cash management. Next. When you're starting to look up and look at your finances, remember: unless you've got a sec... unless you've got a primary job, this business is going to be responsible for providing with your cost of living. That's to put food on the table, roof over your head, wheels in the driveway. So take a look at your personal finances, look at areas where you could cut back. Can you eliminate some of your outstanding debt? What amount have you got in savings? What would be the total amount to cover your startup expenses for six to 12 months? Businesses are not profitable after the first month usually. Frequently it's three, four,
maybe even six months before they start breaking even. So startup cash. This is stuff that you have to buy, you have to spend before you even open the door. You need to put in tools, equipment. You may be able to talk your... if you're renting space, you may be able to talk your owner into doing some leasehold improvements at his expense and then raising the rent just a little bit but it's better than you having to pay for the whole thing. If you've got licenses or permits that you have to purchase, if you've got insurance that you need to prepay, advertising perhaps prepay, if you've got any professional fees.
If you're selling out of a storefront, what's your initial inventory and what kind of working capital reserve are you going to have? Next. Operating cash: once you've opened the door, then the expenses start adding up. Are you paying salaries, rent, insurance, loan interest and principal, utilities, and maybe you've got maintenance on the building that you're responsible for. All of these have to be figured into your cash flow analysis. Where are you going to get this money? A lot of the time that comes from personal savings. If you're wanting to go out for a loan, lenders tend to think that you have... you should
carry 20 percent of the business skin in the game if you will. You're investing your own money before the lender agrees to come on board so you'd look to see where can you get the money, what have you got in terms of personal savings, what... how about family and friends, what about family equity. Maybe... maybe you own a a home that's got 15-20,000 value in it that's not encumbered by a loan. That can be pledged towards a lender's...
you also look to see if you need a partner, what those partner's contributions are going to be and what the partner is going to be responsible for. I... we strongly recommend if you do take a partner, that you have a partnership agreement and the last paragraph reads something like, "in case you agree to disagree, here's how we're going to split the the business up." You can, as the business makes money, retain the profits and help the.... that's a major source of capital. Debt does not signify ownership. Banks, credit unions, community express micro loans, these are
all these can usually be guaranteed by the SBA, Small Business Administration. SBA does not loan money but the lenders go to the SBA and say, "We'd like the SBA to guarantee a portion of the loan." And if SBA takes a look at your business plan and says, "Yep," then the bank can offer you a loan. It will be at a little higher interest,
maybe a percent and a half or two percent above what their best prime customers can get. Also, we do not recommend using credit cards. Many credit cards have 20, 22, 25 percent interest on them and it can you can really dig yourself in a deep hole using credit cards to finance your business. Next.
Lenders have their own way of looking at people and sometimes it's referred to as the five Cs or the six Cs, but they're interested in your character, your commitment, your ability to repay the loan, what kind of credit rating you got. If your FICO score is below 700, you're probably going to encounter some resistance. They're going to want to see how your cash is going to flow, how they're going to get repaid for providing that. What kind of collateral capital are you willing to invest in the company? What's your industry knowledge, what's your personal investment? Also, they'll look at your last three years of income statement, see what your financial history is. We mentioned FICO. They're going to look at those financial projections and have questions about... why they are what they are. They're going to look at you as the manager
saying, "What management skills have you got and how do you compare to the competition?" Next. Cash is king. It's been said time and time again. It's your most important small business asset. Open a separate bank account for your business. Deposit all the receipts. Now, "all" is in bold and caps. You want every nickel, every penny to go into the account, into the bank account. If you need small amounts of cash, then use a petty cash fund. Separate the sales receipts on your books, the sales tax receipts because those tax...
that taxes are not... do not belong to you, they belong to the state. Hang on the cash as long as possible, reconcile your bank account monthly. Again if you're really busy, you might... you could use the services of a bookkeeper or a C.P.A. to do this for you.
If it's a C.P.A., he may even have a few recommendations on how to improve things. Hang on to the cash as long as possible. Have adequate cash and reserve fund at the start of the business. You know you're not going to be profitable for a couple months and so you're going to be dipping into that reserve fund until you start to show a profit. Prepare and maintain a cash forecast for at least six months in the future.
We recommend on the business plans that you do a cash projection month by month for the first year, quarter by quarter of the second year, and then a third year projection. And as you finish one month, look at the actuals and compare that to the... your projection. Does it need to be adjusted for future months or are you on track? Next.
Business plan basics. Next. It gives you an objective view. You'll find when you're sitting down, sit down and write it out that it you ask yourself a lot of questions and it then becomes the foundation for doing your planning. It is a very powerful management tool, it tells key people like your banker, your partners and people like that, your family what you expect to happen and when and then you can compare to what actually happens. It communicates your owner's ideas. Basic plan... excuse me, business plan: contents... table of contents, executive summary usually half page to two pages. Anything more than two pages and most bankers, lenders will just simply say,
"I'm not interested in reading a book." Section one talks about the business, section two is financial forecasts, and section three are the supporting data that you might need. If you're starting a store, you may have a floor plan sketched out, you may have a... a sample lease agreement on property that you want to lease. Any number of things that... and also in supporting data goes your resume and any other key management resumes. Next.
The executive summary. Like I say, keep it short, sweet. It says summary, please. Brief description of the business, how much do you want to borrow, how will it be used, will you... whether you'll seek a loan or you're going to go to investors like crowdfunding, angel investors, things like that. And a big one: when will you repay the loans, when will you start repaying them and when do you think you will have it paid off. Next. This is the section on business. It's a description of your business, your product, your service. How you identify the market need,
where you're going to be located whether it's going to be at home or it's going to be in a... a nice location, who's the competition. And you'd preferably not like to be next door to them. Who are the key management and personnel involved with this business and how are you going to use the new funds? Next. Target market. Is it large enough to be profitable? How is your product/service differ better? What is your unique selling proposition? How does a customer identify your product in relationship to the competitors? How is the market reached? That gets into actually developing a market plan and saying here's who...
these are the type people that are my customers and this is how I'm going to get there. What costs are involved in reaching those customers? What is the required pricing to make a profit? Your old buddy Joe comes in says, "I can get it for 10, 15 percent less down the street." How are you going to respond? Who are your competitors, where are they located, what are their pricing marketing tactics? Can you do better in some, can you do better in both... in all of them? Good luck. Next. [coughs] Market plan data sources. And John's going to carry the ball on this one in a little bit but data you need is most likely available. And the trick is there's a lot of noise out there
and you've got to sift through that to find the key data points that you're looking for. You can contact your chambers of commerce. Banks are a great source of information. Civic organizations. U.S. Census data has gone overboard in trying to work with us. There's a small business portal that'll help you find the information you're looking at.
Internet. If you're going to be working online business, google the heck out of the competition so you know what... what's out there, what are their policies, things like that. Libraries are a wonderful source of... of information and as I said, John'll cover that shortly. Also if you're
in a particular trade, if you're in the restaurant business, the hotel business, if you're in any... any organization that has... excuse me -- [coughs] -- a national or state association, they can be a very good source of information. Next. Financial forecasts. What are you going to need in terms of capital equipment? What are the income and expenses associated with your business? How... what kind of assets and liabilities and equity? These are things that you put together perhaps with the help of a bookkeeper or C.P.A. or... any way to get your business identified
and show that you know what you're doing in terms of making a profit. Probably do a break-even calculation and we can help you with that. Historical records... has to do with... if you... if it's an existing business, you can look at the
last three years. Beware: look to see what the owner has taken out of the the business and is he going to continue to do so if if he carries the loan on it? Next. Review. We've buzzed through this. We've talked about the myths, we've talked the business opportunities, assessing your own journey. What do you... how do you see you... how do you see yourself in three or five or ten years? What kind of organization, what kind of insurance, what kind of regulations are you going to have to be conversant in? Do you have opportunities to find funding and what's your experience in terms of cash management? Business and marketing plans are key. If you put it down in writing, then you can come back
and compare to it and that customer that comes in says I can get it 15 percent less down the street, you'll know what that does to you in terms of your making a profit or not. If it's not, maybe you want to buy from the guy down the street, who knows? And we also talked a little bit about next steps. Next. Now what? Okay, next.
We've gone through the startup basics module rather hurriedly I will mention, and you can go back and look at the recording of this presentation or number two, you can go out to score.org, search for "simple steps" and it'll bring these five modules up so you can watch them in the convenience of your home. It comes with its own student workbook and a couple examples on business plans and things like that. Next. This URL will take you straight to the link to handouts, workshop materials, and lots of other additional resources. SCORE... score.org also has a number of financial templates that you can download. Many of them have already got links built in them so you
and put a number in one place and it pops into... into several different areas. Next. We've got more workshops coming up this spring and we're going to cover those shortly. Next. Okay. At the library, next month we'll be talking about the essentials of your business plan. You're welcome to attend and the reservation line is open already and we'll go into more depth in terms of business plans. March 27, we talk about business plans for non-profits.
They're a little different and we have a a new mentor, Cindy Miles, who's the executive director of Kansas non-profits will be presenting this and she has a lot of non-profit expertise to share. Finally, we'll get into talking about marketing 101. Each of these at the Library includes an overview on the Library's research and small business reference databases and John Cleary does a very fine job providing that. Also coming... these these are organized... these workshops are organized because we used to do them face-to-face and we continue to keep that format because back when we scheduled them, we were expecting that COVID would be behind us. But we're going to continue doing Zoom format probably for this next six months. Hopefully we'll be able to resume the
in-person. Derby, okay, and Simple Steps series. We're actually going to do the same workshop that we did now as well as the one in defining your business, the market research and planning, financial projections, funding sources, and... and we'll have a representative from SBA there to talk about access to capital. You can register through Maize rec or ultimately we'll be advertising it and we'll be sending out information on them. Next.
Cowley County has come on strong this December and January and has asked us to do a number of workshops in their area. These are Zoom workshops still and so you're welcome to sign up for them and participate. Coming on February... February 4, "Am I an Ideal Candidate for Franchising," will be... Megan Stanek from Kansas City will be presenting that
and she'd like for people if they're interested in franchising to go ahead and take the professional franchise assessment and she can discuss that in more... more detail February 4 and February 8. Bill Ellison will be talking about marketing and competitive spaces and then we'll have on the 24th, business structure and tax considerations. It's heavily... structured towards Kansas but the same business structure applies throughout the United States. And next. And one more, John.
JOHN: All right, thank you Ron very much for your information. SCORE is a wonderful partner to the Library providing these free workshops and I heavily recommend that you contact Ron or one of the other SCORE mentors that can help you through your path, your journey through your business startup and growing your business and help you avoid the pitfalls and so please, please make use of their experience. RON: There was one question in the chat and said would the PPT be available after the class? The class is being recorded and the Library will make that available in their YouTube in the very near future. I put on the chat if you want to do a copy paste, this is the latest on the... PPP, the SBA payroll protection program if anybody was interested in that. Thank you, John. JOHN: Yes, are there any other questions in the chat that we need to address before we switch gears here? Okay, then I'll continue. My name is John Cleary. I'm one of the business librarians here, been working with small businesses for over 25 years helping find market research information and help fill out their business plans. The Wichita Public Library has both print and digital resources for
all aspects of small business. This is going to include books on starting your business, business plans, marketing, accounting, management and all other aspects of business. We also have some great electronic databases for business. We're going to be looking at the AtoZ database, the Small Business Reference Center, and Business Source Premier. And then library staff is available to apply their knowledge in helping you with market research for your business, helping find lists of competitors, lists of potential customers, sales leads, sample business plans. We have some great business directories and can get you detailed business profiles. We also can help you find business articles from trade journals and industry magazines. So we have
a wealth of information and we encourage you to use it. If you don't have a library card, I highly recommend you get one. They're free, you can get one at any library location around the city. With that library card, it'll have a library barcode on the back and with that and the last four digits of your phone number you'll have access to all of our electronic resources. And I'm going to spend the last 30 minutes or so here showing you those resources and how they can help you find market research, business plan information specifically for your business. So here's the Research Tools at the top of the Library page. So when you click on Research Tools,
it'll take you a list of all of the Library's databases. Scroll down to where it says "view all databases" and you'll have an alphabetical list of them and there's several dozen databases we have available, but the ones I want to focus on are our business databases today and AtoZdatabases. AtoZ is a company out of Omaha, Nebraska that compiles business information as well as consumer information and they repackage it and put it in a nice, searchable database for customers to research. At this point when you're clicking on the AtoZdatabases link, it's going to ask you for your library card number and the last four digits of your phone number and when you do that, it'll take you straight to the AtoZ database.
This is the main search screen and you'll see you can search for a business. They contract with indeed.com so they have career and job searching available as well. It also has all the phone directories all across the country so you can search for people by name, by address, by telephone number. Some of their other services they offer is a residential database which covers
240 million residents. Information is valuable, especially when you're starting a business. Google compiles all kinds of information on individuals. Whenever you fill out a warranty card, it compiles information, puts them into databases. So lots of information, anything... any time you purchase something from amazon.com, gets tracked and put into these market databases and AtoZ compiles all that and makes them available for searching for business purposes. So
you can also use this tool as a business search lead so you can get sales leads, find new customers, and grow your business by finding which new businesses are opening up, when new movers have come to your area, also new homeowners and you can look for existing businesses that could become your customers, so business to business opportunities. You can outreach to your local community so you can find out all the businesses that are in your neighborhood or nearby. All of your competition as well. If you're looking to open or expand locations, AtoZ can help you find the best location by finding nearby competitors, finding the area population, income, and where the new businesses are popping up. You can also form business alliances using this tool so you can find other businesses and see if you want to partner with them, find out common markets and common locations and you can get a complete list and contact information using this database. So let's take a look at how this would
work with the 240 million residents. We'll go ahead and click "get started" and we'll pick a geographic location. We'll go with Wichita so we'll pick our state, Kansas and we'll select Wichita. Add that to our selection criteria. And for example, if you have a... insurance sales business and you're trying to target certain individuals, you can search by age so if you want to target everybody 65 and older, you can click the "65 to 69," "70 to 74," and "over 75" categories.
And just to get an idea of how many people are in Wichita for... for insurance sales purposes, we'll click on "update count" and it finds over 78,705 individuals that meet that criteria and when you hit "search," it brings up a list of all of those individuals. You might want to go into this database and put your name in here and see what it says about you. When you click on the person's name, it's going to give you their full name, their address, a Google link, maps and directions so you can see a picture of their house and their their front yard, flowers. It also gives their telephone number if they have a listed landline.
Unfortunately, cell phone numbers are not available. Those are are not publicly available and released by Verizon and some of the other large cell phone companies. It has the length of residencies so it tells you how long they've lived there and also gives you their age and then it gives some census information over here, what their estimated household income is, their home value, also lists their neighbors as well. So again you can go into this, put your name in here and find out who your neighbors are and all the things that AtoZ has available on you. If you want to revise your search, you can just go back and you can search by any of these parameters. You can search by estimated household income so if you
want to target high net worth individuals, you can do that. You can search by homeowner status, whether they're homeowners or renters, that's an option. You can search by marital status and one of the neat things I like is interest hobbies and lifestyles. You can go in and have a list of all kinds of interests, hobbies that people are into and really track where where these people are at. I've used this tool to help customers find all the motorcycle owners in their zip code or all of the people that are pet owners for dogs and cats. You can do that under animals here. So you can really narrow down just about any kind of interest or hobby or product or service
and find out exactly where those people are at, not only here locally but all over the country. So this is a very powerful tool. It takes advantage of all that information that Google compiles and Amazon compiles and puts this into a searchable consumer database. We're going to go back to the home screen. I also mentioned new movers and new homeowners. If you have a product or service in your business that would benefit somebody that just recently moved, you can get over 350,000 new movers and homeowners that are added weekly to this database. If your product or service could benefit a new business, somebody's just started in business, if you have a bookkeeping service and somebody needs bookkeeping help, you could target the new businesses this way. Over two million new businesses are added throughout this database.
If you have a product or service that could benefit the medical field or a health care professional, there's a specialized database of 12 million health care professionals and you can search by specialty -- whether they're surgeons or dentists or psychologists or chiropractors -- this will have their state of licensures and... and all of the information about the health care professions. And then finally here is the 30 million businesses that have mailing lists, sales leads, emails, and it allows advanced searching. We'll take a look at that. Here on the left side is all of the different parameters that you can search by and I'll do a couple of sample searches so you can see what a business profile looks like. Let's take a look at...
we'll go to keywords and put in "auto wrecking" for auto wrecking and towing business and let's do that here for Wichita so we'll select Kansas. Wichita. And get a list of some of the auto wrecking and towing businesses here in Wichita.
So if you are getting into the towing business and wanted to find out who your competition is, you could use this as a tool to find out more about them and how big the market is. So here it has their name, the owner or manager's name, the address of the business, telephone of the business, and what their sales revenue is. And if you go into an individual business like Bud Roat Towing and Repair here, this is what a typical detailed profile is going to look like on each of these 30 million businesses that are in this database. So it'll have the formal business name, where they're physically located as well as a Google map link so you can find directions to them, their telephone number.
Gives you the owner's name is Mr. Bud Roat. Their main line of business: auto service and repair shops and they do tows all over Wichita. Takes you to their website, budroattowing.com. Also gives you their number of employees, so they have approximately 80 employees and their sales revenue last year was around $780,000. This business has been in business since 1978 and they
are a private business. This database has both private companies as well as public corporations. It includes a business credit rating so if you do any business, you can find out whether they pay their bills on time. In this case, they have an excellent credit rating so they pay their bills. Ron mentioned industry... industry codes and this is very useful when you're trying to find out who your competition is and find out how big your market is and doing your market research. So S.I.C. codes, that stands for standard industrial classification codes.
What these are are four digit industry codes that represent all lines of business so 7539 represents automotive service and repair shops. 7699 represents locks and locksmiths so they'll help you get your... in your car when you locked yourself out. And then 5015 is automobile wrecking so they'll tow your your vehicle as well. So these are where you'll get your industry codes and you can search from that advanced search screen by industry code to find out all of the businesses that are in your industry so that way you can find out what the market... how big the market is, how much sales revenue is involved in that market so a good way to do your market research and build your... flesh out your business plan. The codes right below that, the NAICS
codes they call them are the North American Industry Classification System codes. They're a little bit longer number, it's fairly similar to S.I.C. codes but they include a lot of the newer businesses, especially web-based businesses that have happened in the last 20 or 25 years so things like your Googles, your Amazons, your eBays, those kinds of online database or online companies are included in the NAICS system. Also in the profile you'll have a Q.R. code so you can quickly add this contact business to your tablet or your telephone, your cell phone. Next is your area competitors so this goes into some of the other towing and auto repair businesses that are competitors of Bud Roat. And again you can go into each one of these to get their detailed profiles and find out more information about those businesses.
Over here is your historical sales revenue trend, so you can see the towing and repair business has been good over the last four or five years. We've got steadily increasing revenues shown and also gives a sales growth percentage so if you are getting into this business it will give you what the sales growth percentages are for your business plan. Likewise with the employee trends, they have hot... been hiring employees over the years so this is a growing business, growing industry and it shows the percentage of employee growth over the years. One of the other tools that use this is nearby businesses so if you have an existing business that you have, you can find out who the... nearby businesses are that you may want to partner with or you can also do... reciprocal sales with the businesses around you as well.
And then finally down here it has the estimated annual expenditures for the business and all of these major account business areas so things like accounting -- this is approximately an estimate of how much they spend annually on accounting -- advertising; business insurance; their legal expenses; their office equipment; their annual rent; how much they spend on PCs and technology, their telecom, and their utilities. So you can use some of these numbers as rough guides if this is a similar business to what you're wanting to start as to what you could put on your business plan on what your expenditures might be for the year. Over here on the bottom, it gives the owner's name. Sometimes it will give the
email addresses for different owners and managers and executives as well. And this is a fairly new area, this internet presence but if they have a website, Facebook page, Instagram, something of that nature, they'll have the links to those links there. So that's what a typical profile looks like. At any time you can download to a flash drive, you can print these, you can email these results to yourself. So very, very detailed information and a good way to do market research So let's go back to the results. I'll show you quickly how you could
take this list, you would check at the very top here to select all the records, come over here to email, put in your email address, what the file name is so this could be towing businesses. It allows you to send it in either PDF format like we just looked at or you can put it in Excel format so if you wanted to total all of the sales revenues for example to get a total market value for here in Wichita, you could do that with the Excel format. And then the comma delimited version puts it into something like Google Sheets or some other spreadsheet format formula other than Excel. You can do the results view which is what we're seeing here on the screen: nine results, or you can do the detailed view on each one of these so the detailed profile or you can choose your own custom level of detail on... if you just want the sales revenue and number of employees for example. So that's how you can email
them, you can also print them, and again download to a flash drive. Let's do another search. Again, here's the different parameters you can do geographically by state, city, metro area, county. You can even narrow it down to zip code and address. You can also do what's called a map-based search so if you want to have all the businesses in a certain zip code or within a certain radius of where you live if you have a home-based businesses, you can do a map-based search. Business keyword is just what it means. It's similar to the yellow
pages. You can look up any kind of keyword or business type here. You can also look up industry groups, home-based businesses and then these are the S.I.C. codes and NAICS codes that I mentioned. That's where you can put in your four-digit code or your five-digit NAICS code and bring up all of the other similar businesses to yours. You can also search by business name,
whether they have email in the profile listing or not, you can search by employee size. So if you want to hit all the mom and pop businesses, you can choose one to four employees, five to nine. If you want to target mid-sized businesses, you might look at a hundred to five hundred employees. Or you can search very large companies, ten thousand or more. Those are going to be your
large public corporations. Likewise, you can search by sales revenue so if you want to hit small companies, usually sales from zero to a hundred to... a half million a year, half a million to one million a year, or your very large companies: 500 million to one billion and more. So a lot of different ways to search the database.
If you have a women's specific product or service you can search by women owned businesses or you can... if you're targeting men, you can exclude women owned so just target the men owned businesses. So if you have a product that targets women or men owned, that's an option. Public or private companies: if you want to deal just with private companies and no public corporations, you can choose that as a selector. You can select a small business indicator, whether it's a small business or not. Also whether it's a franchise or business or not.
And then some of the other ways you can search are how long the business has been in business so if you want to target new ones or ones that have been in business for 15 years or more, you can do that. The estimated annual expenditures. If you have a PC business and want to find out how many computers they have, that's an option. You can search by credit rating, so poor, fair, excellent credit ratings. You can target Fortune 1000 companies if you want to hit the big public corporations around the country. This also allows you to search for non-profit organizations so if you're working with the American Red Cross or the Kansas Food Bank or any of the local non-profits, you can use this as a delimiter. You can search by county population,
find out where the people are at. Manufacturing indicator, whether this is a wholesaler in manufacturing. You can also look at either import or export businesses. What the gender is of the executive of the business. Whether they have a web presence and a web URL on the detailed profile. Website name, square footage of the business and then number of PCs. So really the sky is
the limit as far as searching this database and how you could use it for your product or service both to do your market research and to flesh out your business plan. I'll show you another tool that I've used here. I'm going to put in the attorneys, so I'll select "attorneys" from the list and again I'll go with Wichita. I had a company that was starting a janitorial services and they wanted to focus on all of the attorneys here in Wichita, so we used this tool to quickly find a list of all of the attorneys and market the services directly to them. So once you have your attorneys in your business type and your geographic location, you can update count and it finds 821 attorney firms and it's going to rank those by largest to smallest here.
So here you have a ready-made marketing list to market all of your janitorial services to. So Stinson Leonard with between 100 and 500 million is going to be the largest in town. Foulston Seifken is another large attorney firm here in town. But again, a way to create your own custom database would be to select these so it selects the first 25, then you can go to page two, select the next 25, so on and so forth. And once you have all the results you want, then you can again save them to your flash drive, download them to your computer. You can print them if you want a hard copy or you can email the results to yourself.
So it's a great tool to do marketing leads and sales leads list. If you're doing business to business sales leads, just a wonderful tool for that. We'll go back and look at the home screen and tell you a little bit about the data quality, where they get their information. I mentioned a little bit about companies like Google and Amazon that track what you buy and what you search for and what you're interested in, your hobbies when you're looking at pets and dogs and cat videos, that sort of thing. They take all of that information but they also use annual reports that are put out by public corporations, the S.E.C. -- Securites and Exchange Commission -- has the EDGAR database filings which is public information for detailed business information on corporations.
Corporate registers and directories. Public records so things like your public deeds office and court records. They also use the national directory assistance data, thousands of yellow and white pages listings, and also business directories that are marketed to libraries that we have a lot of in our collection. They do a lot of telephone verification so on over 80 percent of these businesses, they will call and talk to the manager or owner to verify the information before they publish it. They also do what's called deep web mining so they'll do... search websites, they'll search databases
to dig out that information to add to the database. They're also connected to the national change of address system which is when you fill out a card with the post office, when you're changing addresses, that's how they compile new addresses for both apartment movers and people that have moved to new homes. The database information on the residents, they get that information from sources like the national directory assistance data, real estate deed and tax information for when you purchase a home. Voter registration data is also public and can be put into these databases. Mail order data, whenever you fill out a mail order, that gets put in. Warranty cards. If you buy a product like a appliance and you fill out the warranty card, a lot of that is compiled and also put into these databases. So that's where they get
the hobbies, interest, and lifestyles area where they know whether you're into motorcycles, boats, dog/cat owners, gardening, all of that information is compiled and put into these types of databases. Also the jobs database, they partner with indeed.com so they have current job listings for part-time work, full-time work, temporary positions and contract work. So if you don't have
enough experience in... in your business and want to get some experience you may want to look at the job section first before you plunge into business ownership. New businesses with... that register with the secretary of state, that's where they compile the information on new businesses so you can find out who has opened up a business in the last year or two if you have a product or service that would benefit a new business. The new movers and new homeowners that are added weekly again are done by the post office change of address system and also the public register of deeds when people purchase new homes. That's why when you move into a new home, you'll always get lots of mail for
lawn mowing services and snow shoveling services and homeowners insurance and car insurance. That's where they get this information, find out that you've just purchased a new home and need services and products. And then the healthcare databases, all healthcare professionals are... required to do state licensing filings. There's also information with the United States D.E.A.
information and the national provider directory files for all doctors, chiropractors, health care people in general. So that's where the 12 million listings for the doctors and physicians come from. Also they have introduction videos so this talks a little bit about what I've talked to you on this particular program, but you can view the introduction videos on helps and tips to search the database. They also have frequently asked questions if you have questions about where they get their data, how to do a better search. During the week they'll have a little chat icon in the top right corner here which allows you real time chat to talk with an expert from AtoZ that will answer any question you have during your searches or how to have more productive searches. They also do AtoZ university live training webinars so six times a week you can register for a training session if you want more in-dept
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