1. New Mexico Broadband Program Internet Tools for Small Business Success
Module 1
Terminology and Planning

2. Primary Business Components
Planning
Operations
Finance & Accounting
Sales & Marketing
Hiring
Accounting
& Finance
Operations
Planning
Welcome to the Terminology and Planning module of the “Internet Tools for Small Business Success”. These classes are structured around the five components of running a small business.
The basic components of running a small business fall into five categories: Planning, Operations, Finance and Accounting, Sales and Marketing, and Hiring. Each of the 12 modules in this training series fall into one of those categories. This module deals with the Planning aspect of running starting or running a small business, and also covers important business and Internet terminology you will need to complete the “Internet Tools for Small Business” series.
Management & Hiring
Marketing
& Sales

3. Internet Tools for Small Business Success Class Series
Terminology & Planning
Finance & Operations
Accounting & Finance
Intro to Online Marketing
E-Newsletters
Websites & Blogs
SEO
E-Commerce
Intro to Social Media Marketing
Facebook & Twitter
Social Media Administration
Linked In
“Internet Tools for Small Business Success” offers twelve modules. This class is the first of the twelve in the series.

4. Discussion & Demonstrations
How This Class Works
Terminology
Discussion & Demonstrations
This class covers terminology and offers a combination of discussions, demonstrations, and hands-on exercises.
Hands-on Exercises

5. Class Framework Divided into Core Business Elements
Internet Tools for each Element
Terminology
Realm of tools
Choosing the right tool for your business
Getting Started

6. Today’s Class Goals Define Internet and business terminology
Learn about profitability
Understand the importance of planning
Learn the components of a Business Plan
Be able to find local & online resources
Begin or update your Business Plan
Here are our goals for today’s class.

7. Terminology Broadband Internet or Online World Wide Web Web 2.0
Cloud Computing
Business Roadmap
Here are the terms we will be exploring in this course. Let’s look at them one at a time.

8. Broadband
A way to access information via the Internet using one of several high-speed transmission technologies.
The transmission technologies that make broadband possible move data much more quickly than traditional telephone or wireless connections, including traditional dial-up Internet access connections. Broadband refers to a telecommunications signal or device of greater bandwidth, than another standard or usual signal or device.
The broader the band (bandwidth), the greater the capacity for traffic (data), and therefore the faster. Think of the ability of a multiple lane highway to move traffic verses a single lane road. More lanes of traffic on the road equals faster arrival times.

9. Is the Internet just a big collection of computers and cables?
Internet or Online
Is the Internet just a big collection of computers and cables?
The Internet is worldwide system of computer networks (computers connected to each other). Users at any one computer can, if they have permission, get information from any other computer. When you are connected to this worldwide system of computer networks, you are “online”.

10. World Wide Web
A system of interlinked documents accessed via the Internet. With a web browser, one can view web pages that display content such as text, images, and videos, and navigate between them.
This slide contains the technical definition of the World Wide Web. Another way to put it is that the World Wide Web is the part of the Internet that consists of documents linked to each other around the world.

11. Web 2.0
Improvements in technology introduced in 2004 that led to the second generation of the World Wide Web. These improvements allowed interactive conversations to take place on the World Wide Web.
Web 2.0 is a term that was introduced in 2004 and refers to the second generation of the World Wide Web. It doesn’t refer to a specific version of the Web, but rather a series of technological improvements. These improvements include interactive sharing that wasn’t available before and enabled two way conversations. This allowed the creation of new tools such as Blogs, Wikis, and Facebook (social media). Web 2.0 improvements put the “social” in social media.

12. Cloud Computing
Users do not download and install applications on their own device or computer; all processing and storage is maintained over the Internet.
Run application
Save data
You used to have to purchase software applications, install them on your own computer, and keep them up to date. The data from these applications was also saved on your own computer and took up a lot of space which slowed it down. If your computer crashed, all your data could be lost.
Now, applications are run over the Internet on a network server (in the cloud) which is located somewhere else and your data is stored there, too. Your computer doesn’t have to be as powerful or have as much storage space as it used to – you can even use small devices such as a phone or a tablet PC (ipad) to access an application in the cloud. The applications you use on the Internet are always kept current and you don’t have to worry about updates.
You can also use the cloud to store things such as photographs and videos. Videos on YouTube are an example of cloud computing.

13. Cloud Computing
This diagram shows the types of information that can be stored in the cloud.
Now we are going to move from Internet terminology on to some business terminology that we will use in this module.

14. Cloud Computing
Since this concept can be difficult to grasp at first, let’s take a look at a video on the Internet that explains Cloud Computing. YouTube is the Internet’s second largest search engine after Google and it’s a great place to look for videos on topics you want to learn more about.

15. Terminology
Business Plan A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. Business Plan = Business Roadmap
A business plan sets the goals for your business. Think of it as a roadmap for your business. Without knowing your destination, how will you get there?
We will be talking more about a Business Plan later in this module.

16. Terminology Profitability
The capability of your business to generate more sales dollars than the cost of the
operating expenses.
Profitability = the capability of your business to make money

17. The Fundamental Goal of Business
What are the three ways to increase the profitability of your business?
Decrease Costs
Increase Sales
Increase Prices
There are only three ways you can increase the amount of money you make. Who knows what they are?
You can decrease your expenses (how much it costs you to run the business such as rent, cost of materials for goods, etc), increase how much you sell, or increase how much you charge for your products and/or services.

18. Profit Margin PROFIT MARGIN PROFIT MARGIN (Increase in sales)
The amount by which revenue from sales
exceeds costs in a business.
PROFIT MARGIN (Increase in sales)
PROFIT MARGIN (Decrease in costs)
PROFIT MARGIN
Here is a graphical way to see the three ways to increase the amount of money a business makes. Profit margin is the amount by which revenue exceeds costs.

19. Business Planning What is a Business Plan?
A roadmap that defines your business, helps identify goals, and sets the direction of your business in order to reach those goals.
Think about getting into your car and going on a long road trip. Would you start driving before knowing your destination or mapping the route to get there? No. This would result in driving around aimlessly, finding dead ends and detours, and possibly going in circles.
Just like this driving example, without researching and mapping out your business route, your business may get lost, will encounter unanticipated obstacles in the road, and will take longer to reach its destination (goals).

20. Why do I need a Business Plan?
Saves time & money by helping to avoid
going down the wrong road.
Investors and lenders require one.
Developing a business plan helps you think through many issues that you may encounter BEFORE you have a problem and in that way can help you to anticipate, prepare for, and avoid some of them.
If you need an influx of capital, investors and lenders such as banks, microlenders, and venture capitalists require that you have one and will want to review it before they loan you money.

21. Business Plan Elements
Executive Summary
General Company Description
Products and Services
 Marketing Plan
Operational Plan
Management and Organization
Startup Expenses and
Capitalization
Financial Plan
In general, these are the main elements of a Business Plan. Let’s look at what should be included in each section in more detail.
Please refer to your business plan template handout for this discussion. This template is available for free on the website. You will start working on your business plan at the end of this module.

22. Business Plan Elements
Executive Summary
Two or fewer pages
Write it last
Concise, professional
summary of the
fundamentals
of the proposed
business 
The Executive Summary is a concise summary of the fundamentals the proposed business, and it is easier if you write it last. Your banker (or anyone else) should be able to read it and easily understand your business model.

23. Business Plan Elements
General Company Description
Explanation of business and what you do
Mission Statement, Goals, and Objectives
Business Philosophy
To whom will you market your products?
Description of your industry
Description of company strengths
and core competencies
Legal form of ownership
Here is what is contained in the General Company Description section.

24. Business Plan Elements
Products and Services
In depth description of products and services
Explanation of competitive advantages or disadvantages
 Pricing, fee, or leasing structures of your products or
services
Describe target market
The Products and Services section gives an in depth description of your products and services, your pricing, and your market.

25. Business Plan Elements
Marketing & Sales Strategy
Market Research
Economic Factors
Product features and benefits
Identify customer demographics
Identify competition and do a competitive analysis
Promotion strategy and budget
Identify your pricing and location
The Marketing and Sales Strategy section identifies who will buy your products and services and your competition.

26. Business Plan Elements
Organization & Management
Explain the daily operation
of the business, including location, equipment, people,
and processes
Detail management
and experience
The Organization & Management section describes who will be managing the company and the daily operations of the business.
Image courtesy of Beta Daily

27. Business Plan Elements
Financial Plan
12‐month profit and loss projection
four‐year profit and loss projection
a cash‐flow projection
projected balance sheet
a break‐even calculation
The Financial Plan section makes you think through what your sales and expenses will be in the first year and over a longer period of time. From that you can determine how much money will be coming in and when it will come in (cash flow), and when you can expect to break even (start making money).

28. Business Plan Updates
If you already have a business plan, consider updating it because:
You can use it like a map to gauge if you are still
going in the right direction.
Your goals may have changed.
You may want to add online sales and marketing.
Since your business plan is really your business’s roadmap, you if already have one, you should pull it out periodically and review it. Are you still going in the direction outlined in your business plan? Has something changed that has caused your goals to change (the market for your product is disappearing due to new technological advances)? Are there new methods of sales and marketing that you want to incorporate in your plan (set up an Internet-based store, create a Facebook page)

29. Planning need not be academic
Developing a business plan doesn’t have to be dry and academic. The most import part is that you think about where your business is heading. The Internet offers all sorts of resources and tools to help you create a business plan that fits with your personality and your type of business. Here is a course developed to assist creative people in generating a business plan that invokes their creativity.
(Instructor note: Click on this link :// . Launch the video that discusses a way to create a business plan that is less traditional than the one discussed earlier).
You have a handout that provides a list of local and Internet-based resources for developing business plans.

30. New Mexico Resources New Mexico Resources ACCION www.accionnm.org
WESST
Small Business Development Centers
Let’s take a look at the websites of just a few of the local (New Mexico) resources available that offer financial and other business assistance to small businesses.
(Instructor note: bring up each website and look briefly at the services they offer).

31. Beginning your Roadmap
Let’s look at the resources for business plans available on
Follow instructor and your handout to begin your roadmap
If you started the plan on your computer, attach it to an and send it to yourself via your Gmail account for future work
Now, let’s start a business plan. The business plan template we are using today comes from (bring up this website). SCORE, the Service Corps Of Retired Executives, is a nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow, and succeed nationwide.
You have a handout of this template from SCORE. Begin working on your business plan.
(Instructor note: if the business plan template has been loaded onto the computer of each student, put an icon on the Desktop. Tell them to find the Business Plan icon on their Desktop and open it. Hit FILE, and SAVE AS, and save it under their name. Do these steps with them on the projected screen. Have them attach a copy of the business plan they started to an that they send to themselves).

32. Review Define Internet and business terminology
Learn about profitability
Understand the importance of planning
Learn the components of a Business Plan
Be able to find local and online resources
Begin or update your Business Plan
To end, here are the class goals that we talked about at the beginning of today’s training. Did we meet them? Hopefully we impressed upon you the importance of a business plan, how to get started, and where to go for help and more information on business plans.
Thank you for coming to class and we hope you join us for “Business Operations”, the next session in the Internet Tools for Small Business Success series.

33. We appreciate the time you spent with us
We appreciate the time you spent with us. We hope to see you at the next training!
These materials were created collaboratively by the New Mexico Department of Information Technology, Fast Forward New Mexico, and the New Mexico State Library, under grants provided by the National Telecommunications and Information Administration. These materials are not to be used for profit. Connecting you to a world of opportunities