By James Pruitt, Senior Staff Writer

Crowdsourcing is a relatively new phenomenon and an alternative to angel investors. Many find crowdsourcing campaigns obnoxious. However, crowdsourcing websites provide an invaluable resource for new businesses. 

Additionally, over time, investment crowdsourcing has evolved to cater to the needs of new businesses. When a new business resorts to traditional crowdsourcing sites, a better way to describe these campaigns is presales campaigns. Such campaigns are as old as capitalism.

Angel investors are harder to come by. Angel investors are usually at the later stages of successful business ventures and take satisfaction from boosting new ideas. Such investors generally ask in exchange for a share of the business equity or convertible debt. Oftentimes, a mentorship or patronage relationship comes with the package.

The earliest crowdsourcing campaigns were shameless attempts to score frivolous rewards for brazen internauts seeking consumer goods, vacations, and other vanities. Later, crowdsourcing sites became known for charity fundraising. Now, crowdsourcing sites such as gofundme.com and kickstarter.com have found new life in promoting novel business ventures.

We should all welcome the repurposing of these established websites. Anyone can use these platforms to market their business idea. These sites offer great springboards for presales marketing. Angel investors are harder to come by and offer different risks and benefits.

A distinction should be made between regular crowdfunding and investment crowdfunding. Most crowdfunding provides nothing but the satisfaction of help for another. Investment crowdfunding provides an equity interest in the company. In other words, the funders receive a tiny share of ownership of the company commensurate with their investment. SeedInvest and FundersClub are popular forums for investment crowdfunding.

“Angel investors” are few and far between. Such investors often show an emotional interest in the enterprise beyond the fiscal rewards, yet generally do expect compensation. Online resources do exist for those seeking angel investors. The Angel Capital Association provides a forum for well-meaning senior investors seeking promising candidates. Gust and the Angel Forum also facilitate meetups between entrepreneurs and angel mentors. In general, such relationships are quite hard to come by. Successful relationships with angel investors tend to be serendipitous and start with lucrative personal connections before they bear any kind of fruit.

As for crowdfunding, the idea itself must be a crowd-pleaser. Hence, the idea itself provides a great exercise in marketing in its early stages. Legitimate early-stage crowdfunding generally needs good marketing material. In other words, the business concept should have developed to the point where it can attract interest. A crowdfunding endeavor may also provide an exercise in business development. 

In sum, “angel investors” are often a matter of luck. They can provide vast resources but may usurp control. “Crowdfunding campaigns” generally require the preparation of a palatable business idea. As for crowdfunding, an understanding of the different types of crowdfunding can set new business owners on a good track for funding their new enterprise. At the same time, bear in mind that most of the funding for new business ideas comes from independent “bootstrap” money. A balanced, well-researched understanding of all three can provide a realistic assessment of funding potential at the earliest stages.

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

What is Depreciation, and How Can I Benefit from it?

Any new item in a business’s repertoire likely depreciates over time. Owners may write off this decline in value during tax season. Also, services and other intangibles may qualify as tax deductions.

For example, vehicles, equipment, and buildings inevitably require maintenance, as well as accounting for any loss of value. These assets may endure wear and tear during the early stages of your business. Guess what? Both the maintenance costs and the loss of value may qualify business owners for a tax write-off.

Oil changes, paint jobs, and worn-out parts can reduce your tax liability. Similarly, loss in inherent value can relieve proprietors come tax season.

Methods for Calculating Depreciation

The straight-line method is the most common way to calculate depreciating resources. This method simply divides the initial cost of an asset by its years of useful life. This asset may be a vehicle, a piece of equipment, or a piece of real property.

Other methods of calculation may fit different circumstances. Variables such as “useful life” and “value” may not always calculate simply, based on the nature of the asset.

Many calculation methods other than straight-line depreciation can reduce a veteran entrepreneur’s tax burden.

• Sum-of-Year’s-Digits (SYD) Depreciation

The Sum-of-Year’s method accounts for the salvage value of an asset. This method is complex, and business owners should apply this method to their taxes only very cautiously.

• Units of Production Method

This method accounts for the wear-and-tear of a piece of equipment. Essentially, this accounting practice considers the productivity of a piece of equipment. The depreciation of the equipment depends on the quantity of resulting product.

• Declining Balance Depreciation

Consider the cliché that a car loses much of its value after leaving the dealer’s lot. This method allows users to subtract most of an asset’s value during the first few years of use. After this period, often the depreciation of an asset flattens. However, the largest tax breaks for depreciation may come early on.

• Double Declining Balance Depreciation

This method is a hybrid. Generally, this method combines straight-line depreciation with declining balance depreciation. Usually, business owners use this method for equipment with a short useful life.

• Straight-Line Depreciation

The straight-line method is by far the most common method for calculating depreciation. Most small business owners use this method. This method of depreciation even reduces to a simple formula: (asset cost – salvage value) / useful life in years = annual depreciation.

Which Method to Use?

The straight-line method provides the best calculation method for the majority of small businessowners. However, the relevant variables themselves may not always seem readily apparent. How do we calculate, for example, “asset cost,” “salvage value,” or “useful life in years?”

Consider a small business that manufactures t-shirts. Imagine an embroidering machine. Perhaps the “units of production method” may provide a more useful method come tax season to gain that useful write-off. Lacking sophisticated expertise in gauging the declining value of this piece of equipment, a small business owner could legitimately resort to calculating the deterioration of the machine by the number of t-shirts produced.

Bottom Line

The straight-line method provides by far the most common method of calculating depreciation. However, straight-line depreciation is not always practical.  Variables such as “asset cost,” “salvage value,” and useful life in years” may themselves present difficulties. These values may depend on the type of equipment and the nature of the business. The owner’s discretion inevitably provides the best fit for the optimal tax and accounting methods.

VAMBOA, the Veterans and Military Business Owners Association hopes that this article on Depreciation has been valuable.   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

Don’t forget that VAMBOA members receive significant discounts on technology needs.   Check them out here:

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

By Debbie Gregory.

VAMBOA and our team hopes that you have enjoyed Part 1 and Part 2 of this three-part series on Business Grants for Veterans and found it to be valuable.   Please let us know what you think because we value your input.  You can email us at info@vamboa.org.

Once you have your funding secured, either by grant or loan, you may still need some other business assistance. Below you can find some excellent resources for your Small Veteran Owned Business to utilize to start, learn, nurture, and grow your small business:

• Boots to Business is a two-step program offered by the Small Business Administration (the SBA) offered on military installations around the world to introduce service members to entrepreneurship and the foundations needed to begin a business when they return home.
• Entrepreneurship Bootcamp for Veterans (EBV)is a free program for post-9/11 vets and their spouses.
• Patriot Boot Camp is a branch of the startup incubator: TechStars and is specifically for active duty military members and their spouses who want to gain entrepreneurial skills.
• Service-Disabled Entrepreneurship Development Training Program offers between $50,000 and $150,000 as a grant to support organizations that deliver entrepreneurship training program(s) to service-disabled veteran entrepreneurs who want to become small business owners or who currently own a small business.
• Small Business Administration (SBA) offers several veteran entrepreneurship training programs.
• Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE) is an SBA-funded program that offers online training, a conference and mentorship specifically to female veterans.
• Veterans Business Services helps veterans acquire or start small business. Veteran Business Services offers assistance with franchising, marketing and with connecting you with financial services.
• Veterans Business Resource Center offers business training for Veterans including help with understanding business plans, financials, marketing, sales, human resource management, and more. They also offer webinars and professional counseling.
• Veterans Institute for Procurement (VIP)is an accelerator program with three specific offerings specifically designed for owners, principals, and C‐level executives of Veteran Owned Small Businesses and Service-Disabled Veteran Owned Small Businesses SDVOSB).  Veterans Institute for Procurement (VIP) Grow helps companies develop overall strategies to operate and expand within the federal marketplace. VIP Start helps companies that want to get into the federal market and become procurement-ready. VIP International is for companies that want to enter or expand their federal and commercial contracting opportunities overseas.
• VetsInTechis a private sector training program that offers tech related education opportunities, connections with tech jobs and workshops and bootcamps to help veteran startup founders boost and grow their businesses.

By Debbie Gregory.

Looking for a business grant? Are you a Veteran Owned Small Business? There are quite a few grants out there that are offered by a variety of institutions.   Grants are time sensitive and are open for a specific period and then they are no longer available.  It does not make sense to list grants in this article because by the time you read this article, they may no longer be available.  However, you certainly can find them!

This is a three part series on Business Grants for Veterans and Part 1 will detail a few good places to find grants and other financial assistance for your Veteran Owned Small Business. Please keep in mind that just because you don’t see a specific grant or site listed within this article, there are many other grants that you can locate by performing a comprehensive search with specific criteria that applies to you.  It may take some energy, research and time to locate the right grants and financing options but consider it a treasure hunt that will always be worth it to your Veteran Owned Business.

The best place to begin your search for grants is the Federal Government’s database for small business grants at.Grants.gov. You should check the site often as grant opportunities begin and end frequently. Once you have found a grant (or two) that will work for your needs, you need to determine your next steps.  Grants.gov provides a very clear and specific process for applying for grants.   Below are some specific areas that will assist you on their website:

1. Learn about grants: Their learning page includes a brief instructional video to help guide you.
2. Check eligibility: This page will help you determine whether or not your business is eligible to apply for a federal grant.
3. Search grants: You can search for grants by keyword, opportunity number, as well as other criteria.
4. Register: If you find a grant you would like to apply for you will need to register for an account.
5. Apply for a grant: The apply page includes helpful videos on how to use the system to properly apply for your chosen grant.
6. Track your application: This page gives you the ability to keep an eye on how your application is progressing.

If you are looking specifically for Research and Development (R&D) grants from the Federal Government, there are two other programs that you may wish to consider:

• Small Business Innovation Research Program (SBIR): This program is focused mainly on technical innovation that specifically has the potential for commercialization.
• Small Business Technology Transfer Program (STTR): This program is very similar to SBIR but to qualify you need to collaborate with a research institution.

Even though Grants.gov is an outstanding resource to locate grants, the Federal Government is not the only place to look for grants for your Veteran Owned Small Business. Our next article in this series will cover specific state offered business grants that you should explore as well.   Stay tuned!

By Debbie Gregory.

Happy New Year to our Veteran and Military Business Owners.   There are always many tasks for entrepreneurs to do and not always enough time to do them.   This is an excellent time to start with a fresh prospective, plan and focus.   You may want to reflect on the prior year and refocus your energy.   Below is a list to begin 2020:

1. Recap & Forecast: Now is a good time to look at where you are and where you want to go with your business.   Review your return on investment, ROI on major projects, your finances and your goals.   Make sure you and your team understands your goals for the coming year.   This will make any changes easier.  It is a also an excellent time to  gain valuable input on what works, what can be improved and what has not worked.

If you have a team, you need to talk with them and develop an understanding of their roles and how they feel about them.   The New Year is an excellent tine for an annual review.    This is the time to perform your due diligence and be proactive to place you ahead of your competition.    Consider this to be your plan for success in 2020.

2. ROI Marketing Focus: Your focus in determining your 2020 marketing initiatives must be what is the ROI (Return on Investment) on each initiative.  These include social media, advertising, blogs,brand building and more.  Not every marketing initiative is measurable but you should evaluate those you can.   You want to direct your money and resources to those initiatives that pay off for you.

3. Look At Industry Trends: You need to take the temperature of what is going on within your own industry as well a industries that impact yours such as your suppliers.  This will enable you to react to changes and be proactive.   If the Trade Wars with China or oil prices affect your business, you need to take all of this into consideration and be prepared for a worst case scenario.

4. Realistic Financial Goals: It makes a great deal of sense to put your financial goals in writing at the beginning of a New Year to achieve them.  You may want to check out SMART (specific, measurable, achievable, relevant and time bound) and OKRs (objectives and key results) formats.   This can include creating a list of objectives and key results for each area of your business (such as sales, finance, marketing, manufacturing and product development, etc.).   Each member of your team needs to have a keen understanding of their goals for the new year and how they are going to achieve them.

You might want look into affordable financing options for your business too.   This can make sense even for thriving businesses because the best time to look for financing is when your business is doing well.   Don’t take out loans unless you need one to grow your business and take it to the next level.

5. Look at Automating Your Business: You might want to look into automated software solutions that will enable you to automate accounting, customer management and time tracking  to allow you to focus on accomplishing the real work.  Automating your finances will also provide you valuable input into better managing your cash flow and ROI and to forecast properly.

6. Working Remotely: This is a good time to determine if some or all of your business can be done remotely.  Remote work is a trend and many believe that almost three-quarters of all  departments will have remote workers by 2028.   You may want to look at whether hiring remote workers and freelancers can benefit your business.   This is not viable for every business such as a retail store.   However, for some businesses, it can reduce the cost of office space and enable you to draw from a larger pool of talent.   We recommend that if you are considering a remote staff that you look into collaborative and communication tools.

7. Mentors: Mentors are one of the most valuable resources for any business at any level.  Mentors provide objective advise, experience and access to a larger network of resources and people.   Almost all small business owners believe that mentors have had a direct impact on the growth and success of their business.   Those who don’t have a mentor, wish that they did.   If you don’t have mentors, the new year is a a good time to find them and start the year right.