Incubators for Small Business Owners

By Debbie Gregory.

Business incubators are organizations geared toward speeding up the growth and success of startups and companies in their early stages.

Incubators have been around for quite a while, but the concept really began to gain traction in the 1980s when institutions of higher learning decided to launch school-affiliated business incubators in order to offer students better employment prospects.

Many for-profit or “private” incubation programs were launched in the late 1990s by investors and other for-profit operators seeking to hatch businesses quickly and bring in big payoffs

The vast majority of startups lack the experience and networks that are required for growth, business incubators seek to offer entrepreneurs a range of essential resources and skills development programs. They are often a good way to attract capital from angel investors, state governments, economic-development coalitions and other investors. Other benefits include mentorship, expertise and networking.

Business incubators sometimes have an actual physical space, while others operate on a virtual basis. Both are meant to foster networking among entrepreneurs and their coaches.

Why doesn’t every new business take advantage of an incubator? The answer is that there can be a downside and the very benefits that can make incubators so useful can impact focus during the crucial early stages of your business development.   Additionally, an incubator is a place your company will generally live and grow for years.  If you are looking for quicker results, an incubator might not be the right option for you. For the most part, the benefits far outweigh the downside.

There are some important requisites before you seek out an incubator. To have a successful relationship, you need to be coachable and allow the experts to provide you guidance. You also must be prepared to roll up your sleeves and work and some of it might not be what you think is important.

If you’re considering an incubator for your business, it’s important to find one that is the best fit.   The National Business Incubation Association has a search engine and a directory of state business incubation associations.  Other good sources for finding an incubator include state and local economic development departments, as well as local Small Business Association (SBA) offices.

Veteran and Military Business Owners Association, VAMBOA,

Crowdfunding For Entrepreneurs

By Debbie Gregory.

Crowdfunding enables entrepreneurs to tap into the power of the Internet to raise money for their small businesses. It provides business owners a relatively inexpensive way to bankroll a young business or new product idea.  Additionally, Crowdfunding helps promote businesses and products on social media while building a base of enthusiastic customers.

Crowdfunding is when a “crowd” funds a project as opposed to having one or two major investors. Having a unique product that fills a consumer void and a strong personal or business story that compels investors to provide funding to have an opportunity for success.

Crowding works with the company selecting a crowdfunding platform, and backers pledging an amount to the fund, usually in return for a reward for their contribution. Donors receive a product or service related to the project, with the value depending on the amount donated. For instance, a $5 donation might be rewarded with a handwritten thank you card, while $50 or $100 might bring early access to the company’s product or service.

Many crowdfunding websites exist, each with its own fees and rules for use.   The top five Crowdfunding websites are Kickstarter, GoFundMe, LendingClub, Indiegogo and Prosper.

• Kickstarter – is one of the best-known crowdfunding resources with a proven history. It is best for businesses focused on making products for consumers such as games, art, technology, music, and food. Products that are able to be shipped to campaign backers.
• GoFundMe – doesn’t charge any fees other than the transaction fees when the funds are received. It can be challenging to get your campaign attention.
• LendingClub – works for businesses that need quick capital and can qualify and is a fantastic debt crowdfunding option. Businesses must have been up and running for at least 12 months, have good personal credit score of at least 700 or more, with a minimum of $50,000 in annual sales.
• Indiegogo – works best for businesses that are making consumer products that can be shipped as rewards. Companies at any stage are welcome, but most Indiegogo backers want to see that prototypes available.
• Prosper – is best for business owners who desire a personal loan that can be used for business purposes. This is an excellent option for a startup or when a business isn’t generating enough revenue to qualify for other financing options. Keep in mind that it can place personal assets at risk.

Every crowdfunding site offers small businesses something different, with options from bigger sites that provide more exposure but a lot of competition to niche sites that have dedicated followers.

Veteran and Military Business Owners Association, VAMBOA,

More Financing Info For Small Businesses

By Debbie Gregory.

Many business owners focus on the numbers on their balance sheet and don’t pay enough attention to their cash flow needs. To keep a company thriving, business owners need to take charge of their working capital.

Working capital is the daily, weekly and monthly cash requirement for the operations of a company.  It is paramount to the success of any business. Working capital ensures that a firm has enough liquidity to run its operations smoothly. Veteran business owners need to also be mindful of working capital.

Some of the additional benefits of having healthy working capital include:

• A higher return for every dollar invested in the business
• Improved credit profile
• Higher liquidity and profitability
• The ability to weather market ebbs and flows
• Favorable Financing Terms

While there are many options to finance your small businesses, be aware that finance terms and fee structures are hidden and don’t clearly display the true cost of credit.

To that end, StreetShares, a veteran-run company, is currently providing one of most transparent and fair business lending products that benefit entrepreneurship across the U.S., according to Mark Rockefeller than CEO and an Iraq War.

Streetshares is launching zero fee products with a low, straightforward interest rate, allowing business owners to more clearly understand the real cost of credit as they are increasingly accustomed to in the consumer lending space.   These products will be available until May 31^st.

Additionally, StreetShares is also providing a four-week interest rate rebate to small business owners so if borrowers choose to pay off their loan or line of credit draw within the four week period, they can do it without paying any fees or finance charges whatsoever.

“Our mission is to be the trusted financial solution for America’s heroes and their communities, this offering will help us achieve that,” said Rockefeller

Knowing how much working capital your business needs to function will vary, but it’s important to have a clear understanding, plan accordingly and manage your financial responsibilities.

Veteran and Military Business Owners Association, VAMBOA,

Veteran Owned Business Financing Methods

By Debbie Gregory.  

Are you ready to start your business? If so, you need to think about how you’re going to fund your business. There are many different ways to secure financing, so here are some suggestions. 

• Equity Financing – is the method of raising capital by securing investors. Think Shark Tank: in return for the investment, the shareholders receive ownership interests in the company. You need to be prepared to give up part ownership of your business. Angel investors, Venture Capital firms (and Sharks) provide not only the capital you need to grow, but often their wisdom and advice can be an invaluable resource to your business. 
• Debt Financing – is the method of funding your company through business loans. Like any loan, you’re required to pay back that debt plus interest over an agreed-upon amount of time. This method allows you to retain 100% of your company. 

Some loan options include short-term and medium-term loans, equipment financing loans, Invoice financing, SBA loans, line of credit and merchant cash advances.  Below we take a look at them in greater detail.

• Short-Term Loans – offer smaller amounts in financing usually paid back period ranging from three to eighteen months. These are good options for less-qualified borrowers, but usually have higher interest rates. 
• Medium-Term Loans – offer a larger amount of capital at a relatively affordable rate. 
• Equipment Financing – can only be used to purchase new or used equipment. Equipment lenders advance up to a specific percentage of the value of the equipment.  
• Invoice Financing – is sometimes referred to as contract financing or factoring.  This is an asset-based lending product that allows companies to finance slow-paying accounts receivables through the sale of invoices sold to a factoring company in exchange for an immediate payment. Choose wisely especially if you want to continue to do business with this customer because often these companies will not focus on customer service when collecting the amount owed. 
• SBA Loans – are loans issued by a traditional bank, but with very low interest rates and guaranteed by the SBA.  
• Lines of Credit – Provides access to funds that a business owner may draw from whenever they want or need the funds for their business. Interest is only paid on the funds drawn from the line of credit, and only for the time the funds are outstanding. 
• Merchant Cash Advance – provides a lump sum of capital, that is repaid by allowing the lending company to take a fixed percentage of your daily credit or debit card sales each day until you’ve repaid in full. 

VAMBOA, the Veterans and Military Business Owners Association encourages you to carefully investigate and select the right option for your Veteran Owned Business. 

Veteran and Military Business Owners Association, VAMBOA,  

By Debbie Gregory. 

Having funding is extremely import to veteran entrepreneurs.   Below are some financing options available to veteran-owned businesses.  We have listed them in alphabetical order.   Some of these funding sources are under the radar and we hope they are helpful. 

•   7-Eleven Veterans Franchising – offers special benefits to veteran franchisees. Eligible veterans can receive up to 20% off the initial franchise fee and up to 65% financing through 7-Eleven. 
•  Family and Friends – those who are close to you and believe in you might be interested and welcome the opportunity to assist you with financing. If you don’t ask, you don’t get. 
•  Hivers and Strivers – an angel investment group, offers equity financing to veterans who graduated from U.S. military academies. This includes graduates from West Point, Annapolis, the Air Force, and the Coast Guard. 
•  Little Caesars Veterans Program – offers several discounts to honorably discharged veterans (including a $5,000 franchise fee discount, a $5,000 discount on the first equipment order, and free marketing and supply services of a $30,000 value). 
•  The Military Economic Injury Loan program – is for military reservists whose businesses were impacted when they were activated. This loan program is specifically meant to help get businesses back on track within one year of the completion of active duty service.  
•  The SBA Express Loan Program – offers business loans of up to $350,000 without upfront fees. You should receive a response to your application within 36 hours. 
•  StreetShares/StreetShares Commander’s Call Veteran Business Award– Veteran-owned StreetShares is an online loan marketplace that acts as an auction marketplace where veteran entrepreneurs can connect directly with investors who have an interest in investing in small businesses. They also have a $5,000 business award for veteran entrepreneurs, the Commander’s Call Veteran Business Award, presented to a veteran or military spouse-owned business with strong growth potential. 
•  The UPS Franchise Discount – is an initiative to help veterans cover the many costs associated with opening a franchised location. This discount of $10,000 can be used to cover the UPS franchise fee, along with a 50% to 75% discount on the initial application fee. 
•  VetFran Business Grant Fund – assists with funding for franchise opportunities via a $10,000 grant. 
•  The Veteran Business Fund – focuses on East Coast companies in the technology, healthcare, business services, and manufacturing space and offers a maximum investment of $3 million. 

We recommend that you take the time to investigate carefully and choose wisely. 

Veteran and Military Business Owners Association, VAMBOA,