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.

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,

By Debbie Gregory.

The outlook is bright for startups that want to work with government. New pathways to federal business are helping many startups thrive on government work. The timing has never been better for technology startups to see that working with the government is a winning business proposition.

Small startup firms are perfectly situated to fill the contracting gaps left by large companies, in that they are flexible enough to move quickly, avoid red tape, and at times, their work is less costly. In this respect, startups have an advantage over the larger, more established businesses. Since the government has a wide variety of critical missions that are in need of the newest and most innovative technology ASAP,  the federal government now offers ways for startups to test and deploy their innovative solutions.

“Gov Tech” or “Civic Tech” startups are now the hallmarks of innovation in areas such as mobility, the cloud and data analytics.  These areas are seeing thriving advancements under entrepreneurial thinking, agile processes and open data. Gov Tech startups enable governments to become more efficient, and have already seen rapid growth as a series of technologies have been adopted by national, regional and city governments.

Many government agencies have developed funds and contract vehicles with shorter procurement timelines and rapid iteration cycles. And once a startup has government users for one product, it can often develop products for both government and commercial markets.

It is evident that startups have a real opportunity with the federal government. The Office of American Innovation (OAI) has maintained that one of its primary goals is to convene the private sector with the government and encourage collaboration between the two. To the extent that innovative companies can help the government save taxpayer money, OAI has painted itself as an ally.

With the new doors that have swung open in non-traditional procurement, winning government customers should be an ambitious goal for our country’s most innovative startups.

Veteran and Military Business Owners Association, VAMBOA,

By Debbie Gregory.

When it comes to having online visibility, nothing is more valuable than your company’s website. Having a strong, professional destination gives customers the impression that you mean business, and the motivation to want to engage more with your business.

Because most small businesses don’t have the resources to launch a full-scale marketing campaign, your website is where many consumers will decide whether or not they want to engage with you. They’re likely to dismiss you entirely should they believe your website doesn’t reflect the kind of experience your business should offer. Keeping that in mind, if you have a bad website, it’s better to have no website at all. Yes, having no website equals missed opportunities, but a bad website can actually be worse since it literally can make your business look bad.

The first area of major importance is your homepage. This is where you tell your visitors exactly what you do with a clear, easy-to-find value proposition.  The homepage navigation should be easy to use, and the page should include links to your social media and your contact information. Additionally, you should have high-quality images that are original. You don’t want visitors to see the same image on a thousand other websites. If you have a blog, this is the heart of your content strategy. Encourage people to view and subscribe to it by highlighting it on your homepage.

Next you want your about us page to explain your values, tell your story, and introduce the people behind your business. Good stories humanize your brand, providing context and meaning for your product, so skip the stiff intro and tell your story in your own words.

Conversions, revenue, business and profit- they all depend on calls to action. Whatever action it is meant to compel, your calls to action text need to say what you mean and mean what you say. Be clear and direct, and make sure the button performs as advertised. Use action words such as Order, Subscribe, Buy, Get, Learn, Discover, etc. Calls to action should appear throughout the website, not just on the homepage.

The last tip is to be mobile-friendly. Since more and more people are turning to their smart phones to browse the internet, a responsive site is a must.

A great website is one that lots of people visit and who hopefully convert – whether that’s a sale, a lead, or interacting with an element on the page.

Veteran and Military Business Owners Association, VAMBOA,

By Debbie Gregory.

Have you ever put an item in an online shopping chart, then changed your mind about buying it, only to find a follow-up email in your inbox offering an incentive to complete the transaction? That is an example of great email marketing.

Email marketing is one of the most cost-effective and environmentally friendly ways to reach your clients/customers. At least 91% of consumers check their email on a daily basis, which can’t be said of any other communication channel.

Targeting inboxes with email automation allows your business to send personalized, timely, and engaging emails to customers. The most important thing to keep in mind is that you need permission to email your prospects and customers, so make sure that you have an opt-in form in place.

The best way to grow your email list is by attracting people with a compelling offer, often called a lead magnet. This can consist of digital materials like PDFs, MP3 audio files, infographic or videos that you can create yourself at minimal or no cost. It can be absolutely anything you want, so long as it provides value to your visitors for free.

Once you have a healthy email list, using an email platform such as Constant Contact, MailChimp, etc. to send your emails gives you access to templates that you can customize with your company’s logo, and corporate look and feel, strengthening your brand recognition. Your email subscribers want relevant, timely information and updates about your business, since they subscribed to your mailing list; you know that you’re targeting a receptive audience. Make sure they know about up-and-coming products, timed promotions, and seasonal updates.

Email list segmentation is the process of breaking your subscribers into smaller groups based on specific criteria so that you can send them more personalized and relevant emails. This results in higher conversion rates.

Be sure to monitor the performance of your emails to identify areas that need improvement. Then A/B test some of your changes in order to make improvements.

Don’t get upset about unsubscribes, they happen. But ask yourself why people subscribed to your list in the first place, and are you delivering on that promise? Is your content of value to the segment it is being sent to? Are you sending too many sales emails with too little value?

Keeping your loyal customers is much more cost-effective than acquiring new ones. Therefore, rewarding your email subscribers with exclusive offers is a powerful tactic for increasing the chances of them sticking with your business longer than they would have otherwise done.

Veteran and Military Business Owners Association, VAMBOA,