IL NET an ILRU/NCIL National Training and Technical Assistance Project Expanding the Power of the Independent Living Movement Entrepreneurship in IL: For Profit and Fee-for-Service Opportunities Participant's Manual March 5-7, 2001 Contributors to the training materials: Susan Webb Mike Oxford Burt Danovitz Carri George Richard Petty Dawn Heinsohn Anne-Marie Hughey Kristy Langbehn Darrell Lynn Jones Raweewan Buppapong 2000 IL NET, an ILRU/NCIL Training and Technical Assistance Project ILRU Program NCIL 2323 S. Shepherd Street 1916 Wilson Boulevard Suite 1000 Suite 209 Houston, Texas 77019 Arlington, Virginia 22201 713-520-0232 (V) 703-525-3406 (V) 713-520-5136 (TTY) 703-525-4153 (TTY) 713-520-5785 (FAX) 703-525-3409 (FAX) ilru@ilru.org 1-877- 525-3400 (V/TTY - toll free) http://www.ilru.org ncil@ncil.org http://www.ncil.org Permission is granted for duplication of any portion of this manual, except where otherwise indicated, providing that the following credit is given to the project: Developed as part of the IL NET: an ILRU/NCIL National Training and Technical Assistance Project. IL NET is funded through a special provisions cooperative agreement with the U.S. Department of Education, Rehabilitation Services Administration, Agreement No. H132B99002. ENTREPRENEURSHIP IN IL: FEE-FOR-SERVICE AND FOR-PROFIT OPPORTUNITIES Learning Objectives Participants will learn: · ways to build on existing relationships and resources to create businesses that work · how to resolve the perceived conflict between the advocacy role and charging fees for services · programs to offer for a fee which are consistent with the IL mission · advantages and disadvantages of not-for-profit vs. for-profit structures · legislative opportunities on the horizon that may provide fee-for-service and for-profit opportunities · the components necessary for successful planning · ways to obtain start-up funding About the Trainers Burt Danovitz is Executive Director of the Resource Center for Independent Living located in Utica, NY. RCIL is one of the larger independent living centers in the country serving in excess of 15,000 people per year through a combination of direct services and individual and systems advocacy. RCIL's current budget is $5.6 million with 300 full and part time employees. Burt has been involved in the promotion of several key disability rights activities in NY including: voting access, transportation, and long term care. In addition Burt serves on a number of boards including: Workforce Investment, United Way, Central New York Arts Council and Mohawk Valley Physicians. Mike Oxford has been involved with the independent living movement for fifteen years. He is the Executive Director of the Topeka Independent Living Resource Center and an organizer with American Disabled for Attendant Programs Today (ADAPT). He also serves on the Board of the National Council on Independent Living (NCIL) and chairs NCIL's Personal Assistance Committee. Mike recently was elected vice- president of NCIL. He has retired after three years from the steering committee for Project ACTION and is a co- founder of Kansas ADAPT. Mike is an officer with the Kansas Association of Centers for Independent Living (KACIL). His past work includes having been a legislative analyst for the Kansas Department of Human Resources and manager of paratransit services in Lawrence, Kansas. Susan Webb is the former Executive Director of Arizona Bridge to Independent Living (ABIL) in Phoenix, Arizona. She served on the Board of Directors of the National Council on Independent Living for three years. During her tenure at ABIL, Susan initiated numerous new programs including an innovative staffing agency within the CIL. She earned a Masters Degree in Business Administration while working for AT&T as a Senior Account Executive. Her strong business experience as well as her years as an advocate enabled her to bring both those skills to the CIL such that its annual budget grew from $500,000 to $6 million. In March of 2000, Susan spun off her own business, Webb Transitions, Inc., which specializes in return-to-work services for welfare moms with disabilities or who have children with disabilities. She is still significantly involved with the CIL and the Independent Living movement as a consultant. She was appointed by Congress to a two-year term on the Social Security Work Incentives Advisory Panel and was recently appointed to the U.S. Small Business Administration National Advisory Committee. Entrepreneurship in IL: For Profit and Fee-for-Service Opportunities Trainers Burt Danovitz, PhD Executive Director Resource Center for Independent Living 409 Columbia Street P.O. Box 210 Utica, New York 13503 315-797-4642 (V) 315-797-5837 (TTY) 315-797-4747 (Fax) burt.danovitz@rcil.com Mike Oxford Executive Director Topeka Independent Living Resource Center 501 SW Jackson Topeka, KS 66603 785-233-4572 (V) 785-233-4572 (TTY) 785-233-1561 (Fax) mlox@tsbbs02.tnet.com Susan Webb Executive Director Arizona Bridge to Independent Living 1229 E. Washington Phoenix, AZ 85034 602-778-0116 (V) 800-367-8939 (TTY) 602-778-0607 (Fax) susanwebb@webbtransitions.com IL NET STAFF ILRU Lex Frieden Laurie Gerken Redd Executive Director Administrative Coordinator lfrieden@ilru.org lredd@ilru.org Richard Petty Carri George Program Director Publications Coordinator richard.petty@bcm.tmc.edu cgeorge@ilru.org Laurel Richards Dawn Heinsohn Training Director Materials Production Specialist lrichards@ilru.org heinsohn@ilru.org ILRU Program 2323 S. Shepherd Suite 1000 Houston, TX 77019 713-520-0232 (V) 713-520-5136 (TTY) 713-520-5785 (FAX) ilru@ilru.org http://www.ilru.org NCIL Anne-Marie Hughey Executive Director hughey@ncil.org NCIL 1916 Wilson Boulevard Suite 209 Arlington, VA 22201 703-525-3406 (V) 703-525-4153 (TTY) 703-525-3409 (FAX) 1-877-525-3400 (V/TTY - toll free) ncil@ncil.org http://www.ncil.org Kristy Langbehn Project Logistics Coordinator kristy@ncil.org Darrell Lynn Jones Training Specialist darrell@ncil.org Raweewan Buppapong Project Assistant Toony@ncil.org ABOUT ILRU The Independent Living Research Utilization (ILRU) Program was established in 1977 to serve as a national center for information, training, research, and technical assistance for independent living. In the mid-1980's, it began conducting management training programs for executive directors and middle managers of independent living centers in the U.S. ILRU has developed an extensive set of resource materials on various aspects of independent living, including a comprehensive directory of programs providing independent living services in the U.S. and Canada. ILRU is a program of TIRR, a nationally recognized, free- standing rehabilitation facility for persons with physical disabilities. TIRR is part of TIRR Systems, a not-for-profit corporation dedicated to providing a continuum of services to individuals with disabilities. Since 1959, TIRR has provided patient care, education, and research to promote the integration of people with physical and cognitive disabilities into all aspects of community living. ABOUT NCIL Founded in 1982, the National Council on Independent Living is a membership organization representing independent living centers and individuals with disabilities. NCIL has been instrumental in efforts to standardize requirements for consumer control in management and delivery of services provided through federally funded independent living centers. Until 1992, NCIL's efforts to foster consumer control and direction in independent living services through changes in federal legislation and regulations were coordinated through an extensive network and involvement of volunteers from independent living centers and other organizations around the country. Since 1992, NCIL has had a national office in Arlington, Virginia, just minutes by subway or car from the major centers of government in Washington, D.C. While NCIL continues to rely on the commitment and dedication of volunteers from around the country, the establishment of a national office with staff and other resources has strengthened its capacity to serve as the voice for independent living in matters of critical importance in eliminating discrimination and unequal treatment based on disability. Today, NCIL is a strong voice for independent living in our nation's capital. With your participation, NCIL can deliver the message of independent living to even more people who are charged with the important responsibility of making laws and creating programs designed to assure equal rights for all. ABOUT THE IL NET This training program is sponsored by the IL NET, a collaborative project of the Independent Living Research Utilization (ILRU) of Houston and the National Council on Independent Living (NCIL). The IL NET is a national training and technical assistance project working to strengthen the independent living movement by supporting Centers for Independent Living (CILs) and Statewide Independent Living Councils (SILCs). IL NET activities include workshops, national teleconferences, technical assistance, on-line information, training materials, fact sheets, and other resource materials on operating, managing, and evaluating centers and SILCs. The mission of the IL NET is to assist in building strong and effective CILs and SILCs which are led and staffed by people who practice the independent living philosophy. The IL NET operates with these objectives: Assist CILs and SILCs in managing effective organizations by providing a continuum of information, training, and technical assistance. Assist CILs and SILCs to become strong community advocates/change agents by providing a continuum of information, training, and technical assistance. Assist CILs and SILCs to develop strong, consumer-responsive services by providing a continuum of information, training, and technical assistance. Published by the IL Net and the Research and Training Center on Independent Living September 10, 1999 The "Business" of Independent Living Philosophy, Economics and Systems Change -Richard Petty- IL Net Director Consumer control. Advocacy. Peer support. Self-determination. Equal access. We know these as the values of the independent living movement. They form the philosophical foundation on which centers for independent living and state independent living councils build programs and services to promote leadership, empowerment, independence and productivity for people with disabilities. Poll a sampling of CILs around the country and you'll find little, if any, disagreement on what the independent living philosophy is. But ask them what it looks like--how it translates into programs and services--and the answers get more diverse. Then it gets really interesting when the conversation turns to CILs as service providers--or not. Some IL advocates simply say that CILs should not be service providers. It's difficult--if not impossible--to advocate to change a system you're a part of, they say. Others take a moderate, yet cautious, position that it's probably okay for CILs to deliver some types of services. But even they have different ideas about which services are appropriate. Then there are the CILs which have entered the service delivery arena with enthusiasm. This group includes advocates who say the IL philosophy and service delivery not only can coexist--they must commingle to advance IL principles into mainstream society. Beyond the philosophical issue is a practical concern about the business of being a business. CILs are expected to use sound business practices in their day-to-day operations. But many advocates--wherever they stand on the philosophical spectrum-- agree that successfully launching and managing a new business takes basic business practice to an entirely new level. And that raises a whole new set of concerns. Are CILs really equipped to run businesses? What do they need to know, do or learn in order to be equipped? Can the IL philosophy survive in a business environment? What's the proper balance and how do you maintain it? These are among the questions that CILs and SILCs are asking more frequently as the independent living movement faces changing financial and community environments. They are part of a conversation that is being heard more often when IL advocates gather. In this issue of ILRU Net Work we offer a range of ideas, opinions and resources which address the philosophical and practical aspects of the subject. If you're looking for the definitive answer to the question, you won't find it on these pages or in any report or article. As with so much else in life, this is an issue that has lots of gray area. Your board, your constituents, and you must decide for yourselves which shade of gray looks best. With this collection of articles, what you will find is a fair sampling of the variety of shades which make up yet another interesting facet of our diverse IL community. Net Notes Where does your CIL stand on the issue of "service versus advocacy?" Do you have a great idea for a business? We'd like to know! Send us your comments (no dissertations, please) and we'll post them with any others we get on the ILRU Net Work Online website. An upcoming issue of ILRU Net Work will highlight how State Independent Living Councils incorporate public input into their planning processes. Do you have questions or concerns about getting meaningful input? Does your SILC have a process that works especially well? We'd like to hear from you as we develop articles for this issue. Don't wait too long; we're working on a fast track. Our premier issue of ILRU Net Work featured Kelly Dillery, the Ohio "wheelchair mom," and her struggle for independence in Sandusky. We're grateful to Kathleen Kleinmann, executive director of Pennsylvania's Tri-County Partnership for Independent Living, for writing a wonderful personal account about the advocacy effort to support Dillery. We didn't have enough space to run Kleinmann's entire article in the newsletter, but there's plenty of room in cyberspace. Check out ILRU Net Work Online to read the whole article. To access ILRU Net Work Online, point your browser to ILRU.ORG and follow the links to Net Work Online. To send us your comments and story ideas, check out the back page of this newsletter for all the contact information. Advocates Urge Caution to Uphold IL Philosophy and Values Patricia Puckett--Georgia "When you are fearful the dollars will dry up, you might not advocate as strongly against a system. You're in a compromising position. You need to be free to kick butt." With that, Patricia Puckett, executive director of the Georgia State Independent Living Council, states in a nutshell one of the central issues in the "service versus advocacy" discussion. In fact, the potential to compromise IL values to keep funding sources happy was the most often cited concern among IL advocates interviewed for this newsletter. Puckett's viewpoint is representative of many in the IL community who approach the concept of going into business with caution. She's not strictly opposed to all business ventures and, in fact, sees opportunities for systems change in some. But it's not a decision to take lightly. "CILs must be conscientious and careful" when deciding whether or not to take on a business--especially one that provides services to consumers, she says. CIL staff and board members need to have "lots of discussion" about it, she advises. "They need to ask themselves what exactly does co-optation look like? What are we going to do to prevent being in a compromising position?" Puckett believes that CILs may also undermine their advocacy role when they provide services that other entities are clearly mandated to provide. "If there's a mandate that a public service be provided by the city, state or county," she says, "the SILCs' and CILs' role is to make sure the system is doing its job. If the mission is to assure equal participation for people with disabilities, setting up a special and/or separate system is not meeting the mission." "On the other hand," Puckett says, "if there is no mandate and there's an opportunity to move a system forward, the CIL might accomplish that by providing a service. When it comes to creating a new reality, sometimes you have to lead the way." Ruth Stegeman--Michigan "We're the ones who are going to have to make changes in the system. Our job is to get those other organizations to do it. We are not gap-fillers." Ruth Stegeman does not embrace the notion of "business as a systems change strategy." She is concerned that advocacy may take a back seat when service or business interests dominate a center's attention. And in her view, that could have negative implications for consumers. Stegeman, executive director of Lakeshore Center for Independent Living in Holland, Mich., says she bases her position on the independent living philosophy that the problem is in the environment, not in the individual. "It makes sense," she says, "that we focus on our unique role of addressing systems change. "The solution to the problem is self-help and consumer control. This means people have both rights and responsibilities. Systems advocacy offers us one of the best ways to provide people the opportunity to practice their rights and responsibilities--to participate in their own liberation." Stegeman says her center routinely involves consumers in its systems change advocacy activities. "They don't learn those skills if they don't have the chance to practice them," she says. Beyond that, she says, CIL staff providing services to consumers could easily fall into the role of professional service provider. "Our role as staff is to be a peer--not a professional," she says. "Why would people want to come in and hang around their case managers?" Stegeman says many of the services CILs might opt to provide require assessment and evaluation, activities she thinks are not in keeping with a true peer relationship. In Stegeman's view, building up business can detract from another important element of the independent living philosophy--the grass roots focus. "A big business is not grass roots," she says. "We have to come to terms with that. There's always a new opportunity out there. Your budget can get big pretty fast. You get bureaucratic, more structure, more policy. It's hard to maintain the grass roots feel. It's hard to maintain staff involvement with consumers." Stegeman recognizes that CILs are compelled to generate revenue. Rather than take on businesses that might detract from the center/consumer relationship, she proposes there are other avenues open to CILs. "I think CILs are in a better position to promote small businesses." Stegeman's own center operates an information and referral business for clients of Michigan's vocational rehabilitation agency. "It's a real advantage to us. It allows us to do outreach, plug who we are and teach consumers how to use the resources available to them," she says. Does that present a problem when her center needs to advocate with the voc rehab agency on an issue? Stegeman says it doesn't. "We have a great relationship with VR," she says, "and our advocacy with them is always within that context. It's not in-your-face advocacy. That's how you do a lot of advocacy anyway--through relationships." Gina McDonald--Kansas The Kansas Association of Centers for Independent Living has advocated for CILs in that state to become providers for an array of services including: employment training for VR clients, personal assistance payroll agents for home and community-based services waivers, individual and systems advocacy, independent living skills training, I&R and peer support training for people with developmental disabilities, welfare to work training, and assistance to juveniles with disabilities in foster care. Gina McDonald, director of the statewide association, believes it is possible for CILs to provide services and be effective advocates as long as their primary focus is systems change. "CILs I consider to be the best do just that," she says. "They provide services, but not as a primary goal," she continues. "They charge funding sources for services, and then they pump the earnings back into an advocacy agenda. And they don't accept funding from sources that seek to minimize their capacity to engage in advocacy efforts." If those comments lead you to think McDonald is firmly entrenched in a pro-business mentality, think again. She and KACIL members have a lot of concerns about being service providers. First, there's the relationship between the consumer and provider. "If you are the provider, who will be the advocate for the consumer who is unhappy with your services?" McDonald asks. Then, there are the stereotypes and myths. "If we provide services only to people with disabilities, we promote the idea that people with disabilities need segregated, special services. That promotes the myth that we are somehow `broken' and need to be `fixed.' "If we continue to provide the services disabled people need, where is the impetus for the community to provide those services?" she continues. "If we provide transportation for disabled people in our community, then why should the community work to make transportation accessible? And why would we want to put ourselves out of business?" McDonald also has concerns about the strings that may be attached to some revenue sources. It's easy to become "so tangled in service dollars" that CILs may be fearful of taking on advocacy activities that might upset a funding source. She adds that the rules that go along with certain funding streams may limit the ability to "really ensure consumer control." McDonald points out that the IL philosophy embraces the concept that the problems people with disabilities experience are in society--not in the people themselves. Yet, she says, many service dollars are devoted to "fixing" people and not the system. Centers may take those dollars with the best of intentions, she says, and then find themselves focused on fixing the people and not systems change. IL Chief Says RSA is OK with CIL Business Ventures John Nelson says balance is key to local decisions Title VII of the Rehab Act offers a "wonderful smorgasbord of opportunity" related to services and businesses CILs might choose to get involved in. So says John Nelson, chief of the Independent Living Branch of the Rehabilitation Services Administration, when asked where RSA weighs in on the service delivery question. "As long as CILs are taking care of business in providing the four core and two other IL services," Nelson says, "RSA doesn't care one way or the other if they choose to venture into the business world. They can do what needs to be done to serve people with significant disabilities." "CILs are small to medium sized businesses. They should determine what changes they want to make and then blend funding sources, services and advocacy to achieve those locally determined goals," he says. The federal regs governing CILs features a long list of independent living services beyond the core services, many of them seemingly good potential business opportunities. Nelson says there's really no limit to the services centers can provide. "The list only stopped there because we couldn't think of any more." And if a center makes money providing a particular service? "It's not a problem from our perspective," Nelson says. "In fact they are mandated to attempt to raise funds and can use Part C funds to raise other funds. It seems to me centers would want to make money beyond basic grant dollars so they can do more advocacy and other things they really want to do." Acknowledging the limitations on how government dollars can be spent, Nelson suggests basic grant money may best be used to cover essentials like rent and salaries. By generating other non-program income, he says, CILs can accomplish things they can't do with federal dollars--like lobbying within IRS guidelines. Nelson says he is well aware of the discussions around "service versus advocacy" and the philosophical distance between some centers. "The final balance is really up to each center to decide for itself," he remarks. "However, because the four core services include both services and advocacy, RSA would have as many concerns with a CIL that only did IL services as a CIL that only did advocacy. "There's no question some centers have done a real good job of doing both--it can be done," Nelson adds. "The CILs that do well with both tend to be some of our largest and most successful in terms of consumer control, services, advocacy and funding." There's one notable exception to the kinds of services CILs can provide--residential housing. In 1992, the law was changed to prohibit CILs from operating or managing housing or shelter. "If you're providing somebody a residence, sooner or later you'll become an evicting landlord," he says, adding that's more control than CILs should have over consumers. "How can a center help a consumer be really independent if it controls the person's housing?" When asked how housing differs from some other services CILs can legally provide to consumers, like personal assistance services or case management, Nelson acknowledged it's a fine line. "But housing is too important and the slope is too slippery when we begin thinking about regulating how CILs could provide residence to individuals without becoming nursing homes or homeless shelters." Bob Kafka on "Empowering Service Delivery" CILs as PAS Providers next Evolution of Independent Living "While Nero fiddles, Rome is burning." That's Bob Kafka's take on the independent living community's ongoing discussion about "service versus advocacy." While CILs debate philosophy, he says, the health care industry is having its own discussion about how to provide long-term services to people with disabilities in a managed care environment. It's that conversation Kafka believes independent living and disability rights advocates should be involved in if they are truly interested in creating systems change. In an article published in Ragged EDGE (Sept./Oct., 1998), Kafka, national organizer for ADAPT, wrote: "Unless we people with disabilities are at the table telling managed care corporations what concepts we want in a health care delivery system unless we ourselves start the process of becoming what I call `empowered service deliverers' ourselves, we will continue to be at the mercy of health care providers who understand little about our functional support needs, and even less about the independent living philosophy." Kafka believes the changing health care environment offers a prime opportunity for CILs to show the world how long-term services--particularly personal attendant services--can and should be delivered. He sees this as a chance to finally move away from the much-hated medical model to the consumer-driven, empowered PAS system the independent living community says it wants. The medical model has prevailed, he explains, because there has been no viable alternative. CILs can provide the alternative by taking over the delivery of personal attendant services. Of course there are risks associated with being service providers, Kafka says, but the benefits far outweigh the them. "Managed care providers struggle with how to move people into the communities," he says. "CILs know how to do that. They know how to locate accessible and affordable housing, assistive technology and all the services and supports people need." Beyond that, Kafka says, taking control of the service delivery system would result in a significant shift in the balance of power between current PAS providers and the disability community--especially when the billions of dollars people with disabilities earn for traditional providers find their way into the coffers of the disability community. "Delivering the services ourselves," Kafka says, "would allow us to confront the paternalism of the current system and make changes from the inside. It would also give us revenue to put back into our organizations to fund important advocacy efforts like ADA, housing and community organizing." Kafka disagrees with those who suggest his vision is out of bounds in terms of the independent living philosophy. His is the same philosophy, he says, but with a bigger target. "In addition to empowering people, it empowers an entire system." And that, he says, "is the next evolution of the independent living movement." (A link to Bob Kafka's Ragged EDGE article is included on the ILRU Net Work Online website http://www.ilru.org. -Ed.) Temp staffing service connects ABIL with community CIL director says business and advocacy work hand-in-hand Looking back on it, Susan Webb sees the loss of a major contract as one of the best business opportunities Arizona Bridge to Independent Living (ABIL) has ever had. Webb, the center's executive director, and her staff were sent scrambling when the county pulled the plug on a major personal assistance services contract in 1993. That contract was a major piece of ABIL's business plan and approximately 40 percent of its revenue. Without that funding, ABIL needed to find something else to do with the staff and service system they'd put together to support the county contract--not to mention something that could replace the lost revenue. To ABIL, the structure left behind by the PAS contract most closely resembled a temporary staffing agency. So they started one. The new business, modeled after a California program, connects people with disabilities with employers who have temporary jobs to fill. Beyond meeting an immediate business need, Webb says the temp agency also provided ABIL the opportunity to educate a whole new segment of the community. ABIL joined the Arizona Association of Temporary and Staffing Services. "They taught us about the temp industry," Webb says. "They enabled ABIL to serve people better." But the real important thing, according to Webb, who now serves as association president, is what ABIL brought to AATSS. "As an association," she says, "one of the biggest things they do is legislation." With its strong background in legislative advocacy, ABIL had something to offer the association. "We brought value to them," Webb remarks. "That raised our status in their eyes as a professional organization. Because we're in their business, we're their equal." Seeing people with disabilities as competent, professional business people was a new experience for many of the association members--a worthwhile payoff, Webb says. Another payoff is the contact with people and businesses who have helped place people into jobs. In return, ABIL routinely provides association members with advice on such things as work place accessibility, interpreters, assistive technology and accommodations. ABIL's success as a temp agency with expertise in serving people with disabilities has caught the eye of other industries and allowed the center to expand its business in a big way. Fortis Benefits, representing the Arizona State Retirement System, is referring long-term disability claimants to ABIL. For $65 per hour, center staff provides services to help claimants return to work. "Our experience and understanding of disability," Webb offers, "makes us uniquely qualified for the job." It turns out the county must think so, too. The PAS contract, the loss of which prompted ABIL to seek new business territory, is back in the hands of the CIL. The center is also a Projects With Industry site and continues working on the pilot project with Fortis. Does all this focus on business distract from the main purpose of the center? Does the funding relationship with entities such as the county put the CIL at risk of compromise? Webb's response is simply "no." "CILs can do very good advocacy and do services," she claims. "Our business activities enhance our advocacy and it doesn't prevent us from doing what we need to do." Webb points to a current advocacy campaign focused on a county assisted living program. She says the county doesn't expect the center to drop its advocacy role just because it has the big PAS contract. "You don't have to be co-opted," she says. "Just as there are certain contributions we won't go after or accept, there are certain business relationships we won't pursue if they might require us to compromise our philosophy." Service and aggressive advocacy coexist at Topeka center Almost every conversation about services versus advocacy--no matter who's doing the talking--includes at least one reference to the Topeka Independent Living Resource Center. Known nationwide as an aggressive and outspoken advocate, the Kansas center is also well known as a major service delivery organization. The Topeka CIL brings in close to $12 million annually-income generated by a host of services. The biggest is a contract with Medicaid to provide fiscal intermediary services for PAS consumers. The center also provides legal services for persons with civil rights or other disability related problems, sign language interpreting, Braille printing, conference planning, consulting and public speaking. "We charge a fee for anything we can," says Mike Oxford, executive director. "I subscribe to Tom Sawyer's theory that if you do something for free it has no value." He is quick to point out that consumers get all the services for free. "We charge the people that should be helping to pay for them." Oxford has heard the cautions and knows the concerns--and says they're legit. "You will be in danger of being co-opted. There are limitations that come along with some funds. It does take a lot of extra work to keep a business up and running." But for Oxford there isn't an alternative. Big time advocacy, he notes, takes big time bucks. "Reliance on federal grants alone keeps us small and weak," he says. There's foundation money out there, he adds, but most foundations put strict controls on their dollars and "they're not going to fund strong, effective advocacy." Centers can generate some income by getting grants, he says, but that's not a reliable source of funding and , again, "you're limited on how you use the money." For Oxford, the income is only a means to an end--that being strong, systems advocacy. And earning the income by providing services within the system, he claims, puts you directly in touch with the very thing you want to impact. "How the hell do you really know what to advocate for if you don't know how the system works?" he asks. As an example, Oxford offers a situation that came to light as a result of his center's legal services. "We found out that people with certain disabilities were automatically having their kids taken away and placed in foster care," he recalls. "We would have never known about that if we weren't providing that service and involved in the legal system. By being part of the system we are more tuned in, smarter, more effective." If an independent living provider Net Work had been in place in 1965 when Medicaid was passed, Oxford suggests, "maybe nursing homes wouldn't have been the only long-term care option covered by the law." It might be too late for that, but Oxford still envisions a national Net Work of CILs providing services to consumers. "Part of our responsibility is to make sure the system is meeting the needs of people with disabilities," he says, "but what if the system isn't prepared to meet the needs? We can advocate all day long that we have a right to a service, but who's going to actually deliver it? For example, we have a right to attendant services, but attendants don't just pop out of the woodwork. Somebody has to get the service out there, why shouldn't it be us?" When asked what advice he has for CILs considering taking the plunge into service delivery, Oxford replies, "You have to have a large vision and you have to be able to stick with it." In Topeka's case, the vision wasn't about business--it was about human rights. It started in the mid-80s when the CIL decided to work to change the Kansas nurse practice law to allow people with disabilities to direct their own attendant care. "We didn't know it was a business opportunity," Oxford says. "Then we got the law changed and the demand was greater than we could have ever imagined." In 1991, the center set out to meet that need by launching its PAS program. The other businesses have come along since. Oxford acknowledges, "it's been a lot of work and we haven't always been perfect." But the results, he says, are worth it. Most of the income generated from these programs goes back into operations, but Oxford says the rest goes straight to improving services to consumers and advocacy. "It allows us to have four times the IL specialists to serve consumers. It allows us to have adequate training for our staff. We have decent equipment. And it allows us to contribute big bucks to our state association to fund things like advocacy on the Olmstead case and to assist organizations like Concrete Change." In 1991, Topeka CIL served 60-80 consumers. Today, Oxford says, "we serve thousands." Our service delivery has allowed us to do more good for more people than ever before." DIMENET: Disabled Individuals Movement for Equality Net Work Internet offers CILs a cyberworld of opportunity When Roland Sykes was an Oklahoma CIL director in the 1980s, he noticed a disturbing trend. Center staff handling information and referral calls would dutifully track down requested information, respond to the requester and then, toss the information. Invariably, some time later, another caller would need the same information. The process was repeated--a number of times a day--for however many staffers were handling I&R calls. This bothered Sykes, but not just for its inefficiency. It seemed to him one of the biggest products CILs have to offer is useful, reliable information about disability issues. Yet, it was being carted away with the daily trash. Sykes realized that without a system to collect, organize and store the information, the scenario was destined to be carried out time and time again. He got the chance to do something about it in 1985, when he landed a grant from the National Institute on Disability and Rehabilitation Research. He used the funds to develop a computerized system that would allow center staff to capture, store and share I&R information. Initially known as the National Council on Independent Living Computer Net Work, today we know it as DIMENET . In layman's terms, DIMENET is a package of computer hardware, software and databases from which Sykes says a CIL can run its "all of its critical functions" including I&R, library materials handling and mailing list management. And, it's fully accessible to people with disabilities for whom Windows-based technology just doesn't cut it. Sykes says that DIMENET has the capacity to allow a CIL to put important and useful information on the desktop of every employee all the time. Instead of scribbling it on sticky notes and scrap paper, staff enters information to the database--which every staff member can access and use. Connect that system with an Internet Service Provider, and CIL consumers who need information on a given topic have access to it. "A means of empowerment," Sykes says. And with the ability to combine all the local databases in one place, DIMENET becomes a comprehensive, nationwide resource for disability and independent living information. For many CILs, those features in and of themselves may make DIMENET an "idea worth pursuing." Sykes says it doesn't stop there. For centers looking to develop a business that can generate a lot of income, he says, DIMENET is a great prospect. Buying into the Net Work allows centers to become Internet service providers, website developers, chat room hosts, e-mail providers and more to their communities. Centers provide these services as premiums to subscribers in exchange for donations. The emphasis on accessibility for users extends to accessibility for people who support the operation. For example, Sykes says, it is very easy for consumers to learn the skills to develop accessible websites. Having learned those skills, they can make money designing websites for customers. The opportunities are only as limited as the centers' imaginations. Currently six CILs are DIMENET sites. Sykes hopes that number will grow as centers become more comfortable with computer technology and with the notion of relaxing control over information they are accustomed to having to themselves. Getting involved with computer technology and the Internet is imperative, he says, if we want to be players in the society of today and the future. (Find information about DIMENET at http://www.tnet.com/dimenet/ -Ed.) MetroWest Launches DIMENET and Cyber-Business MetroWest Center for Independent Living in Massachusetts is one of DIMENET's newest sites. Paul Spooner, executive director, gets pretty enthusiastic when he talks about the venture's immediate success--or its prospects for the future. As part of DIMENET, MetroWest is an Internet service provider. They sell server space, e-mail boxes and web page design services. Their services are not limited to the immediate independent living community. "We've picked up a lot of customers that had inaccessible websites," Spooner says. "When we pointed it out, they paid us to fix them." Cyber business has enlarged MetroWest's annual budget considerably. Seven years ago, it was $150,000, the smallest CIL budget in the state. Today it boasts a $400,000 budget, and Spooner says things don't appear to be going anywhere but up. The beauty of it, according to Spooner, is that the earnings allow MetroWest to offer more and better information and referral services to consumers. In fact, it was the center's focus on I&R as a core service that eventually led to the decision to go into it "big time." "We sell it so we can give it away to consumers," Spooner says. An important part of starting a new business is finding a product niche that no one else has. The creation of DIMENET and its capacity to deliver information prompted the MetroWest staff to look at the I&R services they were already providing in a new light-- as a marketable product. MetroWest's initial cash investment to join DIMENET was $40,000, most of which purchased computer equipment. Perhaps more important than the financial investment, though, was the center's intense planning process that took place even before the decision to go into business was made. "It's a difficult blend of skills and knowledge to be an advocate and a provider of any kind of service," Spooner says. "Taking on a business drives you to produce different funding, drives your center's agenda and has profound effects on what you do in the long run." Does that mean CILs should shy away from business opportunities? "No," replies Spooner, "but they need to think it through carefully." Running a business does not have to detract from the quality of independent living services a center provides, Spooner claims. The key, he says, is thoughtfully examining your values and mission and developing a plan that will allow you to maintain them, even as you launch into a new business. "Do they have a strategic plan? How do they want the community to perceive them one, five or ten years from now? Do they want to be known as the service provider entity? Or do they want to be known as the place to go for things like advocacy and I&R? Will it enhance our values and goals or will it detract?" Spooner says he and his staff worked through these and other questions with painstaking care before deciding to join DIMENET. The result was a carefully drafted and strictly adhered to plan that guides all of their decisions related to the business. There might have been a different outcome if the business in question had been something like personal assistance services or case management. While he points to several centers which successfully balance the advocate and service provider roles, Spooner sees that road as having "lots of dangers and traps." All the more reason, he says, to look at other opportunities that aren't so closely related to consumer services. Sources & resources For more information about the stories in this newsletter, go straight to the sources. Thanks to the following for sharing their valuable time, knowledge and experience in our effort to advance the independence of all people with disabilities. Bob Kafka National Organizer ADAPT 1339 Lamar Square Blvd., #101 Austin, TX 78704 (512) 442-0252 bkafka@juno.com Gina McDonald Director Kansas Association of Centers for Independent Living 1423 West Crawford St. Salina, KS 67401 (785) 825-2675 kacil@midusa.net John Nelson U.S. Dept. of Education/OSERS Rehabilitation Services Administration Independent Living Branch Washington, D.C. 20202-2741 (202) 205-9362 John_Nelson@ed.gov Mike Oxford Executive Director Topeka IL Resource Center 501 SW Jackson #100 Topeka, KS 66603 (785) 233-4572 mlox@tsbbs02.tnet.com Patricia Puckett Director Georgia State Independent Living Council 3125 Presidential Pkwy #200 Atlanta, GA 30340 (770) 452-9601 silcga@mindspring.com Paul Spooner Executive Director Metro West CIL 63 Fountain St. #401 Framingham, MA 01702 (508) 875-7853 pspooner@mwcil.org Ruth Stegeman Director Lakeshore Center for Independent Living 426 Century Lane Holland, MI 49423-3879 (616) 396-5326 ruth@egl.net Roland Sykes DIMENET 6256 Ramblewood Dr. Riverside, OH 45424 (513) 237-8360 rsykes@gimp.com Susan Webb Executive Director ABIL 1229 East Washington St Phoenix, AZ 85034 (602) 256-2245 azbridge@abil.org ILRU Net Work is published quarterly by IL Net and the Research and Training Center on Independent Living. The IL Net is a collaborative project between ILRU and the National Council on Independent Living to provide training and technical assistance to centers for independent living nationwide. The Research and Training Center on Independent Living enhances the scope and quality of services provided by consumer- controlled, community-based centers for independent living. For more information, contact: Carri George IL NET Publications Coordinator Independent Living Research Utilization The Institute for Rehabilitation and Research Mail Stop: ILRU 1333 Moursund Houston, Texas 77030 Voice: 713/520-0232 TTY: 713/520-5136 Fax: 713/520-5785 Lex Frieden, ILRU Director Richard Petty, IL NET Director Laurel Richards, ILRU Training Director Dawn Heinsohn, IL NET Materials Specialist Kaye Beneke, Newsletter Production Substantial support for development of this publication was provided by the Rehabilitation Services Administration, U.S. Department of Education. The content is the responsibility of ILRU and no official endorsement of the Department of Education should be inferred. SWOT Analysis SWOT ANALYSIS STRENGTHS: 1. CILs have an infrastructure already in place (e.g., accounting system, space, computer system/database, etc.). Minimizes start up costs and efficiencies. 2. CILs have an existing community presence and established relationships. Minimizes marketing costs. Establishes immediate credibility. 3. CILs already have a relationship with a bank and/or line of credit. Helps manage cash flow and capital needs. 4. Non-profit organizations, such as CILs, have the ability to attract volunteer advice and donated resources from the private sector (e.g., advisory committee from business leaders). 5. CILs have a passion/mission for giving 100% to new projects. Inherent "go-getter" tendencies in CILs are essential to achieving business success. 6. The IL philosophy (non-medical model) is consistent with good customer service and problem solving empowerment. 7. The peer mentoring model used by CILs offers ongoing encouragement and support. 8. CILs have the best disability awareness component of anyone else in the community. Any disability-related business would be enhanced by the culture awareness a CIL brings to the marketplace. WEAKNESSES: 1. CIL staff/board typically are not business savvy. 2. CILs are seen by the business community as a social service. Hurts credibility. 3. CILs do not generally have excess funds to use as seed capital to get a business started. 4. Existing staff (especially the executive director) have limited time available to start a business. Hiring new staff is risky. 5. Resources and skills necessary to evaluate the feasibility (marketing, budget, business plan, strategic plan) of starting a business are lacking. OPPORTUNITIES: 1. A successful business enterprise within a CIL generates unrestricted funds for other CIL activities such as advocacy and lobbying. 2. It expands a CILs presence in the community. Increased awareness about CILs and new contacts generates new volunteers and funding sources. 3. It offers new job opportunities for people with disabilities. 4. It offers better services to the disability community because it is run by people with disabilities who understand and use the peer mentoring approach. 5. A business promotes the IL philosophy of self-sufficiency. 6. Advocacy becomes easier due to the business relationships established. CILs become professional equals and naturally have more credibility when advocacy is needed. THREATS: 1. A business within a CIL could shift focus away from the CILs mission and focus more on making money. 2. Conflicts may arise between advocacy and business roles in the community. 3. It's risky. A CIL could lose a lot of money if the business venture fails. 4. Conflicts may arise between the non-profit and the for-profit work units. 5. For-profit staff may resent "carrying" non-profit activities. They may demand more compensation (e.g. bonuses) because they're making "all the money". 6. Non-profit staff may resent the for-profit getting all the attention and glory. 7. The CILs board of directors may have non-business people on it (e.g. lawyers) who want to dictate business decisions. This could slow down the process thus losing valuable business opportunities. Small Business Administration Resource Materials This material is taken from SBA's website www.sba.gov and used with their permission. The SBA may be reached toll free At 800-U-ASK-SBA or 800-827-5722 All of SBA's programs and services are provided to the public on a nondiscriminatory basis. FIRST STEPS HOW TO START A SMALL BUSINESS Starting and managing a business takes motivation, desire and talent. It also takes research and planning. Like a chess game, success in small business starts with decisive and correct opening moves. And although initial mistakes are not fatal, it takes skill, discipline and hard work to regain the advantage. To increase your chance for success, take the time up front to explore and evaluate your business and personal goals. Then use this information to build a comprehensive and well-thought-out business plan that will help you reach these goals. The process of developing a business plan will help you think through some important issues that you may not have considered yet. Your plan will become a valuable tool as you set out to raise money for your business. It should also provide milestones to gauge your success. 1. Getting Started Before starting out, list your reasons for wanting to go into business. Some of the most common reasons for starting a business are: § You want to be your own boss. § You want financial independence. § You want creative freedom. § You want to fully use your skills and knowledge. 2. Next you need to determine what business is "right for you." Ask yourself these questions: § What do I like to do with my time? § What technical skills have I learned or developed? § What do others say I am good at? § Will I have the support of my family? § How much time do I have to run a successful business? § Do I have any hobbies or interests that are marketable? 3. Then you should identify the niche your business will fill. Conduct the necessary research to answer these questions: § What business am I interested in starting? § What services or products will I sell? § Is my idea practical, and will it fill a need? § What is my competition? § What is my business's advantage over existing firms? § Can I deliver a better quality service? § Can I create a demand for my business? 4. The final step before developing your plan is the pre-business checklist. You should answer these questions: § What skills and experience do I bring to the business? § What will be my legal structure? § How will my company's business records be maintained? § What insurance coverage will be needed? § What equipment or supplies will I need? § How will I compensate myself? § What are my resources? § What financing will I need? § Where will my business be located? § What will I name my business? Your answers will help you create a focused, well-researched business plan that should serve as a blueprint. It should detail how the business will be operated, managed and capitalized. One of the most important cornerstones of starting a business is the business plan. SBA offers you a tutorial on preparing a solid plan with all its essential ingredients. Be sure to review and peruse this section. Once you have completed your business plan, review it with a friend or business associate. When you feel comfortable with the content and structure, make an appointment to review and discuss it with your banker. The business plan is a flexible document that should change as your business grows. WORKSHOP INTRODUCTION: THE BUSINESS PLAN ROAD MAP TO SUCCESS WORKBOOK Training Module 2 WORKSHOP OBJECTIVES By the end of this workshop, you should be able to: * Understand the role of the business plan. * List several reasons for developing a business plan. * Identify sources where you can get help in developing a business plan. * Identify the type of information to include in the business plan. * Prepare an outline for a business plan. THE BUSINESS PLAN - BUSINESS PLAN OUTLINE Below is an outline for a business plan. Use this model as a guide when developing the business plan for your business. Elements of a Business Plan 1. Cover sheet 2. Statement of purpose 3. Table of contents I. The Business A. Description of business B. Marketing C. Competition D. Operating procedures E. Personnel F. Business insurance G. Financial data II. Financial Data A. Loan applications B. Capital equipment and supply list C. Balance sheet D. Breakeven analysis E. Pro-forma income projections (profit & loss statements) - Three-year summary - Detail by month, first year - Detail by quarters, second and third years - Assumptions upon which projections were based F. Pro-forma cash flow - Follow guidelines for letter E. III. Supporting Documents - Tax returns of principals for last three years - Personal financial statement (all banks have these forms) - In the case of a franchised business, a copy of franchise contract and all supporting documents provided by the franchiser - Copy of proposed lease or purchase agreement for building space - Copy of licenses and other legal documents - Copy of resumes of all principals - Copies of letters of intent from suppliers, etc. THE BUSINESS PLAN - WHAT IT INCLUDES What goes in a business plan? This is an excellent question. And, it is one that many new and potential small business owners should ask, but oftentimes don't ask. The body of the business plan can be divided into four distinct sections: 1) the description of the business, 2) the marketing plan, 3) the financial management plan and 4) the management plan. Addenda to the business plan should include the executive summary, supporting documents and financial projections. THE BUSINESS PLAN - DESCRIPTION OF THE BUSINESS In this section, provide a detailed description of your business. An excellent question to ask yourself is: "What business am I in?" In answering this question include your products, market and services as well as a thorough description of what makes your business unique. Remember, however, that as you develop your business plan, you may have to modify or revise your initial questions. The business description section is divided into three primary sections. Section 1 actually describes your business, Section 2 the product or service you will be offering and Section 3 the location of your business, and why this location is desirable (if you have a franchise, some franchisers assist in site selection). 1. Business Description When describing your business, generally you should explain: § Legalities - business form: proprietorship, partnership, corporation. The licenses or permits you will need. § Business type: merchandizing, manufacturing or service. § What your product or service is. § Is it a new independent business, a takeover, an expansion, a franchise? § Why your business will be profitable. What are the growth opportunities? Will franchising impact on growth opportunities? § When your business will be open (days, hours)? § What you have learned about your kind of business from outside sources (trade suppliers, bankers, other franchise owners, franchiser, publications). A cover sheet goes before the description. It includes the name, address and telephone number of the business and the names of all principals. In the description of your business, describe the unique aspects and how or why they will appeal to consumers. Emphasize any special features that you feel will appeal to customers and explain how and why these features are appealing. The description of your business should clearly identify goals and objectives and it should clarify why you are, or why you want to be, in business. 2. Product/Service Try to describe the benefits of your goods and services from your customers' perspective. Successful business owners know or at least have an idea of what their customers want or expect from them. This type of anticipation can be helpful in building customer satisfaction and loyalty. And, it certainly is a good strategy for beating the competition or retaining your competitiveness. Describe: § What you are selling. § How your product or service will benefit the customer. § Which products/services are in demand; if there will be a steady flow of cash. § What is different about the product or service your business is offering. 3. The Location The location of your business can play a decisive role in its success or failure. Your location should be built around your customers, it should be accessible and it should provide a sense of security. Consider these questions when addressing this section of your business plan: § What are your location needs? § What kind of space will you need? § Why is the area desirable? the building desirable? § Is it easily accessible? Is public transportation available? Is street lighting adequate? § Are market shifts or demographic shifts occurring? It may be a good idea to make a checklist of questions you identify when developing your business plan. Categorize your questions and, as you answer each question, remove it from your list. THE BUSINESS PLAN - The Marketing Plan Marketing plays a vital role in successful business ventures. How well you market you business, along with a few other considerations, will ultimately determine your degree of success or failure. The key element of a successful marketing plan is to know your customers -- their likes, dislikes, and expectations. By identifying these factors, you can develop a marketing strategy that will allow you to arouse and fulfill their needs. Identify your customers by their age, sex, income/educational level and residence. At first, target only those customers who are more likely to purchase your product or service. As your customer base expands, you may need to consider modifying the marketing plan to include other customers. Develop a marketing plan for your business by answering these questions. (Potential franchise owners will have to use the marketing strategy the franchiser has developed.) Your marketing plan should be included in your business plan and contain answers to the questions outlined below. § Who are your customers? Define your target market(s). § Are your markets growing? Steady? Declining? § Is your market share growing? Steady? Declining? § If a franchise, how is your market segmented? § Are your markets large enough to expand? § How will you attract, hold, increase your market share? If a franchise, will the franchiser provide assistance in this area? Based on the franchiser's strategy? How will you promote your sales? § What pricing strategy have you devised? Appendix I contains a sample Marketing Plan and Marketing Tips, Tricks and Traps, a condensed guide on how to market your product or service. Study these documents carefully when developing the marketing portion of your business plan. 1. Competition Competition is a way of life. We compete for jobs, promotions, scholarships to institutes of higher learning, in sports -- and in almost every aspect of your lives. Nations compete for the consumer in the global marketplace, as do individual business owners. Advances in technology can send the profit margins of a successful business into a tailspin causing them to plummet overnight or within a few hours. When considering these and other factors, we can conclude that business is a highly competitive, volatile arena. Because of this volatility and competitiveness, it is important to know your competitors. Questions like these can help you: § Who are your five nearest direct competitors? § Who are your indirect competitors? § How are their businesses: steady? Increasing? Decreasing? § What have you learned from their operations? From their advertising? § What are their strengths and weaknesses? § How does their product or service differ from yours? Start a file on each of your competitors. Keep manila envelopes of their advertising and promotional materials and their pricing strategy techniques. Review these files periodically, determining when and how often they advertise, sponsor promotions and offer sales. Study the copy used in the advertising and promotional materials, and their sales strategy. For example, is their copy short? Descriptive? Catchy? Or how much do they reduce prices for sales? Using this technique can help you to understand your competitors better and how they operate their businesses. 2. Pricing and Sales Your pricing strategy is another marketing technique you can use to improve your overall competitiveness. Get a feel for the pricing strategy your competitors are using. That way you can determine if your prices are in line with competitors in your market area and if they are in line with industry averages. Some of the pricing strategies are: * retail cost and pricing * competitive position * pricing below competition * pricing above competition * price lining * multiple pricing * service costs and pricing (for service businesses only) - service components - material costs - labor costs - overhead costs The key to success is to have a well-planned strategy, to establish your policies and to constantly monitor prices and operating costs to ensure profits. Even in a franchise where the franchiser provides operational procedures and materials, it is a good policy to keep abreast of the changes in the marketplace because these changes can affect your competitiveness and profit margins. Appendix 1 contains a sample Price/Quality Matrix, review it for ideas on pricing strategies for your competitors. Determine which of the strategies they use, if it is effective and why it is effective. 3. Advertising and Public Relations How you advertise and promote your goods and services may make or break your business. Having a good product or service and not advertising and promoting it is like not having a business at all. Many business owners operate under the mistaken concept that the business will promote itself, and channel money that should be used for advertising and promotions to other areas of the business. Advertising and promotions, however, is the lifeline of a business and should be treated as such. Devise a plan that uses advertising and networking as a means to promote your business. Develop short, descriptive copy (text material) that clearly identifies your goods or services, its location and price. Use catchy phrases to arouse the interest of your readers, listeners or viewers. In the case of a franchise, the franchiser will provide advertising and promotional materials as part of the franchise package, you may need approval to use any materials that you and your staff develop. Whether or not this is the case, as a courtesy, allow the franchiser the opportunity to review, comment on and, if required, approve these materials before using them. Make sure the advertisements you create are consistent with the image the franchiser is trying to project. Remember the more care and attention you devote to your marketing program, the more successful your business will be. A more detailed explanation of the marketing plan and how to develop an effective marketing program is provided in the Workshop on Marketing. See Training Module 3 - Marketing Your Business for Success. THE BUSINESS PLAN - THE MANAGEMENT PLAN Managing a business requires more than just the desire to be your own boss. It demands dedication, persistence, the ability to make decisions and the ability to manage both employees and finances. Your management plan, along with your marketing and financial management plans, sets the foundation for and facilitates the success of your business. Like plants and equipment, people are resources -- they are the most valuable asset a business has. You will soon discover that employees and staff will play an important role in the total operation of your business. Consequently, it's imperative that you know what skills you possess and those you lack since you will have to hire personnel to supply the skills that you lack. Additionally, it is imperative that you know how to manage and treat your employees. Make them a part of the team. Keep them informed of, and get their feedback regarding, changes. Employees oftentimes have excellent ideas that can lead to new market areas, innovations to existing products or services or new product lines or services which can improve your overall competitiveness. Your management plan should answer questions such as: * How does your background/business experience help you in this business? * What are your weaknesses and how can you compensate for them? * Who will be on the management team? * What are their strengths/weaknesses? * What are their duties? * Are these duties clearly defined? * If a franchise, what type of assistance can you expect from the franchiser? * Will this assistance be ongoing? * What are your current personnel needs? * What are your plans for hiring and training personnel? * What salaries, benefits, vacations, holidays will you offer? If a franchise, are these issues covered in the management package the franchiser will provide? * What benefits, if any, can you afford at this point? If a franchise, the operating procedures, manuals and materials devised by the franchiser should be included in this section of the business plan. Study these documents carefully when writing your business plan, and be sure to incorporate this material. The franchiser should assist you with managing your franchise. Take advantage of their expertise and develop a management plan that will ensure the success for your franchise and satisfy the needs and expectations of employees, as well as the franchiser. THE BUSINESS PLAN - THE FINANCIAL MANAGEMENT PLAN Sound financial management is one of the best ways for your business to remain profitable and solvent. How well you manage the finances of your business is the cornerstone of every successful business venture. Each year thousands of potentially successful businesses fail because of poor financial management. As a business owner, you will need to identify and implement policies that will lead to and ensure that you will meet your financial obligations. To effectively manage your finances, plan a sound, realistic budget by determining the actual amount of money needed to open your business (start-up costs) and the amount needed to keep it open (operating costs). The first step to building a sound financial plan is to devise a start-up budget. Your start-up budget will usually include such one- time-only costs as major equipment, utility deposits, down payments, etc. The start-up budget should allow for these expenses. Start-up Budget * personnel (costs prior to opening) * legal/professional fees * occupancy * licenses/permits * equipment * insurance * supplies * advertising/promotions * salaries/wages * accounting * income * utilities * payroll expenses An operating budget is prepared when you are actually ready to open for business. The operating budget will reflect your priorities in terms of how your spend your money, the expenses you will incur and how you will meet those expenses (income). Your operating budget also should include money to cover the first three to six months of operation. It should allow for the following expenses. Operating Budget * personnel * insurance * rent * depreciation * loan payments * advertising/promotions * legal/accounting * miscellaneous expenses * supplies * payroll expenses * salaries/wages * utilities * dues/subscriptions/fees * taxes * repairs/maintenance The financial section of your business plan should include any loan applications you've filed, a capital equipment and supply list, balance sheet, breakeven analysis, pro-forma income projections (profit and loss statement) and pro-forma cash flow. The income statement and cash flow projections should include a three-year summary, detail by month for the first year, and detail by quarter for the second and third years. The accounting system and the inventory control system that you will be using is generally addressed in this section of the business plan also. If a franchise, the franchiser may stipulate in the franchise contract the type of accounting and inventory systems you may use. If this is the case, he or she should have a system already intact and you will be required to adopt this system. Whether you develop the accounting and inventory systems yourself, have an outside financial advisor develop the systems or the franchiser provides these systems, you will need to acquire a thorough under- standing of each segment and how it operates. Your financial advisor can assist you in developing this section of your business plan. The following questions should help you determine the amount of start-up capital you will need to purchase and open a franchise. * How much money do you have? * How much money will you need to purchase the franchise? * How much money will you need for start-up? * How much money will you need to stay in business? Other questions that you will need to consider are: * What type of accounting system will you use? Is it a single entry or dual entry system? * What will your sales goals and profit goals for the coming year be? If a franchise, will the franchiser set your sales and profit goals? Or, will he or she expect you to reach and retain a certain sales level and profit margin? * What financial projections will you need to include in your business plan? * What kind of inventory control system will you use? Your plan should include an explanation of all projections. Unless you are thoroughly familiar with financial statements, get help in preparing your cash flow and income statements and your balance sheet. Your aim is not to become a financial wizard, but to understand the financial tools well enough to gain there benefits. Your accountant or financial advisor can help you accomplish this goal. Sample balance sheets, income projections (profit and loss statements) and cash flow statements are included in Appendix 2, Financial Management. For a detailed explanation of these and other more complex financial concepts, contact your local SBA Office. Look under the U.S. Government section of the local telephone directory. THE BUSINESS PLAN - SELF-PACED ACTIVITY During this activity you will: * Briefly describe what goes into a business plan. * Identify advantages of developing the marketing, management and financial management plans. * List financial projections included in the financial management plan. * Sketch an outline for a business plan. THE BUSINESS PLAN - APPENDIX 1 MARKETING 1. THE MARKETING PLAN 2. PRICE/QUALITY MATRIX 3. MARKETING TIPS, TRICKS & TRAPS ___________________________________________________ _____________ THE ENTREPRENEUR'S MARKETING PLAN This is the marketing plan of____________________________ I. MARKET ANALYSIS A. Target Market - Who are the customers? 1. We will be selling primarily to (check all that apply): Total Percent of Business a. Private sector _______ ______ b. Wholesalers _______ ______ c. Retailers _______ ______ d. Government _______ ______ e. Other _______ ______ 2. We will be targeting customers by: a. Product line/services. We will target specific lines ________________ b. Geographic area? Which areas? ________________ c. Sales? We will target sales of ________________ d. Industry? Our target industry is ________________ e. Other? ________________ 3. How much will our selected market spend on our type of product or service this coming year? $________________ B. Competition 1. Who are our competitors? NAME ________________________________________ ADDRESS _________________________________________ _________________________________________ Years in Business ___________________ Market Share ___________________ Price/Strategy ___________________ Product/Service Features ___________________ NAME _________________________________________ ADDRESS _________________________________________ _________________________________________ Years in Business ____________________ Market Share ____________________ Price/Strategy ____________________ Product/Service Features ____________________ 2. How competitive is the market? High ____________________ Medium ____________________ Low ____________________ 3. List below your strengths and weaknesses compared to your competition (consider such areas as location, size of resources, reputation, services, personnel, etc.): Strengths Weaknesses 1._______________________ 1._____________________ 2._______________________ 2._____________________ 3._______________________ 3._____________________ 4._______________________ 4._____________________ C. Environment 1. The following are some important economic factors that will affect our product or service (such as trade area growth, industry health, economic trends, taxes, rising energy prices, etc.): ________________________________________________ ________________________________________________ ________________________________________________ 2. The following are some important legal factors that will affect our market: ________________________________________________ ________________________________________________ ________________________________________________ 3. The following are some important government factors: ________________________________________________ ________________________________________________ ________________________________________________ 4. The following are other environmental factors that will affect our market, but over which we have no control: ________________________________________________ ________________________________________________ ________________________________________________ II. PRODUCT OR SERVICE ANALYSIS A. Description 1. Describe here what the product/service is and what it does: ________________________________________________ ________________________________________________ ________________________________________________ B. Comparison 1. What advantages does our product/service have over those of the competition (consider such things as unique features, patents, expertise, special training, etc.)? __________________________________________________ __________________________________________________ __________________________________________________ 2. What disadvantages does it have? __________________________________________________ __________________________________________________ __________________________________________________ C. Some Considerations 1. Where will you get your materials and supplies? __________________________________________________ 2. List other considerations: __________________________________________________ __________________________________________________ III. MARKETING STRATEGIES - MARKET MIX A. Image 1. First, what kind of image do we want to have (such as cheap but good, or exclusiveness, or customer oriented or highest quality, or convenience, or speed, or ...)? __________________________________________________ D. Features 1. List the features we will emphasize: a. __________________________________________ b. __________________________________________ c. __________________________________________ E. Pricing 1. We will be using the following pricing strategy: a. Markup on cost ____ What % markup? _____ b. Suggested price ____ c. Competitive ____ d. Below competition ____ e. Premium price ____ f. Other ____ 2. Are our prices in line with our image? YES___ NO___ 3. Do our prices cover costs and leave a margin of profit? YES___ NO___ F. Customer Services 1. List the customer services we provide: a. ____________________________________________ b. ____________________________________________ c. ____________________________________________ 2. These are our sales/credit terms: a. ____________________________________________ b. ____________________________________________ c._____________________________________________ 3. The competition offers the following services: a. ____________________________________________ b. ____________________________________________ c. ____________________________________________ G. Advertising/Promotion 1. These are the things we wish to say about the business: ___________________________________________________ _ ___________________________________________________ _ ___________________________________________________ _ 2. We will use the following advertising/promotion sources: 1. Television ________ 2. Radio ________ 3. Direct mail ________ 4. Personal contacts ________ 5. Trade associations ________ 6. Newspaper ________ 7. Magazines ________ 8. Yellow Pages ________ 9. Billboard ________ 10. Other ________ 3. The following are the reasons why we consider the media we have chosen to be the most effective: __________________________________________________ __________________________________________________ __________________________________________________ MARKETING TIPS, TRICKS & TRAPS 1. Marketing Steps * Classifying Your Customers' Needs * Targeting Your Customer(s) * Examining Your "Niche" * Identifying Your Competitors * Assessing and Managing Your Available Resources - Financial - Human - Material - Production ___________________________________________________ _____________ NOTES AND STRATEGIES FOR YOUR BUSINESS ___________________________________________________ _____________ MARKETING TIPS, TRICKS & TRAPS 2. Marketing Positioning * Follower versus Leader * Quality versus Price * Innovator versus Adaptor * Customer versus Product * International versus Domestic * Private Sector versus Government ___________________________________________________ _____________ NOTES AND STRATEGIES FOR YOUR BUSINESS ___________________________________________________ _____________ MARKETING TIPS, TRICKS & TRAPS 3. Sales Strategy · Use Customer-Oriented Selling Approach - By Constructing · Agreement * Phase One: Establish Rapport with Customer - by agreeing to discuss what the customer wants to achieve. * Phase Two: Determine Customer Objective and Situational Factors - by agreeing on what the customer wants to achieve and those factors in the environment that will influence these results. * Phase Three: Recommend a Customer Action Plan - by agreeing that using your product/service will indeed achieve what customer wants. * Phase Four: Obtaining Customer Commitment - By agreeing that the customer will acquire your product/service. · Emphasize Customer Advantage · Must be Read: When a competitive advantage can not be demonstrated, it will not translate into a benefit. · Must be Important to the Customer: When the perception of competitive advantage varies between supplier and customer, the customer wins. · Must be Specific: When a competitive advantage lacks specificity, it translates into mere puffery and is ignored. · Must be Promotable: When a competitive advantage is proven, it is essential that your customer know it, lest it not exist at all. ___________________________________________________ _____________ NOTES AND STRATEGIES FOR YOUR BUSINESS ___________________________________________________ _____________ MARKETING TIPS, TRICKS & TRAPS 4. Benefits vs. Features * The six "O's" of organizing Customer Buying Behavior ORIGINS of purchase: Who buys it? OBJECTIVES of purchase: What do they need/buy? OCCASIONS of purchase: When do they buy it? OUTLETS of purchase: Where do they buy it? OBJECTIVES of purchase: Why do they buy it? OPERATIONS of purchase: How do they buy it? · Convert features to benefits using the "...Which Means..." · Transition · Sales Maxim: "Unless the proposition appeals to their INTEREST, unless it satisfies their DESIRES, and unless it shows them a GAIN--then they will not buy!" · Quality Customer Leads: Level of need Ability to pay Authority to pay Accessibility Sympathetic attitude Business history One-source buyer Reputation (price or quality buyer) ___________________________________________________ _____________ NOTES AND STRATEGIES FOR YOUR BUSINESS ___________________________________________________ _____________ CONVERT FEATURES INTO BENEFITS--THE "...WHICH MEANS..." TRANSITION FEATURES "WHICH MEANS" BENEFITS Performance Time Saved Reputation Reduced Cost Components Prestige Colors Bigger Savings Sizes Greater Profits Exclusive Greater Convenience Uses Uniform Production Applications Uniform Accuracy Ruggedness Continuous Output Delivery Leadership Service Increased Sales Price Economy of Use Design Ease of Use Availability Reduced Inventory Installation Low Operating Cost Promotion Simplicity Lab Tests Reduced Upkeep Terms Reduced Waste Workmanship Long Life BUYING MOTIVES RATIONAL EMOTIONAL Economy of Purchase Pride of Appearance Economy of Use Pride of Ownership Efficient Profits Desire of Prestige Increased Profits Desire for Recognition Durability Desire to Imitate Accurate Performance Desire for Variety Labor-Saving Safety Time-Saving Fear Simple Construction Desire to Create Simple Operation Desire for Security Ease of Repair Convenience Ease of Installation Desire to Be Unique Space-Saving Curiosity Increased Production Availability Complete Servicing Good Workmanship Low Maintenance Thorough Research PRICE / QUALITY MATRIX SALES APPEALS HIGH MEDIUM LOW "Rolls Royce" Strategy "We Try Harder" Strategy "Best Buy" Strategy "Out Performs" Strategy "Piece of the Rock" Strategy "Smart Shopper"Strategy "Feature Packed" Strategy "Keeps on Ticking" Strategy "Bargain Hunter" Strategy THE BUSINESS PLAN - APPENDIX 2 FINANCIAL MANAGEMENT 1. Income Projection Statement - Instructions for Income Projection Statement 2. Balance Sheet - Instructions for Balance Sheet 3. Monthly Cash Flow Projection - Instructions for Monthly Cash Flow Projection 4. Information Resources INCOME PROJECTION STATEMENT Industry Annual Totals Percentages § Total net sales (revenues) § Costs of sales § Gross profit § Gross profit margin Controllable expenses § Salaries/wages § Payroll expenses § Legal/accounting § Advertising § Automobile § Office supplies § Dues/Subscriptions § Utilities § Miscellaneous § Total controllable expenses Fixed expenses § Rent § Depreciation § Utilities § Insurance § License/permits § Loan payments § Miscellaneous § Total fixed expenses Total expenses Net profit (loss) before taxes Taxes Net profit (loss) after taxes INSTRUCTIONS FOR INCOME PROJECTIONS STATEMENT The income projections (profit and loss) statement is valuable as both a planning tool and a key management tool to help control business operations. It enables the owner/manager to develop a preview of the amount of income generated each month and for the business year, based on reasonable predictions of monthly levels of sales, costs and expenses. As monthly projections are developed and entered into the income projections statement, they can serve as definite goals for controlling the business operation. As actual operating results become known each month, they should be recorded for comparison with the monthly projections. A completed income statement allows the owner/manager to compare actual figures with monthly projections and to take steps to correct any problems. Industry Percentage In the industry percentage column, enter the percentages of total sales (revenues) that are standard for your industry, which are derived by dividing Costs/expenses items x 100% = total net sales These percentages can be obtained from various sources, such as trade associations, accountants or banks. The reference librarian in your nearest public library can refer you to documents that contain the percentage figures, for example, Robert Morris Associates' Annual Statement Studies (One Liberty Place, Philadelphia, PA 19103). Industry figures serve as a useful benchmark against which to compare cost and expense estimates that you develop for your firm. Compare the figures in the industry percentage column to those in the annual percentage column. Total Net Sales (Revenues) Determine the total number of units of products or services you realistically expect to sell each month in each department at the prices you expect to get. Use this step to create the projections to review your pricing practices. - What returns, allowances and markdowns can be expected? - Exclude any revenue that is not strictly related to the business. Cost of Sales The key to calculating your cost of sales is that you do not overlook any costs that you have incurred. Calculate cost of sales of all products and services used to determine total net sales. Where inventory is involved, do not overlook transportation costs. Also include any direct labor. Gross Profit Subtract the total cost of sales from the total net sales to obtain gross profit. Gross Profit Margin The gross profit is expressed as a percentage of total sales (revenues). It is calculated by dividing gross profits ___________ total net sales Controllable (also known as Variable) Expenses - Salary expenses -- Base pay plus overtime. - Payroll expenses -- Include paid vacations, sick leave, health insurance, unemployment insurance and social security taxes. - Outside services -- Include costs of subcontracts, overflow work and special or one-time services. - Supplies -- Services and items purchased for use in the business. - Repair and maintenance -- Regular maintenance and repair, including periodic large expenditures such as painting. - Advertising -- Include desired sales volume and classified directory advertising expenses. - Car delivery and travel -- Include charges if personal car is used in business, including parking, tools, buying trips, etc. - Accounting and legal -- Outside professional services. Fixed Expenses - Rent -- List only real estate used in business. - Depreciation -- Amortization of capital assets. - Utilities -- Water, heat, light, etc. - Insurance -- Fire or liability on property or products. Include workers' compensation. - Loan repayments -- Interest on outstanding loans. - Miscellaneous -- Unspecified; small expenditures without separate accounts. Net Profit (loss) (before taxes) - Subtract total expenses from gross profit. Taxes - Include inventory and sales tax, excise tax, real estate tax, etc. Net Profit (loss) (after taxes) - Subtract taxes from net profit (before taxes) Annual Total - For each of the sales and expense items in your income projection statement, add all the monthly figures across the table and put the result in the annual total column. Annual Percentage- Calculate the annual percentage by dividing Annual total x 100% ___________________ total net sales - Compare this figure to the industry percentage in the first column. BALANCE SHEET COMPANY NAME As of ____________________________, 19____ Assets Current assets Cash $_______ Petty cash $_______ Accounts receivable $_______ Inventory $_______ Short-term investment $_______ Prepaid expenses $_______ Long-term investment $_______ Fixed assets Land $_______ Buildings $_______ Improvements $_______ Equipment $_______ Furniture $_______ Automobile/vehicles $_______ Other assets 1. $_______ 2. $_______ 3. $_______ 4 $_______ Total assets $______ Liabilities Current Liabilities Accounts payable $______ Notes payable $______ Interest payable $______ Taxes payable Federal income tax $______ State income tax $______ Self-employment tax $______ Sales tax (SBE) $______ Property tax $______ Payroll accrual $______ Long-term liabilities Notes payable $______ Total liabilities $______ Net worth (owner equity) $______ Proprietorship or Partnership (name's) equity $_____ (name's) equity $_____ or Corporation Capital stock $_____ Surplus paid in $_____ Retained earnings $_____ Total net worth $_____ Total liabilities and total net worth $_____ (Total assets will always equal total liabilities and total net worth) INSTRUCTIONS FOR BALANCE SHEET Figures used to compile the balance sheet are taken from the previous and current balance sheet as well as the current income statement. The income statement is usually attached to the balance sheet. The following text covers the essential elements of the balance sheet. At the top of the page fill in the legal name of the business, the type of statement and the day, month and year. ASSETS List anything of value that is owned or legally due the business. Total assets include all net values. These are the amounts derived when you subtract depreciation and amortization from the original costs of acquiring the assets. Current Assets · Cash -- List cash and resources that can be converted into cash within 12 months of the date of the balance sheet (or during one established cycle of operation). Include money on hand and demand deposits in the bank, e.g., checking accounts and regular savings accounts. · Petty cash -- If your business has a fund for small miscellaneous expenditures, include the total here. · Accounts receivable -- The amounts due from customers in payment for merchandise or services. · Inventory -- Includes raw materials on hand, work in progress and all finished goods, either manufactured or purchased for resale. · Short-term investments -- Also called temporary investments or marketable securities, these include interest--or dividend-yielding holdings expected to be converted into cash within a year. List stocks and bonds, certificates of deposit and time-deposit savings accounts at either their cost or market value, whichever is less. · Prepaid expenses -- Goods, benefits or services a business buys or rents in advance. Examples are office supplies, insurance protection and floor space. Long-term Investments Also called long-term assets, these are holdings the business intends to keep for at least a year and that typically yield interest or dividends. Included are stocks, bonds and savings accounts earmarked for special purposes. Fixed Assets Also called plant and equipment. Includes all resources a business owns or acquires for use in operations and not intended for resale. Fixed assets may be leased. Depending on the leasing arrangements, both the value and the liability of the leased property may need to be listed on the balance sheet. - Land -- List original purchase price without allowances for market value. - Buildings - Improvements - Equipment - Furniture - Automobile/vehicles LIABILITIES Current Liabilities List all debts, monetary obligations and claims payable within 12 months or within one cycle of operation. Typically they include the following: - Accounts payable -- Amounts owed to suppliers for goods and services purchased in connection with business operations. - Notes payable -- The balance of principal due to pay off short-term debt for borrowed funds. Also includes the current amount due of total balance on notes whose terms exceed 12 months. - Interest payable -- Any accrued fees due for use of both short- and long-term borrowed capital and credit extended to the business. - Taxes payable -- Amounts estimated by an accountant to have been incurred during the accounting period. - Payroll accrual -- Salaries and wages currently owed. Long-term Liabilities Notes payable -- List notes, contract payments or mortgage payments due over a period exceeding 12 months or one cycle of operation. They are listed by outstanding balance less the current position due. NET WORTH Also called owner's equity, net worth is the claim of the owner(s) on the assets of the business. In a proprietorship or partnership, equity is each owner's original investment plus any earnings after withdrawals. TOTAL LIABILITIES AND NET WORTH The sum of these two amounts must always match that for total assets. MONTHLY CASH FLOW PROJECTION Name of Business ________________________________ Owner __________________________________________ Type of Business __________________________________ Prepared by _____________________________________ Date ___________________________________________ Date Cash on Hand (beginning Month) Cash Receipts Total Cash Receipts Total Cash Available Total Cash Paid Out Cash Position (end of Month) Mo./Yr. Est. Act Est. Act. Est. Act. Est. Act. Est. Act. Est. Act. Jan-01 Feb-01 Mar-01 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 INSTRUCTIONS FOR MONTHLY CASH FLOW PROJECTION 1. Cash on hand (beginning of month) -- Cash on hand same as (7), Cash position, pervious month 2. Cash receipts- (a) Cash sales-- All cash sales. Omit credit sales unless cash is actually received (b) collections From credit accounts--Amount to be expected from all accounts. (c) Loan or other cash injections-- Indicate here all cash injections not shown in 2(a) or 2(b) above. 3. Total cash receipts (2a+2b+2c=3) 4. Total cash available (before cash out)(1+3) 5. Cash paid out - (a) Purchases (merchandise)--Merchandise for resale or for use in product (paid for in current month). (b) Gross wages (including withdrawals)--Base pay plus overtime (if any) (c) Payroll expenses (taxes, etc.)-- Include paid vacations, paid sick leave, health insurance, unemployment insurance, (this might be 10 to 45% of 5(b)) (d) Outside services--This could include outside labor and/or material for specialized or overflow work, including subcontracting (e) Supplies (office and operating)--Items purchased for use in the business (not for resale) (f) Repairs and maintenance-- Include periodic large expenditures such as painting or decorating (g) Advertising--This amount should be adequate to maintain sales volume (h) Car, delivery and travel--If personal car is used, charge in this column, include parking (i) Accounting and legal--Outside services, including, for example, bookkeeping (j) Rent-- Real estate only (See 5(p) for other rentals) (k) Telephone (l) Utilities--Water, heat, light and/or power (m)Insurance-- Coverage on business property and products (fire, liability); also worker's compensation, fidelity, etc. Exclude executive life (include in 5(w)) (n) Taxes (real estate, etc.)-- Plus inventory tax, sales tax, excise tax, if applicable (o) Interest--Remember to add interest on loan as it is injected (See 2(c) above) (p) Other expenses (specify each) _______________________________________________ _______________________________________________ Unexpected expenditures may be included here as a safety factor _______________________________________________ Equipment expenses during the month should be included here (non-capital equipment)__________________________ When equipment is rented or leased, record payments here (q) Miscellaneous (unspecified)--Small expenditures for which separate accounts would be practical (r) Subtotal--This subtotal indicates cash out for operating costs (s) Loan principal payment--Include payment on all loans, including vehicle and equipment purchases on time payment (t) Capital purchases (specify)--Nonexpensed (depreciable) expenditures such as equipment, building purchases on time payment (u) Other start-up costs--Expenses incurred prior to first month projection and paid for after start-up (v) Reserve and/or escrow (specify)-- Example: insurance, tax or equipment escrow to reduce impact of large periodic payments (w) Owner's withdrawals-- Should include payment for such things as owner's income tax, social security, health insurance, executive life insurance premiums, etc. 6. Total cash paid out (5a through 5w) 7. Cash position (end on month) (4 minus 6)-- Enter this amount in (1) Cash on hand following month-- Essential operating data (non-cash flow information)--This is basic information necessary for proper planning and for proper cash flow projection. Also with this data, the cash flow can be evolved and shown in the above form. A. Sales volume (dollars)--This is a very important figure and should be estimated carefully, taking into account size of facility and employee output as well as realistic anticipated sales (actual sales, not orders received). B. Accounts receivable (end of month)-- Previous unpaid credit sales plus current month's credit sales, less amounts received current month (deduct "C" below) C. Bad debt (end on month)-- Bad debts should be subtracted from (B) in the month anticipated D. Inventory on hand (end on month)-- Last month's inventory plus merchandise received and/or manufactured current month minus amount sold current month E. Accounts payable (end of month) Previous month's payable plus current month's payable minus amount paid during month. F. Depreciation--Established by your accountant, or value of all your equipment divided by useful life (in months) as allowed by Internal Revenue Service THE BUSINESS PLAN - APPENDIX 3: INFORMATION RESOURCES U.S. Small Business Administration (SBA) The SBA offers an extensive selection of information on most business management topics, from how to start a business to exporting your products. This information is listed in "Resource Directory for Small Business Management." For a free copy contact your nearest SBA office. SBA has offices throughout the country. Consult the U.S. Government section in your telephone directory for the office nearest you. SBA offers a number of programs and services, including training and educational programs, counseling services, financial programs and contract assistance. Ask about ¨ Service Corps of Retired Executives (SCORE), a national organization sponsored by SBA of over 13,000 volunteer business executives who provide free counseling, workshops and seminars to prospective and existing small business people. ¨ Small Business Development Centers (SBDCs), sponsored by the SBA in partnership with state and local governments, the educational community and the private sector. They provide assistance, counseling and training to prospective and existing business people. ¨ Business Information Centers (BICs), offering state-of-the-art technology, informational resources and on-site counseling for start-up and expanding businesses to create business, marketing and other plans, do research, and receive expert training and assistance. For more information about SBA business development programs and services, call the SBA Small Business Answer Desk at 1-800-U-ASK-SBA (827-5722). Other U.S. Government Resources Many publications on business management and other related topics are available from the Government Printing Office (GPO). GPO bookstores are located in 24 major cities and listed in the Yellow Pages under the "bookstore" heading. You can request a "Subject Bibliography" by writing to Government Printing Office, Superintendent of Documents, Washington, DC 20402-9328. Many federal agencies offer publications of interest to small businesses. There is a nominal fee for some, but most are free. Below is a selected list of government agencies that provide publications and other services targeted to small businesses. To get their publications, contract the regional offices listed in the telephone directory or write to the addresses below: Consumer Information Center (CIC) P.O. Box 100 Pueblo, CO 81002 The CIC offers a consumer information catalog of federal publications. Consumer Product Safety Commission (CPSC) Publications Request Washington, DC 20207 The CPSC offers guidelines for product safety requirements. U.S. Department of Agriculture (USDA) 12th Street and Independence Avenue, SW Washington, DC 20250 The USDA offers publications on selling to the USDA. Publications and programs on entrepreneurship are also available through county extension offices nationwide. U.S. Department of Commerce (DOC) Office of Business Liaison 14th Street and Constitution Avenue, NW Room 5898C Washington, DC 20230 DOC's Business Assistance Center provides listings of business opportunities available in the federal government. This service also will refer businesses to different programs and services in the DOC and other federal agencies. U.S. Department of Health and Human Services (HHS) - Public Health Service Alcohol, Drug Abuse and Mental Health Administration 5600 Fishers Lane Rockville, MD 20857 Drug Free Workplace Helpline: 1-800-843-4971. Provides information on Employee Assistance Programs. National Institute for Drug Abuse Hotline: 1-800-662-4357. Provides information on preventing substance abuse in the workplace. The National Clearinghouse for Alcohol and Drug Information: 1-800-729-6686 toll-free. Provides pamphlets and resource materials on substance abuse. U.S. Department of Labor (DOL) Employment Standards Administration 200 Constitution Avenue, NW Washington, DC 20210 The DOL offers publications on compliance with labor laws. U.S. Department of Treasury Internal Revenue Service (IRS) P.O. Box 25866 Richmond, VA 23260 1-800-424-3676 The IRS offers information on tax requirements for small businesses. Environmental Protection Agency Office of Small Business Ombudsman U.S. Environmental Protection Agency (EPA) Small Business Ombudsman Room 3423 401 M Street, S.W. Washington, D.C. 20460 1-800-368-5888 except in DC and VA 202-260-1211 in DC and VA The EPA offers more than 100 publications designed to help small businesses understand how they can comply with EPA regulations. U.S. Food and Drug Administration (FDA) FDA Center for Food Safety and Applied Nutrition 200 C Street, SW Washington, DC 20204 The FDA offers information on packaging and labeling requirements for food and food- related products. For More Information A librarian can help you locate the specific information you need in reference books. Most libraries have a variety of directories, indexes and encyclopedias that cover many business topics. They also have other resources, such as · Trade association information Ask the librarian to show you a directory of trade associations. Associations provide a valuable network of resources to their members through publications and services such as newsletters, conferences and seminars. · Books Many guidebooks, textbooks and manuals on small business are published annually. To find the names of books not in your local library check Books In Prints, a directory of books currently available from publishers. · Magazine and newspaper articles Business and professional magazines provide information that is more current than that found in books and textbooks. There are a number of indexes to help you find specific articles in periodicals. In addition to books and magazines, many libraries offer free workshops, lend skill- building tapes and have catalogues and brochures describing continuing education opportunities. SBDC MISSION AND OVERVIEW The U.S Small Business Administration (SBA) administers the Small Business Development Center Program to provide management assistance to current and prospective small business owners. SBDCs offer one-stop assistance to small businesses by providing a wide variety of information and guidance in central and easily accessible branch locations. The program is a cooperative effort of the private sector, the educational community and federal, state and local governments. It enhances economic development by providing small businesses with management and technical assistance. There are now 58 small business development centers -- one in every state (Texas has four), the District of Columbia, Guam, Puerto Rico, Samoa and the U.S. Virgin Islands -- with a network of nearly 1,000 service locations. In each state there is a lead organization which sponsors the SBDC and manages the program. The lead organization coordinates program services offered to small businesses through a network of subcenters and satellite locations in each state. Subcenters are located at colleges, universities, community colleges, vocational schools, chambers of commerce and economic development corporations. SBDC assistance is tailored to the local community and the needs of individual clients. Each center develops services in cooperation with local SBA district offices to ensure statewide coordination with other available resources. Each center has a director, staff members, volunteers and part-time personnel. Qualified individuals recruited from professional and trade associations, the legal and banking community, academia, chambers of commerce and SCORE (the Service Corps of Retired Executives) are among those who donate their services. SBDCs also use paid consultants, consulting engineers and testing laboratories from the private sector to help clients who need specialized expertise. Funding The SBA provides 50 percent or less of the operating funds for each state SBDC; one or more sponsors provide the rest. These matching fund contributions are provided by state legislatures, private sector foundations and grants, state and local chambers of commerce, state-chartered economic development corporations, public and private universities, vocational and technical schools, community colleges, etc. Increasingly, sponsors contributions exceed the minimum 50 percent matching share. What the Program Does The SBDC Program is designed to deliver up-to-date counseling, training and technical assistance in all aspects of small business management. SBDC services include, but are not limited to, assisting small businesses with financial, marketing, production, organization, engineering and technical problems and feasibility studies. Special SBDC programs and economic development activities include international trade assistance, technical assistance, procurement assistance, venture capital formation and rural development. The SBDCs also make special efforts to reach minority members of socially and economically disadvantaged groups, veterans, women and the disabled. Assistance is provided to both current or potential small business owners. They also provide assistance to small businesses applying for Small Business Innovation and Research (SBIR) grants from federal agencies. Eligibility Assistance from an SBDC is available to anyone interested in beginning a small business for the first time or improving or expanding an existing small business, who cannot afford the services of a private consultant. Additional Information In addition to the SBDC Program, the SBA has a variety of other programs and services available. They include training and educational programs, advisory services, publications, financial programs and contract assistance. The agency also offers specialized programs for women business owners, minorities, veterans, international trade and rural development. The SBA has offices located throughout the country. For the one nearest you, consult the telephone directory under "U.S. Government", or call the Small Business Answer Desk at 1-800-8-ASK-SBA or (202) 205-7064 (fax). For the hearing impaired, the TDD number is (202) 205-7333. Small Business Development Centers - Phone Guide University of Alabama, Birmingham, AL (205) 943-6750 University of Alaska/Anchorage, Anchorage, AK (907) 274-7232 Maricopa County Community College, Tempe, AZ (480) 731-8720 University of Arkansas, Little Rock, AR (501) 324-9043 California Trade and Commerce Agency, Sacramento, CA (916) 324-9538 Office of Business Development, Denver, CO (303) 892-3794 University of Connecticut, Storrs, CT (860) 486-4135 University of Delaware, Newark, DE (302) 831-2747 Howard University, Washington, DC (202) 806-1550 University of West Florida, Pensacola, FL (850) 595-6060 University of Georgia, Athens, GA (706) 542-6762 Guam - University of Guam, Mangialo, Guam (671) 735-3590 University of Hawaii at Hilo, Hilo, HI (808) 974-7683 Boise State University, Boise, ID (208) 462-3877 Dept. of Commerce & Community Affairs, Springfield, IL (217) 524-5856 Economic Dev. Council, Indianapolis, IN (317) 264-2820 Iowa State University, Ames, IA (515) 292-6351 Fort Hays State University, Hays, KS (785) 296-6514 University of Kentucky, Lexington, KY (606) 257-7668 Northeast Louisiana University, Monroe, LA (318) 342-5506 University of Southern Maine, Portland, ME (207) 780-4420 University of Maryland, College Park, MD (301) 403-8303 University of Massachusetts, Amherst, MA (413) 545-6301 Wayne State University, Detroit, MI (313) 964-1798 Dept. of Trade and Economic Development St. Paul, MN (651) 297-5770 University of Mississippi, University, MS (601) 232-5001 University of Missouri, Columbia, MO (573) 882-0344 Department of Commerce, Helena, MT (406) 444-4780 University of Nebraska at Omaha, Omaha, NE (402) 554-2521 University of Nevada in Reno, Reno, NV (775) 784-1717 University of New Hampshire, Durham, NH (603) 862-6975 Rutgers University, Newark, NJ (973) 353-1927 Santa Fe Community College, Santa Fe, NM (505) 428-1362 State University of New York, Albany, NY (518) 443-5398 University of North Carolina, Raleigh, NC (919) 715-7272 University of North Dakota, Grand Forks, ND (701) 777-3700 Dept. of Development, Columbus, OH (614) 466-2711 S.E. Oklahoma State University, Durant, OK (405) 924-0277 Lane Community College, Eugene, OR (541) 726-2250 University of Pennsylvania, Philadelphia, PA (215) 898-1219 Inter American University, Hato Rey, PR (787) 763-6811 Bryant College, Smithfield, RI (401) 232-6111 American Samoa Community - Pago Pago, Samoa 001 684-699-9155 University of South Carolina, Columbia, SC (803) 777-4907 University of South Dakota, Vermillion, SD (605) 677-5287 University of Memphis, Memphis, TN (901) 678-2500 Tennessee Board of Regents, Nashville, TN (615) 366-3931 Dallas Community College, Dallas, TX (214) 860-5835 University of Houston,