Setting The Course! Build Your Business Strategy

Sigma FreePresents…

Provided by Sigma College of Small Business, Inc.

Setting the Course!Build Your Business Strategy

Tuesday, June 22, 2010, 6pm‐8pm

Sigma College of Small Business6611 Jefferson St., Ste 103

Haymarket, VA 20169

Copyright 2010 Sigma College of Small Business, Inc.2Setting the Course! Build Your Business Strategy

Introductions

Keynote Topic


Break

Ask Questions Any Time

Agenda

Keynote Topic



Exit Strategy

Entity Structure

Value Mod

el

Marketing

Tactics

Implem

entation

Business Strategy

–Perspe

ctive

–Organization

–Incentive

–App

roach

–Actions

Five Pillarsof a Business Strategy

Copyright 2010 Sigma College of Small Business, Inc.

Exit Strategies‐ Starting with the end in mind

• Crash and Burn – Bankruptcy• Controlled Dissolution

– Business goes as long as you go– When you’re done, it’s done

• Ownership Transfers– Sell ownership – most common– Public Offering– Stock Buyback

• Transition to Passive Investment– Keep ownership and draw “distributions”

• Combination

4Setting the Course! Build Your Business Strategy


Decision Point

Business Sized to YOU

• Market and Sell to what you can manage

• Growth dependent on your capacity

• Limited Exit Value

• Business is a job

Business Beyond YOU

• Market and Sell to the total market opportunity

• Growth dependent on delegation

• Unlimited Exit Value

• Business is an investment

5Setting the Course! Build Your Business Strategy


Legal Organization

• Considerations– Liability – accident and financial

– Taxes – Income, payroll, estate

– Investment , ownership transfer and management

• Types of Organization– Sole Proprietor and Partnership

– “C” Corporation and “S” Corporation

– Limited Liability Company

6What's the Best Entity? Solve the Mystery of Legal Organization

Legal organization is an important decision made to support your personal and business goals

Sole Proprietor Partnership Limited

Partnerships Limited Liability Company S‐Corporation C‐Corporation Sole Proprietor Partnership Limited

Partnerships Limited Liability Company S‐Corporation C‐Corporation Sole Proprietor Partnership Limited

Partnerships Limited Liability Company


Terminology

• Personal Tax Rate – incremental tax rate on personal return

• Business Tax Rate – incremental tax rate on business return

• Payroll Taxes – Social security and Medicare taxes

• Pass Through – Business profit taxed on personal taxes

7What's the Best Entity? Solve the Mystery of Legal Organization

• Business Liability – company assets that are at risk

• Personal Liability – personal assets that are at risk

• Limited Liability –personal liability is limited for some reason

• Active Investment – investor actively involved in management

• Passive Investment – investor not involved in management

Liability

Taxes

Owne

rship


“I’m Going to Start a Business”Legal Organization Example

Generate Income for Myself

• S‐Corp or LLC– Liability Protection– Cash can pass through

without double taxing– Losses pass through

• May be a draw for some investors

– LLC provides more flexible management and ownership options

– No “corporate” or foreign investors for S‐Corp

Build Business for Growth

• C‐Corp– Liability Protection– Cash kept in company for

growth taxed at corporate rate – 15% for <$50k

• Personal Service Corp – 35%

– Dividends taxed to shareholders

– Benefits to salaried shareholders not part of salary

– Corporate Investors

Setting the Course! Build Your Business Strategy 8


ValueThe Incentive Factor

• Fair Market Value– The “price” something would change hands

• between willing parties• when all parties know the facts

– Impersonal, detached, hypothetical parties• Investment value

– The specific amount a specific party would pay based on individual investment criteria

• Personal to the parties involved

• Intrinsic Value– Analytical judgment of value based on

perceived characteristics of the investment• How good a “deal”

Setting the Course! Build Your Business Strategy9


Increasing Value

• “Franchise Mentality”– What would have to happen for you to franchise– Create a business someone else could run– Work yourself out of a job

• Increase Confidence of Projected Results– Create business with predictable results– Cash flows, growth and potential resale

• Build to the Market Opportunity– Adopt a true CEO mentality– Lead and Manage to maximize value

• As opposed to creating a pay check


Passive income is more valuable than active income!






Haymarket, VA 20169


Developing a Marketing Strategy

• Where are you now?– Market Position

• Where do you want to be?– Marketing goals

• How do we get there?– The marketing strategy– The Marketing Plan

• The Marketing Strategy– Define the current market – where are

the weaknesses?• Gaps, competition, segments, pricing

– Determine methods of attack– Set actions across the Marketing Mix


The Market

The Market


Market Positions

• Market Leader– Dominates market

• Market Participant– Strong – Significant market share, challenging leader

– Weak – Content with some market share

• Nicher– Serve small segments of market


The Market

Strong Market

Participant

Market Leader

WeakMarket

Participant

Nicher


ImplementationCreating and Executing the Plan

• Create an action plan– Create strategies and projects– Schedule actions from strategies and projects

• Accountability– Big Companies use Board of Directors– Create a “Board of trusted advisors”– Use friends, consultants or family– Business Coaches


An accountability partner or team will help get you where you want to be!


Leveraging the Online Social Network


Tuesday, July 13, 2010, 10am‐2pm


Haymarket, VA 20169






Haymarket, VA 20169