Raising Capital in a Cooling Economy

By James Pruitt, Senior Staff Writer

The once-booming economy has finally started to cool. Veteran Small Business owners may need to read the tea leaves to determine how to exploit the current economic landscape. People and institutions still have much of the on-hand capital they acquired during the Pandemic. However, as much as investors want to invest, entrepreneurs must exercise a new level of caution.

The following considerations may attract investment for a new small business as 2024 continues:

1) Innovating in an exciting, trending new field may convince investors that your company has a future.

Companies that operate in emerging fields, or service larger companies that do, can attract investors simply due to the newness of the field. For example, the Pandemic popularized Zoom. Now, we all know that such platforms have a rich future. Other examples might include renewable energy, plant-based food, and health care services. 

Of course, not all smaller businesses operate in these more innovative spheres. However, a small business in tune with current patterns can foster confidence in whoever may finance you, such as a venture capitalist.

Finally, sleek, up-to-date operations can impress friends and family, but most importantly, they drum up business. They impress those who matter, the customers. In other words, they provide the upward trajectory necessary to demonstrate to other lenders you are on a solid footing in the early stages. 

2) Your company can demonstrate clear, objective growth.

No matter what the industry, anyone who lends money will need confidence that you have something worthwhile. Depending on your stage of business development, large investors want quantifiable data. A company whose quarterly reports show ongoing growth may win the confidence of virtually anyone seeking to get in on the game. Another benefit to early growth is the establishment of a strong credit score, which may help secure loans.

Major investors want numbers. The first seeds from your operation may come from savings, friends, or family. Other investors need evidence of a clear upward trajectory.

3) Investors need to see evidence that they can compete.

You are unlikely to be the only entrepreneur with your business idea. Competition is a fact of life. Those who lend money tend to have many options, as do consumers. Successful business owners stay mindful of their competition and use their opportunities to succeed where others might fail. Entrepreneurs can learn from other’s practices, as well as improve upon them. Absent crushing demand, a strong competitive potential is necessary to sustain confidence in your developing business

Summary

Investment in your small business may come from banks, private individuals, venture capitalists, or any of many other sources. Depending on the source, your investor needs to trust in the future of your enterprise. To secure investment, business owners need solid numbers that demonstrate success. Also important for many benefactors is subjective evidence of a bright future, as well as clear, objective data. As the post-pandemic market cools, everyone is becoming more cautious. Regardless, the right idea properly implemented can still attract the capital necessary to achieve success.

By James Pruitt, Senior Staff Writer

The Secure Act 2.0 called RISE and Shine passed in June of 2022 in the Senate. The bill had already passed in March of 2022 in the House of Representatives and introduces new responsibilities on employers for providing for their workers’ retirement. 

Legislation already exists that establishes standards for employer-funded retirement programs. ERISA regulates existing pension, benefit, and retirement plans. ERISA does recognize the increased burden of retirement plans on small businesses. 

The law imposes certain requirements for businesses with 1 – 99 employees, and additional requirements for employers with 100 or more employees. Among other responsibilities, under ERISA employers need to provide a “summary plan document” for each benefit and notify employees regularly of their rights and responsibilities. In other words, ERISA requires that employers keep employees informed about the status of their pension and benefits while setting out the responsibilities of plan administrators.

Enter the Secure Act 2.0, which covers employers who offer 401k and 403b plans. The Secure Act changes the game by incentivizing the wider use of retirement programs, especially by small businesses. Currently, relatively few smaller companies offer these plans. Hence, the difference between ERISA and the Secure Act is the following: while ERISA predominantly imposes additional requirements on companies that administer these programs, the Secure Act compensates by reducing the burden on smaller companies. 

The original Secure Act became law in 2019. This legislation streamlined the duties of benefits administrators while incentivizing wider enrollment in retirement programs. The second version seems due for enactment at the end of 2022.  

The new Secure Act will impose some additional responsibilities. One new rule may require businesses to automatically enroll employees. Exceptions might include:

• Small businesses with 10 employees or fewer,
• New businesses that have been in business for less than three years,
• Religious organizations,
• Governmental bodies.

On a positive note, the legislation also provides incentives to offer a healthy benefits package. These incentives may include: 

• Tax incentives for establishing retirement programs,
• Significant among these tax incentives, businesses with 50 or fewer employees will be eligible to claim 100% of the benefits paid. This added benefit enhances the existing benefit, which allows companies with 100 or fewer employees a credit of 50% of expenses. Hence, the existing tax benefits for small businesses will include even greater benefits for still smaller companies
• Increased starting age for distributions, up from the current 72 years for relevant plans. The minimum starting age would increase yearly to 73 in 2022, 74 in 2029, and 75 in 2032. These increases in the minimum age would make retirement plans viable for a larger group of businesses.

Remember the difference between an IRA and a 401k. The prospective retiree opens an IRA on their own, although employers can sometimes contribute. 401K programs, however, are employee sponsored. The new Secure Act legislation affects both. Veteran Business Owners who choose to provide benefits or pension plans need to verse themselves in the relevant legislation in order to take advantage of these valuable new opportunities.

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/ 

By James Pruitt, Senior Staff Writer

In our last article, we emphasized the need to engrain an innovative mindset into the core values of any new company. Moving forward, Veteran Business Owners should apply certain strategies to create a more dynamic operation. Some of these strategies are the following:

1. Use creativity to define your objectives

In other words, Veteran Small Business Owners need to ask the right questions. Asking the right questions is necessary to get to know your client base. We need to understand our client base in order to develop effective marketing strategies. Perhaps the entrepreneurs’ own perspectives can inform initial marketing efforts.  However, subsequently, we need to diversify our lines of inquiry.

2. Take the Bull by the Horns. In other words, be proactive and involve yourself in all stages of your business process

In many cases, this involvement may include moving into the trenches so you can understand what is going on, even at the production and customer service levels. Small businesses give owners this advantage. A Vice President of Microsoft performing data entry to show he’s “part of the team” might come off as awkward or disingenuous, or even a poor use of resources. 

Small businesses can transcend this awkwardness since they tend to be more vertically integrated. In a smaller company in its growth phase, the boss likely understands processes from the floor to the C-Suite. Remember involvement in each level of operations can educate the higher-ups about the company’s everyday challenges.  

When plausible, business owners should take any opportunity to perform even the most menial tasks. Putting yourself on the front lines is the best way to engage with every challenge your company may face as well as earn the respect of employees.

3. Market yourself, and know your talents

You know yourself better than anyone else. Innovation requires self-knowledge and understanding your own capacities. Consider any untapped abilities you may have. Also, consider any directions you can take these secret wells of knowledge. Even better, the more you find your passion, the more you find yourself absorbed in the work you do. Once you find the tasks that put you in the “zone,” everyone can benefit when you develop your business in that direction.

4. Acknowledge and utilize talent in others as well

It takes a certain maturity to recognize talent in others. More to the point, any effective organization requires collaboration to succeed. Effective business leaders have an eye for recognizing effective partnerships. Whether in the hiring process or while networking, Veteran Business Owners should develop effective team-building skills, and know how to launch their endeavors with an eye toward finding teammates with contradictory styles and talents.

Focus, focus, focus!

5. Your business should engage you, your workers, and especially your customers. A good fit between an entrepreneur and their business venture can ensure maximum engagement. Consider those tasks where you excel and plan your schedule around them. More mundane, less interesting tasks “flow” more easily when you make your standout talents the centerpiece of your schedule.

These strategies can weave innovation into the fabric of your business. Innovation always requires collaboration and self-understanding, as well as good team-building and management skills. Veteran Business Owners should consider these factors while priming their organization to move forward.

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/ 

By James Pruitt, Senior Staff Writer

The race to innovate has propelled itself to center stage as technology has advanced. Companies need to constantly rebuild themselves to stay competitive. In other words, companies should deeply integrate forward-thinking mindsets into their cultures. So, what does this mean? 

Twenty-five years ago, a fleet of internet-capable computers could cost several thousand dollars each. Now, a small company can buy these computers in bulk for hundreds per workstation. But in today’s economy, Veteran Business Owners need to consider the cost-effectiveness of such an investment.

Consider the industry. These days, many tech-centered businesses may really need fast, up-to-date computers to simply get the day’s work done. Other companies may need to keep closer track of innovations in their own fields. Such companies may include restaurants, clothing manufacturers, and machine shops. Depending on their needs, such companies may even benefit from saving money on expensive computer equipment, while concentrating on the latest innovations in their own fields.

As a bottom line, companies in these times need to keep track of industry trends. In fact, to stay competitive, most companies need to integrate forward-looking mindsets into their company culture. Veteran Business Owners can implement the following mindsets in order to take their companies down this path:

1. Get Ready for Cross-Industry Partnerships

Vastly different companies sometimes have operations that complement each other. In many cases, one business may have discovered a new methodology that might benefit a separate one. Consider, for example, delivery methods. Maybe a business in one field has begun to use drones or self-driving cars. One company could even act as a supplier for the other, and hence vertically or horizontally integrate the operations of each. Finally, consider that businesses in different fields might not be in competition.  As a bottom line, remember the importance of networking for reaching the best outcomes for each party.

2. On a Similar Note, Never Forget the Power of Collaboration and Partnership

Competition can provide us with the drive to press forward. However, sometimes extreme rivalries between companies might prevent the spread of new ideas. Extreme competition may be toxic. It is true that the legal system enforces noncompete covenants and antitrust laws, and for good reason. However, Veteran Business Owners should trust themselves and each other to join forces in many cases where partnerships might benefit each. Your own method may work for you, but in some cases, teamwork with others in your industry may yield the best fruit.

3. Some Industries May Completely Disappear Or Even Morph to the Point Where They Are No Longer Recognizable

Remember the metaphor of the frog boiling so slowly in a pot that it doesn’t understand it’s being cooked? Business owners should keep in touch with trends in their field and understand when and why they need to innovate. Time flies, especially for busy people. Your field could gradually disappear absent a willingness to innovate. Even within many of our own lifetimes, at one point we had telegrams, then we had FedEx, then email. 

Successful companies see trends and innovations as they arise and adapt accordingly. Those who stick their heads in the ground may find themselves boiled alive as advancing new technologies eat away at their core business.

4. Remember the Importance of Social Responsibility for Public Image

These days, companies need to stay aligned with changing ethical sensibilities. Businesses that fail on this front risk finding themselves in a two-front war. Customers may abandon their products even as governments start regulating them. The combined social forces could spell doom for a small business, regardless of what short-term opportunities may come their way. For example, don’t expect many new tobacco companies any time soon. 

In conclusion, any business owner needs to stay “in touch” with the business environment surrounding them. New Veteran Business Owners most of all need to remain self-aware. The need for innovation can arise at any moment, so all of us need to contribute to company cultures that seep these forward-thinking concepts as deeply as possible into the souls of any new business.

Stay tuned for part two of this mini-series.

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/ 

By James Pruitt, Senior Staff Writer

Businesses need to engage with customers in order to succeed. A good relationship requires demonstrated concern for the client’s well-being and satisfaction. 

1. Communicate with the customer in a manner they feel comfortable with.

Businesses should adapt to the communication preferences of their clientele. Many people find email time-saving because they can respond at their leisure. Others prefer texts because of the instant notification. Others prefer the familiarity of a phone call. Some who speak English as a second language feel more comfortable with a written message.

Additionally, not everyone uses Twitter, Ticktock, or Facebook, but assuming your clients do, why shouldn’t you? Proprietors and clients should sync with their clientele in the digital world as well as the real world.

2. When professional and practical, extend the relationship outside the business realm.

We’re talking about building friendships, or at least familiar customer relationships. Of course, we are excluding businesses that maintain professional boundaries, such as doctors and lawyers. However, owners of small shops, restaurants, and manufacturers have every reason to incorporate their personal relationships into their businesses. These kinds of relationships can help form a community of collegial, like-minded people who love your product or service. 

Here’s one funny strategy: Many companies recognize micro-holidays such as National Red-Apple Day, National Peanut Day, and World-Wide Volkswagen Beetle Day. Extra points if the holiday is relevant to your business!

Also, many companies make a small celebration out of the birthdays of customers and employees. A small card can go a long way in reminding your client of the importance of your practice. Even an internet celebration can soften hearts and create a familiar mood.

3. Product education can build a relationship

Especially with technical products, effective customer support can build rapport with the company. Different techy products may require different measures, depending on the industry. One example may be sponsorship of training classes for your product, if practical. As another option, a launching event for a new product may provide another option to build a community of loyal customers. Make it a party!

4. Find small ways to go above expectations

As we’ve said before on this blog, if you have extra inventory that you absolutely can’t get rid of, give it away for free. You may or may not want to give a birthday scene for the birthday boy or girl at a restaurant. But a more discrete strategy to make a connection may be a small birthday deal or gift. Polite, discrete ways to make customers feel special never hurt anyone and will increase your popularity with your customers.

Overall, whenever possible, always try to go above expectations when the opportunity arises. Maybe during a slow time, going the extra mile with a service or product just may keep the customer coming back. These measures are important not only to increase revenue but even to provide further online reviews.

5. Conclusion

Never forget the importance of a community of loyal customers to boost your brand. Only customer satisfaction can build your business to capacity. Even with the best conceivable product or service, only good marketing can build success for a veteran entrepreneur. Remember these maxims from this blog and those to follow.

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/