By Debbie Gregory.

As the new year was ushered in, so were two major rules and three proposed rules that may have an effect on how government contractors and other veteran owned companies operate in 2019.

The first rule is the DFARS Deviation 2019-O0003 – Limitations on Subcontracting. This rule was signed by the Department of Defense (DoD) on December 3, 2018 and effectively implements the SBA’s Limitations on Subcontracting regulations for DoD procurements. The updated small business regulations allow small prime contractors to include work subcontracted to “similarly situated entities” when calculating their compliance with limitations on subcontracting.  

The second rule is the Small Business Runway Extension Act of 2018, passed on December 17, 2018, adjusted the previous measure of a company’s size by using the average annual receipts from the previous five years, up from three years. The change was designed to reduce the impact of rapid-growth years and resulting spikes in revenue that could prematurely eject a small business out of a size standard. It was also designed to allow small businesses to have more time to grow and develop their competitiveness and infrastructure.

In previous regulatory iterations, the percentage of work that small business contractors could subcontract on contracts set aside for small businesses was limited to essentially 50% for supplies and services, 85% for general construction and 75% for specialty construction. These limitations have created a hardship for many small businesses. The class deviation addressed the nonmanufacturer rule and clarifies that those small businesses who are in a joint venture may aggregate work performed by all members of the joint venture to reach the minimum percentage.

The three proposed rules are the End to Self-Certification for SDVOSB, the FAR Rule, and the HUBZone Program Changes.

The Proposed End to Self-Certification for SDVOSB- The purpose of this new legislation is to facilitate the transfer of responsibility for verifying small business concerns owned and controlled by veterans to the Small Business Administration (SBA). While this proposed legislation will serve to consolidate the separate SBA and U.S. Department of Veterans Affairs (VA) certification standards, it will also put an end to the current SBA policy of self-certification and will require many small and large businesses to revise policies, procedures, and certification programs.

The FAR Rule – Limitations on Subcontracting proposes to update the FAR to match the SBA regulations on limitations on subcontracting.  This again includes language to include a prime’s subcontracted work to “similarly situated entities” in its calculations towards its limitations on subcontracting.    

Proposed HUBZone Program Changes- The SBA recently proposed new regulations to make it easier for small businesses to understand and comply with the Historically Underutilized Business Zone (HUBZone) Program’s requirements. These proposed changes will make the program a more attractive avenue for procuring agencies.  While the 8(a) Business Development Program has been an integral part of SBA’s history, the HUBZone Program has the potential to be just as popular. The problem with existing HUBZone rules and regulations is that compliance is often difficult to achieve and maintain and can change almost without warning, thereby rendering a company ineligible due to no fault of the business owner.

Veteran and Military Business Owners Association, VAMBOA,

By Debbie Gregory.

You know you need a great website for your small business. But before you start building your website, you should know exactly what you want it to do for your business. A well-designed site does not begin with a beautiful layout or catchy writing. It begins with clarity of purpose, answering the question: what do you want people to do once they get to your site?

The answer will depend on your business, and will determine how robust your site should be. Do you want visitors to purchase a product, sign up for your email list, read your content? Your website should actively be functioning to meet the needs of your business.

Your “home page” is usually the place where visitors will land first. This is where you will have the opportunity to introduce your company and feature your most valuable content. This could include an explanation of your services / products, reasons visitors should work with you / buy from you, a link to your blog, customer reviews, and a call to action. It should also have links to your social media, and trust signals such as any money back guarantees, payment security certifications and accreditations. To make your website especially user-friendly, it is a good idea to include a search bar.

Another key page is your “about us” page. People do business with other people, and visitors will want to know who the people behind your company are. The page should give a brief summary of who you are, who your employees are, how you are different from your competitors, and your company story.

An FAQ page is a self-service area where your customers can get answers to the most frequent questions you are asked. Chances are, their question will fall into this category, and will save you the time it would take to answer these individually. On the off chance that there are questions and answers not addressed here, make sure you include contact information on your site. This can be in the form of your social media pages, a phone number or an email address. Some companies prefer to use a contact form instead of listing their email address for spam prevention purposes.

A privacy policy is must for every website as it lets the visitor know what you’ll do with the personal information they give you. Here you will detail if you use cookies, what you will do with email addresses (especially if you have a registration form for a mailing list), and whether or not this information will be shared with third parties. You will also want to state your terms and conditions, which are the rules and guidelines you expect users to adhere to.

Optional pages would include a blog page, testimonials/reviews, press or news page, and a sitemap.

A website with 200 words and a single picture can be more powerful than a website with dozens of pages and several blog posts if it well designed to serve your ultimate purpose, whatever you define that step to be.

Veteran and Military Business Owners Association, VAMBOA,

By Debbie Gregory.

In this series of articles, we examine the financial options and program available to business owners to fund their business.

In the three previous articles, we have looked at self-funding, venture capital and crowdfunding. In this final installment, we will look at Small Business Loans.

Once you have your business plan together, including your expense sheet and financial projections, contact various banks and credit unions and compare terms they are offering for small business loans.

Loans guaranteed by the U.S. Small Business Administration (SBA) are very popular since they are guaranteed if you meet the qualifications, including meeting the government’s definition of a small business for your industry and already having been turned down for a loan on your own from a bank or other financial institution.

The SBA’s mission is to further the growth and development of small businesses throughout the country. However, the SBA doesn’t lend money directly to small business owners. Instead, it sets guidelines for loans made by its partnering lenders, community development organizations, and micro-lending institutions.

SBA-guaranteed loans generally have rates and fees that are comparable to non-guaranteed loans, lower interest rates, longer repayment terms, as well as manageable fees. And many of the SBA programs come with continued support to help you start and run your business.

There are three different kinds of SBA loan programs, each with their own terms, conditions, and advantages:

• SBA 7(a) loan, which is the most popular loan type, can be for loans as high as $5.5 million in cash with terms up to ten years.
• CDC/504 loans, which are meant specifically for purchases like real estate and machinery with terms up to 25 years.
• SBA microloans for a max of $50,000, which can be repaid for up to six years.

You typically need to have a 680 or higher personal credit score and ability to repay, 1.25 times or better debt-service coverage ratio (DSCR), the measurement of the cash flow available to pay current debt obligations, to get an SBA loan.

Veteran and Military Business Owners Association, VAMBOA,

DUNS Numbers To Be Phased Out – First New Managing Vendor After 20 Years

A new vendor is taking over management of the vendor verification system run through the General Services Administration, ending a 20-year dynasty for the company that established the Data Universal Numbering System, or DUNS.

Through the Integrated Award Environment, GSA issues each vendor or organization that does business with the government a unique DUNS number. The system has been managed by Dun & Bradstreet since it was created in 1962 and the company has held the contract with GSA since DUNS became part of the Federal Acquisition Regulation in 1998.

After opening the contract to competitive bids last year, GSA announced Monday that a new vendor, Ernst & Young, would be taking over the entity validation system.  The new deal has a one-year base period with four one-year options.  The value of the contract is $41.8 million if all options are exercised.

GSA is taking the opportunity to reengineer the system. The DUNS number will be phased out over the coming months and replaced by the System for Award Management Managed Identifier, or SAMMI, number.  The standards on how the system will function are be worked out by an interagency working group.  The federal government will have a safe, secure and unified method for validating entities, while also simplifying the process for those who seek awards,” GSA Office of Systems Management Assistant Commissioner Judith Zawatsky said in a release announcing the award.  Dun & Bradstreet will continue to work with GSA and Ernst & Young during the transition.

Additionally, the new system will also create a workaround for the proprietary nature of validation services which many have characterized as monopolistic.  A GSA spokesperson said that Ernst & Young will retain proprietary rights to certain data but going forward, the process will be structured in a different way.  The entity validation services contract features a new approach wherein users will provide their registration information at SAM.gov and that information will be validated against [Ernst & Young’s] data..  The government has unlimited rights in perpetuity to the validated results and there is no charge to SAM.gov registrants.”

 #GeneralServicesAdministration #GSA #DUNS #Dun&Bradstreet #Ernst&Young #SAM.gov #JudithZawatsky

By Debbie Gregory.

In this series of articles, we will examine the financial options and program available to business owners to fund their business.

In the two previous articles, we have looked at self-funding and venture capital. Now, we will look at a fun option… crowdfunding!

Crowdfunding is where you get a lot of people to invest in your idea, rather than finding one person, venture capital firm or bank to come up with the funds you need. People who are interested in your idea or product usually buy in at various stages. Usually, the “early birds” who get in on the campaign at the very beginning get the best deals, and the closer you get to your goal, the higher the buy-in. Once you have received the funds, you can get going.

Most business owners use a platform such as Kickstarter, Indiegogo or Patreon.

Your first step will be to set a goal for how much money you’d like to raise and over what period of time. Friends, family, and strangers then pledge money as short term supporters who will receive something in return, a gift if you will, which is usually your product.

Crowdfunding is very low risk for the business owner. For the fee you pay to the platform company, you get to retain full control of your company, and you’re typically under no obligation to repay your crowdfunders.

Some of the most successful crowdfunding campaigns have raised millions of dollars, and include products such as the Pebble Time smartwatch (78,471 backers pledged $20,338,986), the Coolest Cooler (62,642 backers pledged $13,285,226) and the game Kingdom Death: Monster 1.5 (19,264 backers pledged $12,393,139). Film and video projects included Bring Back Mystery Science Theater 3000 (48,270 backers pledged $5,764,229) and the Veronica Mars Movie project (91,585 backers pledged $5,702,153).

Because each crowdfunding platform is different, make sure you read the fine print and understand your full financial and legal obligations.

Veteran and Military Business Owners Association, VAMBOA,