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Small Business

SeminarThursday, September 5, 2019

8:00AM

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• Goal: Bridge the gap between our local businesses and school systems, by

making it easy for schools to connect.

• All industry sectors needed to participate.

• Anticipates and answers the questions schools have about engaging with

employers.

• Participate Here: https://www.surveymonkey.com/r/M5GK7KS/r/M5GK7

ONLY 5 minutes to complete

Facility

Tours

School Engagement On-Site programming Connect with

OhioMeansJobs

•Group Size

•Group Types

•Ages/Grades

•Employers participating IN the classroom

•Teaching/mentoring

•mock interviews

•Participating in events

•Job Shadowing programs

•Internship/apprenticeship

•On Site classes

•School to work experiences

•Impact 419

•WIOA

•Training programs

Williams County

Business to Education

Connection Survey

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Next Upcoming WEDCO Event:

3rd ANNUAL ENERGY UPDATE

September 11, 2019, 8:00AM

Williams County Community Offices

Conference Room A&B

RSVP by September 10 to:

Megan Puehler, WEDCO

Phone: (419) 636-8727

Email: office@wedco.info

Or Register Online: www.wedco.info/utilties

Small Business BasicsThinking of starting, expanding or buying a small business?

https://www.sba.gov/starting-business

The State of Ohio is an Equal Opportunity Employer and Provider of ADA Services

Small Business Planning

Why put together a business plan?

• Acts as a feasibility study

• Tool for obtaining financing

• Serves as a management tool

The State of Ohio is an Equal Opportunity Employer and Provider of ADA Services

Writing a Business Plan

Make it professional!

• Cover Page

- Name

- Date

- Title of Project

- Who it is prepared for

• Table of Contents

- Headings of report

- Page numbers

Writing a Business Plan cont’d

• Executive Summary

– Overview of ENTIRE plan

– Funding request including your contributions

• Company Description

– History of business

– Industry

– Location

– Legal structure

– Strategic advantage

– Percentage ownership

Writing a Business Plan cont’d

• Management Plan

– Owner responsibilities

– Payroll

– Number of employees

– Mentors/ advisors/ board of directors

– Accountant/ lawyer/ banker/ insurance agent

• Operations Plan/ Situation Analysis

– Mission/ vision statement

– Industry analysis

– Competitor analysis

– SWOT analysis

Writing a Business Plan cont’d

• Marketing Plan

– Product strategy

– Place strategy

– Price strategy

– Promotion strategy

• Financial Plan

– Three year projections

– First year monthly/ second and third annual

• Income Statement

• Balance Sheet

– Startup funds needed

– Source and use of funds

Legal Structure

• File with the Ohio Secretary of State,

www.sos.state.oh.us

– Sole Proprietorship

– Partnership

– Corporation (C-Corp or S-Corp)

• Non-Profit (notated in articles)

– Limited Liability Company

Licensing & Permits

• First Stop Business Connection

www.business.ohio.gov/starting

– Starting Your Business in Ohio publication

• If you have sales tax involved, you need a

vendor’s license

– Ohio Department of Taxation,

www.tax.ohio.gov

– Ohio Business Gateway

– County Auditor’s Office

– Certificate of Exemption

Tax and Employer Requirements

• Federal Taxes – www.irs.gov

– FREE EIN application

• Ohio Taxes – www.tax.ohio.gov

– New Hire Reporting, www.oh-newhire.com

– Unemployment, www.state.oh.us/odjfs

– Worker’s Compensation, www.ohiobwc.com

• Local Taxes – city, township, county & school

Small Business Opening Checklist

1. Research and write your business plan

2. Meet with lending institutions

3. Register with the Ohio Secretary of State

4. Obtain your EIN from IRS

5. Open a bank account

6. Contact the Ohio Department of Taxation

7. Contact the Ohio Bureau of Workers’ Compensation

8. Contact the Ohio Department of Job & Family Services

9. Obtain the proper licenses and permits

10. Report newly hired employees

Small Business Funding

“For the most part, government grants

are not available for small businesses”

www.business.ohio.gov/starting

(Business Financing Opportunities, Part 2)

Contact Information

• Lisa Becher, Consultant, Northwest OH SBDC

at Northwest State Community College, 22600

State Route 34, Archbold, OH 43502

• Room B114

• Direct Line: 419-267-1361

• Email: nwohiosbdc@gmail.com

FY19 (9 months)SBA-Guaranteed Deals, northwest Ohio

Data

NAICS TEXT Count of LOAN NUMBER Sum of GROSS AMT

Full-Service Restaurants 6 $2,069,300

Fitness and Recreational Sports Centers 5 $864,700

Landscaping Services 4 $131,100

Electrical Contractors 3 $109,300

All Other Specialty Trade Contractors 3 $255,000

Limited-Service Restaurants 3 $284,800

Pet Care (except Veterinary) Services 3 $747,000

Roofing Contractors 3 $73,100

Site Preparation Contractors 3 $169,300

Hotels (except Casino Hotels) and Motels 3 $4,224,000

Investment Advice 3 $1,998,000

Drinking Places (Alcoholic Beverages) 2 $922,500

General Freight Trucking, Long Distance, Truckload 2 $90,500

Plastics Material and Resin Manufacturing 2 $173,000

Used Car Dealers 2 $300,000

Sporting Goods Stores 2 $47,500

Jewelry Stores 2 $319,000

Commercial Gravure Printing 2 $250,000

All Other Business Support Services 2 $1,064,000

General Freight Trucking, Local 2 $73,000

Beer, Wine, and Liquor Stores 2 $2,415,000

Snack and Nonalcoholic Beverage Bars 2 $513,000

Machine Shops 2 $2,369,600

Sports and Recreation Instruction 2 $1,086,000

Nail Salons 2 $76,400

Offices of Physicians (except Mental Health Specialists) 2 $1,550,000

Home Health Care Services 2 $1,592,000

All Other Miscellaneous Schools and Instruction 1 $389,000

Other Support Activities for Air Transportation 1 $50,000

Cutting Tool and Machine Tool Accessory Manufacturing 1 $45,000

Advertising Agencies 1 $150,000

Recyclable Material Merchant Wholesalers 1 $2,919,000

All Other Support Services 1 $50,000

Tobacco Stores 1 $240,000

Highway, Street, and Bridge Construction 1 $250,000

Other Computer Related Services 1 $350,000

1 $2,825,000

Administrative Management and General Management Consulting Services 1 $75,000

Ambulance Services 1 $250,000

Drywall and Insulation Contractors 1 $50,000

All Other Amusement and Recreation Industries 1 $25,000

All Other Personal Services 1 $248,000

Janitorial Services 1 $100,000

All Other Specialty Food Stores 1 $45,000

Breweries 1 $40,500

Other Building Equipment Contractors 1 $95,000

Child Day Care Services 1 $590,000

Other Foundation, Structure, and Building Exterior Contractors 1 $125,000

All Other Automotive Repair and Maintenance 1 $76,000

Distilleries 1 $102,700

Computer Facilities Management Services 1 $23,000

Plumbing, Heating, and Air-Conditioning Contractors 1 $150,000

Marketing Consulting Services 1 $1,450,000

Residential Remodelers 1 $16,500

Masonry Contractors 1 $75,000

Sheet Metal Work Manufacturing 1 $5,000,000

Miscellaneous Financial Investment Activities 1 $60,000

Electronics Stores 1 $50,000

Mobile Food Services 1 $20,000

Flooring Contractors 1 $35,000

Motor Vehicle Towing 1 $33,000

Florists 1 $40,000

Custom Computer Programming Services 1 $1,262,000

Offices of Dentists 1 $2,375,000

Grand Total 108 $43,446,800

North American Industrial Classification System (NAICS) Activity

WilliamsFultonHenryLucas Wood

Top Codes:

Restaurants, Contractors, Hotels, but very diverse industries

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Why are these loan guarantees necessary?

Lenders: “We want a sure thing, or as close as we

can get to it.”

Entrepreneurs: “We need funding to grow, with reasonable rates and

terms.”

Lack of net worth — personal or in the business – no fall backShort time in business — no track recordLoan is for working capital or leasehold buildout — no collateralPersonal credit score is too low to meet bank threshold — high balances against limit, few

reporting lines open, student or consumer debt High-default Industries — restaurants, sole proprietorshipsCyclical Industries — tend to be very exposed in recessions

SBA Loan Programs7(a) Guarantees | 504 CDC Loans | Microloans

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SBA Loan Programs

• Lenders can seek SBA’s guarantee to support their transaction

• Allows lenders to take greater risk• Startups• Longer Terms• Larger loans • Troubled or challenging industries• Collateral Shortfalls• Other transactions that are difficult to underwrite effectively

• Maximum Loan: $5 million

• Guarantee Percentage: 50% to 90%, depending on sub-program

• Maximum maturity: 25 years plus construction period (if necessary)

• Maximum rates: WSJ Prime + 2.25% (or more, for smaller loans and/or longer term loans, and for the SBA Express sub-program)

• Guarantee Fees: Generally 2 to 3% of the guaranteed portion, but higher for loans over $700,000. Veterans, HUBZone Businesses, and Rural Businesses may receive fee relief. 20

7(a): SBA’s Flagship Loan Guarantee Program

SBA Loan Programs

• SBA Express is a sub-program of 7(a), for experienced lending institutions.

• Lenders commit the SBA on their own authority – without further review from SBA.

• SBA Express loans may be structured as lines of credit.

• Maximum loan amount: $350,000

• Guarantee Percent: 50%

• Maturity: Up to 25 Years. LOC’s must have a term out period at least as long as the draw period, total of 10 years maximum.

• Maximum Interest Rate: WSJ Prime + 4.5% (or more, for smaller loans)

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7(a) Subprogram: SBA Express

SBA Loan Programs

• SBA 504 involves a government bond sale, which funds hundreds of special small business loans every month. The government’s buying power results in a low, long-term fixed rate which is passed through to the borrower on a 2nd mortgage 2nd lien loan.

• Banks handle a 50% first mortgage/lien

• SBA makes a 30-40% second mortgage/lien via a Certified Development Company

• Borrower injects 10 to 20% of their own funds

• Terms: 10, 20, or 25 years

• Fees: .5% on first mortgage; a little over

2% on second mortgage

• Rates determined at bond sale

• Use of proceeds: Capital Assets ONLY

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SBA 504 Certified Development Company Loan Program

+Northwest Ohio Development Assistance Corp (Toledo Port)+West Central Partnership (Anchor)

SBA Loan Programs

• Provides financing to borrowers who cannot access either conventional or SBA-backed loans – for example:

• Startups

• Poor credit/no credit

• Ex offenders

• Recent immigrants

• Minority/women-owned businesses

• Transitioning military

• Loan sizes up to $50,000

• Rates usually around 7 to 12%

• Terms 6 months to 5 years

• Flexible underwriting

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Microloan

Economic and Community Development Institute(Application intake at the Toledo Port)

SBA Loan Programs

• Dozens of lenders participate with SBA

• First step: Work with a counselor to help prepare your loan package and understand what you can expect.

• Try your local lender, or SBA’s Lender Match at www.sba.gov.

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Getting the loan

https://www.sba.gov/funding-programs/loans/lender-match

Requirements

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REQUIREMENTS

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The SBA works with lenders to provide loans to small businesses. We do not lend directly to small business owners.

Be a for-profit business: The business is officially registered & operates legally.

Do business in the U.S.: The business is physically located & operates in the U.S. or its territories.

REQUIREMENTS

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The lender will provide you with a full list of eligibility requirements for your loan.

Have invested equity: The business owner has invested their own time or money into the business.

Exhaust financing options: The business cannot get funds from any other financial lender.

REQUIREMENTS

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Ineligible businesses

Non-profitsPassive

holder of real estate

Owned by aliens

Gambling

Restricting patronage

Promoting Religion

Consumer & Marketing co-

ops

Prurient nature

Poor character

Prior loss to government

GETTING APPROVED

Be a good credit risk

✓Good personal credit

✓Reasonable personal debt

✓Business Cash flow coverage of 1.2x

✓Reasonable invested equity

✓Not being a startup

✓Relevant experience

Have a complete application

✓SBA Loan Application

✓Personal Financial Statement

✓Business Financial Statements• 3 years business tax returns• Interim financial statement• Notes and explanations

✓Articles/Operating Agreement

✓Resumé

✓Business Overview, History, and Project Description

✓Business Lease

✓Cost Documents

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Contact me.

Raymond GravesSBA Cleveland District Office1350 Euclid Ave., Suite 211Cleveland, OH 44115Raymond.graves@sba.gov216.522.4192 direct216.522.7180 general office

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