1. Ch. 4: Business Planning and Structure Present your business in the best possible light Put financial requirements and projections in writing Define your management style Determine the business structure and type of corporation yours will be Recruit a board of directors Research permit and license requirements in your field Identify local, state, and federal tax regulations and responsibilities

2. Business Plan Components The Preview - Cover page, contact info, executive summary The Business Description - Introduction, industry, competition The Marketing Plan - Positioning statement, how product will be sold, types of marketing and advertising planned

3. Business Plan Components (continued) The Financial Plan – Cash flow projection, profit/loss statement, risk analysis The Management Plan – Your background and experience, key employees, consultants and financial advisers, board of directors, family commitment, overall management style The Summary – Key points from each of the other sections, reinforcing the strength of the plan

4. Business Structures: Sole Proprietorship PROS CONS Don’t have to share profits Maximum flexibility; make all your own decisions Minimal paperwork to get started in business Insurance can cover some risks Easy to close if you decide not to remain in business Personal financial & legal liability Liens may be taken on your personal property by creditors Difficulty getting traditional financing All business income is taxed as your personal income Sole responsibility for success of the business

5. Business Structures: Partnership PROS CONS Shared financial & management responsibility Easy to form Expertise of more than one person Moral support from partners Insurance can cover some personal risks Possible conflict among/between partners Unequal financial risk between partners Difficulty in obtaining traditional financing Difficulties when one partner wants to sell or close business & others do not

6. Business Structures: Corporation PROS CONS Corporation (not individuals) has legal & financial responsibility Separates personal assets of owners from their business Transfer of ownership is relatively easy Requires more paperwork and legal advice: annual reports, quarterly tax statements Higher taxes and potential “double taxation” (unless you are an S corp)