1. Standard Mkt MP 6 MKT-MP-6 Employ financial knowledge and skill to facilitate marketing decisions. ESSENTIAL QUESTION: HOW IS PERSONAL FINANCE SIMILAR/DIFFERENT THAN THE FINANCE USED IN THE BUSINESS WORLD?

2. Financing Your Business

3. Getting Started Bootstrapping: Operating a business as frugally as possible and cutting all unnecessary expenses.

4. Start-up Money Equity Financing: Cash raised for a business in exchange for an ownership stake in the business Debt Financing: Financing with loans that must be paid back with interest

5. Sources of Equity Capital/Financing Personal Savings Personal Savings Friends & Family Friends & Family Private investors (Angels) Private investors (Angels) Partners Partners Venture Capitalists Venture Capitalists

6. Sources of Debt Capital/Financing Bank Bank Trade Credit: credit one business grants to another Trade Credit: credit one business grants to another SBA Loan SBA Loan Commercial Finance Companies Commercial Finance Companies Minority Enterprise Dev. Programs: owners must be at least 51% minority, female, or disabled Minority Enterprise Dev. Programs: owners must be at least 51% minority, female, or disabled

7. What Bankers Expect FIVE C’s 1. Character 2. Capacity 3. Capital 4. Collateral 5. Conditions

8. What Bankers Expect FIVE C’s 1. Character: A. The borrower’s reputation for fair and ethical business B. Business experience C. Management team

9. What Bankers Expect FIVE C’s 2. Capacity: A. The ability for the business to pay the loan 3. Capital: A. The net worth of a business

10. What Bankers Expect FIVE C’s 4. Collateral: A. Valuable assets a bank can claim if the loan is not paid back 5. Conditions: A. Potential for growth B. Amount of competition C. Location D. Form of ownership

11. Start-Up Costs The costs a business incurs before a business opens. Determining Start-Up Costs You need to talk to: You need to talk to: Suppliers Suppliers Vendors Vendors Manufacturers Manufacturers Distributors Distributors Other businesses in your industry Other businesses in your industry

12. Start-Up Costs Rent Rent Security deposit Security deposit Equipment Equipment Furniture, Fixtures, Phones, Computers, Counters, etc. Furniture, Fixtures, Phones, Computers, Counters, etc. Fees and Licenses Fees and Licenses Permits, Licenses, Legal Fees Permits, Licenses, Legal Fees Promotion Expenses Promotion Expenses Business, Cards, Brochures, Forms, Business, Cards, Brochures, Forms, Contingency (emergency money) Contingency (emergency money)