Special Sources

SBA Online Opportunities

ACE-Net
http://ace-net.sr.unh.edu
The Angel Capital Electronic Network fosters small business development by attracting 250,000 "angels" nationwide to invest in small, growing companies. Through the Internet, this private, independent, nonprofit organization informs angel investors about small business securities offerings, enabling them to search through an electronic Entrepreneur Database by specific industry, geographic area, capital needs, or minority status. SEC-accredited investors wishing to participate need to subscribe for a password at the nearest ACE-Net Operator and complete a brief, confidential application. To be listed on ACE-Net, small companies must complete Small Corporate Offering Registration and meet federal and state securities requirements.

SBA Web Site
http://www.sba.gov
This essential resource addresses pressing issues, offers FAQ’s for start-up companies, discusses available SBA loans, runs a women’s business network and lists numerous tools valuable to entrepreneurial success. Online workbooks walk entrepreneurs through understanding, preparing and implementing a business plan, marketing plan, financing plan and franchising package. The site also lists helpful walk-in, call-in and online training and counseling services such as the Service Corps of Retired Executives (SCORE), local SBA offices, Small Business Development Centers and Business Information Centers, as well as resources and a calendar of events. Additional services include access to SBA-contracted research studies, a comprehensive business card database and a nationwide listing of property for sale.

PRO-Net
http://pro-net.sba.gov
The Procurement Marketing and Access Network unites contractors with small, disadvantaged, 8(a) and women-owned businesses via the Internet. Federal and state government agencies, contractors and subcontractors can search its database of 171,000 small companies by SIC codes, key words, location, quality certifications, business type, ownership race and gender, and EDI capability. Its business profiles display user-friendly executive summaries that discuss products and services, history, references and other marketing information.

SBA Welfare to Work
http://www.sba.gov/welfare
This site provides information on how small business owners can benefit from the Welfare to Work Initiative. The SBA’s goal is to connect employers with local welfare-to-work efforts and job-ready workers. Lists information on tax credit incentives for businesses as well as general resources such as statistics, fact sheets, and a video on the SBA’s role. Also contains a helpful list of welfare to work-related links.

Online Women’s Business Center
http://www.onlinewbc.org
The U.S. Small Business Administration recently opened the Online Women’s Business Center, an interactive Web site for beginning and established female business owners. The North Texas Business Development Center developed the site with cooperation from the SBA’s 60-plus Women’s Business Centers nationwide and with generous support from its corporate sponsors: IBM, JC Penny, NationsBank, GTE and Avon. The Web site includes:
• Business principles and practices
• Management techniques
• Interactive mentoring
• Individual counseling and other services

Office of International Trade
http://www.sba.gov/OIT/
SBA’s Office of International Trade is prepared to help small business owners negotiate the nuances of the global market. This site provides information for companies interested in entering the export market, businesses looking for finance, or parties interested in lending. OIT also includes a list of Internet links and trade information valuable even to seasoned small business exporters. An international event calendar is also available.

NSBU

National Small Business United
Founded in 1937, NSBU is a 32-member board of trustees made up of volunteer small business owners. Its mission is to inform entrepreneurs about relevant legislative and regulatory issues as well as empower the small business community to take action. More than 65,000 small business owners including carpenters, consultants, manufacturers, retailers, grocers and designers are members.

Services include:
• NSBU Net, a weekly fax or e-mail that updates members about the most current and pressing Congressional action on key small business issues and where they can go to take action.
• Small Business USA Magazine, a how-to resource about major business issues.
• Combined purchasing power that offers reduced rates on insurance, telecommunications, foreign currency exchange and Airborne Express delivery services.

To learn more, call (202) 293-8830; fax (202) 872-8543; e-mail nsbu@nsbu.org; visit http://www.nsbu.org; or write 1156 15th Street NW, Suite 1100, Washington, D.C. 20005.

Happy 35th Anniversary SCORE!

Weary of information overload? Just wait–technology and communications continue to advance rapidly. Without the right insight, how do entrepreneurs not only survive, but beat increasing competition? For the last 35 years, smart small business owners have turned to SCORE to equip themselves with useful resources and free, confidential, reliable counseling, enabling them to compete in today’s ever-changing marketplace.

SCORE resulted from the efforts of a retired consultant, Walter Channing, who noticed small companies beginning to grow without access to helpful information. Channing teamed up with a valuable resource, the SBA, and after early meetings as well as an act of Congress, founded SCORE to share real world wisdom with small, developing firms.

Since then, SCORE has continued to adapt to changing times. Forty-nine percent of its counseling and workshop training participants are female–resulting in an outreach program that focuses on increasing the number of women joining SCORE as counselors.

Many SCORE services are now available through emerging media:

E-mailed your business counselor today?

Now SCORE makes it even easier to tap the knowledge and expertise of its experienced counselors by offering free access via electronic mail 24 hours a day. At www.score.org, a key word search allows Web users to match their questions and needs to specialized experts. These advisers address not

only special concerns, but also offer general advice on how to craft business plans, manage cash flow, determine a product’s market potential, and assess capital needs. All interactions remain completely confidential. Already this tool enjoys great popularity. For instance, entrepreneur Dan Adamovich found e-mailing his counselor, Erv Simon, so valuable that he traveled from St. Louis, Missouri to Colorado Springs, Colorado, just to meet and thank Simon. With Simon’s advice, Adamovich opened a Computer Renaissance franchise in Flagstaff, Arizona, generating revenues that are triple the national average.

Teleconferenced via satellite lately?

This latest, hi-tech service from SCORE brings together entrepreneurs, experts, industry leaders and the media to discuss pressing business issues and successful strategies. Most importantly, this timely service remains free and accessible, thanks primarily to IBM and Edward Jones. To access the conference at no charge, Edward Jones even offers participants more than 4,000 downlink facilities. Led by this coalition, the first national satellite teleconference, held on June 1,1998, was a resounding success. Hosted by Jane Applegate, author of 201 Great Ideas for Your Small Business, the Inspired to Win Conference reached 10,000 people. Additional 1998 conferences included Wired to Win and Funded to Win–which explored leading technology and business capital issues. SCORE will participate in three conferences in 1999, and expects to attract even larger crowds. To participate, contact (800) 441-1384 or the local Edward Jones representative.

Met all your capital needs yet?

SCORE and Visa U.S.A. are arming entrepreneurs with a series of free financial management workbooks. The first workbook, How to Secure Financing, assists small business owners in identifying cost requirements and securing the best loans. How to Choose the Best Bank for Your Business, the follow-up workbook, helps entrepreneurs communicate effectively with banks, refine bank presentations, and obtain expert advice. One of SCORE’s most recent workbooks, How to Really Start Your Own Business, takes business owners and potential business owners step by step through the mechanics of starting a small business–including developing a business plan, obtaining credit and financing, marketing and using technology.

Overcoming the challenges of increasing competition and scarce capital requires access to the most valuable resources. SCORE can help. Ken Yancey, SCORE Executive Director, advises, "Small businesses need to build a network of advisors consisting of friends, family and SCORE to avoid information overload. Pick and choose sources of expertise and advice, a ready group of people on whom to call when charting your course to entrepreneurial success."

Founded: In 1964, U.S. Small Business Administrator Eugene P. Foley officially launched SCORE as a national volunteer group with 2,000 members, uniting what had been more than 50 independent efforts into a national force. SCORE was formed to aid, counsel, assist and protect the interests of small businesses. In 35 years, SCORE has grown to 12,400 volunteer members, assisting nearly 300,000 entrepreneurs annually through no-cost counseling and low-cost training workshops.

Role: A nonprofit association and resource partner of the U.S. Small Business Administration, comprising 389 chapters throughout the U.S. and Puerto Rico.

Mission: Dedicated to entrepreneurial education and the formation, growth and success of small business nationwide.

Notable Points: Possesses a breadth and depth of business experience far beyond any consulting firm. SCORE’s 12,400 volunteer counselors are retired and actively employed small business owners, executives and business professionals from such companies as Proctor & Gamble, General Electric, General Motors, IBM and Citibank.

• Assists nearly 300,000 annually.
• Has served more than 3.5 million clients since 1964.
• Counsels nearly 30,000 annually via the Web at http://www.score.org.

How to Reach SCORE:

Call (800) 634-0245; write 409 3rd Street SW, 6th Floor, Washington, DC 20024; or visit http://www.score.org.

Finding the Right Trade Association

Trade associations have much to offer, especially to small businesses. As thousands exist in the U.S. alone, the challenge becomes one of finding the best one for your company. The following five-step process will help:

Step One: Self-Evaluate

"First define and list what you want to gain by joining an association," suggests Ken Yancey, Executive Director of the Service Corps of Retired Executives (SCORE). Doing this will help you decide whether your needs would be better met by a local or national group. As Gene Fairbrother, small business consultant for the National Association for the Self-Employed, points out, "local associations offer more opportunities to expand your network with other businesses in your industry. National associations, on the other hand, will have access to information specific to your industry, provide you with more buying power in groups, and voice your interests to national policymakers."

Step Two: Identify

The next step is to conduct research to identify a few associations that match your interests most closely. Helpful resources at this stage include the Internet and two annual publications, The Encyclopedia of Associations and National Trade and Professional Associations of the U.S.

Step Three: Contact the Association

After you have narrowed down your choices to several associations, contact them to determine whether they meet the objectives you defined in step one. Ask questions such as: "If I were a member of your organization, I would hope to gain specific things after a year of membership…How can your association meet these needs?" If the association does not have a quick and sufficient response to this question, remove it from your list.

Step Four: Call Association Members

Although you can get a good idea of what a certain association offers after a phone call, additional perspective may be helpful. Contact individual members of the association to learn first-hand how membership has benefitted them. It’s also a good idea to attend an association’s local chapter meeting.

Step Five: Final Evaluation

Double check to see whether your objectives defined in step one were met. If you are not satisfied, try repeating steps two through four to find other potential associations that will better address your concerns.

Although finding the right association is not easy, the long-term benefits of this effort can make the time and energy you spend a valuable long-term investment. p

Evaluating an Association

When evaluating an association, consider whether the association provides:
• Information on the latest trends and news on your specific industry?
• Training and educational programs?
• Certification programs of value to your business?
• A diverse network of contacts for your industry?
• Relevant resources for your business?
• Access to policymakers whose decisions affect your industry?

Preparing for and Coping with Disasters

Could a Disaster Actually Happen to Me?

Imagine you are the owner of a very successful oceanfront restaurant. People come from far away to experience its delicious food and stunning view…until the floods and mudslides strike. Severe winter storms bombard the coast, severely damaging your premises and hindering customer access. While this might sound extreme, it was painfully real for John Barbour, owner of Moss Beach Distillery, a restaurant 25 miles south of San Francisco.

In January 1995, storms inflicted serious damage upon the San Mateo community. "Living in California you expect earthquakes, but nothing like this," recalls Barbour. The flooding and landslides not only destroyed the building’s foundation, but decimated his customer base by 30 percent. Barbour used his $1.5 million disaster loan from the U.S. Small Business Administration to repair the property and prepare for the future. He installed a new drainage system, redesigned and paved the parking lot to drain water more easily, and erected a retaining wall to halt beach erosion.

Barbour's hard work not only helped him reopen in February 1997, rehiring 75 employees, but he now has much less to fear should the same situation occur again. "Recognize that disaster is not a possibility. It is a probability," says Barbour. Is your small business prepared for this "probability"?

The Emergency Action Plan (EMP)

The best way to deal with the inevitable onslaught of natural disasters (i.e., flooding, firestorms, earthquakes and explosions) is to be ready for them before they occur in the first place. The following basic steps will help you develop an Emergency Action Plan (EMP) tailored to your company’s needs.

Assess Dangers

Identify the disasters that tend to threaten your business based on its location. Determine resource deficits that might hinder recovery and review insurance to ensure it includes property loss and liability.

Manage Risks

Draw out evacuation routes, display emergency numbers and stage periodic drills to prepare personnel for potential disasters. Secure shelves and equipment in case of an earthquake, and clear gutters in case of a flood. Be sure to duplicate important files and store them off site in a safety deposit box. Barbour recommends saving funds so as to be able to ride out a disaster should it occur. "Save your money. Don’t overexpand because you need to be physically and financially prepared."

Establish Emergency Operations

Rebound faster from a disaster by setting up temporary operations at a safe location, equipped with phones and fax machines. Communicate with employees, customers, vendors and bankers and coordinate with alternative suppliers.

Project Impact

Project Impact is a program initiated by the Federal Emergency Management Agency (FEMA) to help communities develop a more proactive approach to disasters. FEMA is an independent federal agency of 2,600 full-time and 4,000 standby employees that manages emergency recovery in all 56 states and territories. FEMA provides a toll-free information helpline and coordinates efforts of federal, state and local agencies to help victims recover from the effects of disaster. The Project Impact effort coordinates all members of the community and helps them work together to prepare for, and in some cases prevent, the devastation of natural disasters.

The initiative is comprised of four phases: building community partnerships, assessing risks, prioritizing needs and building support and communication. The process is very similar to building an EMP on a community level. Project Impact encourages business owners to comply with codes such as building and fire, share information about their efforts with other companies, and support disaster resistance initiatives. The vision behind Project Impact is simple: communities that are prepared for disasters will be able to bounce back quickly and with less property damage. FEMA estimates that every dollar spent in prevention will save two dollars in repairs.

In December 1998, FEMA held the first-ever Project Impact Summit in Washington, D.C. to recognize communities and partners who have aided the program. During the Summit, 60 new communities were announced as participants, raising the average number of Project Impact communities to two per state.

For more information about Project Impact, contact FEMA at (202) 646-4600 or call the FEMA Helpline at (800) 525-0321. The phone number for publications is (800) 227-4731, while FEMA’s Web site can be accessed at http://www.fema.gov.

Key Disaster Resources

FEMA Disaster Recovery Centers: These counseling centers—staffed by representatives from federal, state, local and volunteer agencies—explain aid and loan programs available to victims. For more DRC information, call (800) 462-9029.

FEMA Global Emergency Management System: This online-searchable database lists resources to assist disaster victims, including small business, in preparing for and recovering from a disaster. For a copy of A Guide to Federal Aid in Disasters (publication number: DPA 19), call (800) 480-2520 or write FEMA Distribution Facility, P.O. Box 2012, Jessup, Maryland 20794.

Business and Industry Council for Emergency Planning and Preparedness (BICEPP): A forum to exchange information and enhance emergency preparedness as well as contingency planning within the business community. Educates, sponsors ongoing seminars and workshops, regularly publishes the BICEPP Bulletin, and provides networking opportunities to exchange the most effective emergency planning strategies. Call (213) 386-4524 or write to P.O. Box 712445, Los Angeles, CA 90071-2445.

Association of Record Management Administration: Publishes a series of three free handouts, featured in the Disaster Recovery Journal, which assist business owners in developing a disaster recovery plan. Provides useful tips on how to salvage water-damaged property, and offers a bibliography as well as a list of valuable resources that include organizations, reference books and Internet sites. To order, call (800) 422-2762.

Small Business Administration Disaster Assistance: Serves as the federal government’s disaster bank to provide low-interest, long-term loans. Works in partnership with FEMA. In fiscal year 1997, provided $5 million in loans to 11,500 small businesses; in 1998, provided $295 million to 5,800 small businesses. Once the President or the SBA Administrator declares an area a disaster, available services include:

Business Physical Disaster Loans: Loans up to $1.5 million help businesses of any size repair or replace damaged property, including inventory and supplies.

Economic Injury Disaster Loans (EIDL) Disaster Offices: Working capital loans available to small businesses financially impacted by a disaster.

Disaster Office: Sets up temporary assistance centers in disaster stricken regions. Provides free face-to-face counseling to issue, help complete, and accept loan applications.

For disaster-related publications, call (800) 488-5323. For more information or assistance, contact SBA Disaster Assistance Headquarters at (202) 205-6734 or check the web site at www.sba.gov.

The Importance of Financial Ratios

Successful companies often use financial ratios to monitor their current performance and help plan for the future. The following Q&A will help you do the same.

What are financial ratios?

Financial ratios are quantitative figures that indicate a company’s financial strength and operational success.

Who else uses financial ratios?

Banks and lending institutions compare a firm’s financial ratios to those of the industry at large to determine risk when making lending decisions.

How do I use financial ratios to determine how my company is doing now?

"Current" and "quick" ratios indicate whether your company has enough cash and operating assets to operate optimally. Should these figures get "out of line," you may not be able to pay your bills. Once the optimal ratio is found, it will be easy to project how much cash revenue you need to generate within the next few months to maximize profits. Efficiency ratios tell you how fast your goods and services are selling and how quickly customers are paying their bills.

How do I use financial ratios to plan for the future?

Compare your financial ratios to those of industry leaders to see which figures (e.g., cash flow, number of employees) you need to change in order to grow to a certain size. Financial ratios can also help you prepare for an acquisition or merger. Using financial ratios from a larger company helps determine how much capital will be needed in order to sustain operations for your company when it increases in size.

Where can I find the financial ratios of my peers and my industry?

Industry-specific financial ratios can be obtained from your accountant, industry associations, the Securities Exchange Commission or publications such as the Design Firm Management & Administration Report (call (212) 244-0360 to obtain a copy). Dun & Bradstreet and Robert Morris Associates (RMA) publish reports that compare financial statements of different U.S. public corporations and provide normative statements on the health of a business relative to its type, size and region.

Troy’s Partnership Almanac provides ratios for U.S. unincorporated partnerships in specific industries.

Take the Mystery out of Your Financials:

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Solve the mystery of your financial planning and analysis. Improve your business management skills and steer clear of financial pitfalls by using Bizz$mart to help you plan effectively.

For more information or to order your copy of Bizz$mart at a special introductory price, call (800) 966-2867.

Dealing with Regulatory Agencies

They strive to protect human health, the natural environment and their share of the government’s tax revenue. Yet while regulatory agencies pursue noble causes, their bureaucratic processes leave many small business owners with painful fines, costly penalties and irritating ulcers. To limit the sting of a regulator’s bite, follow this simple yet effective damage control strategy when faced with a potential audit.

Seek Help

Understanding whether your business did or did not violate the law requires knowing the regulations involved. Most small business owners, however, do not have the time to familiarize themselves with thousands of pages of complex code. Even the IRS’ Web site boasts, "There’s no doubt about it—tax rules can be complicated." Therefore, seek professional counselors and trained lawyers who comprehend both your situation and the allegedly violated regulations. Their insight will prove a valuable resource, especially when you enter into negotiations with regulators.

Cooperate Carefully

Regulators love records, and will ask for yours. They will interview your employees, check your receipts, and review your business history. Treat them in a respectful, businesslike manner, because frustrated regulators do not reduce fines. Moreover, respond to questions in a brief and factual fashion, omitting sob stories about business hardships. Finally, while cooperating, keep a record of the investigation itself. Document your responses to the regulator’s questions and ask about audit policies and penalty criteria. With this information, you can reconstruct the regulator’s assessment of your violation and determine the regulator’s goals to better equip yourself for negotiations.

Negotiate

Never settle unquestionably for a penalty amount proposed by regulators. Rather, seek to reconcile inconsistencies between your assessment and the regulator’s assessment while considering alternative payment options. Offer, for instance, to develop environmentally friendly operations instead of paying EPA penalty fees if it saves your business resources in the long run. And be careful not to engage in delay tactics while negotiating. These may later prove quite costly, because agencies sometimes base penalties on profits derived from non-compliance.

With this strategy you can minimize the hassle involved in the resolution process, lower penalty costs and strengthen friendly ties with that agency in case of future investigation.

The Small Business Association Office of Advocacy provides a compendium of state small business regulatory flexibility laws. These laws require government agencies to analyze the impact of certain regulations upon small businesses.

To obtain a copy of these laws, contact:

Office of Public Liaison
U.S. Small Business Administration
409 Third Street SW
Washington D.C. 20416
Phone: (202) 205-6531
Fax: (202) 205-6928

Resources

Visit these regulatory resources online:

Department of Corporations
http://www.corp.ca.gov.
—Regulates health maintenance organizations, thereby affecting small businesses interested in securing health insurance plans. Includes a list of California-licensed plans as well as an online "Request for Assistance Form."

The Digital Daily, Internal Revenue Service
http://www.irs.ustreas.gov/prod/cover.html.
—Provides educational programs, explains tax regulations, offers electronic services, gives tax information and recommends useful literature to small businesses.

Environmental Protection Agency
http://www.epa.gov.
—Discloses background information about the EPA, its policy statements, contact information and glossary.

Finding Environmental Information on the Internet
http://www.ieti.com/ife/enviro.html.
—Provides links to federal and state agencies, regulatory issue sites, trade organizations, federal registers, news and other resources related to environmental regulations.

Occupational Safety and Health Administration
http://www.osha.gov.
—Offers comprehensive resources including compliance-related information, guides, assistance, regulations and training.

Lending a Hand Where It’s Needed Most

Small Disadvantaged Business (SDB) Certification Now Available

This new program, designed to help SDBs participate in the $200 billion federal marketplace, provides a price evaluation adjustment up to 10 percent for SDBs bidding as prime contractors. It also provides incentives for large businesses that use SDBs as subcontractors.

To be eligible for these benefits, firms must now submit applications and be certified by the SBA. This new process of government certification is designed to reduce costs, prevent fraud and abuse, and ensure that the program is administered fairly.

SDB application information is available at SBA district offices and from private certifiers nationwide.

Quick Reference Directory

SDB application on the Internet: http://www.sba.gov/sdb/forms.html

• Electronic SBA Form 413 (Personal Financial Statement) and SBA Form 355

How to apply for SDB certification: www.sba.gov/sdb.

HUBZones: www.sba.gov/hubzone.

Loans–Local SBA District Office: www.sba.gov/regions/states.html.

PRO-Net database: www.sba.gov.

Small Business Development Centers (SBDCs): www.sba.gov/services.

Standard Industrial Classification Codes (SIC Codes): www.sba.gov/regulations/siccodes.

Size standards: www.census.gov/epcd/www/naics.html.

Application for Small Business Size Determination: www.sba.gov/library.

Other Resources:

Disabled Business Persons Association (619) 594-8805
www.web-link.com/dba/dba.htm
• Serving 10,000 members nationwide, this nonprofit organization offers information about government programs available to the disabled, and provides personal business advice, business plan counseling, seminars, workshops and conferences about securing funding for disabled-run firms.

Minority Business Development Agency (MBDA), U.S. Department of Commerce
www.mbda.gov
• Fosters the creation, growth and expansion of minority-owned businesses. Funds nationwide Minority Business Development Centers, Native American Business Development Centers, Business Resource Centers, and Minority Business Opportunity Committees. These centers provide minority entrepreneurs with one-on-one assistance in designing business plans, marketing packages and management strategies to assure adequate financing for business ventures.

Minority Business Entrepreneur Magazine
www.mbemag.com
• Reports on critical issues, examines legislation, and profiles inspiring entrepreneurs who have started minority-operated companies. Also offers a comprehensive, online business resource directory of agencies and organizations devoted to the development of minority- and women-owned businesses.

Veteran Affairs Vocational Rehabilitation Program
(800) 827-1000
• Educates employers about the benefits and tax incentives associated with hiring veterans. Offers veterans educational, vocational, psychological, employment and personal adjustment counseling as well as living and work-study allowances. Also provides placement and self-employment services.