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10 Tips for Veteran-Owned Businesses Seeking to Sell to the U.S. Federal Government

By Caron_Beesley, Contributor
Published: January 31, 2013 Updated: August 31, 2016

Are you a veteran-owned small business and thinking of selling to your former boss – the U.S. federal government?

Part of the mission of the SBA is to provide assistance to veterans and service-disabled veterans who return home to start, resume or grow their businesses. In addition to supporting veteran business owners through entrepreneurial training, and providing access to capital, the SBA also provides resources, tools and support to help veterans start and grow businesses through government contracting.

If you are a veteran-owned small business, check out these 10 tips for getting started selling to the U.S government and winning a government contract.

1) Boots to Business – Get Help Starting Your Business - Boots to Business is a public-private partnership program that gives service members support to help them learn the nuts and bolts of how to start and grow a business and access SBA tools and resources available to them.

2) Find a Veterans Business Outreach Center – The SBA’s Office of Veterans Business Development oversees multiple Veterans Business Outreach Centers across the country. In addition to helping veterans build a business plan and start a business, these centers can help veterans land government contracts, get access to mentoring services, and find training.

3) Review your Financing Options – In addition to a range of other loan programs, SBA’s Patriot Express Program is specifically designed for small businesses that are more than 51 percent owned or controlled by veterans or members of the military community and are available up to $500,000.

4) Familiarize Yourself with Small Business Incentives for Government Contracting – The law mandates that government agencies establish contracting goals that require them to reach out and consider small businesses and service-disabled veteran-owned businesses for procurement opportunities. Currently, 23 percent of contracts must be awarded to small businesses and three percent to service-disabled veteran-owned small businesses. These opportunities will help open doors, but you must still be able to sell your business on performance, price and ability. Contact your Veterans Business Outreach Center to learn more about these and other incentive opportunities.

5) Learn About How the Government Buys – The government applies standardized procedures to buy products and services it needs from suppliers that meet certain qualifications. The primary contracting methods used by the government include micro-purchases, simplified procedures, sealed bidding, contract negotiations and consolidated purchasing. Learn more about these in another SBA online training course, Government Contracting 101: How the Government Buys, or read a quick overview of the process in my earlier blog: Government Contracting – Learn how the Government Buys from Small Businesses.

6) Understand the Rules – Understanding the government’s procurement rules is critical to your success as a government contractor.  The FAR, or Federal Acquisitions Regulations, is the roadmap for doing business with the government. Check out these resources on SBA.gov to help you become familiar with the regulations that apply to most federal contractors.

7) Size Does Matter – As a small business, certain government programs may apply to you. The question then becomes: What is a small business, or, more specifically, is your firm a small business? Over the years, SBA has established and revised numerical definitions for all for-profit industries, and this numerical definition is called a "size standard."  Use SBA’s Size Standards Tool to help determine if your business is truly “small” and qualifies for government contracts.

8) Learn the Process of Selling to the Government and Find Opportunities – Selling to the government is not as big of a mystery as you might think. There are several fundamental steps you should follow:

For a deeper dive into this process, read Selling to the Government – Get Started with These 5 Steps or check out SBA’s information about Registering for Government Contracting, which explains the easy steps you need to follow to being bidding on government proposals.

9) Find Subcontracting Opportunities – An alternative to seeking prime contracts is to explore subcontracting opportunities. Subcontracting with a prime contractor can be a profitable experience as well as a growth opportunity for a business. To help small businesses find opportunities, SBA maintains SUB-Net, a searchable database of available subcontract opportunities.

10) Have a Question? – If you have questions about the federal marketplace, government contracting methods, contract opportunities or winning recovery and other federal contracts, check out the following resources:

  • SBA’s Government Contracting Guide – Explore the process of government contracting with easy how-to guides and resources.
  • Government Contracting Classroom – Available via SBA’s Learning Center, these self-paced, free online courses cover the fundamentals of selling to the government as a small business owner.
  • Get In-Person Assistance and Training – SBA and its resource partners can answer your questions about the federal market place, government contracting methods, and finding contract opportunities. Find your local SBA office, Veterans Business Outreach Center and more with this interactive map

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Sandy Update 5: A Lending Milestone as Congress Adds Recovery Funds

By James Rivera, SBA Official
Published: January 30, 2013 Updated: February 13, 2013

Ninety days after Hurricane Sandy struck the Northeast, the U.S. Small Business Administration crossed the $1 billion threshold of approved loans to more than 16,800 homeowners, renters and businesses. This makes Hurricane Sandy, in terms of SBA disaster lending, the third largest natural disaster in U.S. history, behind Hurricanes Katrina/Rita/Wilma ($10.8 billion), and the Northridge Earthquake ($4 billion).

To put this massive storm and the coordinated federal recovery effort into context, the SBA has approved more loans for more money to Hurricane Sandy victims than what we approved for all disasters in fiscal year 2012 (Oct. 1, 2011 to Sept. 30, 2012).  In FY2012, the SBA approved 15,000 disaster loans for a total of $689 million. 

The sheer size and scope of this disaster created an increased need for more assistance.  This week Congress passed an aid package that will provide SBA with an additional $520 million to support up to $5 billion in low-interest disaster loans.

The bill also provides:

  • $249 million to cover to the administrative costs of making the loans;
  • $20 million to support SBA’s resource partners (SCORE, SBDCs, Women’s Business Development Centers) as they help business owners rebuild;
  • And $10 million to cover salaries and overhead expenses associated with the agency’s recovery efforts.

We continue to process loan applications.  Together with FEMA, we have extended the disaster loan application deadlines for states where we have seen the highest demand. The deadline for New York is Feb. 27, and March 1 is the deadline for New Jersey.   The Maryland (Worcester County) application deadline is March 4, and the deadline for Puerto Rico is March 11.

If you have a disaster loan application, complete and send it back to as us soon as possible. Don’t wait on your insurance payout. Your policy may not cover all the replacement, repair and rebuilding costs—and the SBA disaster loan can offset the difference.   In addition, the SBA will use any insurance proceeds to reduce the loan amount.

You can apply online using the Electronic Loan Application. If you think you need help filling out the application, or have questions about what documents are required to complete the process, call SBA’s Disaster Customer Service Center at 800-659-2955. Those with a speech disability or hearing loss may call 800-462-7585. You can also email the center at disastercustomerservice@sba.gov. Visit SBA’s Hurricane Sandy website for more information.

About the Author:

James Rivera
James Rivera

SBA Official

James Rivera was named Associate Administrator for SBA’s Office of Disaster Assistance in November 2009 after serving for several months as Acting Associate Administrator. In a typical year, his office approves about 20,000 loans totaling about $1 billion. This is the SBA’s sole direct lending program.

New Year, New Benefits

By BarbaraWeltman, Guest Blogger
Published: January 30, 2013 Updated: January 31, 2013

You love your staff and want to show it by giving them more in a tangible way. Increasing their pay may not be the best strategy for you or your employees. Added pay is taxable to employees, so they net less (how much less depends on their tax bracket). And added pay has additional costs to you in the form of payroll taxes. What to do? Think about giving them fringe benefits.

Overview

You’re not obligated to provide any benefit (starting in 2014, employers with more than 50 full-time employees will have to provide health coverage or pay a penalty for not doing so). If you choose to give fringe benefits, it’s a win-win for you and your employees:

  • You reward your staff without incurring additional employment taxes, such as the employer’s share of FICA (covering Social Security and Medicare taxes) and state unemployment insurance. Some benefits won’t even cost you a penny because you merely arrange for workers to buy them on their own with favorable tax results to them (explained later).
  • Your employees get valued benefits that do not increase their taxable pay. If they’d had to buy these benefits on their own, they would have had to earn enough, after tax, to cover the cost. For example, say you offer dependent care assistance of $2,500 annually for all employees. If an employee in the 25% tax bracket had to pay this cost on her own, she should have had to earn about $3,350 more in wages to cover this cost.

If you provide any fringe benefits, you must do so on a nondiscriminatory basis (with few exceptions). This means that benefits cannot go merely to owners and highly-paid employees; they must be available to rank-and-file employees as well.

Tailor your benefits plans to the needs of your staff and to your pocketbook. Remember that health coverage and retirement plans are the top two most-valued employee benefits.

Transportation fringe benefit

Employees know that their commuting expenses are not deductible, regardless of the length of the commute or how much it costs. However, you can pay for certain transportation fringe benefits that will be tax free to employees. For 2013, transportation fringe benefits are:

  • Free parking, transit passes and vanpooling up to $245 per month
  • Bicycle assistance (to maintain and store the bicycle) up to $20 per month

Alternative: Instead of paying these benefits, you can arrange for employees to pay for them on their own on a pre-tax basis (i.e., the portion of their wages used to pay for the benefits don’t count as taxable income). Your cost: only minimal administrative costs. For more about this, look at *TransitChek or the websites of other companies that arrange for transportation fringe benefits.

Child-related benefits

You can help your staff with family obligations in a tangible way by paying some child-related costs:

  • Dependent care assistance. You can pay up to $5,000 of assistance for each employee each year; this amount is tax free. Alternatively, you can enable workers to pay for their dependent care needs on a pre-tax basis by setting up a dependent care flexible spending account (FSA). The funds in this FSA cannot be combined with funds in a medical FSA.
  • Adoption assistance. You can pay up to $12,970 for adoption assistance in 2013 (the limit increases annually for inflation).

Small employers may not be able to offer these benefits and enjoy them personally. The law prevents “highly-compensated employees” (e.g., owners) from excluding company-paid benefits if the plan skews benefits toward them. In other words, the plan must be nondiscriminatory for all workers.

Cafeteria plan

Workers usually prefer to have a menu of benefits from which they can choose. A cafeteria plan lets employees choose between cash (or taxable benefits) and tax-free benefits; they are not taxed on the tax-free benefits merely because they could have opted for cash.  Some of the benefits you can offer under the plan include:

  • Adoption assistance
  • Athletic facilities
  • De mimimis (minimal) benefits
  • Education assistance
  • Employee discounts
  • Employer-provided cell phones
  • Health benefits
  • Meals
  • Moving expense reimbursements
  • No-additional-cost services
  • Transportation commuting
  • Working condition fringe benefits

As a small employer (no more than 100 employees), you can opt to use a simple cafeteria plan. A simple cafeteria plan is presumed to be nondiscriminatory. You must make minimum contributions (e.g., at least 2% of worker’s pay) to workers in the plan who are not highly-compensated employees; all employees can enjoy benefits under the plan. Your contributions to the plan are tax deductible.

You can find more about cafeteria plans in IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits. (The 2013 version is not yet out but should be shortly.)          

Conclusion

Whether you offer benefits, what they are, and how much you pay depends on your company’s financial situation. Obviously, you can only do what you can afford to do, no matter how generous you may want to be. Always discuss your benefits plans with a knowledgeable tax advisor.

 

*denotes non-government website

About the Author:

BarbaraWeltman
Barbara Weltman

Guest Blogger

Barbara Weltman is an attorney, prolific author with such titles as J.K. Lasser's Small Business Taxes, J.K. Lasser's Guide to Self-Employment, and Smooth Failing as well as a trusted professional advocate for small businesses and entrepreneurs. She is also the publisher of Idea of the Day® and monthly e-newsletter Big Ideas for Small Business® and host of Build Your Business Radio. She has been included in the List of 100 Small Business Influencers for three years in a row. Follow her on Twitter: @BigIdeas4SB or at www.BigIdeasforSmallBusiness.com

January 5, 2006 - Final rule, National Primary Drinking Water Regulations: Long Term 2 Enhanced
Surface Water Treatment Rule; Rule, published in the Federal Register.

January 4, 2006 - Final rule, National Primary Drinking Water Regulations: Stage 2 Disinfectants and Disinfection Byproducts Rule, published in the Federal Register.

April 21, 2003 - Final rule, National Emission Standards for Hazardous Air Pollutants; Reinforced Plastic Composites Production , published in the Federal Register.

August 2, 2001 - Proposed rule, National Emission Standards for Hazardous Air Pollutants; Reinforced Plastic Composites Production , published in the Federal Register.

February 12, 2003 - Final rule, National Pollutant Discharge Elimination System Permit Regulation and Effluent Limitations Guidelines and Standards for Concentrated Animal Feeding Operations published in the Federal Register.

May 13, 2003 - Final rule, Effluent Limitations Guidelines, Pretreatment Standards, and New Source Performance Standards for the Metal Products and Machinery Point Source Category, published in the Federal Register.

How to Take on Venture Capital Without Losing Control of Your Start-Up

By Caron_Beesley, Contributor
Published: January 28, 2013 Updated: August 4, 2016

Considering options for funding your start-up? Wondering if now is the right time to seek venture capital, but worried about losing control of your business?

Here are some tips for weighing your funding options, finding the right venture capital firm for your needs, and working with them once you’ve received your first injection of seed money.

Is Venture Capital Right for Your Small Business?

If you are looking for funding under $200,000, smaller angel investors (this could include borrowing from family and friends) or peer-to-peer lending or crowdfunding might be better options than a larger VC firm. Other alternatives include SBA loans. SBA doesn’t provide the loan; instead, they provide a repayment guarantee to banks, removing much of the risk of lending to small businesses. If your business is engaged in a high-tech industry or R&D, another option is a Small Business Innovation Research Grant. These federal funds support the critical start-up and development stages of small businesses.

Finding the Right VC Firm

If you have a proof of concept and are ready for a significant investment to fund your next stage of growth, then venture capital (VC) might be for you. But how do you find the right VC firm with which to align your business?

Given that a VC firm is going to be involved in your business’ funding and management, choosing one that provides a good match for your business is critical. Look for companies that have experience with businesses and industries like yours. Since a VC is going to be actively involved in your business, other factors such as its personality and core values are also important. A VC that is located close by might also be important.

So where can you find potential VC investors? If you have a good network then there’s a strong likelihood you can pinpoint potential investors via this route. Start locally and extend your search from there. Here are some tips and resources that can help:

  • Start in your Community – If you are involved in a local Chamber of Commerce or other small business group, start your search here. Talk to experts and business peers alike. Small Business Development Centers (SBDCs) and Women’s Business Centers may also be able to help introduce you to local investors. Find a center here.
  • Talk to Your State Economic Development Agency – At the state level, State and Local Economic Development Agencies may be able to help refer you to investors in your region.
  • Consider Trade Associations – Most industries are represented by a trade association, this is another great place to expand your search and meet potential investors. You can also look into national and local investing and venture capital groups like the National Venture Capital Association and the Angel Capital Association.

Your next step is to present any potential investor with a business plan.  SBA’s online Build a Business Plan tool can help you create one.

How to Maintain Leadership Control of Your Company

Many small business owners are reticent to invite VC funding because they’re concerned about losing control of their business. While it’s true that a VC firm will insist on controlling more than 50 percent of an early-stage entrepreneurial enterprise—does this mean you actually relinquish control of your business? Not necessarily. VC deals are structured around mutual incentives and milestones that are beneficial for all, and are rarely about one-sided control. VCs want business founders to aspire to grow and succeed, and they structure the financing deals to ensure this. For example, the terms of typical VC financing dictate that the investors don’t realize a profit until management does (assuming that they’ve already seen a return in capital invested) and vice versa.

Another emerging trend, as reported by the New York Times, is that VCs are increasingly putting a premium on young, visionary entrepreneurs who grew up with the Internet, social media and mobile technologies. With this clout behind them, these young founders are becoming more assertive in funding rounds, securing better terms and even cashing out their investors before an initial public offering.

That’s not to say your VC can’t move to replace you if your business isn’t performing or hitting key milestones. Some other things you can do to ensure you retain some level of control include the following:

  • Insist on an Employment Contract – This can minimize the risk of founders getting fired by their board of directors. Negotiate this before any seed money has exchanged hands.
  • Hire Stellar Employees – Poor staff will compromise the success of your business and jeopardize your position on the management team. By hiring right, you’ll ensure key milestones are understood and met, and profits are realized.
  • Collaborate with your Investors – In addition to funding, investors bring a wealth of experience. Capitalize on this and treat your VC as a partner—not as a threat.

For other tips, read Surprising Ways to Maintain Control of Your Business with Investor Approval from Yahoo Small Business Advisor.

Has your business sought VC financing? What best practices can you share for working with VCs? Leave a comment below.

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

May 25, 2006 - Letter to Susan B. Hazen, Acting Assistant Administrator, Environmental Protection Agency, comments on EPA's Proposed Lead; Renovation, Repair, and Painting Program Rule.

January 10, 2006 - Proposed rule, Lead; Renovation, Repair, and Painting Program, published in the Federal Register.

January 18, 2001 - Final rule, Control of Air Pollution From New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards; Highway Diesel Fuel Sulfur Control Requirements, published in the Federal Register.

August 25, 2000 - Letter to Margaret Borushio, Environmental Protection Agency(EPA) providing comments on EPA's proposed Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur Control Requirements.

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