Understanding Small Business Succession Planning

As a successful small business owner, you have poured tons of time, money, and commitment into your company. But there may come a day when you want to retire or focus on a new business venture, and what will happen to the business you’ve worked so hard to build? 

In addition to giving you a sound exit strategy when you’re ready to make your next career move, a business succession plan can also address unexpected life circumstances, such as illness, disability, or death.

Read on for some business succession planning tips from the Oregon SBDC. If you need more help, our knowledgeable advisers are available and ready to assist; click here to connect with us. 

What Is Business Succession Planning?

Business succession planning is an action plan around the logistical and financial aspects of your business, including who will take over and fill the key roles and responsibilities when you retire or need to exit. While succession plans are most commonly associated with the owner’s retirement, they also support the sale of a business and other circumstances that can take place throughout your business’s life span. 

If anything unexpected happens to you or a co-owner, including death or disability, having a succession plan in place provides peace of mind about the business you’ve worked so hard to build.

Why Create a Business Succession Plan?

Besides providing you peace of mind, a plan, and a goal to work toward, a business succession planning strategy ensures that there will be less disruption to your company’s operations, employee performance, and clients when you are no longer able to run the company or decide that you no longer want to run it yourself.

A good succession plan also addresses how your business would respond to unexpected events, including death, disability, divorce, or the decision to separate from partners; to whom the business’s ownership would be transferred; how you can maintain your lifestyle when you’re no longer working full time; and how your heirs would be provided for financially.

Your Business Needs a Succession Plan: Here Are the Basics

A business succession plan is put into writing to guide all participating parties through the change in ownership. It aims to benefit everyone involved, including departing small business owners, successors, employees, and the business itself.

Depending on the complexity of your succession and your business, you may develop the plan yourself or hire a professional to assist you through the succession planning process. Whichever method you choose, a well-crafted small business succession plan should include the following:

  • A succession timeline: This details the specific circumstances for when a succession would occur and, if applicable, the dates it would commence.
  • Potential successors: If the succession is not through a purchase of the business, you should choose three or more potential successor candidates, the order of consideration, and explain why they would make suitable successors based on their key positions, management roles, and skill sets.
  • Formalized standard operating procedures (SOPs): This includes the compilation of documents, procedures, employee handbooks, and training manuals.
  • Your business’s valuation: This should include the method for how the business was valued and should be updated on an ongoing basis.
  • How the succession will be funded: This part of the plan spells out if the succession will be funded through life insurance, a seller’s note, a business loan, or other financial options.

How Do You Create a Business Succession Plan?

This section contains a general outline of what a small business succession plan should cover and the steps to ensure a smooth transition when you leave the company.

1. Decide how the business’s ownership will be transferred.

These are the four ways to transfer business ownership:

  • Transfer the business to your heirs.
  • Sell your shares or ownership interests to your business partner(s) or co-owner(s).
  • Sell the company to an employee who now fills a leadership position or other critical role.
  • Sell the business to an outside buyer.

2. Conduct a business valuation.

Even if you don’t plan to sell your business, getting a business valuation is beneficial in many ways. It can help with your retirement income strategy, place a value on future owners’ shares, and ensure the purchase of adequate insurance for long-term protection. 

A business valuation is also used to attract potential buyers and investors, and to help qualify you or your potential successors for business loans.

3. Prepare for the transition.

The period of time when ownership of a business is being transferred can put the company in a vulnerable position. Therefore, your succession plan should include the details on how the transition will happen to ensure that there is minimal disruption to operations and a high potential for a seamless handoff to your successor.

4. Review your plan annually.

Once your plan is created, don’t just file it away and forget about it. Over time, potential successors could change due to employees in key roles leaving the company or family members losing interest in taking it over—or your own long-term plans for the future may shift. Therefore, review your succession plan annually to ensure that it stays aligned with your current and potential future circumstances. 

Some Final Thoughts

Creating a business succession plan can be complicated, which is why many small business owners choose to work with a professional third party to help them develop a succession plan that provides peace of mind. 

The Oregon SBDC Network offers guidance to support small business owners with effective succession planning. Locate a Center closest to you by visiting OregonSBDC.org.

How to Get a Business Loan in Oregon

Oregon is home to over 387,000 small businesses. Many of these ventures started with a great idea. But to turn a concept into reality, you need capital.

A small business loan can help you get your business off the ground or take an existing one to the next level. Keep reading to learn the steps to getting the business financing you need to make sure your company is one of the strongest small businesses in the state.

Startup Business Loans

Obtaining a loan at startup isn’t as simple as going to the bank, filling out an application, and receiving the funds. There are few financial institutions that are willing to lend to a business with no track record, but that doesn’t mean there aren’t options available. Startup loans generally require collateral to secure the loan, as well as some cash investment from the owner. 

A business plan is essential, and many new business ideas may not have one already in place. But don’t worry: Oregon’s Small Business Development Centers (SBDCs) specialize in helping you formulate thorough plans that can help you get the funding you need.

A strong business plan outlines several key elements of your business model, marketing strategy, product or service development, and structure. A plan needs to include:

  • A detailed description of products or services, including their strengths, weaknesses, and plans for upgrading or adjusting them
  • Profiles of your target customers
  • Marketing strategies for each kind of customer
  • The Sales techniques and tools you will need
  • Product development life cycle plans, including the future phases of development for each product or service you provide
  • A plan for how you will spend the money you borrow
  • A financial plan outlining when and how you will repay your funds
  • Your business structure (LLC, corporation, etc.)
  • A detailed outline of each principal’s responsibilities
  • A description of the physical resources, equipment, inventory, and other items needed to support your business
  • Any real estate requirements, such as a shop or office space rental
  • At least two years of monthly financial projections

Once this is accomplished, you can approach a lender that offers loans to startups with the kind of plan that inspires confidence in your success. 

Small Business Loans for Existing Businesses

As with startup loans, a business plan is essential to securing funding for your existing business. Whether you’re looking for a working capital loan, a small business line of credit, or a short-term loan, the Oregon Small Business Development Centers can help ensure that your plan has the right content and structure. 

For example, we can teach you how to emphasize your current earnings—and those you will receive as a result of the new funding—in a way that’s honest, realistic, and compelling for a lender.

Also, as a seasoned small business owner, your organization may have some qualities that can make it more appealing to a lender. An Oregon SBDC can help you identify attributes that can enhance the appeal of your business when approaching financial institutions.

Options for Obtaining Loans

There are a variety of lenders, loan programs, and financing solutions for small businesses, including the following:

  • A private lender. A private lender can be anyone from a friend or relative to a venture capitalist. Regardless, you will need to have a business plan in place before approaching any private party about funding. A private lender can be an option for both startups and existing businesses. 
  • The Entrepreneurial Development Loan Fund (EDLF) from Business Oregon. This organization provides direct loans for startups and small businesses that made less than $1.5 million in the past 12 months or are owned by a severely disabled individual.
  • Microlenders. Some organizations focus on microloans or smaller loans for both startups and existing businesses.
  • Oregon Economic Development Districts. These are set up by the Economic Development Administration (EDA), which has districts across the state of Oregon that support the development of economies in those areas. In some cases, when a bank can give you only some of the funds you need, the Economic Development District in your area may be able to help you find the rest.
  • Traditional bank. Most banks and credit unions offer small business lending, but most focus on lending to existing businesses with a solid cash flow. If your business has an established relationship with a bank, start there. Terms, interest rates, and loan products may vary.
  • A Small Business Administration (SBA) loan. While the Small Business Administration itself doesn’t lend money, it works with lenders and has standards you have to meet to qualify for the loans its lenders offer. Examples of SBA loans include SBA 7(a) and SBA 504. Both of these loans are generally more available to existing businesses. 

How to Use an Oregon SBDC

If you’re starting or expanding a small business in Oregon, you don’t have to go it alone. Both new and existing small business owners can work with a Center for guidance and resources. Even if all you have is an idea, an SBDC can help you get everything in place so you’re ready to approach lenders about getting a loan.

The Oregon Small Business Development Center Network and our Capital Access Team can help you transform your business idea—no matter how well-developed it is—into a solid plan designed to help secure the funding you need and ensure that you’re able to repay the loan.

With a strong business plan in hand, you’ll have plenty of options for securing a loan to fund your new or existing venture. To locate an Oregon SBDC near you, visit our website.

How to Scale a Business for Sustainable Growth

Scaling a business is typically done when a company has passed through the growth stage and is now ready to increase its customer base and revenue without significantly increasing expenses. In this article, we’ll explore how to scale your small business strategically so that it won’t take too much away from the bottom line. 

How to Scale a Product-Based Business 

If your business sells products, implementing these successful scaling strategies can help you reach a broader audience. 

Leverage Online Exposure

When trying to generate significantly more sales, simply having a website will not cut it. There are many ways to expand your businesss online presence, and these are some ways you can gain broader exposure for your goods:

  • Place your products on various platforms. Regardless of what type of products you sell, you can make them available for sale on other e-commerce platforms, like Amazon, Walmart.com, eBay, or specialty stores that sell products in the same niche as yours.
  • Promote products through social media. Post engaging stories, photos, and videos featuring your products; share customer reviews; and promote special offers to put your products in front of new customers, build your brand image, and drive more sales.
  • Take advantage of CPC advertising. Consider running CPC (cost-per-click) campaigns on social media channels, which are targeted posts that get directly in front of your target audience. With CPC ads, you set your own daily budget. 
  • Make the most of influencer marketing. Arrange to have your product endorsed by an influencer. Influencers are individuals who have a large social media following and are seen as experts in a specific niche. This is a business strategy that can propel product sales.

Go Global to Scale Your Business

Another way to scale your small business is to sell your products to customers outside the U.S. or to import products internationally. The Oregon SBDC’s Global Trade Center offers no-cost advising services to help small businesses reach their global business goals. The Oregon SBDC’s Global Trade Center allows you to work with a trade adviser to assess your company’s readiness, create a business plan, access specialized training programs (such as Buying and Selling Outside the United States and CGBP Exam Prep Training), get support from a network of global trade partners, and more. 

Gain Access to Market Research 

Having valuable data at your fingertips is a surefire way to ensure that youre making intelligent decisions when scaling your products-based business. The Oregon SBDC’s Market Research Institute provides market research to help companies identify growth opportunities, understand the competitive landscape, refine their business plans, and make more informed decisions. 

How to Scale a Service-Based Business 

If you have a business that offers services like beauty, healthcare, accounting, finance, marketing, and so on, below are some strategies on how you can grow your business depending on the type of service you offer. 

Use Technology to Serve More Clients

If you provide services that dont need to be conducted in person, you can take advantage of tools that allow you to do more. Many service-based businesses have continued operations during the pandemic by meeting with clients through video-conferencing platforms like Zoom, Google Meet, Microsoft Teams, and others. These tools allow you to expand your client base outside your geographic area.

Another way your business can use technology to serve clients better is to utilize online schedulers, automatic appointment reminder texts, online form completion, and digital contractsigning platforms. These tools not only offer more convenience for your clients but also help streamline your businesss internal processes.

Scale Your Business Through Government Contracts

Securing a government contract can offer numerous benefits for companies, making it a great way to scale your business. These contracts come in different sizes, and multiple companies, including major corporations and small businesses, can compete against each other for the winning bid. While there is usually a lot of paperwork involved, and it can take a long time to win the bid, some of these opportunities can be lucrative. 

The first step is to research what contracts are up for bid on the federal, state, and local levels and determine whether your company would be a suitable fit. You can access government contracts up for bid through the U.S. Small Business Association (SBA), and you can find Oregon state and local government contracts on OregonBuys or the Procurement page on Oregon’s state government website. 

Scale Through Innovation

To help Oregon small businesses scale and bring innovative concepts to the marketplace, the Oregon SBDC helps companies prepare proposals for Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants through the Network’s partnership with VertueLab. SBIR/STTR are competitive federal grant programs that award funding to small businesses to engage in research and development with the potential to commercialize new technologies. More information can be found here.

The Oregon SBDC is here to support small business owners from launch to expansion, and renewal to exit strategy. To locate a regional Center near you, visit OregonSBDC.org.

Setting Your Small Business Up as a Sole Proprietorship

Setting Your Small Business Up as a Sole Proprietorship

Operating as a sole proprietor is the easiest route to starting your own business compared with forming another type of business structure, like an LLC (limited liability company). Sole proprietorships are popular among solo business owners, consultants, and freelancers, who can conduct business under their own names because creating a separate business or trade name isn’t needed.

Read on to learn the basics of a sole proprietorship, its advantages and disadvantages over other business structures, how to set up your business, and what you need to know to operate your business as a sole proprietor.

What Is a Sole Proprietorship Business?

A sole proprietorship is an unincorporated business with just one owner.

A sole proprietorship is easy to form and gives you complete control of your business. You’re automatically considered a sole proprietor if you perform business activities but have not registered as any other type of business, like an LLC or a C Corp.

Sole proprietorships are not a separate business entity. This means your business assets and liabilities are not separate from your personal assets and liabilities. Therefore, you can be held personally liable for your business debts and obligations.

Sole proprietorships can be a good choice for consultants, businesses with very low risk, and those who want to test their business first before committing to the time and costs of forming a more formal business structure.

What Are the Pros and Cons of Being a Sole Proprietor?

The most significant benefits of a sole proprietorship are the ease of creating one, its pass-through tax advantage, and the low fees for establishing the business.

With a sole proprietorship, you need to register the business with the state only if you are using a name other than your legal name (“real and true” name). However, depending on the kind of business you operate, you may be required to obtain a license or permit. With a sole proprietorship, you can get your business up and running quickly and with less hassle and cost.

The tax process is easier, too, as you are not required to obtain an employer identification number (EIN) from the IRS unless you have employees. You can also use your Social Security number to file and pay taxes.

The disadvantages of a sole proprietorship include the unlimited liabilities and potential difficulties in obtaining business funding from a bank or investors due to being in the early stages of business.

Because a sole proprietorship is not a separate business entity, any business liability can become your own. For example, business creditors could seize your personal assets. Because a sole proprietorship offers no liability protection, you could go personally bankrupt if your business doesn’t succeed or faces unexpected challenges.

Obtaining financing can also be a hurdle with a sole proprietorship. Banks prefer to work with businesses that have a proven financial track record, and sole proprietorships are often start-ups. As an individual starting out, you appear as higher risk to bank lenders. Getting equity from investors can also be difficult, as many prefer to fund more refined start-ups.

However, many entrepreneurs and small business owners begin as sole proprietorships. As their business grows, they can register to become a limited liability entity, such as an LLC, LLP, or a corporation.

Sole Proprietorship vs. LLC: How to Choose?

Depending on the nature of your business, you may be wondering if it would be better to create a sole proprietorship or an LLC. A sole proprietorship is usually a good fit for small businesses with low risk, low profits, and a small customer or client base.

An LLC may be the better fit if your business is associated with some risks, there’s the possibility of raking in large profits, you have a large customer base, you have employees, or you’re in a position where you could benefit from certain tax structures.

How Do You Set Up a Sole Proprietorship in Oregon?

In Oregon, you can start a sole proprietorship without filing any paperwork with the state government, unless you choose an assumed business name, need licenses and permits to operate, or will be hiring employees. Review the steps below to take the necessary actions, if any apply to your sole proprietorship business:

1. Choose a business name.

In Oregon, a sole proprietor may use their own “real and true” name or use a trade name. If you plan to use a business name or a trade name, state law requires that the name be distinguishable from other company names on record. You also want to choose a name that is not too similar to another registered business because of common and federal law trademark protections. To make sure your business name is available, run a search in the following government databases:

2. File an assumed business name.

If you use a business name different from your legal name, Oregon requires you to register an assumed business name with the Secretary of State’s Office. This is a mandatory requirement in Oregon. To file your assumed name, you must fill out the Online Assumed Business Name Registry from the Secretary of State Business Registration Service. There is a $50 filing fee.

3. Obtain licenses, permits, and zoning clearance.

Your business may need licenses depending on its business activities. Oregon provides a directory of every profession and occupation requiring a license, and you can obtain this information by visiting the Oregon License Directory. In addition, local regulations—including licenses, building permits, and zoning clearances—may apply to your business. You will need to check with your city and county governments for more information.

4. Obtain an EIN if hiring employees.

Sole proprietors who want to have employees need to obtain an EIN (employer identification number). This is a number issued by the IRS for tax reporting purposes. All businesses with employees must report wages to the IRS using their EIN. You can register for an EIN through the IRS website. Sole proprietors with no employees are not required to have an EIN because they can use their Social Security number to file and pay taxes.

How Do You File Taxes as a Sole Proprietor?

To file taxes as a sole proprietor, you’re required to complete a Schedule C to report your business’s profits and losses when you complete your Form 1040 for personal income taxes. The amount of taxes you owe will be based on the combined income reported on these forms.

The Bottom Line

A sole proprietorship is a straightforward way for individuals to start their own business. In some situations, it does not require registering with your state or obtaining an EIN with the IRS. However, keep in mind the risks involved and the liabilities that can be passed from the business to you personally. But if you operate a low-risk business, being a sole proprietor presents a quick, easy, and low-cost way to get your business up and running.

For professional guidance specific to your situation, contact your attorney or CPA.

Need Assistance?

The Oregon Small Business Development Center Network is committed to helping build Oregon’s best businesses. Our 20 regional Centers and Global Trade Center assist small businesses throughout Oregon with advising, classes, and access to the resources they need to be successful. Each Center is backed by our statewide support network, helping small businesses access the proper assistance wherever they are in Oregon. Connect with your local SBDC at OregonSBDC.org.

Small Business Accounting Basics

Small Business Accounting Basics

Operating your own small business and being your own boss comes with many benefits but also brings new responsibilities. One of the biggest burdens of being a small business owner is handling the accounting. This includes keeping a record of all income and expenses and accurately reporting your business financials when tax season rolls around.

This article covers the basics of how small businesses can set up an accounting system and manage their bookkeeping effectively.

What Is Small Business Accounting?

Small business accounting includes the process of tracking, recording, and analyzing your business’s financial transactions, including purchases, sales, expenses, payroll, and more. These numbers translate into a statement that provides a picture of your business’s profitability.

In short, small business accounting tracks the money that flows in and out of your business accounts and boils down to:

  • Bookkeeping (recording financial transactions)
  • Creating financial reports
  • Filing tax returns

Accounting also helps you determine the health and value of your company so you can adjust accordingly for short- and long-term success.

Below are some basic steps to help you to set up an effective accounting system for your small business.

Open a Business Bank Account

Once you’ve legally registered your business, you’ll need to have a separate bank account to cover all your business transactions. Not only does this make life easier come tax time, but it also protects your personal assets in the case of bankruptcy, lawsuits, or audits. Additionally, having a business bank account with detailed financial records can help you obtain funding from creditors or investors down the road.

Note that Oregon LLCs and sole proprietors don’t legally need to have a separate bank account, but it is highly recommended.

Start by opening a business checking account. It’s also a good idea to have a business savings account, which can help you organize funds and plan for taxes. For instance, if you automatically put a percentage of your business income into a savings account, you’ll have money set aside for your estimated taxes due each quarter. A good rule of thumb is to put aside 25% of your income, or perhaps more if you’re a high earner.

To open a business bank account, you’ll need a business name, and your business might have to be state-registered. Check with the individual bank on its requirements.

Consider a Business Credit Card

Having a business credit card can help build your company’s credit rating. And if you choose a card with benefits, you can earn cash-back rebates or travel points with your purchases.

Track Expenses

Accurate expense tracking is essential for monitoring business growth, developing financial statements, keeping track of deductible expenses, and preparing tax returns.

From the very beginning, your business needs to establish accounting methods for organizing receipts and other important records, which can be done manually or using accounting software.

What Expenses Do Small Businesses Need to Track?

The IRS requires that you keep documentation that proves income, credits, and deductions shown on your tax return. Although the records and receipts you need to save will depend on the nature of your business, generally you’ll want to keep the following:

  • Receipts
  • Bank and credit card statements
  • Bills
  • Canceled checks
  • Invoices
  • Proof of payments
  • Financial statements
  • Previous tax returns
  • W2 and 1099 forms
  • Any other documentation that supports an item of income, deduction, or credit shown on your tax return

The IRS does not require receipts for certain expenses under $75. You can keep digital or paper copies of receipts, and there are many apps and online storage services that make it incredibly easy to scan, organize, and store all your receipts.

Below are the types of business expenses you need to keep a record of:

  • Meals and entertainment
  • Out-of-town business travel
  • Auto-related expenses
  • Receipts for gifts
  • Home office receipts

Operating your business from your home helps keep overhead low and allows you to qualify for more tax deductions. The IRS allows you to deduct the portion of your home that’s used for business, as well as your internet and cell phone service, and transportation to and from work sites.

Any expense that’s for both business and personal use must reflect its mixed use. For instance, if you use one phone for both, you can deduct the percentage you use the device solely for business. Gas mileage costs are 100% deductible, so be sure to hold onto all records and keep a log of your business miles.

Develop a Bookkeeping System

Bookkeeping is the accounting process of recording transactions, categorizing them, and reconciling bank statements.
Accounting is the high-level process that provides an overview of your business progress and makes sense of the data compiled in your bookkeeping.

As a small business owner, you’ll need to determine how you want to manage your books:

  • You can use software like QuickBooks online or use a simple Excel spreadsheet.
  • You can outsource a part-time bookkeeper, one that’s local or cloud-based.
  • When your business grows, you can hire an in-house bookkeeper or accountant.

You also need to determine whether to use the cash or accrual accounting methods. These are the differences between the two:

  • Cash method. Revenues and expenses are recognized when they are actually received or paid.
  • Accrual method. Revenues and expenses are recognized when the transaction occurs (even if the cash hasn’t been paid or received yet), so it requires tracking accounts receivable and accounts payable.

U.S. business owners can use cash-based accounting if revenues are less than $5 million. Otherwise, the accrual method must be used.


Determine How You’ll Get Paid

Most business transactions these days are not done in cash. Therefore, you’ll need to decide on a payment solution that works best for your business. This will come down to whether you accept payments in person, through a point of sale (POS) system, or online.

  • POS system and in-person payments. If you accept both, consider getting a mobile credit card reader like Square. This is great for businesses that don’t expect to process a high volume of in-person purchases daily.
  • POS payments only. If you perform only POS sales, you can use a POS system that works with a cash register or just a credit card reader independent of any cash collection system. For the in-person payment methods—POS systems or credit card readers—you need to have a merchant account with your bank. This account acts as an intermediary between the payment system and your bank account to withdraw and deposit funds.
  • Online payments only. If you accept only online payments, PayPal and Shopify are two popular platforms for online retailers.

Set Up a Payroll System

When it makes sense for your small business to hire more help, you’ll need to determine whether you hire an employee or an independent contractor.

If you have employees, you’ll have to set up a payroll schedule and make sure you’re withholding the correct taxes. There are many services available to help with this, and if you use accounting software, many offer a payroll feature.

If you hire independent contractors, keep track of your payments to them, as you’ll be required to file a 1099 form for each contractor at the end of the year.

Tax Filing Obligations

The legal structure of your business determines your business’s tax obligations. If you’re a sole proprietor or your business is registered as an LLC or partnership, you’ll likely claim business income on your personal tax return. If you run a corporation, it’s considered a separate tax entity, and the income you receive from the corporation will be taxed independently, as though you were an employee.

Self-employed individuals need to withhold income tax the same way an employer withholds taxes from an employee’s paycheck. If you owe more than $1,000 in taxes for the year, you will need to pay quarterly estimated taxes four times a year.

When tax season comes around, technology is your friend! Understanding what business expenses you can deduct and using technology to track them will help to ensure you don’t pay more than you owe.

Be sure to have a program intended for business purposes, like QuickBooks, Sage, or Great Plains. While there are many “free” programs out there to track mileage and expenses, “Free is not free” when your data is lost!

Consider software that can help track:

  • Mileage
  • Travel and meal expenses
  • Personal use of a dedicated home office space
  • Receipts
  • Time

If your needs are more comprehensive, the Oregon SBDC Network provides classes on small business accounting, budgeting, cash flow management, and QuickBooks—one of the most extensive financial reporting and management programs on the market for small business accounting purposes.

If you’re new to QuickBooks, you can learn how to set up new customer and vendor accounts, create invoices, record sales, and enter payments. If you are already using the basic features of QuickBooks but want to master its other offerings, advanced classes are offered throughout the state.

QuickBooks training is available through your local Small Business Development Center and taught by experienced professionals who understand the software inside and out. To find a QuickBooks or small business accounting class near you, contact your local Center today.

Small Business Development Center Approved for Columbia County, Oregon

The Center will be the Oregon Small Business Development Center’s 21st location in the state

The Oregon Small Business Development Center Network (Oregon SBDC) announced the approval of a new Small Business Development Center in Columbia County, Oregon. The Columbia County Small Business Development Center (Columbia County SBDC) is the first new center formed in Oregon since 2013. It marks the network’s 20th Center offering core business advising services in the state of Oregon.

The Columbia County SBDC will combine with a newly formed Business Resource Center (BRC), co-locating small business advising and coaching with economic development, business retention, recruitment and expansion, and tourism. The Center and staff will have access to all programs, protocols, systems, training, and software within the Oregon SBDC to enhance its already considerable capacity.

In addition, the new Columbia County SBDC will collaborate with BRC partners to conduct outreach and client recruitment that will serve every community throughout Columbia County. The advising services provided will be consistent with the other Oregon SBDC offerings, which include—as mandated by the federal Small Business Administration—no-cost advising and coaching to any business.

The Columbia County SBDC will be operated under the direction of Columbia Economic Team (CET) Executive Director Paul Vogel.

“This exciting development really is all about timing, and the timing is just right,” said Vogel. “Historically, our county has been difficult to serve by the Portland Community College SBDC due to geography and population factors. We’ve been experiencing significant growth, however, and the COVID pandemic both underscored the glaring need for business support and provided funding sources to make it possible,” Vogel added.

The Columbia Economic Team, a private/public membership organization serving Columbia County launched an initiative to form the Business Resource Center and SBDC after filling grant making and other small business assistance gaps during the pandemic and economic downturn.

“On the road to recovery from the COVID-19 pandemic, the Columbia County SBDC is a much-needed and anticipated resource for local small-business owners,” said Mark Gregory, state director for the Oregon SBDC. “With the new SBDC’s presence in Columbia County, there will be opportunities to expand and create new businesses, and provide business support solutions for the many challenges Oregon’s small-business communities face as they emerge from the pandemic in 2022.”

The Oregon SBDC would like to thank several state and local partners and investors. These partners include:

  • Columbia County Board of Commissioners
  • Columbia Pacific Economic Development District (Col-Pac)
  • The City of St. Helens
  • The City of Scappoose
  • The City of Clatskanie
  • The City of Vernonia
  • The City of Columbia City, Oregon
  • Sen. Betsy Johnson
  • U.S. Rep. Suzanne Bonamici
  • The Columbia Economic Team
  • CET Executive Director Paul Vogel
  • Tammy Marquez-Oldham, PCC SBDC Director

For all press inquiries please contact Paul Vogel at paulvogel@columbiacountyoregon.com.

Tips on How to Start a Small Business in Oregon in 2022

Tips on How to Start a Small Business in Oregon in 2022

Everything You Need to Know About Starting a Small Business

In order to become a successful entrepreneur in Oregon, it’s important to first understand how to start a small business.

While some of the steps to bring your small-business idea to market will depend on the type of industry you choose and the products or services you will be providing, every business will need to follow these essential steps:

  1. Identify your business idea.
  2. Research your idea.
  3. Refine and test your idea.
  4. Set up your business.
  5. Write your business plan.
  6. Get your finances in order.
  7. Choose a business location.
  8. Build your website.
  9. Find your customer base.
  10. Prepare for challenges.

Read on to learn more.

Identify Your Business Idea

When considering how to start a small business, it’s important to remember that a great business starts with a great idea. However, even in the ideation stage, there are several approaches you can consider.

When developing your small-business ideas, you can take something you’re passionate about—like a hobby—and turn it into a business. For example, if you love puzzles and care about quality and design, you might consider manufacturing your own brand of puzzles. If you love to bake, perhaps you have a dream to open your own bakery.

Another way to approach your small-business idea is by solving a problem. Perhaps your area is growing in tourism but doesn’t have enough accommodations. If you have extra space at your home or can buy an investment property, this may be an opportunity for you to explore hospitality as a business venture. Finding a need in your community is a fantastic place to start.

You can also generate small-business ideas through brainstorming. Write down any idea that comes to mind—big or small—and refine your idea in the next phase.

No matter how your business idea comes to mind, remember to be realistic about the demand and scalability of your potential business.

Research Your Idea

The next step in how to start a small business is to do some market research and take a hard look at the demand for your business idea in order to ensure that it’s viable before you spend time and money developing your business.

Questions you should seek answers to during this phase include:

  • Is there a need for this product or service?
  • What is currently available in the market?
  • How competitive is this industry, and who are my top competitors?
  • What is needed to turn my idea into a reality?

Conducting market research for your small-business idea will be helpful when you begin writing your business plan.

Refine and Test Your Idea

Testing your idea is a crucial aspect of starting your business. You can provide your service to a few people and get valuable feedback on how it’s working. If you are manufacturing a product, you can create a prototype and learn what works—and, just as importantly, what doesn’t. You can also find out how much potential customers might pay for your product or service. From there, you can refine your business idea.

Set Up Your Business

Next, it’s time to set up your small business, which has several steps within this phase.

You will first want to choose a business name. It’s important to choose a business name that is available for use in Oregon, which you can check through the Oregon Secretary of State’s website. Businesses can also obtain a federal trademark, so it’s a good idea to search the U.S. Patent and Trademark Office (USPTO) for similar business names to yours.

Next, you will need to choose your business structure. Your business structure will influence your registration requirements, your tax responsibilities, and your personal liability. Choosing the right business structure will provide the right balance of legal protections and benefits.

Common business structures include:

  • Sole proprietorship
  • Partnership
  • Limited liability company (LLC)
  • C corporation (C corp)
  • S corporation (S corp)
  • Benefit corporation (B corp)
  • Close corporation
  • Nonprofit corporation
  • Cooperative

Once you have identified your business name and business structure, you can apply online for your business’s federal employer identification number (EIN) through the IRS and register your business in Oregon. This will allow you to apply for the necessary business licenses and permits.

Write Your Business Plan

Writing a business plan is a crucial step to starting any business. It’s a foundational tool that helps to map out your plan for success and guides you through the stages of beginning and operating your business.

There is no right or wrong way to write a business plan—it simply needs to meet your needs and the needs of your business. It can cover anything from high-level overviews about various aspects of your business to more detailed information such as your operational plans and finances.

Topics you may consider including in your business plan include:

  • Executive summary
  • Overview of the company and its objectives
  • Market analysis
  • Company organization
  • Overview of services or products
  • Marketing and sales strategy
  • Logistics and operations
  • Financial projections

You should think of your business plan as a living document, designed to be reviewed and adjusted over time.

Get Your Finances in Order

Being able to manage your finances well will be critical to the success of your small business. One way to get off to the right start is to ensure that you separate your personal and business expenses.

Open a separate business checking account, which can be used to receive payments and to pay for business-related expenses and overhead. LLCs, partnerships, and corporations are required by law to have a separate bank account for business. While sole proprietors are not legally required to have a separate account, it’s highly recommended, and your future self will thank you come tax season!

You may also want to consider opening a business credit card and will be required to do so if your business structure is a corporation or an LLC. Building credit is important for having the ability to secure future funding should you need it.

You’ll then need to develop a bookkeeping system and set up important processes, such as how you’ll get paid by your customers.

At this stage, consider your knowledge, skills, and abilities to:

  • Keep accurate records
  • Analyze timely financial reports
  • Prepare sales forecasts and budgets
  • Track and analyze key financial indicators
  • Structure debt effectively

If you’re unsure about how to manage the day-to-day bookkeeping and accounting responsibilities for your business, you should know that the Oregon SBDC offers resources and ongoing classes for small-business owners to get a handle on their finances and accounting basics, including the Small Business Management Program, which provides a combination of a classroom setting and one-on-one coaching to help make you and your business more successful.

Additionally, businesses will need to secure external business financing through a line of credit, a small-business loan, or other means. The Oregon SBDC’s Capital Access Team can help you access the funding your business will need through specialized business advising.

Choose a Business Location

If you are planning to operate a brick-and-mortar business, choosing a business location is one of the most important decisions you will make before launch, because it will determine the taxes, zoning laws, and regulations your small business will be subject to.

Consider your business’s target market, your personal preferences, and the costs, benefits, and restrictions of different government agencies.

Costs that can vary significantly by location include:

  • Standard salaries
  • Minimum wages
  • Property values
  • Rental rates
  • Business insurance rates
  • Utilities
  • Government licenses and fees

Additionally, local zoning ordinances, taxes, and government incentives will also vary.

Build Your Website

Regardless of what type of small business you’ll be operating, having a website as part of your online presence will be important in building your credibility with your customer base.

As you prepare to build your business website, the first step is to obtain a good domain name. That means finding a URL that is easy to spell, as short as possible, and memorable. Be sure to research the domain name to see if a similar web address already exists. Additionally, check with the USPTO to ensure that you haven’t included any registered trademarks.

Your website should clearly showcase your business products or services in an memorable and engaging way that drives results. Beautiful graphics that are compressed and optimized for fast loading, easily accessible calls to action (such as “Buy now” or “Call now” buttons), and an intuitive navigation system should all be considered as you create your site. Implementing search engine optimization (SEO) practices to ensure that search engines index and rank your website will also help with your business’s visibility.

Find Your Customer Base

Now that the groundwork of how to start a small business has been laid out, it’s time to find your potential customers.

Before you can build your customer base, you will need to know who your ideal customers are. Develop a plan for acquiring customers by understanding how your typical customer would find a product or service like yours. This may include building a presence on social media, using email marketing, working with local newspapers, or finding in-person networking opportunities.

It’s also helpful to research successful competitors to see where they advertise and other strategies they use, as those may be beneficial for your own business efforts.

Prepare for Challenges

When you’re learning how to start a small business, one thing to keep in mind is that there will always be unforeseen obstacles. The market and technology are constantly changing, and the most successful entrepreneurs are ones who are flexible and willing to adapt to their customers’ needs.

As a new business owner, you may also learn that there are aspects of your business that you aren’t sure how to manage. Don’t be afraid to ask for help! The Oregon SBDC is here to support entrepreneurs as they prepare to start their own businesses and can provide crucial business advising at no cost.

No matter the type of challenge you may be facing with opening your small business, the Oregon Small Business Development Center Network can help you turn your small-business idea into a reality! Connect with your local SBDC to learn more at OregonSBDC.org.

What It Takes to Be a Successful Entrepreneur in 2021

What It Takes to Be a Successful Entrepreneur in 2021

For many, the American dream includes owning a business. At the Oregon Small Business Development Center, our mission is to help entrepreneurs realize that dream and their full potential by providing services like small business advising, business planning, and a variety of specialty programs that can help entrepreneurs in every area of business. But the first step in creating a profitable and thriving business is understanding what it takes to be a successful entrepreneur in 2021.

According to data from the Bureau of Labor Statistics, as reported by Fundera, approximately 20% of small businesses fail within the first year. By the end of the second year, it’s 30% of businesses, and by the end of the fifth year, about half will have failed. That’s why it’s smart to think through your business plan and consult with professionals who can help guide you before you start your business.

So what do you need to know before you set out on your first, or next, business venture?

Create a Business Plan

A business plan is crucial to the success of any small business. Whether you are a freelance graphic designer who contracts with different companies or a brick-and-mortar store with 15 employees, having a written plan for where you’re going and how you’re going to get there is a MUST!

At the Oregon SBDC, we use a tool called LivePlan to help business owners from start-up to scaling. LivePlan breaks the business planning process down into simple steps with instructions and examples and is fully customizable. LivePlan also makes budgeting and forecasting easy. All you have to do is enter your projected sales along with your anticipated expenses, and LivePlan will automatically create your financial statements.

SET S.M.A.R.T. Goals

The art of goal-setting doesn’t just take into account the end goal. It’s about breaking down that end goal into small, actionable steps that you implement daily, weekly, monthly, and yearly. A common goal-setting method for small-business owners is the S.M.A.R.T. method (specific, measurable, attainable, relevant, time-based).

S.M.A.R.T. goals help you clarify your goal, focus your efforts, and use your time and resources productively to increase your chances of success.

If you’re having trouble achieving your goals by the time frame you’ve set, make sure to go back and review them. Ask yourself these questions:

  1. Is this goal too broad?
  2. Does the goal need to be broken down more?
  3. Do I have the capacity to achieve this goal?
  4. Is this goal still a focus for my business?

As your business grows and changes, so will your goals—and that’s OK! There is nothing wrong with adjusting your goals as you move throughout the year.

Do Your Research

Market Research Institute to help with this process.
The Market Research Institute provides customized research reports and market intelligence for established businesses that anticipate growth. This data helps businesses identify opportunities, better understand the competitive landscape, refine their business plans, and make more informed business decisions.

Secure Funding

Although you can start some businesses on a scrappy budget with very little overhead and cost, having funding in place is a strategic move for businesses that require more capital to get off the ground. This is where small-business funding can help. Resources like business loans and crowdfunding can help alleviate the stress of startup costs. There are a range of options for accessing capital:

  • Government-funded small business loans (SBA)
  • Private business loans (banks, credit unions, etc.)
  • Angel investors
  • Crowdfunding
  • Income from a 9-to-5 job
  • Grants
  • Lines of credit

Each of these options will have its pros and cons and different requirements. Figure out which are best for you at each stage of your business and entrepreneurship journey.

Leverage Your Network

How can your network affect your net worth? Whether you’re launching a product- or service-based business, tapping into your network is one of the best ways to get it off the ground.

You never know what opportunities will come out of connecting with the people who already know, like, and trust you. Here are a few ways to leverage your network:

  • Attend networking events (virtual and in person) to meet potential clients.
  • Get the message out about your business by email.
  • Share about your business venture on social media.
  • Join organizations that complement your product or service.
  • Ask acquaintances for introductions to others in their network.

Be sure to be genuine and professional in these business relationships. Also, don’t forget that you need to add value to the lives of the other people in your professional network as well!

Seek Advice and Mentorship

Seeking professional advice and mentorship can help cut down on the hard lessons small-business owners often have to learn and help get your business started on the right foot. Connecting with the right business adviser or mentor can be an invaluable move for your business.

Oregon SBDC advisers are knowledgeable business professionals experienced in a variety of topics, including writing a business plan, analyzing cash flow, marketing, hiring, and intellectual property concerns. Our advisers understand how to do business in Oregon, and they can support you with valuable, relevant advice at every stage of your business venture.

Each of our 19 centers provides confidential, no-cost business advising to help you succeed. Advising requires filling out our online intake form and, at some centers, attending a free introductory workshop to see if advising is right for you.

Now that you understand what it takes to be a successful entrepreneur, it’s time to put the wheels into motion. Whether you’re at the beginning stages of planning your business, ready to launch, or a few months in, the Oregon Small Business Development Center is here to assist you. To learn more about our services, click here.

Oregon Resources for Veteran-Owned Businesses (2021 Guide)

Oregon Resources for Veteran-Owned Businesses (2021 Guide)

Our nation shows its appreciation to the men and women who’ve worn the uniform of our armed forces in many ways. From the wide range of discounts for military families to free grub on Veterans Day, your selfless military service has earned you some perks and assistance. If you happen to be a veteran who owns an Oregon business—or is thinking of starting one—you should be sure to take advantage of the state, regional, and national resources that apply directly to you. Here are some of the best Oregon resources for veteran-owned businesses.

State, Regional, and National Resources for Veteran Business Owners

The Veteran Entrepreneur Portal

Easily access the resources you need to help your business succeed via the VA’s Veteran Entrepreneur Portal (VEP). With a layout that’s simple to understand and use, this website should be one of your very first stops as a military veteran looking to start a business in Oregon.

Veteran Business Outreach Center

From pre-business planning workshops to classes on how to expand into international exports, the U.S. Small Business Administration’s Veteran Business Outreach Center (VBOC) offers training and expertise to those at every stage of getting a company off the ground. Whether you’re a vet long out of uniform, a reservist, or a military spouse, they’re here to offer help in building, maintaining, and expanding your business.

Vets First Verification Program

An initiative of the U.S. Department of Veterans Affairs, the Vets First Verification Program is more than just a certification system. Any enterprise that qualifies as a veteran-owned small business (VOSB) or service-disabled veteran-owned small business (SDVOSB) and receives certification through Vets First will be considered first for contracts with the VA. It’s a great way to make sure you get priority access to any VA work your company may be able to carry out.

Business Impact NW

A nonprofit dedicated to helping people in traditionally underrepresented communities—including military veterans—to successfully create and run small businesses, Business Impact NW is a great resource for veterans in Oregon and throughout the Pacific Northwest. It provides both training and advice for entrepreneurs, as well as technical and financial support, and it works directly with the VBOC, serving as their regional partner. So while this is a regional organization, it has national support and connections to help Oregon veterans build businesses.

Oregon COBID

Oregon’s Certification Office for Business Inclusion and Diversity is a statewide initiative that mirrors parts of the Vets First Verification program, providing those who qualify with special access to government contracts. It also shares Business Impact NW’s goal of helping business owners from underrepresented communities. For a veteran-owned business to qualify for assistance, the owner must have a VA disability rating letter demonstrating any percentage of disability, between 0% and 100%. Learn more about the application process and get yours started at Oregon’s Service Disabled Veteran (SDV) Certification site.

Make the Most of the Benefits You Earned

This is by no means a comprehensive list. There are many other organizations and resources, both national and regional, aimed at helping small-business owners succeed. Some are targeted at veterans or other specific communities like these; others are available to anyone with that quintessential American dream of running their own business. So take these tips as just a starting point to seeking out all the Oregon resources for veteran-owned businesses—and remember that you’ve earned this assistance through your selfless service.

How to Write a Business Plan for Your Oregon Startup

How to Write a Business Plan for Your Oregon Startup

If you’re not sure how to write a business plan for your Oregon startup, it’s pretty simple once you know the general structure it should have. As for why you should take the time to write a business plan, well, think of it as a framework to guide you through the stages of beginning and operating your business.

Plus, a business plan shows people that you’re prepared with a plan for the future of your business, and that’s important for everyone from potential investors to employees to partners.

A well-written business plan is just one tool for building a successful business, but it’s a really important one for the foundation of your business.

There’s no right way or wrong way to write a business plan for your Oregon startup. The most important thing is to craft a document that meets your needs and the needs of your business. Here are some things you might consider including in your plan.

Executive Summary

An executive summary is an eagle’s eye view of the company—think of it as the CliffsNotes version of your business plan. It should include:

  • An outline of the company’s goals
  • An outline of the company’s goals
  • A summary of the products and services the company offers
  • A brief description of the market the company serves
  • A projection of the company’s potential growth
  • Basic info about your leadership team and employees, as well as the business’s owners
  • Any plans related to asking for financing or pitching the company to investors

Overview of Company and Objectives

Now, it’s time to dive in and talk about the problem your company solves. Who do you serve and how do you meet their needs? What advantages do you have that will make you a success? It’s time to boast about your strengths and what makes your company a valuable addition to the business landscape.

If you’re already in operation, it’s a little easier to talk about what you do and how you do it. If not, summarize what you hope to accomplish and how you’ll get it done. This is where you should talk about goals, listing milestones with specific steps you’ll be taking in the future.

Market Analysis

Here’s where you let all that market research shine to show you understand what businesses similar to yours are doing. What are their strengths, and why do their businesses work? What are you doing better, and what are you bringing to the market that doesn’t already exist?

Summarize your market demographics and talk about how those demographics fit into what your business sells. Give an overview of your target market’s purchasing habits, buying cycles, and willingness to adopt new products and services. What is the trajectory of your target market—is it growing, stable, or in decline? Quantify your market with as many details as you can.

Ideally, you’re focusing on segments that can support the growth of your business. It’s much easier to serve a market you can define than to have nothing but a vague idea of who your market is.

Company Organization

Describe your type of business—are you a sole proprietorship, a partnership, a corporation, or a limited liability company? Mention your registered agent here, as well (if you have one).

Next, create an organizational chart that shows who holds each position in the company and how their experiences are a key part of the business. If you want, you could include resumes or key stats for each member of your team (this could be helpful if you are presenting the business plan to a possible investor).

It’s also helpful to include a breakdown of what each member of the team does—a basic job description works well here.

Overview of Services or Products

What is your service or product? What is the lifecycle of that service or product? Discuss how what you sell benefits your customers. How is it different from what’s already on the market? If no market for your product or service currently exists, define the opportunity for entering the market and explain why you believe people want what you will sell.

Do you have any research or development in progress? If you’re planning to offer new products or services, give an overview of the timeline and implementation needed to make that happen.

Last, list any trademarks, patents, or copyrights the company owns.

Marketing and Sales Strategy

Your business’s marketing and sales strategy will evolve to fit the needs of your business and your offerings as you grow and as marketing trends change, but it’s good to have a starting point. This section should discuss how you’ll attract customers, retain them, and upsell them. Here are some important talking points when discussing a marketing and sales strategy:

  • What’s your budget for marketing?
  • How will you know if your marketing is successful and how will you adapt if it isn’t successful?
  • What platforms will you be on and how are they relevant to your audience?
  • What will you do for advertising and how will you get the word out?
  • How will you measure return on investment (ROI)?
  • Do you need people to promote your products? How will you form these partnerships?

Logistics and Operations

Provide an overview of the workflows you need to run your business smoothly. Cover all the components you think you need for your planned business operations (or document them, if you’re already in operation), including things like:

Facilities: Where will you work? Do you have actual retail space, and where is it?
Suppliers: For products, where do you get the materials you need for production (if you produce them yourself)?
Production: How are your products produced? How will you handle spikes in demand?
Equipment: What equipment do you need to run your business?
Inventory: Do you have an inventory management system?
Shipping: Do you have a fulfillment process for shipping products to customers?

This section of your business plan shows that you have a solid understanding of your supply chain and have a plan in the event of any spikes in business or sudden growth.

Financial Projections

Here’s where you talk about the projected financial success of your business. If you’re already up and running, include income statements, balance sheets, and cash flow documents. You may also want to include any relevant information about capital expenditures.

If you’re just getting started and don’t have historical information, you may want to get more specific with your projections. You could project quarterly or even monthly information for your first year after starting the business.

A Final Note

Know that although a business plan is an important map, it isn’t meant to be perfect or permanent. It’s designed to be reviewed and adjusted regularly so you can stay on track. Without this baseline, it will be much more difficult to adjust and have a historical reference for making decisions. A business plan shows you where you’re going and where you’ve already been, and that’s key for building a successful business.

If you have any questions about how to write a business plan for your Oregon startup, get in touch with your local SBDC at OregonSBDC.org.