salute to small business - cbjonline.com · 2015. 5. 18. · † obtaining the best rates available...

May 18, 2015 • An Advertising Supplement to the San Fernando Valley Business Journal

Salute to Small Business

It’s always a good time for small business own-ers to reassess their company’s financial healthand their relationship with their bank. The

American Bankers Association offers the followingtips to help small business owners enhance theircurrent banking relationship or choose the bestbank for their needs.

Many small business owners have been won-dering what it takes these days to get a bank loan.One way to influence your bank’s decision is toestablish a personal relationship with your bankerthat shows him or her just how valuable yourbusiness is.

Banks value long-term, profitable businessbanking relationships. Bankers reward these firmsby extending credit with the most favorable inter-est rates. These businesses and their bankersunderstand that developing a meaningful relation-ship is a two-way process—your banker has a roleto play and so do you.

So how do you know if you have a meaningfuland valued relationship with your bank? To findout, take the following “relationship test.”Respond to the seven statements below with“true” or “false.”

1) My firm has a bank relationship managerassigned to our account and we have contact (byphone or in person) at least once per quarter toupdate the bank on recent developments at ourfirm and within our industry.

2) Our bank relationship manager understandsour industry, our position in the industry, ourfirm’s value proposition, where we are today andwhere we’d like to be in the future.

3) We provide our banker with updated finan-cial information (historical and projected balancesheet, income statement, cash flow information toinclude projection assumptions and commentaryon actual performance) regarding our progresstoward achieving our goals on a timely basis.

4) Our senior management team meets annual-ly with our relationship manager and his/her bossto discuss our firm’s financial performance andchallenges and to understand the bank’s percep-tion of our performance.

5) Our relationship manager proactively bringsus ideas to help us achieve our goals.

6) We understand how the current economiccrisis has affected our bank and our relationshipwith the bank (i.e., the availability of credit to ourfirm and the safety of our deposits).

7) Our firm makes sure that our banker is aware

of all of our business with the bank (e.g., bothbusiness and personal) and that it makes moneyon our total banking relationship. In addition, ourfirm provides our banker with referrals to otherprofitable businesses.

If you were able to respond “true” to all sevenof these statements, you have positioned yourfirm well with your banker.

If you answered “true” to five or six, you stillhave room for improvement in developing ameaningful dialogue with your banker and bene-fiting from his or her advice and counsel.

If you answered “true” to four or fewer, youhave not positioned your firm well with yourbanker and are putting your firm at a competitivedisadvantage in terms of:

• receiving the funds you need to grow andprosper;

• obtaining the best rates available for thefinancial products and services your businessneeds to operate; and

• receiving “ideas and advice” to help youachieve your desired business goals.

Your firm should seek a bank that rewards arelationship approach to doing business withthem, and a banker who is able to give your firmthe financial advice that it needs to survive andthrive in today’s ever changing economy. Inreturn, your firm should reward this bank withyour business and loyalty.

The American Bankers Association represents banks ofall sizes and charters and is the voice for the nation’s$14 trillion banking industry and its two millionemployees. Learn more at aba.com.

Banking Relationships from a Small Business Perspective

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38 AN ADVERTISING SUPPLEMENT TO THE SAN FERNANDO VALLEY BUSINESS JOURNAL MAY 18, 2015

By MARLA CLEMOW

It’s spring cleaning season and notjust time to clean out your closets ormop the floors. It’s the right time of

year for small business owners to getorganized. From de-cluttering businessexpenses, to cleaning up plans, everybusiness owner can benefit from a springcleaning. Below are four tips that we’veobserved from small businesses that excelat spring cleaning and can help you stayon track this season:

1. De-clutter your Business Expenses:As a small business owner, you’re likelyresponsible for filing your taxes on aquarterly basis. With the April 15 dead-line in the rearview mirror, you’ve proba-bly had a chance to review your businessexpenses. Now it’s time to think aboutnext quarter and changes you can maketoday to better prepare. If you don’talready do this, keep your business andpersonal expenses separate. Businesschecking and credit accounts that areseparate from personal accounts can helpyou maintain accurate and completerecords of all business-related income andexpenses. For the next tax period, you’llhave separate statements and records toestablish business income and expenses –without having to take the time to breakthem out from co-mingled personalfinancial business.

It’s also a good time to find ways toreduce costs and cut unnecessary expens-

es. An easy way to audit your expenses isto print out a list of all expenditures fromyour accounting or bookkeeping system,and determine whether or not they werenecessary to keep your business running.It’s important to avoid falling into a rou-

tine of devoting resources toward particu-lar business expenses without re-evaluat-ing if those expenses are still addingvalue. Your business’ needs are constantlychanging so make sure your expenses arealigned with your goals.

2. Dust off your Business Plan: Everysmall business should have a formal busi-ness plan to help with business decisionsand strategic planning. If you have onealready, now is the time to do a quickreview and consider updates to reflectyour current business needs and goals. Ifyou don’t have one, set aside time to

draft this important document. From start-up to succession planning,

a business plan serves as a guide throughthe entire lifecycle of a business. An effec-tive plan can help business owners priori-tize how to spend their time and money,and set measureable goals. It also canhelp identify current or future obstaclesso you can better anticipate and avoidpotential risks. A business plan also mayhelp you obtain business financing. Forexample, for an SBA loan and some largerbusiness loans and lines of credit, lendersmay require a formal business plan beforeextending credit.

3. Spruce up your Transition Plan:As a small business owner, you’re proba-bly not thinking about selling your busi-ness or retiring, but it’s never too early tostart planning for the future. There aremany decisions to think about – whetheryou want to sell your business, pass it toa family member, cash out or wind downentirely – and this can sometimes be adaunting task. For this reason, it’s helpfulto start the process of business exit plan-ning several years before retirement anduse the following steps for guidance:

• Identify your business exit planninggoals and objectives,

• Determine what the company isworth,

• Identify transition options, and fund-ing or financing for the transition, and

• Develop an implementation strategyand timeline.

Whichever path you choose, it’s agood idea to take look at your transitionplan while you’re refreshing your busi-ness plan.

4. Reduce your Cash Flow Burden:To run a successful small business, it’sessential that you maintain healthy cashflow. A best practice is to track your cashflow on a monthly basis. This can helpyou improve cash flow projections andbetter plan for recurring expenses andbusiness expansions.

Nearly every small business will face atime when it needs more cash than it hason hand. During spring cleaning, youmay want to consider if a business line ofcredit would help bridge any gaps yourbusiness encounters in cash flow. Forinstance, when taxes are due, you maywant to use a line of credit to help keepyour cash flow constant and cover ongo-ing expenses, while paying down yourtax debts.

Refreshing business plans and review-ing your finances can not only enhanceyour bottom line, but can also have agreat impact on your productivity andfuture success.

Marla Clemow is Region President for WellsFargo’s Los Angeles Metro Region. She can bereached at [email protected] more information about Wells FargoWorks for Small Business, visitWellsFargoWorks.com.

Five Financial Spring Cleaning Tips for Small Businesses

SALUTE TO SMALL BUSINESS

By ROBERT SCOTT

In today’s competitive financing mar-ket there are a number of optionsavailable to business owners seeking

funding. When it comes to the purchase,refinance or renovation of commercialreal estate, borrowers owe it to them-selves to look at all of the possibilities,including the Small BusinessAdministration’s 7(a) Loan Program.

While not widely known or under-stood outside the lending industry, theSBA 7(a) Loan Program offers borrow-ers up to 90 percent financing for thepurchase of owner/user commercialreal estate that is fully amortized withno balloon payments. For the purposeof the loan program, owner/user isdefined as a minimum of 51% of totaloccupancy.

With a maximum loan amount of$5,000,000 and terms as long as 25 yearsfor commercial real estate acquisition,construction or refinance, the 7(a)Program could serve as a real solution tomany borrowers.

Due to the inherent nature of SBAfinancing, in some instances qualifyingfor an SBA loan may actually be easierthan qualifying for other, more traditionalforms of financing. SBA programs general-ly allow for a higher loan to value ratio,longer amortization periods and mayeven consider the projected income of thebusiness and not just historical cash flowswhen making a credit decision. These fac-tors can be extremely helpful, particularly

to a rapidly growing company. SBA 7(a) loans can be used by qualify-

ing borrowers to purchase, renovate orrefinance real estate, additionally theseloans can also be used for acquiring fixedassets, such as heavy machinery or otherequipment, restructuring current debt,working capital and in some cases caneven be used to fund the acquisition of anew business.

It is important to understand that theSBA does not make loans directly to smallbusinesses. Rather, the SBA sets the guide-lines for these loans, which are thenmade by the SBA’s lending partners.Because the SBA guarantees the lenderthat a portion of the loan will be repaid,it significantly lessens the risk to thelending partners. So when a businessapplies for an SBA loan, it is actuallyapplying for a commercial loan that isstructured according to SBA requirementswith an SBA guaranty.

SBA loan guaranty requirements andpractices can change as theGovernment alters its fiscal policy andpriorities to meet current economicconditions. Therefore, you can’t rely onpast policy when seeking assistance intoday’s market, which makes it all themore important that you work with alender that will help guide you throughthe process and identify what type ofprogram may best fit the needs of yourcompany.

SBA 7(a) loans and other types ofspecialized lending make it possible forqualified businesses to get the financ-

ing they need, often times with muchmore flexible terms than more conven-tional loan options. Two resources tohelp you learn about SBA and otherforms of specialized lending are avail-able at www.sba.gov orwww.MissionValleyBank.com.

Robert Scott is senior vice president andchief credit officer of Mission Valley Bankwhich is a full-service, independent, com-mercial bank with Preferred SBA Lender sta-tus serving the San Fernando and SantaClarita Valleys. Bob can be reached at(818) 394-2300.

Looking to Purchase, Refinance or Renovate Commercial Real Estate?

By ANDREA SANDOR

As an entrepreneur, you will have to con-

front the realities of financing a new-busi-

ness concept. But if you have the proper

know-how, you can get the funds you need—

and on the terms you prescribe.

Tips on Forming a Banking Relationship

If you haven’t been able to form a rela-

tionship with a bank before applying for a

business loan, investigate the bank you’ve

chosen. Call up and make an appointment

with a loan officer. Tell him or her that you

are thinking of seeking financing through

their institution and you would like to know

more about them. While you’re there don’t

be afraid to talk to the bank president and

manager, as well as the loan officer—if you

can—to get a feel for their operations and

their treatment of smaller customers.

Describe your credit needs, ask what

the bank can do for you, and try to deter-

mine whether others in your field are

among their customers. Make sure your

banker understands your business—at

least to some degree—and “talks your lan-

guage.” Before leaving the bank, get some

literature, if you can, on the different types

of loans available. Learn about the bank’s

security requirements for these and other

types of loans, and decide which you want

to apply for.

When you’ve picked your lender, call up

and make another appointment, this time to

apply for the loan. Plan for a long, thorough

meeting. Earlier we discussed the prepara-

tion of your business plan, including a

detailed estimate of the amount of money

you need, and a personal financial state-

ment. Take these documents with you. Also

prepare a one-page summary, including

what the money is to be used for and how

you plan to pay it back. Bankers love facts

and numbers, so have lots of both. And do

your homework to be prepared to answer

any questions. If you like, take your

accountant or lawyer with you, but plan to

do most of the talking yourself.

Andrea Sandor is a freelance business and

finance writer based in Van Nuys.

Generating Capital for Your New Business

As a small business

owner, you’re probably

not thinking about

selling your business

or retiring, but it’s

never too early to start

planning for the future.


MAY 18, 2015 AN ADVERTISING SUPPLEMENT TO THE SAN FERNANDO VALLEY BUSINESS JOURNAL 39

Branches located in: SAN FERNANDO VALLEY SANTA CLARITA VALLEY CORPORATE HEADQUARTERS CENTRE POINTE BUSINESS BANKING CENTER 9116 Sunland Blvd., Sun Valley 26415 Carl Boyer Drive, Santa Clarita818.394.2324 661.775.4113

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37 46_salutetosmallbiz.qxp 5/13/2015 1:21 PM 9


As the economy recovers from theGreat Recession, businesses arestill dealing with some turbulence

in the market. There has been a slightincrease in hiring but wage and produc-tivity growth remain stagnant. In addi-tion, the Fed has signaled it will raiserates but it is uncertain as to when thatwill happen. When you add in the eco-nomic uncertainty overseas most compa-nies are remaining cautious. This cautioncreates slower expansion, limited hiringand lower demand for new equipment.Business owners will take risks but only ifthey know what the risks are and in thisuncertain economy it is difficult to assessthose risks.

In the California economy there issome promise as the technology sectorcontinues to be the shining star. SouthernCalifornia’s Silicon Beach expansion – thearea between Santa Monica and ElSegundo – is just one example of growthin the technology sector in this region.This is something that is likely to spreadgiven California’s rich technology sub-cul-

ture, the availability of venture capitaland the key universities in the area thatgrow the best and brightest in this field.

Regardless of industry, there are two bigobstacles facing Southern California busi-nesses. The first is finding good talent.Having the right team in place is crucialfor a company that is trying to generate aconsistent product and grow. The secondis regulation and tax costs in California.This has led to many companies beingunable to expand in Southern California.

In order to navigate through theseobstacles, businesses should choose banksthat understand their business and areable to advise the company and structurebanking products to fit their needs. Agood banking relationship ensures thatthe business will have a reliable source ofcredit and the right treasury managementtools in place to best manage the compa-ny’s finances. Any company that wantsto grow successfully needs consistent sup-port from their bank.

Community Bank provides that sup-port by creating one-on-one personal rela-

tionships with our clients. Our customersknow their banker who becomes a trustedadvisor offering banking solutions to fiteach client’s needs. In addition to havinga banker readily available to assist them,our clients also have access to theExecutive Management team.

Charlie and Howard Cook builtCommunity Bank on these values thatstill define the Bank today. After WorldWar II Charlie was frustrated with dealingwith large banks so he decided to openhis own bank. From its inception theBank focused on middle-market compa-nies and providing excellent customerservice. As the Southern California econ-omy grew, the need for more sophisticat-ed financial tools grew. Today,Community Bank provides virtuallyevery financial service needed by businessin Southern California.

It is important that businesses get theright financing to help the business suc-ceed. Small- to medium-sized businessescan take advantage of the Small BusinessAdministration (SBA) programs through

Community Bank. In fact, CommunityBank consistently provides nearly$100,000,000 in SBA loans each yearthroughout Southern California. Thebenefit of SBA loans is that they typicallyoffer a much lower down-payment forcommercial real estate purchase, debtrefinance, equipment financing and busi-ness acquisition than a traditional loan.

The SBA has recently implemented afew programs to make financing moreaffordable and easier to obtain - especiallyfor U.S. Military Veterans and businessesthat are involved in export activities. ForVeterans all SBA fees are cut in half. Anyloan under $150,000 has zero guarantyfees. For businesses that export, the SBAincreased their guarantee which gives alender a little more latitude. These changeshave helped business owners throughoutLA County overcome the objections mostlenders have had in the past.

Information for this article was provided byCommunity Bank. For more information,visit www.cbank.com or call (800) 788-9999.

How Small Businesses can Effectively Navigate throughObstacles


Starting a business is a great risk yeta rewarding accomplishment- to seean idea manifest itself into some-

thing greater. The business owner has thecommitment and the unrelentless tenaci-ty to see it succeed. Success does notmean everything will go as planned. Atany stage, a business owner will have tochange and adapt to the circumstances tothrive in this competitive market.

One of the ways to ease the stress ofstarting your business is to locate in aCoworking environment. Unlike thetypical office environment, aCoworking space is generally shared byindividuals from different organiza-tions and professions. It is fast becom-ing increasingly popular among inde-pendent contractors, startups, andother folks that would otherwise workfrom home.

Coworking spaces have proven to bemore than office space. Coworkingspaces create professional communities.

Operating out of a Coworking spacehas many benefits. Renting a small officecould cost you hundreds or thousands ofdollars per month. Coworking spaces cancost a fraction of that amount and withvery flexible terms— you can use it everyday or only as you need it.

Coworking spaces also provide theadded benefits compared to traditionaloffice space. Many provide members witha shared receptionist that takes calls andgreets guests at the door. You may alsohave access to necessary amenities, suchas printers, conference space and a pro-fessional atmosphere to meet.

Finally, Coworkers are surrounded bylike-minded individuals who can increasethe potential for collaboration, partner-ships and future business clients.

The Pasadena area has a rich history ofcreative incubator spaces from Idealab,the Pasadena BioScience Collaborative,Chef’s Kitchen (restaurant incubator) andthe Business Technology Center. Mostrecently Pasadena has seen new develop-ments in Coworking space.

Cross Campus recently completed a20,000 square foot campus on RaymondAvenue in Old Pasadena. The new campusfeatures enterprise-class connectivity andaudio/video capabilities, a highly inten-tional design aesthetic that has become atrademark of the Cross Campus brand.“Pasadena has a pedigree and the peopleto be a leading entrepreneurial ecosystem.It is already home to world-class institu-tions such as Caltech, NASA’s JetPropulsion Lab, and Art Center College ofDesign. With great public transit and adensity of food, retail and entertainmentoptions, Pasadena has the raw materials togrow, and we’re excited to help catalyzethis growth,” said Ronen Olshansky, Cross

Campus Co-Founder and CEO.Epic Spaces just signed a 8,500 square

foot lease at the new Playhouse Plaza inthe Playhouse District. Epic Spaces isschedule to open late summer.

Blank Spaces will open a fourth spacein Pasadena. BlankSpaces is expected tohave have flexible plans for a variety ofsizes for any work styles. It is anticipatedthat BlankSpaces will open their Pasadenalocation by the end of the year. Not onlyis the Pasadena location close to commu-nity comforts such as Urth Cafe andTender Greens, but it is anchored close toCaltech in order to serve as a magnet forthe area’s deep academic/tech talent.

At any stage of a business, the City of

Pasadena Economic Development staff isavailable to assist. From Coworking spacesto traditional office space, the City staffcan help you find the perfect location. InPasadena, the team is open for businessand here to help! Check out the websitefor more information or give them a call.They are waiting to hear from you.

For more information, contact the City ofPasadena’s Business Concierge Team: RuthMartinez-Baenen ([email protected]); Robert Montano ([email protected]); Eric Duyshart ([email protected]) at (626) 744-4660, or visitwww.cityofpasadena.net/economicdevelopment

Startups and Coworking Space: the Perfect Match

Bearing in mind the importance of good

leadership to business, consider the follow-

ing lineup of skills, strategies and attributes:

1. Be inclusive. With a smaller operation,

it’s essential that everyone feels like an equal

and involved part of the team. A good

employer is certain to treat each employee

fairly, not only in terms of salary and other

forms of compensation, but also in how that

employee is involved in the daily function of

the business. Encourage feedback, innova-

tion and creativity so employees feel genuine-

ly engaged. You need to create an environ-

ment of integrity, trust and respect to make

absolutely certain that everyone is treated

fairly, regardless of the differences they may

have. It’s essential to be inclusive, because

that keeps everyone on the same page when

it comes to the business’s long-term goals.

2. Mission, not just money. Very few busi-

nesses operate out of sheer altruism, but that’s

not to say that turning a profit is the primary

philosophical and practical focus. Rather, an

effective boss establishes a genuine business

mission. How that takes shape depends both

on the business and on the overriding focus the

boss wants to set. For instance, a restaurant

owner may push speedy lunchtime service as a

way of serving the time-strapped business com-

munity. By contrast, a medical supply outfit may

emphasize how its products improve cus-

tomers’ health. Not only can a clear mission

serve to motivate employees, it can also infuse

a sense of importance in their jobs.

3. Nothing to fear but fear itself. Many

of us have had bosses who would be right at

home with a guillotine next to their desk cal-

endars. Make one mistake on the job and

feel free to slip your noggin right in beneath

the blade. Conversely, an effective boss

encourages his or her employees not to be

gun shy about an occasional snafu along the

road toward better job performance.

4. Don’t just lead — coach. It’s common

to hear a sports reporter observe that one

coach out-coached another in a particular

game. The same dynamic holds true for your

business, in which you view your position

both as a leader and a coach who teaches,

encourages and, if need be, corrects employ-

ees. A coach sees things very differently

than the players. It’s important to use that

different perspective to educate and encour-

age. But it’s also important, like a good

coach, to lead your team by example. For

instance, while you should point out mis-

takes by your employees, be sure to admit

when you yourself make a mistake.

5. It’s their careers, too. Don’t forget that

the people who work for you are looking to

you to help them navigate and advance their

careers. As I said, it’s not all about money.

But it is all about making your employees

see how to improve and create meaningful

careers for themselves. If an employee has a

goal of becoming a manager or running his

or her own business someday, nurture that

goal. Tell them the traits they need to work

on to achieve their ultimate plans.

6. Made, not necessarily born. One final

aspect of being a good boss is recognizing that

much of what goes into being an effective

leader is, in fact, learned behavior. Of course,

there always have been and will be bosses who

seem to have a flawless touch in leading and

motivating. But for every natural, there are just

as many top-flight bosses who got that way by

attending management classes and seminars,

reading books on effective leadership and, just

as important, understanding that a good

employer naturally attracts first-rate employees.

Information provided by the Small Business

Association.

Become a Great Boss at Any Size Company

37 46_salutetosmallbiz.qxp 5/13/2015 8:23 PM 0


VEDC is a leading non-profit smallbusiness lender that is changingthe way small business lending

gets done by making it more availableand impactful.

From their headquarters in the GreaterLos Angeles area, VEDC has supportedsmall business owners for 38 years withthe goal of creating and sustaining jobsand businesses in underserved communi-

ties by providinghigh-quality smallbusiness develop-ment services. Theyprovide loans andmicro-financingoptions to small

businesses, particularly those owned bywomen and minorities, that don’t qualifyfor traditional bank financing.

VEDC believes that the major barrierfor today’s small business is access to cap-ital. Without adequate financing, manysmall businesses are prevented fromthriving. That is why VEDC focuses itsefforts on lending and guiding smallbusinesses to achieve growth and sustain-ability. Their interest is to get loan fundsin the hands of minority and low-incomeborrowers so that businesses can be creat-ed, maintained, and expanded.

In fact, VEDC has been instrumentalin helping to create economic opportuni-ties in low-income, underserved areas forthose who want to improve their finan-cial standards and build stronger commu-

nities. The organization has helped createand retain over 25,000 jobs and openmore than 1,700 new businesses.Historically, 75 percent of VEDC clientsare located in low- to moderate-incomeareas and 65 percent have been minorityand women entrepreneurs.

Taking access to capital one step fur-ther, VEDC has formed the NationalMicrofinance Fund to expand their smallbusiness loan portfolio to include lendingto other micro-lenders across the country.VEDC seeks to continually increase accessto microloan capital and intends to meetthis growing need by acting as a nationalintermediary lender.

This new program will not only sup-port the efforts of microloan organizationsin markets VEDC currently serves, but toalso improve the economic impact of non-profit, mission driven lenders across thecounty. These newfound connections willgreatly support a large number of new andexisting entrepreneurs across diverseindustries in achieving business growththrough access to capital and financing.

It has been proven that a combinationof technical assistance, access to capital andpartnerships with local workforce and busi-ness assistance agencies are critical to entre-preneurial success which is why VEDCoffers training and financial services. Thesuccess of small businesses and the creationof jobs is the key ingredient in developinghealthy and sustainable communities.

VEDC has consistently provided serv-

ices to small and medium sized businessowners, entrepreneurs and members ofthe communities it serves. The organiza-tion operates a Small BusinessAdministration (SBA) Women’s BusinessCenter, San Fernando Valley SmallBusiness Development Corporation,Pacoima Development Federal CreditUnion, and two Los Angeles BusinessSource Centers. The combination of thesesuccessful programs that anticipate theneeds of growing businesses in the ever-changing economy has created a focusedvision of economic opportunity, effectiveorganization of resources, and the foster-ing of job creation.

VEDC offers a core of business work-shops and each year over 5,000 small busi-nesses access these services. The renownedEntrepreneur Training Program is an inten-sive 8 week business training program forstart-up and existing businesses. Alumnifrom this program have proven to have ahigher success rate for business retentionthan the national average. VEDC hasassisted more than 95,000 businesses andgraduated 2,907 individuals from theEntrepreneurial Training Program.

The VEDC Business Services Divisionoffers entrepreneurs the tools they needto succeed in business with the access toconsulting and training to business own-ers and VEDC loan clients as part of anongoing strategy not only to help peoplestart a business but to assist them withcapacity building and growth strategies.

In support of small business, VEDCoffers a wide range of services to entrepre-neurs in the Los Angeles area including:

Business Loan Programs

• Microloan Programs in amountsranging from $1,000 to $50,000

• Small Business Loan Programs inamounts ranging from $50,000 to$500,000

• SBA 7(a), including CommunityAdvantage, in amounts up to $2,000,000

• SBA 504 Commercial Real EstateLoan Program

Business Services and Training Programs

• SBA Sponsored Women’s BusinessCenter in Van Nuys, CA

• Two City of Los Angeles BusinessSource Centers – Pacoima and Reseda

• Microenterprise and EntrepreneurialTraining Programs

• Travelers Small Business RiskEducation Program

Each year, VEDC serves more than5,000 small businesses with financing,training, and direct business assistance.As a result, VEDC has been instrumentalin helping to create economic opportuni-ties areas for those who want to improvetheir financial standards and buildstronger communities.

To learn more visit www.vedc.org or call(818) 907-9977.

A Closer Look at VEDC: Changing the Way Small BusinessLending Gets Done


SMALLBUSINESSSUPPORTSPOTLIGHT

By TOM JONES

How do I grow my business?” Nowthat’s a question that every busi-ness owner wants answered,

preferably with ways that don’t costthem a small fortune. The response issimple. There are really only three waysto grow any business.

First, you go out and find new cus-tomers. Second, you increase the unit ofpurchase, and third, you increase the fre-quency of purchase. These are the onlythree ways I know of to grow any busi-ness. Let’s take a closer look at what eachone really means.

Most people believe that in order togrow a business, you have to prospect,cold call, advertise, do direct mail, or usethe Internet to find new customers. Whilefinding new customers may be one wayof growing your business, it’s also themost expensive and most risky way to go.

There is no guarantee that the thou-sands of dollars you just spent placing anad in a national magazine is going tobring you new business, or that the10,000 pieces of mail you just sent outwill generate a profitable response. Yet, ifyou look around, most businesses spendthe majority of their time and resourcesin this one area alone.

A better way is to focus more of yourattention on the other two ways of grow-ing your business. Although at firstglance, these two might seem surprising-ly similar, they are, in fact, very different.

The first one is to increase the unit ofsale. What this means is that you want tomake your current or even any new cus-

tomers purchase more from you at eachand every sale. In other words, if yourtypical customer buys an average of $100worth of goods or services from you ateach purchase, your goal is to try andmove that number up as much as possi-ble without losing that customer.

You might try adding complimentaryitems to your product mix. An examplethat immediately comes to mind is aphoto store I once worked with. Toincrease the unit of sale, instead of hav-ing the clients just come in for film orprocessing, I suggested he start offeringphoto albums, frames, and batteries. Sowhen a customer came in to pick uptheir finished photos, they could also buya nice frame or photo album, while theywere thinking about it. This also savedthem from having to go to another mer-chant for these items.

This increased the unit of purchase forthe store owner, and inevitably increasedhis bottom line. Think about it, he had noadditional advertising expenditures, hetook very little risk, and he still managed toachieve his goal of growing his business.

The other way to grow your businessis by increasing the frequency of sale. Inother words, if your typical customerbuys from you once a month, for exam-ple, you could offer them a reason to buytwice a month.

An example that comes to mind is aclient I worked with just last year. In thiscase we also had them offer an extendedproduct line in order to increase thenumber of times a customer would pur-chase from them. This was a businessservices company that offered a wide

range of services for the smalloffice/home office professional. Welooked at what people were buying andhow often they were buying.

We decided to poll their customersdirectly and ask them what was miss-ing. In just a few days, we had ananswer. What they needed most weresimple office supplies. For just a fewhundred dollars, the owner of the busi-ness was able to bring in a full range ofoffice supplies including paper, comput-er ribbons, cables, staples, ink, etc.These were the types of things thesepeople frequently ran out of and byoffering them in this location, theysaved a long trip down to the officesuper-center.

It’s always a good idea to talk to yourcustomers on a regular basis. Find outwhat they really like about your business,but even more importantly, find out whatthey don’t like and change it. You mayfind that if you were just to offer themthe product(s) they needed either beforeor after purchasing your products, youcould increase your sales exponentially.

These last two methods work for mostany business because they have very littlerisk associated with them and can veryeasily have the same growth effect as find-ing new customers, but without the inher-ent risk associated with cold prospecting.

Another key advantage to using thesetwo methods is that your customersalready know you and trust you. They’vedone business with you in the past andthey have some positive references aboutyour company. In a cold prospecting situa-tion, you are trying not only to sell a prod-

uct or service, but you are trying to sellyour prospect on your company’s integrityfor which they have no references.

A great question I often ask of myclients is how do they get most of theirnew business? Inevitably they’ll tell methat most of their new customers comefrom referrals. So, my next logical ques-tion is, how much time and effort do youplace into developing referrals? I’malways amazed to find out that althoughthey realize that referrals are a major partof their business, they dedicate few, ifany, resources to this powerful means ofgenerating new business!

If referrals are a major part of yourgrowth strategy, you’ve got to spend timedeveloping programs that increase thenumber and frequency of referred clientsto your business. An easy way to do thisis to offer your existing clients a premiumor discount of some sort for each newcustomer they bring you. What you areactually doing is turning your satisfiedcustomers into a powerful, persuasivesales force and paying them only whenthey produce a result or in other words,bring you a new client.

Growing your business doesn’t have tobe expensive, risky, or even time-consum-ing. Unless you have a time-tested way toadvertise that produces reliable results,try these other ways I’ve mentioned first.You might be surprised to find that theywork as good or better than coldprospecting at a fraction of the cost andwith dramatically reduced risk!

Tom Jones is an independent business man-agement consultant and freelance writer.

Grow Your Business Fiscally and Physically



“The tools in the BusinessPlan Center are goldenfor anyone who’s lookingto grow their business.”

Carolyn MiyeOodles 4 Kids, est. 2012Portland, Oregon

*Wells Fargo rewarded Carolyn Miye $10,000 to help with her marketing plans.

© 2015 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. (1253126_14991)

Our complimentary Business Plan Tool can help youfocus on the things that will make your business thrive.

Like most small business owners, Carolyn Miye* was so busy running her business that she found it hard toorganize ideas for her company’s future into a business plan. Using the Business Plan Tool from Wells Fargo,she gained valuable insight to help her focus on what to do next. It’s just one of the complimentary resourcesin the new Business Plan Center. To learn more, visit WellsFargoWorks.com.



By MIKE TOTTMAN

Some small-business owners look atinsurance as if it were a tax. It maybe necessary, but if they can avoid

it or keep it to a minimum, all the better.This view is penny-wise and pound-fool-ish. Insurance can give you advantages,as well as providing in the case of catas-trophe. There are several kinds of insur-ance to consider for your business.

Four kinds of insurance are essential:fire insurance, liability insurance, auto-mobile insurance, and workmen’s com-pensation insurance. In many business-es, crime insurance may be essential aswell. Fire insurance can be embellishedwith additional protection againstexplosion, vandalism, malicious mis-chief, smoke, etc. at a minimal addi-tional cost. A comprehensive all-riskcontract may be the best buy for thebroadest protection for the money.

Liability insurance is the shield for thebusiness owner against lawsuits by cus-tomers who may slip and fall, or injurethemselves with your product. A liabilitycoverage of $1 million is not excessive.Remember, you may be legally liable evenwhen you exercise reasonable care - in somecases even if the injury is sustained by a tres-passer! Be certain whether or not propertyof customers that is in your care is covered.

It is a sad but true fact that in theUnited States, if you are in business longenough - any kind of business - sooner orlater somebody will sue you. We have agreatly disproportionate number oflawyers, and a mentality that says “sue

businesses for all they’re worth” regardlessof the stupidity of the “victim.” Rememberthe famous hot coffee spill in the lap?

Errors and Omissions Insurance isyour protection against what in the med-

ical field is called malpractice. While lia-bility protects you if you do everythingthat “a normal prudent person” woulddo, that may not be enough. E&O insur-ance covers you if you fail to do some-thing an “expert” would do. For instance,a prudent person wouldn’t stack 50-gal-lon drums full of acid without some safe-guards against falling. An expert shouldhave known that they should be markedin a particular way before shipping. If aninjury occurs in the first case, liabilityinsurance is enough. In the second, E&Owould be necessary, because of your“malpractice” in not properly markingthe containers. In this case, the claimmay not even be an injury, but it couldbe a fine imposed for the marking failure.

Automobile insurance is of courserequired by law. Inquire into fleet policiesif you have five or more vehicles used forbusiness.

Workers’ Compensation is also a legalrequirement, rates range from 0.1 percentof payroll for “safe” occupations to 25percent or more far hazardous ones. Theworkers’ comp coverage premiums can bereduced if your accident rates are belowaverage, and using safety and loss-preven-tion measures.

Other coverages you should considerinclude:

• Business Interruption Insurance: Coversfixed expenses that would continueshould you be closed down by fire orother reason. For instance, if the Citydecides to tear up the road in front of yourstore, so that your customers cannot comein! A more common example is if youinjure yourself so that for a short period oftime you are unable to operate your busi-ness. The bills don’t stop when you do!

• Disability Insurance: Covers you ifyou cannot work on a permanent orlong-term basis. While you were a wageslave, your workers’ compensation insur-ance covered you as required by the state.However, self-employed people are gener-ally not covered by workers’ comp. Youneed to insure yourself instead.

• Crime Insurance: Can be valuable ifyou are burglarized or robbed. It maycover white-collar crime as well, depend-ing on how the policy is written. Thereare federal crime insurance plans to helpin high-crime areas where private crime

insurance would be impossible or tooexpensive to get.

• Glass Insurance: Covers broken win-dows, signs, etc. For stores with a lot ofglass windows, this can more than payfor itself the first time you have toreplace one of those large show windows.

• Disability Insurance: You can purchasecoverage for injuries your employees sus-tain off the job as well as on. Thisreplaces the loss of income while they arerecovering.

• Retirement Income: You can get anincome tax deduction for funds usedfor retirement insurance plans underthe Employees Retirement IncomeSecurity Act.

• Key-Man Insurance: Your keyemployees can be insured with life anddisability insurance made payable toyour company.

It definitely pays to shop around for yourinsurance needs. Different companies mayhave very different rates for the same cover-age - in fact different offices of the samecompany may offer differing rates, as mostare independently owned and operated.

While shopping, check about includ-ing many of the coverages under one“umbrella policy.” If the company isensuring your home and your car andyour business policies, you can often geta combination deal that will save youmoney over the premiums of all the poli-cies billed separately.

Mike Tottman is a writer and retired inde-pendent Broker.

What Kinds of Insurance to Consider for Your Business


Four kinds of insurance

are essential: fire

insurance, liability

insurance, automobile

insurance, and work-

men’s compensation

insurance.



LET US BE YOURBUSINESS PARTNER

S M A R T • I N N O V A T I V E • C O N N E C T E D

c i t y o f p a s a d e n a . n e t / e c o n o m i c d e v e l o p m e n t



Business Owners, Entrepreneurs andSmall Business Service Providersare growing their sales with social

media. Key benefits of social mediainclude attracting and engaging withmore customers on Facebook, Twitter,LinkedIn, Google+, YouTube, oGoing,blogs and more.

“Social Media provides businesses anunprecedented direct communicationwith customers! Using social media, abusiness directly informs their clientsabout what’s going on, promotes newoffers and services, and provides cus-tomer service; the clients freely expresswith the company their experiences, askquestions and provide direct feedback ina public setting. This level of intimacyand engagement hasn’t been achievedbefore,” said Sanjay Dalal, founder &CEO, oGoing.

oGoing is the nation’s fastest growingsmall business social media marketingnetwork. Thousands of Business Owners,Entrepreneurs and Small Business ServiceProviders are using oGoing to generatewarm leads, attract new customers, pro-mote products and services, share deals,and engage with clients directly.

oGoing presents 5 social media tipsand best practices for a business to attractmore customers using social media mar-keting:

1. Know the customers

Take time to know your customersthrough social networks. Stand in theirshoes. Learn more about their business.Ask the question: “What are their

needs?” Find them, and Search theirsocial media updates. Learn more aboutthe customer’s customers. The moreknowledgeable one becomes about thecustomer’s business, the more productsand services the business can ultimatelyoffer to them.

2. Connect with customers

After determining who the customersare, a business must take the logical nextstep: Connect or Follow them! Once con-nected, most social media networks sharea live news feed of the following user’supdates. Thus, when a business is loggedin, they see latest news stories about theircustomers. Reading what’s going on pro-vides greater understanding of the cus-tomers’ current situation, needs andevents.

3. Engage with customers

Reading the customers’ updates andgaining further knowledge about themare important first steps. Next step is tobegin engaging with the customers. Thebest way: Reply to their updates and Askquestions. When a business responds towhat their customers are saying, andbegins a conversation, that’s whenengagement begins. Social media is allabout “live” conversations. Besides reply-ing publicly, a business can also askdirect questions to solicit a response,reply privately or send a direct messagefor further intimacy.

4. Promote customers

Often times, owners and marketers

forget that social media marketing is notso much about promoting their ownbusiness; rather, it’s more about promot-ing their customers. This simple factchanges how well engaged the customersare. When the company takes on theonus of promoting their customers, thereturns are tangible and immediate.What customer doesn’t like a public pro-motion in the form of a mention, shar-ing of their updates, or recommendation?

5. Ask for referrals from customers

After establishing a solid relationshipwith customers and prospects on social

media, a business can begin to transformthis engagement into leads. Social mediacannot be an off and on affair. It has bean always on campaign. Hence, a busi-ness must frequently login to socialmedia networks and engage with theirclients on a daily basis. When the time’sright, ask the customers for new referralsand share with them new offers.

oGoing provides a powerful social mediamarketing network for small business thatincreases website traffic, improves SEO rank-ing, generates warm leads and attracts newcustomers.

Five Small Business Social Media Tips to Attract Customers


It’s hard to believe now, but UPS started

out as a small business more than a centu-

ry ago. Today, as the world’s largest pack-

age delivery company, the shipping organi-

zation understand how important it is to win

contracts with companies, and knows that

the bottom line counts.

Here are 10 tips offered up by UPS for

small businesses to consider for success:

1. Get certified as a minority- or woman-

owned business and get involved in local

organizations.

2. Look for customers who are commit-

ted to supplier diversity.

3. Know how to sell your company by

pitching what you alone can bring to the table.

4. Conduct advance planning and

research about the company.

5. Understand what makes the company

tick.

6. If your product or service is not a good

fit for a company, know when to cut your

losses and focus energy elsewhere.

7. Pick the right point-of-entry by contact-

ing the appropriate buyer.

8. Be able to answer this question: “If

I buy your product or service, how will it

help my company gain a competitive

advantage?”

9. Seek mentor relationships to bolster

weak areas.

10. Practice the three P’s: patience, per-

sistence, and perseverance.

UPS Offers Ten Tips for Small Business Success

Welcome to Simi Valley

• Money Magazine Top 100 Places to Live• One of America’s safest cities• Reasonable prices for lease or purchase• Large and talented labor supply• Excellent schools• Attractive homes in all price ranges• A welcome attitude from the City

A pro-business city featuring:• 2,000,000 square feet of office space

• 8,000,000 square feet of industrial space

• 5,000,000 square feet of retail space

For more information, please contact:Office of Economic Development, City of Simi Valley

2929 Tapo Canyon Road

Simi Valley, CA 93063

805.583.6701 www.simivalley.orgCITY OF SIMI VALLEY

When is Your Move-in Date?


salute to small business - cbjonline.com · 2015. 5. 18. · † obtaining the best rates available...

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