Do you think pursuing government contracts is beyond your small business’s reach? The federal government isn’t the only contracting opportunity out there. Contracting with local government agencies can be a lucrative way for small businesses to get into the contracting game.

How can entrepreneurs find out what types of products and services their local government agencies need?
You can contact the agencies directly, says SBDC Business Advisor Donald Stukes, but you can also perform market research to find out how much money the government spends on your product or service. This is an important step, because if the government doesn’t buy your product or service at a price point that allows you to make a profit, you shouldn’t pursue government contracting. “SBDCs are a great source of information regarding conducting market research,” says Stukes.

What factors should a small business owner consider in assessing whether they are ready to handle local government contracts?
Stukes advises asking yourself the following:

• How much time do I have to work on my business instead of in it?
• What resources do I have available to use for government contracting?
• Is my firm “scalable”?
• Do I have a solid marketing/business development plan?
• Do I have a solid business plan?
• Can I effectively execute my plans?
• Can I take advantage of teaming with other firms?
• Do I have at least three years of above-average and documented past performance?

Pursuing government contracts without assessing these factors is the biggest mistake most small businesses make, says Stukes.

How does the bidding process work?
When a government agency decides to contract out for a product or service, it will issue a Request For Proposal (RFP). Potential contractors review the RFP to see if they meet its requirements and if it fits with their business model. If you decide to respond to the RFP, you need to follow the instructions exactly. Keep in mind, Stukes says, that successful government contractors start the contracting process long before the bid.

How do you meet decision-makers in local government agencies?
“The more difficult part is determining who the decision-makers are,” says Stukes. “Many times the decision makers are a team that has a stake in the outcome of the contract award, and that team can change with each RFP [Request For Proposal] or process in the RFP.” For example, there might be one team that reviews RFPs and interviews potential contractors, but once they make their recommendations, another team will have to review those choices and make the final decision. “Once you identify who buys your products and services,” Stukes explains, “you can start to attend events that these agencies host for the purpose of meeting potential contractors.”

How does selling to a local government agency differ from a typical business-to-business sale?
“The typical business-to-business sale is based on your relationship with the buyer or decision-maker,” says Stukes. “Selling to local government agencies is based on dealing with multiple people and steps in the process.” Another key difference is the time frame. For example, Stukes says the average sales cycle to sell to Southern California Edison is four years.

In general, what criteria do local government agencies use when choosing vendors?
“The criteria vary with each RFP,” says Stukes. For commodity purchases, the decision is normally price-driven; for service purchases, the decision is normally driven by the best value.

Can small business certifications or the location of your business give you an edge over the competition?
“It depends,” says Stukes. “For example, if your office is located in the City of Los Angeles, most Los Angeles agencies will provide an incentive or advantage to L.A.-based small businesses.” Getting small business certifications may be helpful, too. “Certifications cover the federal government, state government and specific industries such as utilities,” says Stukes, who recommends contacting your local SBDC office for more information.

If you bid on a contract and don’t get it, what can you do to improve your chances the next time?
“Always request a debriefing whenever you don’t win a contract award,” advises Stukes. “Be respectful and absorb like a sponge.” The average business wins only one out of seven contracts, Stukes points out. Treat contracting like a marathon, not a sprint, and you’re far more likely to win the race.

Rieva Lesonsky is founder and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Before launching her business, she was Editorial Director of Entrepreneur Magazine. Follow Rieva at Twitter.com/Rieva, read her blog at SmallBizDaily.com, and visit her website SmallBizTrendCast.com to get the scoop on business trends and sign up for free TrendCast reports.

Check it out today at: www.healthlawguideforbusiness.org

For more information or to read the entire release visit: http://californiasbdc.org/Press

Health Law Guide for Business press release pdf

From creating and revising proposals to completing a request for proposal (RFP), wooing a business prospect can be costly and time-consuming. How can you streamline the process while increasing your chances of success? I asked SBDC Business Advisors Monica Rayes and Trevor Shickman for insights.

When a prospect asks you to complete an RFP or create a proposal, what factors should you consider in deciding whether to pursue the job?
Sometimes, these requests are purely formalities, because the prospect already has a vendor in mind. Before you respond to such a request, Shickman says, “understand your relationship with the prospect, their current working partners and the prospect’s history.” Does the company currently have a vendor filling this need? If so, how can you compete? If you don’t have a current relationship with this company, have they ever purchased from a business like yours in the past? Answering these questions can help determine whether your proposal has a fair chance of being considered.

If you think you stand a chance, how can you craft a winning proposal?
Reviewing an RFP will require you to examine not only the project’s feasibility, but also your business’s overall health, Rayes notes. Be sure you understand the project’s run time and the elements essential to meeting its objectives. If you uncover limits to your resources, showcase your company’s proactive management capabilities. “Hiring out specific skills and evaluating costs will demonstrate that your company is capable of taking on the project,” Rayes says. And remember, your written proposal isn’t the only factor in the decision. “Find those internal personal connections,” advises Shickman, “and leverage relationships to further offer a competitive advantage.”

It’s easy to spend a lot of time creating proposals that never lead anywhere. How can you decide how much time should be spent on a particular proposal?
Once you decide your proposal has a fair chance of being evaluated, the time spent should be based on its overall potential, says Shickman. However, “potential” means more than just money. For example, Shickman’s company recently completed a project that didn’t produce enough revenue to justify the time invested, but was necessary to break into a new business category.

Landing a big client can take a year or more. What steps should business owners take to stay top of mind with these prospects without becoming a pest?
Persistence and visibility are the keys, says Rayes, and providing value-added resources keeps you top of mind. “During the decision-making process, it works to your benefit to demonstrate availability, offer your expertise and become a reliable adjunct member of your potential working team,” she explains.

What common mistakes do business owners make in pursuing long-term accounts?
The biggest error is not doing enough. “You never want to be seen as having even the remote potential of neglecting the project at hand,” warns Shickman. “Coordinate ways to be consistent and stay in the loop with your [prospect].”

If you have been pursuing a prospect for a long time with no results, is there a point at which you should move on?
Most government agencies or large corporations make major purchases on a schedule. Often, this business cycle is well underway by the time you learn about a possible client. Once you have been through the full cycle twice without success, Shickman says, move that prospect to the back burner—but don’t give up altogether: “Keeping relationships alive often results in opportunities with different projects, or as individuals move to different organizations.”

If the contact you’ve been nurturing at a prospective client company leaves, what should you do?
“Try to have the outgoing contact facilitate the introduction with the new client,” Rayes advises. If this isn’t an option, “approach the new contact with as much information as possible and attempt to be a resource for their new position.”

You’ve finally landed that elusive client, but servicing them is requiring more time, money and effort than you expected. What should you do?
Use diplomacy to find the best solution for all parties, advises Rayes, whose company recently encountered this situation. “We presented it as a cost-saving measure, and spent the additional resources necessary to teach the client how to handle this part of their business through their own website,” she explains. “While this created more short-term work for us, it allowed us to maintain the relationship for more profitable projects in the future.”

Rieva Lesonsky is founder and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Before launching her business, she was Editorial Director of Entrepreneur Magazine. Follow Rieva at Twitter.com/Rieva, read her blog at SmallBizDaily.com, and visit her website SmallBizTrendCast.com to get the scoop on business trends and sign up for free TrendCast reports.

February 3, 2012

The Veterans Business Outreach Center (VBOC) and Small Business Development Centers (SBDC) partner to present the Veteran Small Business Expo.

The One-Day Program is designed to Provide Education, Inspiration and Support to the Veteran Owned Small Businesses.

Los Angeles, CA – The Veteran Business Outreach Center (VBOC), ELITE Service Disabled Veteran Owned Business (SDVOB) and U.S. Small Business Administration (SBA) in partnership with the Los Angeles Regional Small Business Development Centers (SBDC) Network will hold the first Veteran Small Business Expo event on Wednesday, February 8 on the Long Beach City College Campus. This special intensive one-day program will bring together veteran business owners for a day of training. The day’s agenda also includes workshops on government contracting, supplier diversity, lender roundtable and a keynote presentation by Larry Broughton, Former U.S. Army Green Beret and CEO of Broughton Hospitality.

“We are honored to host the Veteran’s Small Business Expo at Long Beach City College,” said LBCC President Eloy Ortiz Oakley. “As a Veteran myself, I understand the challenges that our soldiers face when they return to the workforce.  We need to ensure that our brave men and women have jobs and are supported.”

“Victor Parker, Director of the SBA’s Los Angeles District Office, also expressed some encouraging words for the Veterans who would be attending. “With so many men and women transitioning from uniform back into civilian life, it is important that the SBA and our Resource Partners let them know that entrepreneurship is a viable and exciting option to consider after the military. The ‘Veteran Small Business Expo’ serves to do just that,” Mr. Parker stated.

Event details:
Date:           Wednesday, February 8, 2012
Location:     Long Beach City College- Building T-1200,  4901 Carson St., Long Beach, California 90808
Time:          9:00am – 2:00pm
Cost:           $10.00 for attendees (includes lunch and refreshments)

Pre-Registration is required. Please register online at www.vboc-ca.org.

This event is also made possible by Southern California Edison, California Public Utility Commission, Metropolitan Water District, ELITE Service Disabled Veteran Owned Business (SDVOB) and U.S. Small Business Administration. We also count on the generous support of Primary Residential Mortgage Inc.

1. Understand their expectations. Know what Millennial employees hope to gain from working for you. Chances are, Millennials will make that clear during the job interview—but if they don’t, ask them.

2. Challenge them. Millennials want to make a difference in their jobs from the get-go. Encourage that enthusiasm by assigning them challenging projects from the start, and adding more responsibility as they learn.

3. Define tasks and goals. It may seem contradictory, but while Millennials enjoy independence, they also grew up with “helicopter parents,” teachers and coaches micromanaging their lives. Be crystal clear when assigning tasks. Set incremental deadlines and check in regularly to review progress.

4. Provide ongoing feedback. An annual performance review isn’t enough for Millennials, who want to hear how they’re doing—both good and bad—on an ongoing basis. This may be a more hands-on approach than you’re used to with older employees, but it’s essential for Millennials to thrive.

5. Offer flexibility. Millennials expect work-life balance, and view working remotely and flexible hours as essentials, not extras. Bonus: Offering these options not only attracts and retains Millennials, but pleases older employees, too.

6. Provide continuing education. Millennials want to improve at their jobs. Sign them up for webinars or seminars in their areas of interest; send them to conferences and events to learn from more experienced peers; or simply provide on-the-job training and education.

7. Match them with a mentor. Millennials welcome mentorships, and pairing a Millennial employee with an older, more experienced worker benefits both of them. It also cements bonds, which can help eliminate generational misunderstandings at work.

8. Tailor benefits and rewards to their interests. Millennials may be less interested in benefits like dental insurance and more interested in perks like continuing education. In a 2011 PriceWaterhouse Coopers survey, the majority of Millennials said they would like to customize their benefits.

9. Let them BYOD. (That means “bring your own device.”) Tech-savvy Millennials often prefer to use their own laptops, cellphones or tablets for work instead of a company-issued device. This can save you money; just make sure devices are secure and sensitive information isn’t compromised.

10. Use their social skills. In the 2011 Cisco Connected World Technology Report, 56 percent of Millennials said they wouldn’t work for a company that banned social media in the workplace—or they’d sneak around the policy. Instead of shutting down Facebook or Twitter on the job, enlist Millennials’ social media expertise to enhance your company’s online presence.

Rieva Lesonsky is founder and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Before launching her business, she was Editorial Director of Entrepreneur Magazine. Follow Rieva at Twitter.com/Rieva, read her blog at SmallBizDaily.com, and visit her website SmallBizTrendCast to get the scoop on business trends and sign up for free TrendCast reports.

Trupart Manufacturing Inc. – Ventura, CA

Before:
Growing a business during a recession is an accomplishment to be proud of. But sometimes rapid growth brings challenges. Trupart MFG, Inc., which makes parts for other companies’ equipment, had used green manufacturing techniques including waste reduction, reuse and recycling so successfully that in 2010, its sales doubled. “With the increase in work flow, we needed to look at every part of the operation and plan for the future,” says Trupart’s Business Manager, Ingrid Boehm. In early 2011, Boehm visited the SBDC for help.

Best Advise:
SBDC Business Advisor Mary Anne Rooney assisted Trupart with everything from payroll and HR to strategic planning, marketing, operations and changing the company’s business structure. She also introduced Trupart to the Ventura County Recycling Market Development Zone (RMDZ), which provided a loan for new equipment.

Lessons Learned:

• Federal, state and local governments have financial resources for businesses. “Mary Anne asked us what equipment we needed to continue our growth,” recalls Boehm, “and RMDZ coordinator David Goldstein came by to meet with us the same day. We were blown away!” The RMDZ program provided a $290,000 loan at 4 percent interest, enabling Trupart to buy a laser-cutting device.
• Go lean. Trupart is working with SBDC Business Advisor Dean Dela Cruz to implement lean principles in its manufacturing process and business operations. The changes should make the company even more efficient.
• Marketing matters. “Mary Anne helped us create a flyer to let customers know about all the services Trupart provides,” says Boehm. “She helped make the flyer I was working on much more polished and professional—now, it really explains what we do.”
• Help is out there. “Just knowing that tools are out there to help Trupart grow has been the best part of working with the SBDC,” Boehm says. “Mary Anne has put us in touch with so many people who have helped our business grow.”

After:
The new laser-cutting machine will increase efficiency, lowering production costs and prices. Already, Trupart has been able to undercut some overseas manufacturers on pricing and bring back customers who had left for cheaper prices. “[We’re] onshoring—keeping jobs and parts from going overseas,” says company owner and president Shane Prukop, who expects to hire as many as four new employees in the coming year.

As Trupart keeps growing, the company will continue to rely on the SBDC. “[Having an SBDC] Business Advisor is like having a board of directors looking out for our best interests,” says Boehm. “Any time I get stuck or have a question, the first person I contact is Mary Anne.”

“Mary Anne has brought so many tools to our facility that I never thought were out there,” says Prukop. “The SBDC is just amazing, and I am looking forward to many years of them helping us out as we grow.”

With funding for SDBCs on the chopping block at both the state and federal level, the SBA has documented the SBDCs’ impact in a new report. It appears entrepreneurs definitely visit the SBDCs — more than 500,000 of them in 2010, the study found – and the business owners report the resources there helped their businesses thrive.

One of the biggest advantages users of SBDCs gained was knowledge of how to get a business loan. There’s also good crossover with business education, as many of the centers are hosted on college campuses.

But the whole system is under threat, in part because of cuts in education at the state level. Supporters worry that no other organization will arise if the SBDC network goes away that would share the SBA’s commitment to minority and women business owners and distressed inner-city neighborhoods where new business creation is desperately needed.

Link to full Entrepreneur article

What are the key elements of the loan application package?
The application package consists of financial information related to the business’s and owner’s earnings, expenses, assets and liabilities, and current credit situation, says Vega. These include tax returns and personal financial statements. “Always include a copy of your credit report so the prospective lender does not need to run a credit check when [the application] is first presented to them,” he adds.

What are the first steps an entrepreneur should take in preparing a loan application?
“Have a clear idea of how much money is needed, how it is going to be used, and how it is going to be repaid,” says Vega. (The third factor—repayment—is crucial.)

What are the most important criteria the banks consider in making a loan?
“Repayment ability from current earnings and income is paramount,” says Vega, who adds that “the existence of collateral is a plus” but not essential if the business owner can otherwise show the means to pay back the loan.

What differences should small business owners be aware of when approaching a big bank vs. a smaller or community bank?
“Large lenders have more standardized loan processes and develop products that are delivered to clients relatively fast,” explains Vega, who says loan applications for small dollar amounts (under $100,000) are better served through large banks. “Community lenders are more relationship-oriented and tend to customize the loan process to the applicant, but they [are less likely to] work with small dollar loans.”

In addition to the loan application documents, there is also a personal interview with a banker. How does this affect the entrepreneur’s chances of success, and how can entrepreneurs make a good impression?
While the interview is important, a good interview is not enough to overcome weaknesses in your financials or compensate for a poor loan application package. “The lender is only interested in the ability of the applicant, both the business and its owner or owners, to repay the loan,” emphasizes Vega. To make a good impression, he advises, stick to short and simple answers.

What are the biggest mistakes entrepreneurs make when applying for a loan?
Developing an overly complex loan application package that includes too many variables to control is a common error, says Vega. “The higher the complexity, the higher the risk”—and bankers don’t like risk.

What software or other tools can help a small business owner create an effective loan application package?
Vega recommends using Excel to prepare a simple and comprehensive budget and Business Plan Pro from Palo Alto Software to create a professional-looking business plan.

If an entrepreneur’s loan application is rejected, what can he or she do? How can an entrepreneur learn from rejection?
Understand that rejection doesn’t necessarily reflect badly on your business—and don’t let it derail your efforts to find financing. “The rejection may be [due to] the inability of the lender to provide the credit, not because the application is [weak],” Vega explains. There are more than 7,500 active small business lenders in the U.S., he says, and each one has its own criteria as to what constitutes a strong credit application. “Try to obtain a reason for the rejection,” says Vega, “[but then] move on to the next lender.”

BEFORE:

Crystal and her sister Kassandra Workman had no business experience when they got the idea for their mobile cupcake business, Sugar Babies Cupcakery. But the sweet treats Workman loved to bake were such a hit with friends and family, the sisters knew customers would love them, too. In a nod to the health-conscious Southern California market, they decided to focus on miniature cupcakes. In March 2010, seeking help getting a loan to open a bakery, the sisters visited the Small Business Development Center hosted by Santa Monica College.

BEST ADVICE:

Classes in QuickBooks, business plan writing, and applying for business loans as well as one-on-one counseling with Business Advisor Ron Sardisco taught the sisters how to manage their finances, develop a business plan and submit loan applications to banks.

LESSONS LEARNED:

• Find your focus.“We went in with a rough idea and just pieces of a business plan,” Crystal recalls. “Ron coached us, gave us feedback and helped us focus in on what we wanted the company to look like.”

• Go step by step.“ I didn’t know the steps [to startup],” says Crystal. “Now that we have a business plan, do we get our permits? Do we try to get loans? What’s next?The SBDC pointed us in the right direction.”

• Have a backup plan.When their loan applications were rejected, the sisters didn’t give up. Having gained new confidence in their business abilities by working with the SBDC, they modified their concept to a mobile cupcake truck,and bootstrapped startup with $30,000 of their own funds.

• Manage your money.“I still refer to my notes from the QuickBooks class I took,”says Crystal, who handles Sugar Babies’ bookkeeping. “I learned that keeping accurate records is vital because it allows you to determine your cost factors and profitability at any given time, [so] you can direct the expansion or contraction of your business.”

AFTER:

Since Sugar Babies hit the road in October 2010, the company has been featured in the Los Angeles Times, People online and L.A. Magazine. The business has been so profitable that in July 2011, the sisters realized their original dream by opening a storefront location. They’re using social media, Groupon and Yelp!, and advertising in local newspapers to generate attention for the store. Long-term plans include opening a second storefront and expanding their product line.

“The [SBDC] was a great help to us and to our business,” says Crystal, who plans to return to the SBDC as Sugar Babies grows. “They expose you to many options that will help bring your business to life.”

Is your small business seeking financing for startup or expansion in the New Year? If so, it’s important to know that bank loans aren’t your only option. In fact, with bank loans still very difficult for many businesses to get, I talked to SBDC Business Advisor Ellis Gordon, Jr. to get his insights on alternative financing methods.

What are some situations where small business owners might seek alternative financing instead of a commercial bank loan or an SBA guaranteed loan?
Traditionally, Gordon explains, entrepreneurs seek alternative financing when their companies are in the startup or nascent stage of development with no operating history. “However, one of the enduring effects of the ongoing financial crisis is that credit remains scarce for small businesses due to traditional banks’ strict lending guidelines and aversion to risk,” he says. As a result, he is seeing more businesses in all stages seeking alternative financing because it provides greater flexibility.

What types of financing do Community Development Financial Institutions or other community-based lenders, such as microlenders, provide?
In California, these lenders provide microloans, specialty financing such as RUST (Removing/Replacing Underground Storage Tanks) loans, EDA (Economic Development Administration) loans and California state guaranteed loans. “The types of businesses financed are quite diverse,” says Gordon, “and these lenders offer more flexibility and sensitivity to the borrower’s needs.” Since community financing options differ depending on your industry, your needs and where your business is located, Gordon suggests starting your search for this type of financing by talking to an SBDC Business Advisor.

What are some advantages and disadvantages of obtaining a loan from a credit union compared to a bank?
“Typically, it’s easier to obtain a loan from a credit union,” says Gordon, who notes that since credit unions are member owned, they offer competitive rates and flexible terms.

What should a small business look for in seeking a factoring company?
When considering factoring, in which a factor buys your accounts receivable for a percentage of what they’re worth, then collects on the accounts, Gordon says it’s crucial to look for competitive rates and flexible terms. On the plus side, he says, factoring provides instant cash flow and decisions are based on the creditworthiness of your customers, which can make this type of financing easier to get than traditional loans. On the downside, he notes, this type of financing is relatively high-cost.

What types of companies or situations is purchase order financing best for?
Purchase order (PO) finance companies extend short-term financing to allow businesses to pay suppliers when they have an order in hand. “PO financing works best for small businesses that are in the early stage of development, have not yet achieved profitability and need instant cash flow,” says Gordon. Since PO financing can be costly, he urges seeking competitive rates and flexibility.

What are the risks and benefits of a merchant cash advance?
“A merchant cash advance is the purchase of a portion of a business’s future credit card sales at a discount,” Gordon explains. The benefits include having no collateral at stake, an easy application and collection process, quick access to cash, a high approval rate and revenue-based collections.” Risks include high costs; there are also some unscrupulous providers out there, Gordon warns, so an SBDC Business Advisor can be helpful in making the right choice.

Is it ever a good idea to use credit cards to start or grow a business?
“Credit card financing can be quite expensive and should only be used if there are no other financing alternatives,” says Gordon. “Also make sure that the company is generating sufficient cash flow to service any credit card financing.”

With any method of financing, what should an entrepreneur consider when deciding if the financing is worth the cost to them?
Weigh your business’s ability to service the financing acquired, as well as the benefits you’ll get from the financing, Gordon advises. “If the financing allows the entrepreneur to increase revenues and the enterprise’s bottom line, then it is a good match.”

Rieva Lesonsky is founder and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Before launching her business, she was Editorial Director of Entrepreneur Magazine. Follow Rieva at Twitter.com/Rieva, read her blog at SmallBizDaily.com, and visit her website SmallBizTrendCast.com to get the scoop on business trends and sign up for free TrendCast reports.