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President Biden proclaims May 1-7 as National Small Business Week

SBA highlights National Small Business Week celebration “Building a Better America Through Entrepreneurship” with remarks from President Biden.

SBA, Isabel Guzman

SBA Administrator Isabel Casillas Guzman. (Photo Source)

The U.S. Small Business Administration (SBA)’s 2022 National Small Business Week celebrations will officially commence with a three-day virtual summit and an awards ceremony for honorees. SBA Administrator Isabella Casillas Guzman will kick off the national event on Monday, May 2, addressing registered participants during the educational, training, and networking event. To end the celebration, President Joe Biden will deliver pre-recorded remarks congratulating our National Small Business Week award winners and acknowledging the contributions of America’s 32.5 million small businesses to our Nation’s historic economic comeback.

President Biden, in his proclamation declaring May 1-7 as National Small Business Week, stated, “For generations, small businesses across America have shaped and embodied our Nation’s entrepreneurial spirit and driven our economy forward. Today, more than 32 million small businesses employ almost half of America’s workforce and represent the heart and soul of countless communities. During National Small Business Week, we celebrate America’s small businesses and their enormous contributions to American life and prosperity.

“When I first took office, the pandemic had devastated America’s small business community. Hundreds of thousands of small businesses had closed, main streets were shuttered, and millions more Americans were out of work through no fault of their own. Even with the creativity and resilience of small business owners and workers, COVID-19 took an incalculable toll on so many lives and livelihoods. That is why I made it a top priority to provide substantial, immediate relief to our Nation’s small businesses, giving them the tools, resources, and support they needed to reopen, rehire, and rebuild.

“My American Rescue Plan and other emergency relief programs distributed hundreds of billions of dollars to millions of small businesses to keep the lights on and keep workers on the payroll. My Administration also removed historic barriers to level the playing field for businesses across rural and urban America, especially businesses owned by veterans, women, and people of color. These efforts have helped millions of small businesses not only weather the pandemic but thrive.

President Biden and SBA Administrator Isabel Guzman. (Photo source)

“My Administration is committed to unlocking new opportunities to help small businesses grow and compete. Through the American Rescue Plan, our State Small Business Credit Initiative provides States, territories, and Tribal governments with resources to establish loan and equity capital programs to support entrepreneurs. In addition, the Bipartisan Infrastructure Law has created unprecedented contracting opportunities for small businesses in every community. Already, more than 4,000 projects have been announced to upgrade America’s infrastructure, creating significant opportunities for small businesses to grow. The law is delivering affordable high-speed internet access to every community — urban, rural, suburban, and Tribal — so every small business can use digital technologies and gain new customers across the country and around the world. The Bipartisan Infrastructure Law makes the Minority Business Development Agency within the United States Department of Commerce a permanent entity — seeded with a record amount of funding — so minority-owned businesses can receive tailored assistance for their unique challenges and access the capital they need to grow.

“I firmly believe that equal opportunity is the bedrock of our democracy. That is why my Administration is committed to using Federal procurement dollars to support firms owned by underrepresented people and to help small businesses build generational wealth. Last year, I announced a set of reforms to increase contracting opportunities for underserved businesses by up to 50 percent by 2025. We are also capitalizing on our historic investments in supply chain resilience and “Made in America” manufacturing so small businesses can innovate, compete, and build the products of tomorrow. To position small businesses for success in the long term, the United States Small Business Administration’s Community Navigator Pilot program is forging stronger partnerships with local organizations to get resources to underserved small businesses.

“Thanks to these initiatives and the resilience of the American people, America’s entrepreneurial spirit has never been stronger. New business applications grew by more than 30 percent over the course of the pandemic, with almost 5.4 million new applications in 2021 alone. More Americans than ever before — including more women and people of color — are following their dreams and starting new enterprises. My Administration will continue to support them, build upon this remarkable resurgence, and strengthen the foundation of our economy with America’s small businesses at the forefront.

You might be interested: Biden-Harris Administration expands SBA Pilot Program targeting access to capital for underserved entrepreneurs

“This National Small Business Week, let us renew our commitment to supporting our Nation’s small businesses. From local “mom and pop” shops to innovative start-ups, small businesses are pillars of our communities and the engine of our economy. By rebuilding our economy from the bottom up and middle out, we can maintain our global competitiveness and build a stronger Nation where everyone can succeed.

 

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A post shared by Isabel Guzman (@sbaisabel)

The President’s proclamation closes with “NOW, THEREFORE, I, JOSEPH R. BIDEN JR., President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim May 1 through May 7, 2022, as National Small Business Week. I call upon all Americans to recognize the contributions of small businesses to the American economy, continue supporting them, and honor the occasion with programs and activities that highlight these important businesses.”

This year’s National Small Business Week virtual conference will offer free educational webinars, free business advice, and an opportunity to network with fellow business owners.

Registration is required; individuals interested in the conference can register here.

About the U.S. Small Business Administration

The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov

5 Reasons to write a business plan 

As small business owners and entrepreneurs, there are many crucial steps toward starting your businesses and ventures. From accessing capital to branding and marketing, there is a lot that goes into launching a business and turning ideas into reality. One important step that should not be overlooked, is writing a business plan. 

A business plan acts as a roadmap for your business and can be especially helpful when you are first starting out. Many new entrepreneurs may shy away from creating a business plan, thinking it is too difficult or unnecessary, but having one can make all the difference in your entrepreneurial journey. 

Since December is National Write a Business Plan Month we are encouraging aspiring entrepreneurs to take that first step and start planning your dream business by writing a business plan. 

5 reasons why you need a business plan

The U.S. Small Business Administration (SBA) provides various resources to small business owners including advice and services to help you write your business plan. Below are the SBA’s top 5 reasons for why you need a business plan

  1. It will help you steer your business as you start and grow.

Think of a business plan as a GPS to get your business going. A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan like a GPS for how to structure, run, and grow your new business. It’s a way to think through and detail all the key elements of how your business will run. 

  1. It’s not as hard as you think.

A business plan is a written tool about your business that projects 3-5 years ahead and outlines the path your business intends to take to make money and grow revenue. Think of it as a living project for your business, and not as a one-time document. Break it down into mini-plans – one for sales and marketing, one for pricing, one for operations, and so on.

  1. It will help you to reach business milestones.

A well-thought-out business plan helps you to step back and think objectively about the key elements of your business and informs your decision making as you move forward. It is essential whether you need to secure a business loan or not. Keep in mind that the plan does not have to be like an encyclopedia and does not have to have all the answers.

  1. It can help you get funding.

Business plans can help you get funding or bring on new business partners. Having one in place will help investors feel confident that they will see a return on their investment. Your business plan is the tool you will use to persuade others that working with you (or investing in your business) is a smart decision.

  1. There’s no wrong way to write a business plan.

There is no right or wrong way to write a business plan. You can pick a plan format that works best for you. What’s important is that your business plan meets your needs. Most business plans fall into one of two common categories: traditional or lean startup.

You might be interested: Employees are quitting in record numbers to start their own business

To help you get started, The SBA offers a Business Plan Tool that helps simplify the process. The tool consists of eight easy-to-follow steps to help create a well-prepared plan.

National Small Business Week delivers virtual summit for post-COVID renewal resources

National Small Business Week commences with three-day free virtual summit from September 13 – 15, 2021. 

Hosted by the U.S. Small Business Administration (SBA), virtual summit will focus on the resilience and renewal of small businesses as they build back from the economic crisis brought on by the COVID-19 pandemic. 

Photo by Sigmund on Unsplash

The National Small Business Week virtual summit will feature a variety of virtual events and activities including educational panels providing tools and practices for entrepreneurs and small businesses looking to pivot and recover post-COVID. With panels such as “The Importance of Black and Brown Community: Coming Together to Support Hispanic Heritage Month, Black History Month, and Small Business Day”, “Empowering the Veteran and Military Small Business Community”, “Unlocking the Doors to Access for Black-Owned Businesses: Funders and Founders Share Their Real-Life Stories” and more on the agenda, the diverse and inclusive summit offers resources and tools to support all business owners expand and succeed. 

Register now for the free three-day virtual summit. 

SBA Administrator Isabella Casillas Guzman. (Photo Source)

“Over the last 16 months, we have seen the incredible determination and ingenuity of small businesses across the nation.  During NSBW, we will honor and celebrate their impact on our economy and strengthening of communities as we look towards recovery,” said SBA Administrator Isabella Casillas Guzman in a video message

As the 27th Administrator of the U.S. Small Business Administration, Guzman represents the more than 30 million U.S. small businesses and is committed to helping small business owners and entrepreneurs start, grow and be resilient. 

The SBA works to empower entrepreneurs and small business owners by providing the resources and support they need to start, grow or expand their businesses, or recover from disaster. The organization delivers services through its extensive network of SBA field offices and partnerships with public and private organizations. 

You might be interested: Latina Leaders share small business post-Covid recovery resources 

“NSBW is the perfect time for small businesses across the nation to network and learn about the many services and programs at the U.S. Small Business Administration, including our no-cost business counseling and mentoring opportunities available via our district offices and resource partners. We look forward to celebrating with you as we rebuild our economy and help our small businesses build back better,” Administrator Guzman added. 

About SBA

The U.S. Small Business Administration (SBA) works to ignite change and spark action so small businesses can confidently start, grow, expand, or recover. Created in 1953, the U.S. Small Business Administration continues to help small business owners and entrepreneurs pursue the American dream. SBA is the only cabinet-level federal agency fully dedicated to small business and provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses.

spanish children's books

Vic Sanchez, founder of Libro Magico Amarillo, shares pandemic lessons learned and exciting future plans

Maria Victoria “Vic” Sanchez is the creator and founder of Libro Magico Amarillo, a publishing company that creates personalized Spanish children’s books that offer a mix of adventures and educational content that keep children engaged and reading longer, all while playing and having fun. Her books also serve as a tool for parents raising bilingual children, helping them foster a love and appreciation of Hispanic language and culture in their children. 

Libro Magico Amarillo, spanish children's books

Maria Victoria “Vic” Sanchez, creator and founder of Libro Magico Amarillo.

We shared Vic’s story last September and we were so inspired by her love for books and her commitment to child education. Vic began her business last June, in the thick of the pandemic–talk about a challenge! But she rose to that challenge and persevered because she believed in her vision and was ready to make her childhood dreams of telling stories a reality. 

Now, nearly a year after launching her business, Vic shares with us some lessons learned and her plans for the future, because yes, it is only just the beginning! 

Running a business during a pandemic: Lessons Learned

As many of you know first hand, running a business this past year has not been easy. Many business owners and entrepreneurs have struggled to stay afloat and adapt to the “new normal” that the COVID-19 pandemic brought upon us all. Latina business owners were disproportionately affected according to the 2020 State of Latino Entrepreneurship Report.

Despite these odds, many Latina-owned businesses found new, creative ways to THRIVE and regain their power, such as turning to Instagram to advertise and grow their businesses

You might be interested: THRIVE! What to expect from deep-dive workshops at 2021 WEES

As an entrepreneur who launched her business in the thick of the pandemic, Vic experienced her share of challenges but shares with us now her lessons learned and advice to other women entrepreneurs and minority business owners. 

Be patient and think outside the box 

“Things take time,” she says, “and we need to be patient, thinking positively, while we continue working on what we believe in.” (Photo courtesy Maria Victoria Sanchez).

One key lesson Vic learned this past year was to be patient. Worrying and stressing will not help in the long run and only lead to more anxiety. Instead, Vic learned to let go, and this has helped her manage her anxiety better and overall feel better. 

“Things take time,” she says, “and we need to be patient, thinking positively, while we continue working on what we believe in.” 

Working on a long-term project or business is not something that always yields quick results. Instead of treating it like a sprint, we must look at each project as a marathon. As the old saying goes: “Slow and steady wins the race.” If we are constantly worrying and rushing we will surely burn out quickly. But by practicing patience and continuing our work at a steady pace, we will soon see those results and feel better too. 

In conjunction with this idea of taking the slow path is another lesson learned: take a different path too! Or, think outside the box. 

When things are not working one way, “sometimes you need to reshuffle,” says Vic. If you feel stuck, consider a new perspective. There is never just one way to do something, just as there can be multiple paths to get to the same place. 

“Things will work out for the best in the end.” 

Do all things with love and collaborate

The third lesson Vic learned during the pandemic is the power of collaboration and that when you do things with love, you bring together that same positive energy to others. Vic always brings that love to everything she does and has been working to help others during the pandemic. 

“I have been dedicating a lot of my efforts to doing pro bono work for fellow entrepreneurs,” Vic shares. “Some weeks ago I participated in a conference for entrepreneurs in Patagonia, where I am originally from. I am happy to help in any way.” 

To other women and minority entrepreneurs, Vic says to join in by collaborating with others and seek help when you need it. 

“This pandemic has been especially hard for women, for caregivers, and for minority women. There are amazing organizations, like Latinas in Business, bringing mentoring and educating us. If you need help, speak up! We are all here to help one another. Nothing can stop what you set your mind to. Women are serious, focused workers. We get things done.” 

Help support El Libro Magico Amarillo!

The future is bright and a year after launching her business, Vic is ready to expand and take things to the next level, but this dream cannot be achieved alone. 

“We are working on a crowdfunding campaign to produce two new books and accelerate our digital marketing efforts,” says Vic. “We want to reach out and impact more families, connecting kids with books and loved ones. Books can always provide a refuge for kids, as we have seen during the pandemic.” 

The upcoming Kickstarter will work to accelerate the company’s growth and produce two new books. 

“My dream is to grow our inventory and with this campaign we hope to do so with two new books. One is about the myth of the minotaur and the other one is about El Dia de los Muertos, as homage to all Latinas from Mexico.” 

spanish children's books, Libro Magico Amarillo

Libro Magico Amarillo’s current Spanish children’s books.

To support Vic and her dream she asks that people subscribe to El Libro Magico Amarillo’s newsletter by registering on their site. The newsletter will keep subscribers up to date when the campaign launches. 

“The only way we can succeed is through the generous support of all you Latinas! Please subscribe to our site and follow and share our campaign with friends and contacts when we launch. This is our first crowdfunding project ever and it would be great to have your support and good energy!” 

As fellow Latinas, minority business owners, and entrepreneurs it’s so important that we support each other. So let’s all give some love and support to Vic and El Libro Magico Amarillo.

Subscribe to the newsletter!

NJ waives $100 certification fee for small, minority-, women-, and veteran-owned businesses

NJ waives the $100 filing fee to become certified as a Small-, Minority-, Woman-, and Veteran-Owned Business Enterprise indefinitely.

Women, minorities and veterans face unique challenges when it comes to opening businesses and accessing capital. But it just got a bit easier for them in New Jersey. 

In the past year, small business owners have struggled greatly to keep their businesses open and running in the face of the COVID-19 pandemic. However, small, minority-, women-, and veteran-owned businesses have been hit harder than most. Not only do these groups face greater struggles staying open, but they also face obstacles when it comes to opening their businesses and accessing capital. 

Luckily, for New Jersey business owners, the process just got a little bit easier. This month, starting last week on June 1st, NJ waived the $100 fee to certify as a small, minority-, women-, and veteran-owned business. 

This plan to waive the certification fee was announced last month during National Small Business Month, by State Treasurer Elizabeth Maher Muoio who said, “We are kicking off National Small Business Week by opening the door wide for small-, minority-, women- and veteran-owned businesses who are looking to do business with the state.”  

“The Treasury is continuously striving to find ways to make doing business with the state easier and more intuitive, especially when it comes to businesses looking to get their foot in the door and pursue contracting opportunities with the state.” 

Businesses can now apply for certification through the Treasury’s online portal. Additionally, NJ business owners may register their business for as many certification categories as they are eligible. 

Certification is an important step for any small business as it provides documentation of a business’ status and allows businesses to participate in select set-aside or goal-based contracting initiatives offered by state agencies. 

“Waiving the fee associated with minority-, women- and veteran-owned business certification removes a monetary barrier to accessing the state’s supply chain that is real for many minority, women, LGBTQ and veteran business owners,” said Chief Diversity Officer Hester Agudosi. 

“As a New Jersey-certified MWBE, both public- and private-sector organizations and firms have access to your profile for considering solicitations for prime and subcontract opportunities.”

Certified businesses are eligible to participate in the Small Business Enterprise Set-Aside Program, which sets a goal of awarding 25% of state contracting and purchase orders to small businesses, and the Disabled Veteran-Owned Set Aside Program, which awards 3% of state contracting and purchase orders to businesses that are owned and operated by service-disabled veterans. 

Additionally, the state’s Office of Diversity and Inclusion is in the process of conducting a statewide disparity study, which may allow for additional set-aside programs to be authorized in the future for small, minority-, women-, and veteran-owned businesses. 

These various programs and waiving the fee to certify are a step in the right direction toward dismantling the barriers and challenges stacked against small, minority-, women-, and veteran business owners.

You might be interested: THRIVE! What to expect from deep-dive workshops at 2021 WEES

2021 WEES

Only 2 days left to register! Don’t miss this must-attend event for all entrepreneurs. Get the tools you need to THRIVE! post-pandemic and take your business to the next level!

fund, funding, money

NJ FAM Fund Created to Support NJ Latinx and Black Businesses

Last week, eight mayors from urban cities announced the creation of the NJ FAM (New Jersey 40 Acres and a Mule Fund), with the collective goal of putting capital directly in the hands of New Jersey’s Black and Latinx business owners and communities, which traditionally have suffered the greatest barriers in access to financial resources.

fund, funding, money

Photo by Gabby K from Pexels

The new initiative stems from the Newark FAM Fund (Newark 40 Acres and a Mule Fund), which was introduced in September 2020 as a private investment vehicle seeking to raise $100 million to combat and reduce social and economic inequalities resulting from systemic racism. The pandemic and continued interest in the fund from across New Jersey has led to the expansion of the program into a statewide initiative.

The NJ FAM Fund was created by a partnership of eight mayors from cities in New Jersey, with assistance from New Jersey Community Capital (NJCC) and from an advisory board. The new initiative will operate with collaboration from eight cities across New Jersey: Newark, Orange, East Orange, Paterson, Camden, Trenton, Irvington, and Atlantic City.

“While the racial wealth gap is a national struggle, it is especially salient in Newark. Minority businesses have always faced more roadblocks than their counterparts and the pandemic has only worsened the issue. The NJ FAM Fund aims to help these businesses reach their full potential in these tumultuous times,” said Newark Mayor Ras J. Baraka. “These investments will be a tremendous tool for the minority business community in Newark and we are incredibly grateful for this generous support.”

“The past year has been extremely difficult and put a spotlight on the racial wealth gap that exists in our country, but we cannot pretend that this problem is something new,” said Bernel Hall, managing partner of the New Jersey FAM Fund. “We look forward to expanding this initiative as partners come to the table. Through the Fund, our goal is to help Black and Latinx business owners and developers to expand their operations, create jobs and generate wealth for the communities that they serve.”

“When the difference in median net worth between White families and Black/Latinx families is nearly 200%, that is much more than a social disparity. That kind of gap is representative of the inequitable financial policies that have kept Black and Latinx businesses and families behind the national curve for decades,” said Mayor Ted R. Green of East Orange. “This initiative is how we start to bring balance to the communities that have been devastated the most. This is how we make amends and bring generational wealth into our communities.”

“We’re proud to stand with Mayor Baraka and other city leaders who understand that an equitable business environment is crucial to maintaining the diverse identity of our urban communities,” said Mayor Reed Gusciora of Trenton. “Despite decades of institutional and financial obstacles, many of our Black and Latino residents still put in the hard work to become entrepreneurs. We need programs like the one announced today to help make sure those historical challenges are not an impediment to their long-term success.”

The name of the fund comes from one of the earliest Reconstruction promises to the newly freed slaves of 1865, to provide freshly emancipated families with “40 acres and a mule” on land along the South Carolina, Georgia and Florida coasts following the Union winning the Civil War. The radical proposal was issued on Jan. 16, 1865, and the initiative was inspired after Union General William T. Sherman and Secretary of War Edwin M. Stanton met with 20 Black ministers four days earlier. Had the policy been fully implemented and enforced, former slaves would have had a chance to be self-sufficient economically, to build, accrue and pass on wealth. However, the promise was not realized for the majority of the nation’s former slaves, and President Andrew Johnson, a sympathizer for the South, overturned the policy in the fall of 1865.

According to the New Jersey Institute for Social Justice, the median net worth of New Jersey’s white families is $309,000, while the median for New Jersey’s Latinx and Black families is just $7,020 and $5,900, respectively—one of the worst racial wealth gaps in the nation. The objective of the NJ FAM fund is to close these gaps by providing Black and Latinx business owners with a more level playing field with their competitors.

pacifier clips

Shop handcrafted, custom pacifier clips for your “Little Amour”

If you’re a mom, you know how babies can be with their pacifiers. They are completely attached to them–until suddenly the pacifier mysteriously disappears right when they want or need it most. Sometimes it can feel like a full time job just keeping track of every time your baby drops their pacifier. If you’re tired of chasing your baby’s pacifier, investing in pacifier clips will be a lifesaver. Pacifier clips can be added to any pacifier and clip on to your baby’s clothing, so when they inevitably spit it out, it won’t go flying off into the unknown. 

pacifier clips

“Little Amour” custom, handmade pacifier clips (Photo courtesy Christina Ochoa)

“Little Amour” is a Latina owned Instagram shop that specializes in making adorable, handcrafted and custom pacifier clips for your baby. 

“Little Amour” is born

Christina Ochoa. owner and founder of Little Amour (Photo courtesy Christina Ochoa)

“Little Amour” began as a hobby for 23 year old Christina Ochoa. Born and raised in California, Christina graduated from California State University Stanislaus with a Bachelor’s in Business Administration with a concentration in General Business. She began making her pacifier clips in her spare time as gifts for family and friends that were moms or soon-to-be moms. It was a simple, relaxing hobby and a great way to unwind and ease her mind after a long day. 

However, soon her friends and family started encouraging Christina to open her own shop to sell her handmade pacifier clips because they loved them so much. On June 26 of this year, Christina decided to finally give in and go for it! She created her Instagram business account that very day and “Little Amour” was born. 

“I decided to name my small Instagram shop “Little Amour” because I have always had a profound love for children and I like referring to them as my “little loves.” Therefore, I wanted my shop to have a Latin touch since it is Latina owned so that’s how “Amour” came upon,” says Christina. 

Growing a small business during COVID-19

Since July, Christina has been launching new pacifier clips daily. As a small online business launched during the COVID-19 pandemic, one of the biggest obstacles for Christina has been growing her following on Instagram and boosting her sales. 

“I have been patient though and I’m confident that my small business will grow and be successful,” she says. “I also know that this can be normal since I recently opened up my shop and that it takes a lot of time, hard-work, and dedication to keep a business running.” 

BPA-free and made with hewable silicone beads to soothe babies’ sore teething gums (Photo courtesy Christina Ochoa)

Christina is diligent and dedicated to growing her business and overcoming these challenges. You can find her on Instagram, posting daily or in Facebook groups dedicated to supporting local handmade small businesses. These efforts have helped her reach more people and grow her client base. 

You might be interested: 3 Marketing challenges Latina-owned businesses face

“Hecho con amour”: custom, handmade pacifier clips

“I like to live by the quote ‘Do what you love, and you’ll never work another day in your life’ because that’s exactly what I aspired to do and now I’m doing it,” says Christina. “Handmaking pacifier clips feels like a hobby and not a job because that’s what I love to do. I put my heart and soul into each clip making sure that it is made to perfection for customer satisfaction.” 

pacifier clips

Stylish and cute, each pacifier clip is fully customizable (Photo courtesy Christina Ochoa)

Each one of Christina’s handmade pacifier clips is “hecho con amor” and BPA Free and 100% safe for babies. The stylish and natural pacifier clips are made with chewable silicone beads to soothe babies’ sore teething gums.

pacifier clips

And of course, every one is “hecho con amor” (Photo courtesy Christina Ochoa)

 

“I am so eager to achieve success because making pacifier clips is something that I have grown to love and very passionate about. I also like seeing the creativity that each customer has when they request a custom clip,” Christina says.

“Little Amour” pacifier clips are baby approved! (Photo courtesy Christina Ochoa)

Most importantly, she loves receiving pictures of the babies wearing her pacifier clips.  “It brings me so much joy and that’s what motivates me to keep going,” she says.

Shop these adorable handmade pacifier clips at “Little Amour” on Instagram now and never lose your baby’s pacifier again!

martial arts

Martial Arts Sensen Marieangelic Martinez defeats industry stigma and work-life balance

Martial Arts and Family Fitness Center owner Marieangelic Martinez talks work-life balance, facing industry stigma, and mindset for success.

Exit strategy for Selling your business

Start today your exit strategy to sell your business successfully

Exit strategy for Selling your business

 

In his book,  The Seven Habits of Highly Effective People,  Stephen Covey said, “Begin with the end in mind.” Covey worked to facilitate the achievement of personal and professional goals through a systematic approach that resulted in the creation of a step-by-step guide.

By beginning with “the end in mind,” Covey tasked his students with establishing and envisioning a goal and then working backwards from that goal, one step at a time. The result of the exercise was the creation of a road map that provided the necessary elements to successful goal achievement.

Most business owners envision an exit for their business. For some, the goal is to own a business that provides a comfortable living and that can one day be passed down the family tree. For many, however, the goal is more straight-forward: build a business, sell it, make a reasonable return, and do it again.

Now that the economy appears to have stabilized…somewhat, many longtime business owners that survived The Great Recession are giving thought to cashing out. Unfortunately, many of these entrepreneurs are finding themselves depressed as they discover that their companies are not worth what they thought.

On May 14, 2014, I had the opportunity to interview Matthew Winefield, President of Winefield & Associates. Matthew joined me on my//  NBC radio show to share his experiences as a consultant to business owners seeking to sell their companies.

There are many ways to value a company. There is the Asset Valuation Approach (what are the assets worth). There is the Liquidation Value Approach (how much can I get in a fire sale). There is the Market Value Approach (how much did similar companies get). There is the Income Capitalization Approach (how much is the company expected to earn in the future). And there is the Income Multiplier Approach (how much does the company make multiplied by some industry factor). While each approach is logical and can produce a rational value, by and large, the most common approach to valuing a company is the Income Multiplier Approach.

The Income Multiplier Approach takes the business’ net income, adjusted for owners benefit (add back owner’s salary, owner’s benefits, interest payments, depreciation and deduct capital expenditures) and multiplies it by an industry factor. The factor, usually expressed as a range (e.g., 3 – 5 times), is multiplied by the adjusted net income number to arrive at the value.Exit strategy for Selling your business

According to Winefield, the process is far from precise. Many factors may affect the multiplier. For example, lower sales can lower the multiplier along the range. Niche businesses can raise the multiplier along the range. And other similar factors can have an effect. An experienced consultant with strong familiarity of the particular industry can provide a business owner with a realistic sense of the multiplier.

Business owners that seek to exit their business some day through a sale should begin the valuation process as early as possible. Winefield stated that many times he must deliver an unexpected wake-up call to business owners when they realize that the valuation of their company is nowhere close to what they thought.

Winefield stated that business owners should conduct valuations early in their business’ life to find out where they fall relative to their exit “goal.” This tactic can provide the time to implement a strategy to achieve their goal. An early valuation analysis will provide the business owner with the metrics (e.g., sales, net income, etc.) that must be acheived to bring in the desired sales price.

At the end of the day, a business is ultimately worth what someone else is willing to pay for it. But given the general acceptance of certain valuation methodologies, a seller is always best served by being aware of the values derived through these methods.