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Psychological Barriers to Starting a New Business

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By James Pruitt, Senior Staff Writer

Veteran Business Owners have a right and a responsibility to market their talents and skills. Successful paths are myriad, as are roadblocks. Many of these roadblocks are psychological. Here is a list of some of the most common misconceptions veterans often have that impede their paths to running a successful business.

1) “I don’t have the resources.”

A Veteran Business Owner need not invest unwieldy amounts of cash or resources to carve out a place in the economy. “Start small” is often the best strategy. Your best resource is yourself. 

A new business can start with meager resources, assuming a good concept. Good planning conceivably may keep the dream alive. 

Consider Sophia Amoruso, founder of the fashion company Girlboss Media. She literally started her fashion company browsing secondhand stores, selling her finds on her Myspace site. Also consider Khan Academy. Sal Khan’s company evolved from tutoring sessions he provided a family member. Other family members showed interest in his lesson plans for themselves, and thus his company turned into a marketable idea.

Marketable ideas often stare potential entrepreneurs in the face for years before they spark inspiration. Often, these ideas require little to no investment at the outset. Consider your talents, hobbies, surrounding circumstances, and social connections. Good ideas are often free and can sow fertile seeds that lead to rich fruits over time.

2) “I can’t do it,” aka “Imposter Syndrome.”

When lightning strikes, and you have a great business idea, one natural reaction might be some variant of “I can’t do it.” 

If an entrepreneur needs affirmation, online communities can frequently offer support, a sounding board, or at least ideas for development. In the end, remember that nothing can take away your relevance to the world around you.

However, “imposter syndrome” is nothing new. Consider Starbucks CEO Howard Schultz and his comment “[v]ery few people, whether you’ve been in that job before or not, get into the seat and believe they are now qualified to be CEO.”  Also, Consider Sonia Sotomayor, and her quote “I have spent my years since Princeton, while at law school and at various professional jobs, not feeling a part of the worlds I inhabit.” The best and brightest of us often suffer from self-doubt. Often these doubts are simply an indication that we have the wisdom to know what we don’t know. 

3) I’ll Fail

Failure is inevitable in business and in life. The first failure can lead to greater success in later attempts. Everyone who lives fails. Frederick W. Smith’s first service, Zapmail, cratered before Fedex could focus on his core concept. Similarly, Amazon took years to turn a profit

Of course, no one wants to fail big. Not everyone has $350 million to burn, as did FedEx. However, the early failures serve as necessary steppingstones to creating a well-oiled machine. Failures of all kinds, whether administrative errors, operations inefficiencies, and hiring mistakes, are necessary to design an enterprise that fits well into the economy. Depending on resources such as financing and social support, slow and steady may win the race. 

4) “The Timing isn’t Right”

Consider a spore in your garden that may sprout hundreds of plants. The most inopportune times may give rise to the perfect storm to get your idea going

Even mulling the idea in your own head can become your own stress relief exercise. The smallest measures can build inertia. Building a web presence, for example, you can start with little effort and adapt to a changing schedule. Your relationship with your idea can morph gradually as it takes on a greater part of your life. Short of huge commitments, there is no wrong time to get started on a business idea.

 

VAMBOA, the Veterans and Military Business Owners Association hope that this article has not only been valuable but provided some unique perspective.  We work hard to bring you important, positive, helpful, and timely information and are the “go-to” online venue for Veteran and Military Business Owners.  VAMBOA is a non-profit trade association.   We do not charge members any dues or fees and members can also use our seal on their collateral and website.   If you are not yet a member, you can register here:  

https://vamboa.org/member-registration/

We also invite you to check us out on social media too.

Facebook:  https://www.facebook.com/vamboa

Twitter:  https://twitter.com/VAMBOA

Do not forget that VAMBOA members receive significant discounts on technology needs.   Check them out here:

https://vamboa.org/dell-technologies/ 

Pricing to Stay Competitive

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By James Pruitt, Senior Staff Writer

Inflation has become a growing concern as cash has flowed into consumer’s hands following the outset of coronavirus. In theory, businesses should increase prices, especially as labor becomes more expensive. In fact, the economy is more chaotic and unpredictable. Business owners should consider sound realities before they jump to conclusions about how to price their products in the post-pandemic economy.

As discussed in previous blog posts, the pandemic sent the trend toward online consumerism into overdrive. Consumers know they can now resort to online sources that maintain a low overhead. This development bodes poorly for “brick and mortar” stores. Unfortunately for such establishments, the balance of power may continue to shift in the direction of online consumers.

What can a small business owner just out of the military and looking to apply their newfound skills do, especially in this strange new economy? Fortunately, many strategies can simplify marketing efforts.

  • First, human interactions, in general, have become more online over the past few decades. The possible end of the Pandemic will not change this trajectory. During the Pandemic, online interactions only became more sophisticated and established. websites and social media have only gained importance. Every economic participant, including veteran business owners, should become more Internet savvy. 
  • Second, unpredictable shifts in price can leave entrepreneurs unprepared. Given confusing shifts in the economy, business owners should understand current market circumstances in the here and now. For this reason, entrepreneurs should stay vigilant about direct competitors. Confusion may arise from assumptions and inaccurate predictions from the media. Mindfulness about the here and now should prevail.

“Staying vigilant” does not mean cutthroat behavior. “Staying vigilant” means an understanding of a ballpark range for goods and services catering to your specific clientele. Everyone benefits from some level of cooperation. Consider networking groups or your local Chamber of Commerce. Of course, backstabbing tactics only draw the worst kinds of attention.

Learning spreadsheets can help new business owners compare themselves most accurately to rivals in the current, uncharted online market. Microsoft Excel, as well as Apple Numbers and Google Sheets, may provide tools to compare prices with similar online marketers. 

  • Third, new business owners should consider their own costs and capacities. Many analysts divide these costs between variable and fixed costs. “Variable” costs shift with demand and changes in the economy. “Fixed” costs may include contractual obligations such as overhead, payroll, and the costs of maintaining websites. The goals and resources of the business owner may determine the outcome.
  • Fourth, consider profit margin and your own economic needs. Profit margin tends to vary by industry. Usually, profit margin consists of the difference between the cost of maintenance and the income from sales. Great damage can occur when the owner has invested heavily in the business, and profit margins stay low. A home business may need only a low-profit margin, and a restaurant or auto shop inevitably requires a much higher one, due to the cost of equipment.
  • Fifth, underpricing may ruin a business. Many entrepreneurs try to achieve brand recognition through discounts, sales, and cheap products. Misguided attempts at market penetration can leave consumers turning their noses when entrepreneurs need to raise prices to simply pay the bills. 

In short, pricing depends largely on the circumstances of the business owner. Generally, higher investments in overhead and equipment necessitate much more careful analysis. Always, the best price for a product or service depends on the relevant market. Hairbrained schemes such as underpricing rarely serve anyone. Veteran Business Owners need to balance their own circumstances and those of any other market participants, including clients and competitors. 

VAMBOA, the Veterans and Military Business Owners Association hope that this article has not only been valuable but provided some unique perspective.  We work hard to bring you important, positive, helpful, and timely information and are the “go-to” online venue for Veteran and Military Business Owners.  VAMBOA is a non-profit trade association.   We do not charge members any dues or fees and members can also use our seal on their collateral and website.   If you are not yet a member, you can register here:  

https://vamboa.org/member-registration/

We also invite you to check us out on social media too.

Facebook:  https://www.facebook.com/vamboa

Twitter:  https://twitter.com/VAMBOA

Do not forget that VAMBOA members receive significant discounts on technology needs.   Check them out here:

https://vamboa.org/dell-technologies/ 

 

A VAMBOA PUBLIC SERVICE ANNOUNCEMENT

VAMBOA believes that this information is important to our membership and all Veteran Business Owners especially those who are Service-Connected Disabled Veteran Business Owners due to Agent Orange.

The Veterans Administration announced two major decisions related to presumptive conditions associated with Agent Orange and particulate matter exposures during military service in Southwest Asia.

Agent Orange

VA will begin implementing provisions of the William M. Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116-283), adding three conditions to the list of those presumptively associated with exposure to herbicide agents, more commonly known as Agent Orange. Those conditions are bladder cancer, hypothyroidism, and Parkinsonism.

“Many of our Nation’s Veterans have waited a long time for these benefits,” said Secretary of Veterans Affairs Denis McDonough. “VA will not make them wait any longer. This is absolutely the right thing to do for Veterans and their families.”

VA will apply the provisions of court orders related to Nehmer v. U.S. Department of Veterans Affairs, which may result in an earlier date for entitlement to benefits for Veterans who served in the Republic of Vietnam during the Vietnam War. Vietnam War-era Veterans and their survivors who previously filed and were denied benefits for one of these three new presumptive conditions will have their cases automatically reviewed without the need to refile a claim. VA will send letters to impacted Veterans and survivors.

Particulate Matter Exposures

The Secretary recently concluded the first iteration of a newly formed internal VA process to review scientific evidence to support rulemaking, resulting in the recommendation to consider the creation of new presumptions of service connection for respiratory conditions based on VA’s evaluation of a National Academies of Science, Engineering, and Medicine report and other evidence. VA’s review supports the initiation of rulemaking to address the role that particulate matter pollution plays in generating chronic respiratory conditions, which may include asthma, rhinitis, and sinusitis for Veterans who served in the Southwest Asia theater of operations during the Persian Gulf War and/or after September 19, 2001, or in Afghanistan and Uzbekistan during the Persian Gulf War.

“VA is establishing a holistic approach to determining toxic exposure presumption going forward. We are moving out smartly in initiating action to consider these and other potential new presumptions, grounded in science and in keeping with my authority as Secretary of VA,” said Secretary McDonough.

VA is initiating rulemaking to consider adding respiratory conditions, which may include asthma, sinusitis, and rhinitis, to the list of chronic disabilities based on an association with military service in Southwest Asia, Afghanistan, and Uzbekistan during the covered periods of conflict. VA will conduct broad outreach efforts to reach impacted Veterans and it encourages them to participate in the rulemaking process.

For more information, visit our website at Airborne Hazards and Burn Pit Exposures – Public Health.

VAMBOA, the Veterans and Military Business Owners Association hopes that this article has not only been valuable information.  We work hard to bring you important, positive, helpful, and timely information and are the “go to” online venue for Veteran and Military Business Owners.  VAMBOA is a non-profit trade association.   We do not charge members any dues or fees and members can also use our seal on their collateral and website.   If you are not yet a member, you can register here:  

https://vamboa.org/member-registration/

We also invite you to check us out on social media too.

Facebook:  https://www.facebook.com/vamboa

Twitter:  https://twitter.com/VAMBOA

Do not forget that VAMBOA members receive significant discounts on technology needs.   Check them out here:

https://vamboa.org/dell-technologies/ 

 

New Minority Business Development Initiatives

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By James Pruitt, Senior Staff Writer

Racial economic gaps still tear an ugly gash in our country’s financial landscape. Intergenerational wealth far disadvantages historically underprivileged groups. Due to complex economic circumstances, some minorities have even lost ground on many fronts. Many even struggle to maintain homes bought and paid for by struggling grandparents during the civil rights era. No one should forget the role of large private institutions in fostering such inequalities.

Complex economic changes over the past several decades have largely disadvantaged minorities. At the very least, some large banks have taken enough responsibility for their role in economic shifts that they have contributed to several programs to aid minority small business owners. Whether these efforts are merely nominal remains to be seen.

Enter “Corporate Call to Action: Coalition for Equity and Opportunity.” This alliance of financial institutions dates from September 2020. As recently as last May, eighteen financial institutions agreed to set aside $10 billion dollars for minority business owners over the next five years.

These institutions include Bank of America, Morgan Stanley Dean Whittier, Goldman Sachs, and Citigroup. They have set a goal of $30 billion dollars for historically underprivileged groups. Incidents such as the George Floyd shooting seem to have mustered the political will for a more proactive approach.

How do business owners access capital from this alliance of institutions? Between them, these companies boast an estimated $27 trillion in capital. As “Corporate Call to Action” develops, the organization intends to apply funds in a variety of directions. How they apply this capital makes all the difference.

Their website, https://corporatecalltoaction.org, references “four pillars.” First, they mention “Supply Chain and Business Partner Ecosystem.” Second, the organization references “Community Investment.” Third, another pillar is “Talent Pipeline.” This pillar involves internship and workplace development programs.  Fourth is “DEI Commitments and Transparency.” “DEI” refers to “diversity,” “equity,” and “inclusion.” The “Call to Action” began with an alliance between the Connecticut Office of the Treasurer, the Ford Foundation, and several for-profit institutions. We all hope this alliance turns out well.

Hopefully, these institutions have finally absorbed some responsibility for the economic inequalities they have historically fostered. In the long run, this corporate movement may or may not adopt measures that fit with the needs of relevant business owners. However, as things unfold, valuable opportunities may spring from these initiatives. Entrepreneurs should stay vigilant for opportunities as they arise. These vast funds, set to good use, should ideally reap great benefits given the right political will and engagement.

At the same time, pro-bono funds sometimes dissipate when trickled through large bureaucracies. The “Corporate Call to Action” is still quite new. Hopefully, their developments continue in the right direction. Proper development of such initiatives require transparency, as well as watchfulness on the part of stakeholders.

Soon, these resources could find channels for real change. Grass-roots entrepreneurs could benefit from engaging as closely as possible with the member organizations and development of their new initiatives. In the long run, presumably these corporate programs will morph and adapt. In the process, interested business owners should take any measures to involve themselves. Engagement is key. Only in this fashion will these programs respond to the needs of relevant communities.

VAMBOA, the Veterans and Military Business Owners Association hopes that this article has not only been valuable but provided some unique perspective.  We work hard to bring you important, positive, helpful, and timely information and are the “go to” online venue for Veteran and Military Business Owners.  VAMBOA is a non-profit trade association.   We do not charge members any dues or fees and members can also use our seal on their collateral and website.   If you are not yet a member, you can register here:

https://vamboa.org/member-registration/

We also invite you to check us out on social media too.

Facebook:  https://www.facebook.com/vamboa

Twitter:  https://twitter.com/VAMBOA

Do not forget that VAMBOA members receive significant discounts on technology needs.   Check them out here:

https://vamboa.org/dell-technologies/

Short-Term Financing: How Not to Get Ripped Off

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By James Pruitt, Senior Staff Writer

Short-term credit often provides vital sustenance to a new business. Short-term creditors also commonly predate on fresh entrepreneurs.  Regardless of need, business owners should use such lenders cautiously.

“Loan sharks” can suck businesses dry in their times of vulnerability. This stage of the pandemic likely exposes the vulnerabilities of many businesses. Small businesses now likely struggle with debts as well as labor and inventory shortages. Predatory lenders may circle like vultures at this stage.

Are there healthy routes to short term credit? Absolutely. Three outlets can provide safe short-term loans for the cautious small business owner.

Lines of Credit and Online Short-Term Loans

Always beware of unethical practices by creditors. Predatory lenders often exploit smaller business owners with exorbitant Annual Percentage Rates or APRs and crushing terms. Of course, businesses do need a cushion when a crisis arises. This cushion could be hard cash in a savings account or a line of credit from any of a variety of lenders, including mortgagers and small banks.

As discussed in our previous blog posts, cash flow poses issues for many business owners. You need money to make money, right? A trustworthy lender usually asks two things from a small business for a simple line of credit: At least six months in business, and at least $50,000 in annual revenue. Short of these requirements, Veteran Business Owners should give a second look to any lender offering short-term lines of credit. A line of credit may provide the “emergency fund” to protect a business in cases of a short-term crisis.

At a pinch, an online short-term loan may offer a tempting alternative. Direct cash from a lender may provide another “safety net.” However, absent reasonable terms, business owners should look elsewhere before contracting with lenders that seem too eager to dispense short-term capital. Their collections efforts will likely haunt them afterword.

Most online short-term loans have similar terms as lines of credit. A decent credit score tends to hold greater significance when the lender offers hard cash outright. These loans offer further risks, and the lenders use even more caution when approving short-term cash.

These loans can range from four to five digits. However, bear in mind that the payback period can range from three to eighteen months. Creditors will want their money in the meantime. Lenders will also wield greater leverage in negotiations for payment plans and repayment terms. In short, despite the occasional necessity of short-term money, lenders inevitably demand their pound of flesh afterward.

Equipment Loans

These loans are a different sort of animal. Lenders foreclose on the equipment itself in case of default on these loans. Such equipment may include kitchen equipment, warehouse machines, and even company-owned mobile devices. Most lenders expect more security from business owners for such loans, since damage to equipment can greatly decrease its value following repossession.

Trustworthy lenders generally expect eleven months in business, a decent credit score, and $100,000 in annual revenue before securing a necessary piece of equipment. The risk to the lender is greater, so the contractual terms place more responsibility on the borrower.

When to Use a Short-Term Line of Credit?

All businesses (and even individuals) should ideally have an emergency fund. Lines of credit and short-term online loans may plausibly furnish that cushion. Additionally, Veteran Business Owners may lack investment funds during their idea’s development phase. In the case of shorter loans and payment plans, both lenders and borrowers generally should recognize the urgency of repayment. Hence, everyone should apply a fine-tooth comb to short-term financing. Short-term lenders can be as sketchy as they are sometimes necessary.

VAMBOA, the Veterans and Military Business Owners Association hopes that this article has not only been valuable but provided some unique perspective.  We work hard to bring you important, positive, helpful, and timely information and are the “go to” online venue for Veteran and Military Business Owners.  VAMBOA is a non-profit trade association.   We do not charge members any dues or fees and members can also use our seal on their collateral and website.   If you are not yet a member, you can register here:

https://vamboa.org/member-registration/

We also invite you to check us out on social media too.

Facebook:  https://www.facebook.com/vamboa

Twitter:  https://twitter.com/VAMBOA

Do not forget that VAMBOA members receive significant discounts on technology needs.   Check them out here:

https://vamboa.org/dell-technologies/

 

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