GUIDANCE ON LAUNCHING A BUSINESS

1. YOUTHSTART’S GUIDANCE ON LAUNCHING A BUSINESS

2. Meet the TeamWhat is Enactus? en•act•us Enactus is a community of student, academic and business leaders committed to using the power of entrepreneurial action to transform lives and shape a better more sustainable world. Entrepreneurial—having the perspective to see an opportunity and the talent to create value from that opportunity; Action—the willingness to do something and the commitment to see it through even when the outcome is not guaranteed; Us—a group of people who see themselves connected in some important way; individuals that are part of a greater whole. Enactusis an international non-profit organization that brings together student, academic and business leaders who are committed to using the power of entrepreneurial action to improve the quality of life and standard of living for people in need. Guided by academic advisors and business experts, the student leaders of Enactus create and implement community empowerment projects around the globe. The experience not only transforms lives, it helps students develop the kind of talent and perspective that are essential to leadership in an ever-more complicated and challenging world. Our Commitment Together we pledge to take action. Together we commit to apply our passions and talents and ideas to impact as many lives as we can. Not to hand out help to people in need, but to work side-by-side with them to create opportunity. So every person and community we touch is empowered to live up to their fullest potential. Enactus McGill Enactus McGill is one of the chapters of Enactus that was created at McGill University by a group of students passionate about making a difference in the world while gaining valuable experience from doing so. Enactus McGill’s mission is to create, develop, and implement projects that empower individuals and communities. We start by helping young people use the power of social business to contribute positively to their community and environment. Sources: http://enactus.org/

3. Meet the TeamWhat is YouthStart? YouthStart! What is YouthStart: YouthStartis an Enactus project created by McGill students. Believing that an entrepreneurial spirit can be created and learned at any age, our goal is to generate an entrepreneurial environment in local high school and CEGEP communities. Our goal is to develop a 3 month program where students will work together in the process of developing a business or product idea, and with our guidance, design a realistic business plan to help launch their own business in the Montreal community. We want students to come out of our program with a profit generating business, developed through a guided process that emphasizes applicable business skills like business organization, entrepreneurial idea generation, market research and development, and the systematic planning necessary to guide a product or service from brainstorm to reality. How Do We Do It: Our unique program design focuses on teaching fundamental and applicable entrepreneurial skills to our participants through a combination of quick, interactive tutorials, mentoring by business experts, local business leaders, as well as our own team of business students and McGill Entrepreneurs, and critical business simulation designed to give students the tools to launch a business. The Team: Our dedicated group of mentors that will guide the students in the program include business experts, local business leaders and a talented team of college students with diverse backgrounds in business and entrepreneurial work. With a program designed on applicable skills our mentors will be an active hand guiding the students along through each state of the business design, all the way to the launch of the product. Through visual and interactive presentations, Q&A sessions, guest speakers and a personal business coaching, each student team has an expert group to guide them to success. Who is Eligible? Any local High School or CEGEP student between ages 14-17 is eligible to join.

4. Meet the TeamWhat is YouthStart? YouthStart! What Do We Teach: Our sessionsof interactive practice of business skills, critical business concepts, and a step - by - step guided approach to creating a business will leave students with a clear and accurate picture of what it takes to launch an idea from design to market, and a set of skills for the modern entrepreneurial world that they will have developed by actually creating a profit making business. The sessions will focus on the following topics: What makes a successful Entrepreneur How to develop a viable business idea How to create a business plan How to run a business organization How to understand a market How to launch a product How to brand a product How to raise capital How to apply for bank loans How to keep track of money How to estimate risk assessment and profit returns How to register a business

5. HOW TO CREATE A BUSINESS PLAN

6. IntroductionWhat is a Business Plan? "Failing to plan is planning to fail.“ - Alan Lakein A business plan describes how a new business is going to achieve its goals, establish itself and become successful. It is a formal statement of a set of business goals, the reasons they are believed to be attainable, and the plan for reaching those goals. Formally, a business plan is: A written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement.(Sources: http://www.entrepreneur.com/encyclopedia/business-plan) The idea behind putting together a business plan is to enable owners to have a more defined picture of potential costs and drawbacks to certain business decisions and to help them modify accordingly before implementing these ideas. The Seven Key Sections Of A Business Plan: 1. Executive summary Provides an overview of the business concept, summarizing the other sections of the plan. 2. Business Overview Covers details regarding the business’s history, vision and/or mission, objectives, and the ownership structure. 3. Products and Services Expands upon the products and services, including features and benefits, competitive advantages, and, if marketing a product, how and where the products will be produced. 4. Industry overview Demonstrates the viability of the business by discussing the size and growth of the industry, the key markets within the industry, target markets, and the competition. 5. Marketing Strategy Describes the target market segments, differentiation of the products or services, and its’ unique selling proposition (USP).Discusses the pricing and promotion strategies, including promotional programs for each of the target market segments, and marketing tactics. 6. Operations Plan Provide a profile of the management team, the human resources plan, the business location(s) and facilities, the production plan (if applicable), and an overview of day-to-day operations. 7. Financial plan Shows three years’ worth of projected financial statements, including income statements, pro-forma balance sheets, and monthly cash flow and annual cash flow statements.

7. IntroductionHow To Come Up With a Business Idea? Having a business plan is important for every entrepreneur, but it is even more important to have a concrete viable business idea first. This can be very hard sometimes. Here are some tips and questions you can use while brainstorming for an idea. Tips On How To Come Up With A Business Idea: 1. Think of the things you are good at: your strengths, talents, hobbies, and interests. You are more likely to be successful if you are passionate about what you do. 2. Pay attention to the world around you. What can you do to make the world a better place? 3. Your business should change the way of living, even in a small way. 4. Think of the difficulties you face in your life (small or big). Try to come up with a product or service that would help solve these problems. Find a problem, think of a solution, and develop an original idea. What can improve your daily life to make it easier? 5. Discover market opportunitiesthat can be taken advantage of. 6. Analyze if there are any products or services that you could provide betterthan the competitors. How will your product or service stand out from the others? Why is it better than the rest? Think quality, availability, price. 7. Think of global or local trends, which can lead to a marketable product or service. Try to come up with a business idea what will capitalize on a current trend. 8. Try to solve any existing limitations. 9.Ask yourself what type of products or services would youuse? 10. Think “outside the box”, be creative. 11. Keep a small notebook and write down all the ideas that come to your head. In moments of inspiration, write down your ideas, then come back to them and analyze how realistic and useful they are. 12. Do your research. Find out if the product or service already exists. Is there already a market for your ideaor is it possible to create one? 13. Think it through to the smallest details. Make sure itis possible to implement your idea in the real world. 14. Be reasonable and know your limits. Don’t create a business that goes far beyond your qualifications or your education. You should know what you are doing in order to provide a high quality product that assures your customers come back for more. 15. Think like an accountant. Calculate how much money / capital will be required to launch your business. What resources are available to you to help raise these funds? How will you generate enough money to set the company in motion? 16. Be adventurous and discover new things. A fresh view on something usually brings innovation and creates opportunity for an original business idea. 17. Make sure to fully develop your idea before you start writing a business plan for it.

8. IntroductionBusiness Plan Outline Defining a Company: Executive Summary Business Overview Strategic Focus and Plan: Core Values Mission Objectives Operations and Management Defining a Product: & Service SWOT Analysis Competitive Advantage Product Life Cycle Defining a Market: Industry Overview: Market Analysis Porter 5 Forces Defining a Customer: Consumer Profiling: Segmentation Defining a Marketing Strategy: The Marketing Mix Positioning Defining a Financial Plan: Financial Projections

9. DEFINING A COMPANY 01 An executive summary is the first and most important section of your business plan. It is usually the first page read by potential investors, and should aim at grabbing their interest. This section should include a summary of each part covered in the rest of the business plan such as the key objectives of your business and your plan, ownership structure, management team, your product or service offering, competitive advantages, target market(s), customer description, marketing strategy, and a summary of your financial projections. It should highlight the strengths of your overall plan and therefore be the last section you write. This section briefly tells your reader where your company is, where you want to take it, and why your business idea will be successful. The executive summary should be 1-2 pages long and should highlight the strengths of your overall plan and therefore be the last section you write. Executive Summary A short summary of the objectives, structure, products and/or services, marketing plans, operations, etc. of the proposed business that is placed at the beginning of the business plan and is designed to attract investors and help with receiving funding. EXECUTIVE SUMMARY

10. DEFINING A COMPANY 02 • A business overview is the section of a business plan that provides a high-level review of the different elements of your business. This is akin to an extended elevator pitch and can help readers quickly understand the goal of your business and its unique proposition. This is the part where you explain the business goals, values and vision. Unlike the executive summary, which must be concise, this is where you can elaborate on the details of the business. The who, what, where, when, and why of the business should fall into place and readers should have a clear understanding of how the company will function. • It should include: • a brief description of the industry and the future possibilities it offers • description of the structure of your business: the type of operation, legal form (partnership, corporation etc.) • The 5Ws and 1H: • Who will you sell to: customers? • What: your product? • Where: distribution? • When: the timeline of your project? • How: the support systems such as • advertising and promotion? BUSINESS OVERVIEW The 5Ws and 1H Who What Where When Why How

11. DEFINING A COMPANY 03 A mission statement is a sentence describing a company's function, markets and competitive advantages. It identifies your business goals and philosophies and defines what an organization is, why it exists, its reason for being. At a minimum, your mission statement should define who your primary customers are and which market you operate in, as well as identify the products and services you produce and the technology you use. Mission statements must be clear and to the point. The length is usually only 5-25 words. It is very important that all employees know and understand the company’s mission so that they can reflect it in their behavior. Mission Statement A statement of the organization’s function in society, its values, visions, and purposes for its work; usually identifies the organization’scustomers, products, and means by which it operates. Sources: http://drdianehamilton.wordpress.com/2011/01/13/top-10-company-mission-statements-in-2011/http://www.missionstatements.com/fortune_500_mission_statements.html STRATEGIC FOCUS Examples Of Mission Statements: Amazon: Amazon’s vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.  Apple: Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings. FedEx Corporation: FedEx will produce superior financial returns for shareowners by providing high value-added supply chain, transportation, business and related information services through focused operating companies. Customer requirements will be met in the highest quality manner appropriate to each market segment served. FedEx will strive to develop mutually rewarding relationships with its employees, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards.

12. DEFINING A PRODUCT & SERVICE 04 SWOT analysis is a simple but useful framework for analyzing your project's strengths and weaknesses, as well as the opportunities and threats you face. It can be used to characterize products, services, product lines and other business/marketing projects, including whole organizations. This method is widely used by marketing professionals in their work. SWOT Analysis An acronym that describesan organization’s assessment of its internal Strengths and Weaknesses and its external Opportunities and Threats. SWOT ANALYSIS Tip: When looking at your strengths, ask yourself whether these open up any opportunities. Alternatively, see if eliminating weaknesses could also open up opportunities. • Internal Origin: • Strengths: What are the elements/advantages • that help this project be successful? • Weaknesses: What are some of the elements of • this project that hinder its performance? • External Origin: • Opportunities: What are some of the trends, structural elements of the market that this project can exploit on? • Threats: What are some of the trends, structural elements or changes of the market that could obstruct this project? • Using SWOT analysis can be very beneficial as it can help you see opportunities that you are well places to take advantage of. Also, by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you off-guard. Moreover, by looking at your project and the one of your competitors using the SWOT analysis, you can put together a strategy that helps you distinguish yourself from your competitors. This will allow you to compete successfully in your market.

13. DEFINING A PRODUCT & SERVICE 05 • When companies earn the highest profits within their industry, they are said to have a competitive advantage. • A competitive advantage allows the firm to considerably increase its profits while delivering superior value to its customers.It can be attained through a variety of strategies: • Cost leadership strategy: aims to offer products and services at the lowest price in the industry. • Differentiation strategy:aims to offer a product or service that is unique and that competitors cannot duplicate easily. • Cost focus: seeks to be the lowest priced in only one or very few market segments. • Differentiation focus: aims to differentiate in only one or very few market segments; specializes in servicing one or few niche market(s). • To gain a competitive advantage a firm has to leverage its resources (both tangible and intangible) and its capabilities. Competitive Advantage A relative advantage of one business over another that is sustainable and that translates into a benefit of being dominant in a given market by successfully meeting the criteria that is most important to target customers. COMPETITIVE ADVANTAGE Differentiation Advantage A sustainable product or service that has an advantage of charging a higher price due to a difference in product offerings, higher quality, advanced technology , brand image, or superior service that successfully fulfills the target consumers wants. Capabilities Recourses Cost advantage or Differentiation advantage Distinctive competencies Value creation

14. DEFINING A PRODUCT & SERVICE 06 Products, just like people, have life cycles. Product life cycledescribes the four stages a new product undergoes in the marketplace. The two curves shown in the graph are the total industry revenue and the total industry profit. They show the sum of sales revenue and profit that all the firms in the marketplace earn from producing this particular product. Product Life Cycle The four stages a product goes through when introduced to a new market:introduction, growth, maturity, and decline. PRODUCT LIFE CYCLE

15. Defining a Product & Service06 Product Life Cycle • Introduction: When a product is first introduced, sales grow slowly and profit is either minimal or negative. The goal is to create awareness, inform and stimulate trial. • Skimming: The price is set very high and progressively brought down for the firm to recover from its costs. • Penetration pricing: The price is set very low to attract new customers. • Growth: Sales grow at an increasing rate, which attracts competition. The goal is to differentiate itself from the new comers through heavy brand advertising. • Maturity: Sales continue to increase but slower than before. The market is almost saturated; prices and profits begin to fall. • Decline: Signaled by a long-run drop in sales, many competitors exit the market, the decline is usually the result of changes in consumer taste and the array of available substitutes. Strategies to overcome decline are repositioning of a product by changing its perception (cf. Positioning), find new use for the product, find new target market etc. • Deletion: Dropping the product completely, discontinued production. • Harvesting: Keeping the product while reducing the marketing effort allocated to it. • Different Types Of Products And Their Life Cycles: High Learning Product: For products that are complicated to use, significant learning is required from the customer. The introductory stage is longer. Low Learning Product: For products that are easy to use, little learning is required from consumers. Sales begin immediately. Fashion Product: Length of the cycles may be years or decades. Think of examples from the fashion industry. Fad Product: Rapid sales on introduction and equally rapid decline. Often happens with novelties.

16. DEFINING A MARKET MARKET ANALYSIS 07 A market analysis is undertaken to identify business opportunities and their monetary value. (Think SWOT!) It helps to assess the attractiveness and the structure and forces that govern a specific market within a certain industry. It is used to define a market, work out their forecasts and better determine the action plan for staying profitable and on trend. Changes in the market environment are a source of opportunities and threats. Environmental scanning is a process of monitoring used to keep track of changes occurring in the evolving marketplace. Environmental Scanning A method of continually gaininginformation about events occurring outside the organization to identify and interpret potential trends and opportunities to tail an action plan around them. Trends identified by an environmental scan with criteria examples: Legislation; regulatory bodies and processes; intellectual property and privacy protection; government policies; trading policies; funding, grants and initiatives; market pressure-groups; wars and conflicts. Home economy; economy trends; general taxation; taxation specific to product/services; specific industry factors; customer/end-user drivers; interest/ exchange rates; international trade; monetary issues. Lifestyle trends;demographics; consumer attitudes and opinions; media views; law changes affecting social factors; brand, company, technology image; consumer buying patterns and trends; fashion and role models; major events and influences; ethnic/religious factors; ethical issues. Competing technology; developmentresearch funding; associated/dependenttechnologies; replacementtechnology/solutions; manufacturing maturity and capacity;information and communications; technology legislation; innovation potential; technology access; licensing, patents. Forms of competition; Porter 5 forces: barriers to entry and exit, power of buyers and suppliers, existing competition and substitutes; pure-play online competitors. Political Economic Social Technological Competitive

17. DEFINING A MARKET PORTER FIVE FORCES 08 Porter 5 forces analysis is used to determine the attractiveness of a market. The model is named after Michael E. Porter and analyzes 5 competitive forces that shape every industry. It serves to determine an industry's weaknesses and strengths that affect the company’s ability to serve its customers and make a profit. A change in the industry usually entails a company to reevaluate its strategy and position in the marketplace. The first four forces are the threat of new entrants, the threat of substitutes, the bargaining power of suppliers, and the bargaining power of buyers. They influence the fifth force, the level of competitive rivalry in the industry. Each of these forces has several elements and determining factor to them. Porter 5 Forces Analysis A model for industry analysis that consists of five distinct forcesoutlined by M.E. Porter, which, when analyzed together, determine an industry’s long-term profitability, attractiveness, and number of competitors. Competition Alternative firms that could provide a product to satisfy a specific market’s need that the given organization also tries to satisfy.

18. Defining a Market08 Porter Five Forces Analysis Threat Of New Entrants: Depends on entry and exit barriers. Barriers to entry/exit can be related to the costs of entering/exiting the market, for example the aerospace industry has high barriers to entry and exit due to the heavy investments that it entails. The more profitable a market is, the higher the number of new entrants. Threat Of Substitutes: Relates to what products/services are alternatives to the product/service that you are offering. The higher the number of alternatives, the less attractive is the industry. Bargaining Power Of Suppliers: Relates to the amount of pressure your suppliers have in that market. For example, when there are only a few suppliers for a large number of firms in the industry, the bargaining power of suppliers is high, and vice-versa. Bargaining Power Of Buyers: Relates to the amount of pressure buyers have in that market. For example, the greater customers’ ability to switch to substitutes, the higher their bargaining power.

19. DEFINING A CUSTOMER 09 Though commonly defined as being advertising, marketing encompasses all activities and processes aimed at creating, communicating, delivering and exchanging offerings. The main task of the marketing department is to deliver the right product or service to the right customers by using the right means of communication, while respecting the company's strategy. Contemporary marketing is focused around the customer: anticipating, identifying, and satisfying customers' needs and wants while building loyalty. Marketing requires thorough knowledge of both the marketplace and its consumers. Thus, advertising, marketing research, and brand management are just a few examples of marketing activities. Consumer profiling is a way to describe consumers by categorizing them into different representative groups. In order to sell a product/service, one must identifywho their customers are. Consumer profiling allows for target marketing.It is more efficient for a company to target advertising to a specific market segment. Consumers can be identified by various preferences, lifestyles, shopping habits, attributes, and traits. It is useful to categorize customers into different groups and to create personas that represent each of these groups. Market segmentation serves as a mean for understanding the customer. Dividing the market into different segments allows for efficient strategy drafting and marketing. A deep understanding of your customers’ needs and wants will help choose how, where, and when to sell your product. There are different ways to segment consumer markets. The main dimensions that are used to characterize consumers through segmentation are geographic, demographic, psychographic, and behavioral. Consumer Profiling The process of categorizingrelevant information to describe the characteristics of different customer groups and to understand what drives their purchasing decisions. SEGMENTATION Target Market One or more specific groups of potential consumers towards which a certain marketing program for a product, service, or an organization as a whole is directed. Market Segmentation A process of dividing potential consumers into different groups, or segments, that have common needs, wants, and values and will respond similarly to a specific marketing program.

20. Defining a Customer09 Segmentation Segmentation variables and breakdowns for Canadian consumer markets

21. Defining a Customer09 Segmentation Segmentation variables and breakdowns for Canadian consumer markets Sources: Frederick G. Crane, Roger A.Kerin, Steven W. Hartley, William Rudelius. «Marketing.» Ch. 9 inMarketing, written by Roger A.Kerin, Steven W. Hartley, William Rudelius Frederick G. Crane, 236. McGraw-HillRyersonCompanies, 2011, 2009.

22. MARKETING STRATEGY THE MARKETING MIX 10 The Marketing Mix, also knows as the “4 Ps”, is one of the pillars of marketing. It is the marketing manager’s group of controllable factors, the marketing actions of product, price, promotion, and place that he or she can take to create, communicate, and deliver value to a target market. After determining the target market and the specific consumer category, the company’s goal is now to satisfy their needs. The marketing mix elements help organize the ways to do so. This method is widely used by marketing professionals in their work. Marketing Mix A combination of the four Ps (Product, Price, Promotion, and Place) that can be tailored according to the demand of a specific target market to satisfy the needs of consumers. Product: Description of your product, the aesthetic, the features, the size, material etc. Price: Is it a high quality product that can be sold at a premium (above average) price, or is it a low cost product? Promotion: What type of communication channels are you going to use to market your product? What media are you going to use, how often? Place: What channels of distribution are you going to use? How are you going to make your product accessible for consumers?

23. MARKETING STRATEGY POSITIONING 11 Product positioning is the relevant value that perspective consumers give to one project compared to other projects based on its features and prices. Product positioning is used by companies to position their brand, product or service and is a very important step when launching a new project. The two axes (price and quality in the example) can be any relevant characteristic that relates to your brand/product. Mapping helps to understand how consumers evaluate the different brands/products in the market. Product Positioning The place a certain product takesin a two- dimensional map of a marketplace created in consumer’s mind relative to competitive products based on certain characteristicsimportant to target consumers. Perceptual mapping is a means to display or graph in two dimensions the location of products or brands in the minds of consumers. It enables the manager to see how consumers perceive competing products or brands relative to its own and then take marketing actions. Reading The Graph: This perceptual map shows four different brands present in a marketplace. We can see that Brand A is seen by consumers as high quality and high price, while Brand B is also priced higher than average, but has a lower quality than Brand A.

24. DEFINING A FINANCIAL PLAN FINANCIAL PROJECTIONS 12 • A budget planis a financial forecast created within a business plan. It aims at assessing how much the company is going to need to spend and how much it is expected to receive in income. • There are three main financial statements: • balance sheet • income statement • cash flow statement • A balance sheet is made up of three main components: • 1. Assets are intangible or tangible resources owned by the company that can produce economic value. For example: buildings, inventory, trademarks etc. • 2. Liabilities are any obligations that a company has resulting from past transactions and need to be ‘paid back’ through asset transfers. For example: any type of borrowing from banks or other entities. • 3. Ownership Equity are the assets left after all liabilities are paid. • The Formula corresponding to the Balance Sheet is then: • Assets=Liabilities + Equity • The balance sheet is often compared to a snapshot of the company’s financials at one precise point in time. It is called a “balance sheet” because the two sides: assets versus liabilities and equity, should always balance out. The balance sheet is usually presented as a table with Assets on one side, and Liabilities and Equity on the other. Once the balance sheet complete: the Assets should ALWAYS equal the Liabilities and Equity, thus balancing each other. Financial Statement Written reports that outline the financial activities of a business or an individual to provide financial information; balance sheet, income statement, and cash flow statement are all present in a financial statement. Budget Planning A process by which acompany evaluates its past earnings and expenses and plans its monetary intakes and outtakes for the future accordingly. Balance Sheet A summary of financial balances that show what the business is worth at a certain point in time; it usually follows the formula Assets = Liabilities + Shareholders' Equity

25. Defining a Financial Plan12 Financial Projections • An income statement (also known as revenue statement or profit & loss statement) shows a company's revenues and expenses at a particular point in time and points out the net income of the company. • Net Income = Gross Revenues – Total Expenses • Revenue is money supply that goes to the company—cash inflow—as a result of its operations. • Expenses are money supply that comes out of the company—cash outflows—from draining its assets or paying current liabilities as a result of its operations. • A cash flow statement shows how the changes in the balance sheet and revenue and income affects the company’s cash and cash equivalents. The cash movements are studied within the operating, investing, and financing activities of the company. • Cash and cash equivalents are the most liquid assets. In other words, those are the assets that can easily and rapidly be transformed into cash such as treasury bills, short-term government bonds and so on. • Operating activities include all activities related to the production, sales, and delivery of a product, and the collected payments from consumers. • Investing activities are all activities related to the purchase or sell of capital assets. For example buying or selling a new building, gains or losses from investments in the financial markets, loans made to suppliers or received by customers, payments related to mergers and acquisitions, proceeds from issuing short or long-term debt. • Financing activities is any inflow of cash from investors (banks or shareholders), as well as the outflow of cash, such as dividends paid to shareholders or repayment of debt. Income Statement Shows a company’s revenues minus its costs and expenses over a given period of time (year, quarter, month) and concludes its net income or net loss. Cash Flow Statement A statement that provides an overview of the company’s cash inflows and outflows during a certain period of time and evaluates the amount, timing, and predictability of these financial changes for better budget and business planning.

26. Defining a Financial Plan Sources: http://www.principlesofaccounting.com/chapter1/chapter1.html Note: The numbers in parenthesis are always negative, need to be subtracted.

27. Defining a Financial Plan12 Financial Projections Basic Business Income Statement

28. Defining a Financial Plan12 Financial Projections Basic Business Income Statement Sources: http://www.cra-arc.gc.ca/bsnsss/menu-eng.html http://sbinfocanada.about.com/cs/taxinfo/f/reportincome.htm

29. Finalize the business planPut Everything Together CONGRATULATIONS! YOU HAVE COMPLETED YOUR BUSINESS PLAN! Now, all that is left for you to do is review your business plan and make sure all the parts correspond to each other----each part includes all the necessary elements defined previously. Make sure you carefully review your executive summary. In case you made any changes or had new ideas along the way, edit it to avoid any inconsistencies. YouthStartcongratulates you on completing your first business plan and on acquiring the necessary knowledge needed to launch your own business. We hope this information was useful and will help you in the future. We wish you all the best in your professional development and hope you succeed in the workplace. Further, we provide you with information on how to create a green business, how to request funding and apply for a bank loan, as well as how to go through necessary legal procedures when creating a business. We recommend reading these units of the booklet in order to broaden your knowledge of launching a business. A lot of this information will prove to be useful as you go further in life.

30. HOW TO BECOME A GREEN BUSINESS

31. How To Become AGreen Business Green Business An organizationthat works to reduce to the minimum the negative impacts on the global or local environment, community, society, and economy. A green business is a business functioning in a capacity where no negative impact is made on the local or global environment, the community, andthe economy. A green business will also engage in a forward-thinking policies for environmental concerns and policies affecting human rights. It does so through such methods as reducing greenhouse gas emissions, reducing waste and reducing the use of harmful chemicals. It also considers the environmental impact made by its suppliers, trades and employees. Sources: http://www.businessdictionary.com/definition/green-business.html http://www.edmonton.ca/environmental/documents/Eco_challenge_definition_of_green_business.pdf http://www.greenmarketing.tv/2010/03/27/what-is-a-green-business/ • Key Points Of Conducting Green Business: • Energy Conservation: There will be energy efficient heating and cooling systems, low-energy lighting, and policies in place for purchasing energy efficient electronics and appliances and using them with the lowest possible energy. • Solid Waste Reduction And Recycling: This could mean reducing packaging waste or ordering in bulk. It will also mean an office with policies to reduce and handle waste properly. And comprehensive recycling programs will be put in place. • Water Conservation. • Pollution Prevention: Work by practicing eco-friendly landscaping methods, using green janitorial supplies, and perhaps even purchasing carbon offsets to mitigate any greenhouse gas pollution they create. • Two Examples Of Green Business: • Old-Fashioned Milk Paint Company wanted to create itsown Colonial-style furniture made with old-fashioned techniques by turning to milk paint. Devising a formula that consists primarily of lime, milk, clay, and earth pigments–all natural, readily-available ingredients–the company provides a product that is environmentally friendly. • Recycline is a company that recognized that millions of toothbrushes are thrown away in American homes every year and decided to do something about the problem. It produces eco-friendly products, including the Preserve Toothbrush. Made with a handle constructed of 100 percent recycled plastic, this toothbrush is not only practical, it is green. All the company’s productscan be recycled with #5 plastics! That’s a true expression of the triple bottom line in action.

32. HOW TO APPLY FOR A BANK LOAN

33. Bank LoanTypes of Loans Bank Loan The distribution of money from a bank to another party under a signed agreement with a number of outlined commitments, including the repayment of the money with a possible interest rate. Main Banks In Canada: The Big Five Banks: Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce Other Banks: National Bank of Canada, HSBC Bank Canada Different Types Of Loans: Personal Loans: This is most useful loan for small business. These loans are offered by most banks, and the proceeds may be used for virtually any expense (from buying a newstereo system to paying off a common bill). Typically, personal loans are unsecured, and range anywhere from a few hundred to a few thousand dollars. As a general rule, lenders will typically require some form of income verification, and/or proof of other assets worth at least as much as the individual is borrowing. The application for this type of loan is typically only one or two pages in length. Approvals (or denials) are generally granted within a few days. The downside is that the interest rates on these loans can be quite high. According to the Federal Reserve, they range from about 10 to 12 percent. The other negative is that these loans sometimes must be repaid within two years, making it impractical for individuals looking to finance large projects.In short, personal loans (in spite of their high interest rates) are probably the best way to go for individuals looking to borrow relatively small amounts of money, and who are able to repay the loan within a couple of years.2. Credit Cards: (Consumer Line-of-credit Loans)When consumers use credit cards, they are essentially taking out a loan with the understanding that it will be repaid at some later date. Credit cards are a particularly attractive source of funds for individuals (and companies) because they are accepted by many merchants as a form of payment. In addition, to obtain a card (and, by extension, $5,000 or $10,000 worth of credit), all that is required is a one-page application. The credit review process is also rather quick. Written applications are typically approved (or denied) within a week or two. Also in terms of their use, credit cards are extremely flexible. The money can be used for virtually anything these days from paying college tuition to buying a drink at the local watering hole. There are definitely pitfalls, however. The interest rates that most credit-card companies charge range as high as 20% per year. In addition, a consumer is more likely to rack up debt using a credit card (as opposed to other loans) because they are widely accepted as currency and because it's psychologically easier to hand someone a credit card than to fork over the same amount of cash.

34. Bank LoanTypes of Loans 3. Home-Equity Loans:Homeowners may borrow against the equity they have built up in their house using a home-equity loan. In other words, the homeowner is taking a loan out against the value of his or her home. A good method of determining the amount of home equity available for a loan would be to take the difference between the home's market value and the amount still owing on the mortgage.The loan proceeds may be used for any number of reasons, but are typically used to build home additions, or for debt consolidation. The interest rates on home-equity loans are very reasonable as well. In addition, the terms of these loans typically range from 15 to 20 years, making them particularly attractive for those looking to borrow large amounts of money. But, perhaps the most attractive feature of the home-equity loan is that the interest is usually tax deductible.The downside to these loans is that consumers can easily get in over their heads by mortgaging their homes to the hilt. Furthermore, home-equity loans are particularly dangerous in situations where the family's ability to repay the loan might be hindered by that person's death or disability. Even a 1% increase in interest rates could mean the difference between losing and keeping your home if you rely too heavily on this style of loan. In situations like these, life/disability insurance is frequently used to help protect against the possibility of default.4. Home-equity Line Of Credit:This line of credit acts as a loan and is similar to home-equity loans in that the consumer is borrowing against his or her home's equity. However, unlike traditional home-equity loans, these lines of credit are revolving, meaning that the consumer may borrow a lump sum, repay a portion of the loan, and then borrow again. It is similar to a credit card that has a credit limit based on your home's equity. These loans may be tax deductible and are typically repayable over a period of 10 to 20 years, making them attractive for larger projects. Because specific amounts may be borrowed at different points in time, the interest rate charged is typically pegged to some underlying index such as the "prime rate". This is both good and bad in the sense that at some times, the interest rates being charged may be quite low. However, during period of rising rates, the interest charges on outstanding balances can be quite high. 5. Cash Advances:Cash advances are typically offered by credit-card companies as short-term loans. Other entities, such as tax-preparation organizations, may offer advances against an expected IRS tax refund or against future income earned by the consumer. While cash advances may be easy to obtain, there are many downsides to this type of loan. For example, they are not typically tax deductible, loan amounts are typically in the hundreds of dollars, making them impractical for many purchases, particularly large ones, and the effective interest rate charges and related fees can be very high.

35. Bank LoanTypes of Loans 6. Small Business Loans:The Small Business Administration (SBA) or your local bank typically extend small business loans to would-be entrepreneurs, but only after they have submitted (and received approval for) a formal business plan. The SBA and other financial institutions typically require that the individual personally guarantee the loan, which means that they will probably have to put up personal assets as collateral in case the business fails. Loan amounts can range from a few thousand to a few million dollars, depending on the venture.While the term of the loan may vary from institution to institution, typically, businesses will have between five and 25 years to repay the loans. The amount of interest incurred from the loan depends on the lending institution in which the loan is made. Keep in mind that borrowers can negotiate with the lending institution with regard to the level of interest charged. However, there are some loans on the market that offer a variable rate.Small business loans are the way to go for anyone looking to fund a new or existing business. However, be forewarned: getting a business plan approved by the lending institution may be difficult. In addition, many banks are unwilling to finance "cash businesses" because their books (i.e.. tax records) often do not accurately reflect the health of the underlying business. Sources: http://www.investopedia.com/articles/pf/07/loan_types.asp

36. Bank LoanApply for Loans Necessary Materials To Apply For Loans: Credit history:Credit is one of the key factors that affect loan approvals, and getting any type of financing with a bank generally requires establishing a credit history prior to submitting an application, as well as maintaining a good credit score. Financial history: Lenders will evaluate your income statement, primarily cash flows, to see how much you earn in a month when reviewing your loan application. Collateral: Lenders often require a piece of personal property to secure a loan. This protects their investment if you default on the loan payments. Lenders base collateral on the requested dollar amount. • Credit Rating • An evaluation of the creditworthiness of an individual. Sources: http://www.ehow.com/info_7918213_do-need-apply-loan.html https://www.cibc.com/ca/apply/llc/llc-apply.html?prodId=llc-plc https://www.envisionfinancial.ca/Personal/Borrow/Loans/LoanBasics/ Credit Report A report that shows an individual’s credit ratings and credit history. How Loan Rates Are Determined: Lenders establish their rates based on several factors. These include the prime rate (which is influenced by the Bank of Canada), inflation levels, the type of lending product you want, the amount you wish to borrow, and the term over which you plan to pay the funds back. Generally, rates are lower when loans are secured with some form of collateral, as the lender has less risk to assume. Your credit rating will also be considered. A higher credit score indicates that you are a lower credit risk, and will likely entitle you to a better rate.Because the features of a loan are as varied as the reasons for borrowing, it is important that you get the right loan for the right purpose. Credit Rating: A good credit rating is precious—it's the most important factor in determining whether you qualify for a loan, mortgage, or line of credit. Financial experts recommend you know the status of your credit rating and ensure your credit report is free of inaccuracies. Credit Report: A report containing detailed information on your credit history, including identifying information, credit accounts and loans, bankruptcies, late payments, and recent inquiries. Prospective lenders can obtain it (with your permission) to determine your creditworthiness.

37. Bank LoanApply for Loans How To Calculate Loan Balance And Payments: The loan payment formula is used to calculate the payments on a loan. The PV, or present value, portion of the loan payment formula uses the original loan amount. The original loan amount is essentially the present value of the future payments on the loan, much like the present value of an annuity.It is important to keep the rate per period and number of periods consistent with one another in the formula. If the loan payments are made monthly, then the rate per period needs to be adjusted to the monthly rate and the number of periods would be the number of months on the loan. If payments are quarterly, the terms of the loan payment formula would be adjusted accordingly. • Loan • A temporary transfer of a property (money) from alender to a borrowerwhich needs to be repaid according to certain terms and is usually returned in a series of periodic payments. Sources: http://www.financeformulas.net/Loan_Payment_Formula.html • Loan Payments • Equal amounts of money that are to be paid each period by the borrower to the lender. • Loan Balance • Amount of money needed to completely pay off the debt and meet the outlined terms of the loan agreement.

38. Bank LoanAlternative Financing Options How To Get A Loan With Bad Credit: Use a home equity line of credit Apply to credit unions Get a Pear to Pear loan - It’s an online platform that allows people to borrow directly from an individual instead of from an institution. Take a loan from family or friends Appeal to co-signer Alternative Financing Options: Credit Unions:Credit unions are similar to banks but are owned by their members, who typically have something in common—like working in the same industry or living in the same geographic area. Credit unions are non-profit organizations that pass along earnings to members in the form of lower fees and higher customer service. Asset-based Lending: These loans, often in the form of lines of credit, are based on a percentage of the value of a company’s assets, including inventory and accounts receivable. Hedge Funds And Private-equity Funds: A hedge fund is a pooled investment vehicle administered by a professional management firm, and often structured as a limited partnership, limited liability company, or similar vehicle. A private equity fund is a collective investment scheme used for making investments in various equity (and to a lesser extent debt) securities according to one of the investment strategies associated with private equity. Venture Capital: Venture capital is financial capital provided to early-stage, high-potential, high risk, growth start-up companies. The venture capital fund makes money by owning equity in the companies it invests in. Sources: http://www.quickanddirtytips.com/money-finance/credit/5-ways-to-get-a-loan-with-bad-credit?page=1 http://www.businessweek.com/smallbiz/tips/archives/2011/08/five_alternative_financing_options.html

39. CANADA’S LEGAL PROCEDURE

40. Legal ProcedureTypes of Companies • Types Of Companies: • Legally, there exist different types of companies on the market. • Two types of companies may be incorporated under the Companies Act, namely non-profit companies and profit companies.  • Profit companies may be incorporated under the following types: • Private Companies • Public Companies • Personal Liability Companies • State Owned Companies • Non-Profit Companies (NPC): • To be considered a not-for-profit, a company must be incorporated for public benefit or other object relating to one or more cultural or social activities, or communal or group interests, as well as it’s income and property must not be distributable to its incorporators, members, directors, officers or persons related to any of them. • Public Companies (Ltd): • The definition of a public company is largely unchanged. The only difference is that a public company under the new Act only requires one member for incorporation compared to the 7 members under the current Companies Act. • Personal Liability Companies (Inc): • The directors and past directors (where applicable) of such companies are jointly and severally liable together with the company for any debts and liabilities arising during their periods of office. • State-Owned Companies (SOC Ltd): • A State owned company is either a company defined as a “state-owned enterprise” in the Public Finance Management Act 1 of 1999 or a company owned by a municipality. The majority of the provisions of a public company will apply to state-owned companies as well. Sources: http://www.cipc.co.za/Companies.aspx

41. Legal ProcedureTypes of Ownerships • Types Of Ownerships: • Private Company (Pty) Ltd: • A private company is a separate legal entity distinct from its shareholders. A private company is liable for its debts, and creditors cannot sue the shareholders for the payment of these debts. A private company can have up to 50 shareholders. Other companies and closed corporations (CCs) can hold shares in a company, which is an advantage over a CC, which cannot have a company as a member. • There is a slight advantage to writing (Pty) Ltd after your company's name because it will be perceived to have a more stable and established image.But there are many disadvantages, including the costs to register, which can go up to R3 000 or R4 000 if you do it through a lawyer or an accountant. The structure of a company is more complex than a CC because it must have separate ownership and management, the shareholders own it and the board of directors manages it.The decision making process is complex because there are prescribed general meetings, notice periods and formalities for the passing of resolutions. The law requires a company to audit its books once a year. This can run into thousands of dollarsevery year, depending on the size of the company.The law strictly governs the conduct and duties of company directors and officers. For example, not keeping minutes of board meetings or not holding an annual general meeting is illegal. If you are going to register a company, make sure that you are aware of all the legal requirements that must be complied with. • Sole Proprietor: • A sole proprietorship is a business owned by one person. This type of business is not a separate legal entity as the owner enters into all transactions in his/her personal capacity. There are no agreements or articles stipulating how the business must be managed. The sole proprietor is the owner of all the business' assets and is responsible or fully liable for all the business' debts. The sole proprietorship terminates when the owner stops carrying on business. The advantages of a sole proprietorship are: • No legal formalities are required to establish a sole proprietorship • The overhead costs and management expenses are lower than for other entities • The owner has the freedom to adjust the business as they deem fit • The disadvantages of a sole proprietorship are: • The owner's personal assets are at stake, if the business fails • The business closes when the owner dies or retires • The business usually remains small due to the limited resources • It's normally difficult for owners to raise finance for their businesses

42. Legal ProcedureTypes of Ownerships • Partnership: • A partnership is a particular type of business formed by people who intend making and sharing profits. It can be defined as a relationship based on an agreement between two or more persons who undertake to contribute something with the object of making a profit and sharing it between them.A partnership can be formed by natural or legal persons, or by a combination of natural and legal persons. A partnership must have between two and 20 partners. The partners in accordance with the partnership agreement manage the partnership. A partnership is not a separate legal person, since the rights, duties and liabilities of a partnership belong to and bind the partners individually. • Close Corporation: • A Close Corporation (CC) is a company, similar to a private company. It is a legal entity with its own legal personality and succession and must register as a taxpayer in its own right. A CC has no share capital and no shareholders. • The owners are the members of the CC and their initial interest in dollars(which often reflect their ownership percentages) are called membership contributions. For income tax purposes a CC is regarded to be a company. • Note that following the new Companies Act that came into force on 1 April 2011, no new CCs can be incorporated. All existing, registered CCs will continue to exist. Current CCs can choose to either convert to a company or continue to exist until deregistration or dissolution. • Franchise:The franchisee buys the rights from the franchisor to open a "branch" of the business in a certain area. He agrees to operate it under certain rules and to maintain the franchisor's standards and way of doing business. The franchisee usually pays a regular fee to the franchisor for the right to trade under the franchise name.The franchisor, on the other hand, promises the franchisee that the business he is buying is tried and tested and has proven to be successful. The franchisor agrees to train the franchisee to run the branch, and supports him. Often the franchisor agrees to do collective advertising and bulk buying of stock for all the franchisees in the group. Sources: http://www.standardbank.co.za/portal/site/standardbank/menuitem.de435aa54d374eb6fcb695665c9006a0/?vgnextoid=4cbd08f82045b210VgnVCM100000c509600aRCRD

43. Legal ProcedureRegister a Business • How To Make Your Business Legal: • Choose name and get it approved • Make sure that you are legally permitted to use the name and that it is not being used by an existing business. • Choose a form of business ownership: • thesoleproprietorship • thepartnership • thecorporation • andthecooperative • Research federalandprovinciallicensing, localsafetyandhealthregulations, environmentalprotectionrules, liability, employeedeductionsandlabourstandards. • Register your business - Provincial and Territorial business registration • Thebasicproceduretoregister a businessnamefor a soleproprietorshiporpartnershipistoconduct a businessnamesearch, fillouttheappropriatebusinessregistrationform, andpayyourfee. TheBusinessRegistrationsectionofthiswebsitehaslinkstoallthedifferentprovincialregistriestospeedupthisprocessforyou.Youfile a DeclarationofRegistrationform (alongwiththeapplicablefee) atanofficeoftheRegistrairedesentreprises (REQ) inMontréalorQuébecCity. • Getting PermitsandLicense • Youmayalsorequirespecificpermitsandlicencesfromthefederal, provincialormunicipalgovernments, dependingonyourlocation, industrysector, andspecificactivitiesthatyouplantoconduct. Useourpermitsandlicencessearchtofindoutwhichpermitsandlicencesmightapplytoyourbusiness. Sources: http://sbinfocanada.about.com/od/formsofbusinessownership/a/formbusinesshub.htm http://sbinfocanada.about.com/od/bizregistration/a/businessreghub.htm http://www.youth.gc.ca/eng/topics/jobs/business.shtml http://sbinfocanada.about.com/od/bizregistration/a/regquebec.htm http://sbinfocanada.about.com/od/formsofbusinessownership/g/NUANS-Business-Name-Searches.htm

44. Legal ProcedureRegister a Business • How To Make Your Business Legal: • Québec • CooperativesAct (In FrenchOnly) • LearnabouttheCooperativesActandregulationsthatgovernnon-financialcooperatives. • Creating a non-profitcorporationororganization • Learnthemajorstepsforestablishing a non-profitcorporationororganizationinQuebec. • Enterpriseregistrar • Ifyouhave a businessoperatinginQuebec, youmustregisterwiththeenterpriseregisteranddeclareyourorganization'slegalform. • NEQ — QuebecEnterpriseNumber • SimplifyandspeedupyourdealingswiththevariousQuebecgovernmentdepartmentsandorganizationsbyregisteringwiththeRegistrairedesentreprises [Quebecenterpriseregistrar]. ThisisyouQuebecEnterpriseNumber. • Registrationof a charitableorganization • Findalltheinformationyouneedtoregister a charityinQuebec. • RevenuQuébec – BusinessPortal • IsyourcompanybasedinQuebec? Thisbusinessportalprovidesinformationonincometax, consumptiontaxes, andmore, tohelpyoumeetyourfiscalobligations. • Settingup a cooperative (In FrenchOnly) • Doyouwanttocreateorstart a cooperative? Ifso, thissiteprovidesusefulinformationaboutstarting a cooperative. Sources: http://canadabusiness.ca/eng/page/2730/

45. GLOSSARY