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July 8, 2020

How To Get Startup Funding: 5 Types Of Funding For Startups & 5 Tips To You Get Started

You have a great idea, and you’re ready to take action and turn that idea into a thriving business. Maybe you have a new product that’s unlike anything on the market, or you’ve hashed out the details of a much-needed business in your area. No matter what type of business you have in mind, all startups have one thing in common: the need for capital.

Unfortunately, new businesses find it challenging to find funding. You can’t just walk into your local bank, produce a few financial statements, and get a business loan. A lack of revenue and business credit history works against you, as traditional lenders see you as a big risk.

However, this doesn’t mean you have to put your dreams on hold. It simply means that you need to get a little creative with your funding. Not sure where to start? You’re in the right place. This post is going to focus on startup funding.

This goes beyond just small business loans. We’ll look at a few unique types of funding for your business, as well as provide you with tips to get started. Use these ideas to get the money you need to get your business off the ground. Ready to get started? Let’s dive right in.

Use Startup Funding To Take Your New Business To The Next Level

Before we delve into the different types of funding, let’s first evaluate why you need startup funding for your business.

Every business needs capital. The amount of capital you need varies based on a number of factors. Your type of business, specifically, influences your costs. If you’re creating a new product, your initial startup costs will differ from those of someone opening a store or restaurant. An online business will have different costs than a brick-and-mortar business. One of the first steps to launching your startup is to identify potential costs and then estimate how much capital you need to cover the costs to get your business off the ground.

When launching your business, some of the startup costs to keep in mind include:

Rent or mortgage
Utilities
Equipment
Supplies & inventory
Marketing
Research & development
Payroll
Insurance

Securing capital is the first step to launching a successful business. Just take a look at some of the businesses and products you may already be familiar with. The wildly successful card game Exploding Kittens had one of the biggest Kickstarter campaigns in history, raising over $8.7 million in 2015. Since its launch, its become a top-selling game across retailers such as Amazon and Target with over 9 million games sold. Expansion packs and other card games are also available, making this business even more successful.

Or perhaps you’ve heard of the food delivery service Grubhub. By 2011, the company had received five rounds of investment funding, transforming the company from one that simply offered online restaurant menus to a food delivery service in cities across the nation. Grubhub was just sold to Dutch company Just Eat Takeaway.com for a cool $7.3 billion.

Maybe you want to grow your business this large … or maybe you just want to kick your 9-to-5 to the curb, make your own money, and be your own boss. Whatever your ultimate goal is, securing funds can help you get there.

How Does Startup Funding Work?

There are two main types of startup funding to consider: debt financing and equity financing. There are a number of funding sources that fall under each umbrella, but for now, let’s focus on the general meaning of each.

Debt Financing

Debt financing means that you receive a lump sum of money that is paid back over a period of time. In addition to paying the principal (in other words, what you borrowed), you’ll also pay interest to the lender. You may also be required to pay fees, such as an application fee or origination fee.

Lenders look at several things when determining whether you qualify for funding, the amount you qualify for, and the rates and terms. This may include your personal and/or business credit history, revenue or personal income, and personal or professional references.

There are several types of debt financing to fund your startup, including:

Loans: You receive a lump sum of cash that is paid back over a period of time (anywhere from a few months to 20+ years).
Business Credit Cards: A business credit card works like a personal card. You’re assigned a credit limit by the lender. You can use your card as often as needed provided you haven’t hit your credit limit. Interest is charged only on borrowed funds. As you pay down your balance, funds are once again available to borrow.
Lines Of Credit: Lines of credit are similar to credit cards. A lender approves you for a set amount, which can be used as needed. Interest is charged only on borrowed funds. As you repay your line of credit, funds may become available to use again.

Debt financing has its benefits. Paying back your lender helps build your credit so you can qualify for higher limits and lower rates in the future. Your lender also doesn’t have a stake in your business, so you retain ownership.

On the other side of the coin, there are a few drawbacks to consider. Interest rates and terms — particularly for startups — may be less-than-favorable. If your business doesn’t succeed or you’re otherwise unable to repay your loan as agreed, your credit score will plummet. Your business and/or personal assets may also be at risk if you put up collateral, signed a personal guarantee, or have a blanket lien attached to your loan.

Equity Financing

You can also get startup capital through equity financing. Like debt financing, you receive capital to use for startup costs. However, equity financing is different in that you don’t have to repay the funds. Instead, your investor receives a stake in your business in exchange for this capital. In the reality TV series, “Shark Tank,” the sharks invest money in products in exchange for ownership in the company — this is classic equity financing.

The good news is that you won’t have to repay funds, even if your business isn’t a success. The bad news is that you do have to give up partial ownership of your business. Not only does this mean that you have to share the profits, but you may also have to consult with stakeholders before making big decisions, such as making a large purchase or expanding your business.

5 Ways To Get Funding For Your Startup

There are a few ways to get funding for your startup. You may even opt to try several different methods to get the capital you need. Read on to learn more about getting funds for your startup.

Seed Funding

Think about a seed. It starts off small. But over time, that seed grows into a plant or tree. Now, think of this seed as your business. The seed money — money given by investors — helps start your business. Over time, your goal is to grow this seed (the investment) into a thriving business.

Because this is a type of equity financing, your investors have a stake in your business in exchange for their seed money. Once your business has grown, the investors may opt to sell their stakes and move on to another opportunity. They may sell it back to you or to other investors that are interested in being a part of your business.

Pros

Access To More Capital:Â The sky is the limit when it comes to seed funding. Unlike loans and other more traditional forms of funding, you don’t have to worry about limitations being put on the amount of funding you receive — provided, of course, that you find the right investor.
Requirements:Â No business credit history? Low personal credit score? No revenue from your business? No problem. While some investors may have their own requirements before investing their funds, many are simply looking for the next big idea that has a potential for profit.
No Regular Payments: You won’t have to worry about making regularly scheduled payments and high interest rates and fees when scoring seed funding from investors.
Additional Skills & Knowledge:Â It’s highly likely that your investor will at least have some experience with your industry and can provide valuable skills and knowledge to help you grow your business to its full potential.

Cons

Giving Up Part Of Your Business:Â In exchange for funding, your investor will take a percentage of your business. This means that they have a right to some of your profits and, depending on their level of involvement, may be involved in making major business decisions.
Finding An Investor: Finding an investor that is willing to invest in your product/business (and, ultimately, you) can be a challenge. Other sources of funding may be acquired in just a few days…finding an investor can take weeks, months, or even longer.

Crowdfunding

The internet has changed business funding for the better in many ways. One way is through crowdfunding. You most likely have heard of (or maybe even donated to) campaigns on sites like Kickstarter or GoFundMe. These crowdfunding platforms have opened up financial opportunities for many startup businesses, and yours could be next.

There are two main types of crowdfunding to consider: equity-based and rewards-based. Equity-based crowdfunding means that investors get a stake in your business in exchange for their financial contributions. Rewards-based crowdfunding provides each investor with a reward or perk — think, first dibs on a new product or a deeply discounted price at launch.

Pros

Few Limitations:Â You won’t encounter maximum funding limits like you would with loans or traditional financing. Although some crowdfunding platforms do have limitations in place, ultimately you can find a platform that lets you raise as much capital as you need — no matter how much that is.
Keep Your Equity:Â If you opt to run a rewards-based campaign, you don’t have to give up ownership in your business.
Tests & Builds Your Market:Â In addition to drawing in interested investors, you’re also putting your name out there to others — even those that don’t contribute — to begin building interest in your business before you even launch.

Cons

Requires A Lot Of Work:Â Crowdfunding isn’t as simple as starting a campaign and waiting for the money to roll in. Instead, you will need to promote your campaign through social media, email, your website, or through other means in order to successfully raise funds for your business.
May Not Be Successful:Â Sure, you didn’t raise all the money you needed, but you raised some, so that’s okay, right? It depends on what platform you used. Some platforms require you to meet your goal in a set period of time in order to receive your funds. If you fall short, you’re back at square one.

Negotiate With Suppliers

Another way to get your startup off the ground is to negotiate with suppliers. If you need supplies to create a product or open your business, negotiating is a smart tactic you need to master.

First, start by estimating supply costs. Get quotes from suppliers, do your research, and understand what costs are associated with your supplies. Next, find reputable suppliers and begin negotiations. If their pricing is too high, for example, use the data from your research to get a better deal. You can also inquire about discounts — i.e., for bulk or recurring orders.

Next, consider the payment terms. If payment is due immediately, try to negotiate net-30 terms; in other words, your payment will be due in 30 days. If the supplier isn’t willing to extend terms this much, even net-10 or net-5 terms can be helpful as you try to secure financing, sell products, or find an investor. Some suppliers may even offer in-house credit programs that are easier to qualify for than bank loans or credit cards.

Pros

Lenient Requirements: As a startup with no business credit or revenue, proving your creditworthiness is pretty much impossible. But when you work directly with a supplier to get a reduced cost or improved repayment terms, these requirements may not even be a consideration.
Building Business Relationships: As you build relationships with your suppliers, it’s possible that you may get additional discounts, better terms, and other perks in the future.

Cons

Doesn’t Always Work: Getting a supplier to come down on the price of products or offer longer repayment terms isn’t guaranteed. Any savings or credit options and the requirements that come with vary by supplier.
Other Funding May Still Be Needed: Even if you get the cost of your supplies negotiated to a more reasonable rate or score longer terms, you’ll still need capital to pay the supplier. If you launch your business and start making cash, great! If not, you may be required to find some form of financing in order to pay for your supplies.

Loans

We can’t talk about funding your business without at least mentioning loans. Of course, obtaining a loan through traditional lenders may be difficult, but it isn’t impossible. The Small Business Administration (SBA) offers funding programs for small businesses, including startups and underserved communities. There are also a number of alternative lenders that may be able to help you now or just a few months after you begin bringing in revenue.

Another option to consider outside of small business loans is a personal loan. If you have steady income and a solid personal credit profile, you may be eligible for a personal loan to use toward startup expenses — a loan with longer terms and lower rates than you’ll find with many alternative lenders.

Pros

No Hard Work Required: Getting a small business or personal loan is as simple as submitting an application with requested documentation. Lending marketplaces make it easier than ever to compare rates and terms by filling out just one application.
Keep Your Equity: When you receive a loan, you don’t have to give up ownership in your company.

Cons

Can Be Expensive: Depending on the lender you select and criteria such as your credit score and income, the interest rates and fees of loans can get pretty expensive.
May Require Collateral: Many lenders require risky borrowers (including startups) to put up collateral for a loan. This could be a specific business asset or personal asset. Some lenders use blanket liens, which covers everything owned by your business. Failure to pay your loan as agreed could result in losing these assets — and putting your business underwater.
Requirements Not Met: Your application may be rejected if you don’t meet the requirements of the lender, which may include business credit score and history, personal credit profile, time in business, revenue, personal income, or type of industry.

Small Business Grants

If you have an innovative business idea, you may qualify for a startup grant. Not only can you score the capital you need with a grant, but funds don’t have to be repaid. However, don’t just think that grants are an easy way to get free money. Most small business grants have pretty strict requirements, so finding ones you qualify to receive is difficult. Once you find grants that are a good fit, competition is pretty stiff — so be prepared.

Startup grants are available for tech companies, innovative new products, and even underserved communities like minority-owned businesses. In addition to submitting information about yourself and your business or product, you may also be required to create a video, write an essay, submit a business plan, or complete other steps before being considered for a grant.

Pros

Grants Don’t Have To Be Repaid: You don’t have to worry about repaying a lender if you receive a small business grant. If you qualify and are awarded a grant, funds do not have to repaid.
Not Just Monetary Awards: Depending on the grant that you’re awarded, money isn’t the only thing you’ll receive. Many grants also include access to resources, such as industry-specific workshops, training, and mentorships.

Cons

Finding Grants Can Be Difficult: Most grants have requirements that your business may not meet. You also have to keep an eye out for application deadlines to ensure your application is received on time.
Competition Is Tough: You aren’t the only aspiring business owner to seek out grants. Competition is tough, and most people that apply won’t receive a grant, so make sure you have a backup plan in place.

Startup Incubators

On a farm, an incubator is used to create the perfect environment for the successful hatching of eggs. In business, a startup incubator works in a similar way — metaphorically, of course.

A startup incubator is a program designed to foster the growth of new businesses. An incubator provides a number of resources to help startups grow into a successful business. A single company or organization may act as a startup incubator, but more commonly a number of businesses and organizations come together to provide the resources startups need to succeed.

These programs don’t just open up new opportunities for capital but also may provide your startup with resources including mentorships, office space, and training to ensure your business starts on the right path.

Looking for a startup incubator? Start your search online or contact your local SBA office.

Pros

More Than Just Funding: Your business needs funding, and a startup incubator can give you opportunities you couldn’t find on your own. In addition to just capital, though, you can also take advantage of the numerous resources and expertise offered through these programs.
Find Your Focus: The benefits you’ll receive from a startup incubator can help you become more structured and focused on launching and growing your business.

Cons

Finding & Being Accepted To A Program: Unfortunately, startup incubators won’t just flock to you. It’s your job to do the research and find incubator programs, learn more about joining, and ensuring you meet all requirements. Once you do find suitable programs, actually being accepted over competing startups is another challenge.
Requires Commitment: Your program may require you to attend training, workshops, or meetings with investors or mentors. This time commitment may prove to be too much if you have other obligations, such as a full-time job.

Tips To Get The Startup Funding You Need

Once you’ve determined the method (or methods) you’ll use to acquire your startup funding, there are a few things you can do now to improve your odds for success. Before reaching out to that lender, investor, or supplier, keep these tips in mind.

Understand The 5 Cs Of Credit

Whether you plan to apply for a business loan now or in the future, it’s important to understand what lenders look for — specifically, the five Cs of credit. Those are:

Character: Lenders want to work with borrowers with good character traits. This may include personal work experience, industry experience, and personal credit history.
Conditions: Are the conditions favorable for lending? Lenders will consider this, looking at things such as industry trends, the state of the economy, and even pending legislation to determine if lending to your business is a smart move.
Collateral: Do you have collateral to secure your loan in the event that you default on your loan agreement? Equipment, real estate, and even accounts receiveable can be used as collateral.
Capital: Have you invested in your business? If so, you have skin in the game and will have something to lose if your business goes under. Lenders will consider how much capital has been invested in your business when determining if you qualify for funding.
Capacity: Does your business have the capacity to take on a loan payment? Lenders will consider factors such as your debt-to-income ratio (DTI), debt service coverage ratio (DSCR), and cash flow to determine if your business is financially prepared to take on additional debt.

Is your business falling short in one of these areas? Learn more about the 5 Cs of credit and how you can make sure your startup is prepared before approaching a lender.

Create A Business Plan

You have your business ideas in your head and maybe even jotted down in a notebook somewhere, but it’s important to have an actual business plan. Not only is this essential for drawing in investors or securing funding, but it also serves as a blueprint for your business. Think of your business plan as a road map, outlining the details of where you’re going (your goal) and how you will get there.

Since every business (and the goals of each business owner) is different, no two business plans are the same. However, there are a few common sections that each business plan shares. These include:

Company Description
Products & Services
Management Team
Marketing Plan
Financial Projections

For some businesses, a one-page business plan may be sufficient. For others, however, a more comprehensive plan may be needed, particularly if you’re looking for investors or to obtain a small business loan.

Evaluate The Cost Of Borrowing

It may be tempting to jump on the first funding offer that comes your way, but it’s important to stop and weigh out the cost of funding.

For instance, if you get approved for a startup loan, look at factors such as fees and interest. Calculate how much you’ll pay to borrow funds, and determine if this is feasible or if it could potentially sink your business.

If you have an interested investor that wants equity in exchange for capital, consider how much of your business you have to give up. Are the funds you’ll receive today worth giving up a large portion of your profits in the future? Look at the cost of borrowing over the long-term to determine if you need to find another source of funding.

Don’t Be Afraid To Get Creative

When it comes to starting (and growing) a business, acquiring funding takes some creativity. Maybe you’ll use one (or more) of the methods suggested in this post to fund your startup. Or maybe you’ll do something else entirely. The key is to find what works best for you.

Don’t be afraid to get creative. Tap your friends and family that could be potential investors. Attend industry events and network with like-minded entrepreneurs. Keep an open mind, be flexible, and have a backup plan in place in the event that your

Hold Up Your End Of The Bargain

Once you do get funding, your work doesn’t stop there. Whether you agree to repay a lender each month or you’re using a supplier for recurring purchases, make sure that you always keep your promises (whether they’re on paper or not). Word travels fast among the small business community, and the last thing you want to do is burn your bridges. Repay your debts as agreed, hold up your end of every deal you make, and build a reputation as a business owner with integrity and strong character.

An added bonus? Paying your debts on time helps raise your credit score, making it easier to qualify for additional funding with better terms in the future.

Go Out & Get Funded

Now that you have a better idea of the funding opportunities open to you, it’s time to get out there and find that capital. Remember, it pays to be patient, do your research, and explore all funding options before making the giant leap into owning and operating your own business. Good luck!

The post How To Get Startup Funding: 5 Types Of Funding For Startups & 5 Tips To You Get Started appeared first on Merchant Maverick.

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July 8, 2020

How Fintechs Fared: Many Small Businesses Got Much-Needed PPP Funding Via Online Lenders

In the midst of the much-bungled Paycheck Protection Program (PPP), one group of financial institutions have stood out: Fintechs.

Fintech — a term that stems from “financial technology” — has played a key role in the years after the 2008 recession by offering small businesses alternative lending platforms to the traditional banking system. During the current time of crisis, many fintechs pivoted quickly to shovel out billions in PPP funds.

Like almost everything else associated with the PPP, fintechs have been far from perfect over the past few months. However, these forward-facing firms have still helped fill a gap left by the bigger banks.

Let’s take a look at how some fintechs leveraged their technology to help small businesses sort out the PPP.

Fintech Lenders Processed Small-Sized Loans

With the PPP receiving $350 billion in round one of funding and then another $310 billion in round two, there should have been enough funds to go around — especially because Congress just extended the program’s deadline from June 30 to August 8.

However, traditional banks appeared to have favored richer clients — the latest numbers from the SBA indicate the average PPP loan sits at $107,000 — leaving many smaller businesses in a lurch.

That’s where fintech has thrived.

Based on data compiled from companies themselves and the SBA, here’s a peek at how some non-traditional financial institutions have fared compared to the average loan size of $107,000:

Square Capital, the funding arm of the well-known payments giant, has averaged a loan size of under $11,000.
While approving the third-most PPP loans of any institution, online lender Kabbage has helped primarily small borrowers: Its average loan size so far is $28,100.
In round one of funding, multi-strategy finance company Ready Capital approved the most PPP applicants by volume as well as the lowest average size among the top 15 lenders at $72,803 per loan.
While not actually a fintech, Cross River Bank is an FDIC member that underwrites a number of loans routed through fintechs (including some loans through the above-mentioned Kabbage). This bank has averaged a loan size of $39,871.

Additionally, The New York Times reported in April that some legacy banks gave special assistance to wealthier clients. According to a JPMorgan insider, their bank’s service was internally dubbed a âconcierge treatment” that enabled clients to avoid online portals while skipping long queues.

With bigger banks privileging richer clients, numerous small businesses across the country have turned to fintech.

“Any exogenous shock to the system favors companies that can move quickly and take advantage of those things,” the co-founder of payroll firm Rippling, Parker Conrad, told The New York Times in June. “All the reticence about doing things online evaporated in an instant. Thatâs a dynamic that impacts not just fintechs but technology companies more broadly who are trying to automate business processes that are offline.”

Even Fintechs Caused Customers Grief

It hasn’t been all sunshine and roses for fintechs, however.

On our site, Merchant Maverick has noticed a particular struggle with Kabbage — which, it should also be noted, shut off credit lines to customers in the early days of COVID-19.

“We have applied for the PPP loan and they are so unorganized and have asked for the same documents at least 15 times please run far far away from this company,” commented one frustrated PPP applicant on our Kabbage review. Another person who claimed to have applied for a PPP loan through Kabbage added: “After a month of sending every document in and sometimes sending them in twice, calling them [every day] and being put on a wait time just to be told they would return my calls and never did.”

Lendio, which Merchant Maverick generally likes for its wide-ranging loan marketplace, has also irked potential borrowers — mainly during the first round of PPP funding.

Some voiced their stories on Reddit about how Lendio’s partner banks, Ready Capital and Customers Bank, were slow to process approved loans. One Redditor in particular wrote: “Ready [Capital] is now asking for more docs in order to deny loans Lendio has already approved. And of course after being held hostage for 19 days, PPP funds are now gone.”

Countless Business Got Funding Through Fintechs

Still, it’s hard to fully disparage the work these firms have done to help small businesses during the economic downturn.

Kabbage, for example, has managed to help an impressive number of businesses despite any flaws with its process. By the end of June, the company doled out 209,000 SBA-approved PPP loans (second only to bigwigs Bank of American and JP Morgan Chase) worth $5.8 billion in total. Kabbage CEO Rob Frohwein had earlier claimed that the company “processed over 40% of the average PPP application volume of the largest three banks in the country.”

The Atlanta-based company also partnered with Uber to create a more streamlined process for the car ride’s independent contractors who have been struggling for work since lockdown started. This partnership was especially unique because it allowed Kabbage to prepopulate loan applications with data shared directly from Uber.

Moving on from Kabbage, Square Capital facilitated over 76,000 small business loans worth $820 million in PPP funding through mid-June. Square Capital especially focused on sole proprietors — its number of loans to non-employer businesses doubled that of employer firms.

Meanwhile, Lendio has helped over 300 financial institutions process 100,000+ PPP loans worth more than $8 billion. The Utah firm has further pledged additional economic support by promising $200,000 in grant money to underserved small business owners.

Otherwise, Nav, which operates a lending marketplace, built a forgiveness calculator and says it helped “tens of thousands of small business owners” in finding the right PPP lender. Direct online lender BlueVine vowed on June 30 to continue receiving PPP applications, even as Congress held the program’s July extension in limbo.

Fintechs that don’t usually offer loans even got into the act. Divvy and Brex, both corporate card companies, used their tech prowess to help small businesses in need. In the cloud-based payroll and human resources sphere, Gusto provided tools to help small businesses compile the paperwork necessary to get PPP funds.

Still Need More Business Aid?

Because Congress extended the PPP deadline to August 8 on July 1, you still have time to apply. Merchant Maverick has written up a basic guide to applying for a PPP loan. The government is also operating Economic Injury Disaster Loans for businesses impacted by COVID-19. To learn how to apply, read our guide to the EIDL application.

If you don’t qualify for federal aid or have already exhausted your funds, you will need to look elsewhere for financial support. We recommend owners take a peek at our list of best PPP/EIDL alternatives.

It’s also worth noting that many state, county, and city governments are currently running their own aid programs. For instance, Tampa, Fla. just handed out $1.2 million in grants to local businesses while the state of Louisiana recently passed a $300 million small business relief package.

If one of those routes fails, you could try a different type of business loan. Merchant Maverick’s step-by-step article on getting a loan may also be helpful in securing cash for your business.

The post How Fintechs Fared: Many Small Businesses Got Much-Needed PPP Funding Via Online Lenders appeared first on Merchant Maverick.

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July 8, 2020

How To Get A Business License: Expected Cost, Timeline, & Resources To Get You Started

When starting a small business, there is a litany of legal hoops to jump through and requirements you must follow to ensure your business is ready and compliant with state and federal guidelines. One of those requirements is to obtain a business license that allows you to operate legally in your city, state, and county. Yes, even home-based businesses need a license to operate within city limits! And you might even need more than one.

The guidelines for business licensure are designed to protect both businesses and consumers from unsafe practices, create a common language for small business owners within a geographic jurisdiction, and regulate businesses in a common location. The requirements and fees vary by state.

What A Business License Is & Why You Need One

A business license is a permit to operate your business, and it is non-negotiable. In fact, it is illegal to operate a business without a permit or license. The moment you conduct business within a certain city or county, you may be required to prove you’ve got all your legal ducks in a row. This keeps you accountable to the city in which you operate and helps local government agencies regulate the businesses in their jurisdiction.

Overall, the types and costs of licensure required will largely depend on the following factors:

Type of business you operate
Where your business operates
How many employees you have

The government uses business licenses to monitor taxes, including payroll taxes, and to hold businesses accountable for the health and safety of the public.

What could happen if you decide to take a chance and not get a license? Well, you could be liable for major damages (and if your business doesn’t have insurance, you could be held personally liable), you may have to pay a fine, or you could have to shutter your business.

Types Of Business Licenses

There are many different types of business licenses available. As always, you will want to do some additional research related to your own city/state/county or your specific business industry. This is by no means intended to be a comprehensive list of your personal legal requirements.

Federal VS State VS City & County Licenses

Most licenses, permits, and certifications are based on where your business is located. While you likely won’t stop with a local business license, starting in the area in which your business is located is the first step. Begin with your city and county. All businesses will need a business license for the city where they operate; these are located either online or at the city hall/with the city clerk.

Metropolitan areas might offer a single business license form for several counties to help businesses who may travel frequently between cities and counties to operate. While there are some state license requirements, some states don’t require state-specific licensure at all (states like California and Oregon have no state requirements; all licensing happens at the city level). For the rules in your state, check your state’s government website.

According to the Small Business Administration (SBA), you will need a federal business license if your business is managed by a federal agency. You can see the types of federal licenses listed below.

Common Types of Licenses

Requirements differ vastly from state to state and industry to industry. You may not need more than one type of license or you may need several. As you research which license options are required for your city and industry, you might see these types of licenses available for you:

Local Business License:Â All businesses will need a local business license from the city in which their business is located.
Seller’s Permit/Sales Tax License:Â This type of license/permit is what a business will need to collect sales tax from its customers.
Peddler’s License:Â If your business plans on selling door-to-door, your county might require a peddler’s license.
Cleaning/Janitorial License:Â A cleaning or janitorial business might require a cleaning/janitorial license depending on state requirements. However, cleaning companies need to be licensed and bonded as clients have come to expect that assurance.
Gardening & Landscaping License:Â Same as cleaning/janitorial, there are certain licenses in some states required for people working on gardening and landscaping. Many states require landscaping businesses to be bonded and insured.
Food Handling License:Â If your business serves food, there are state-specific food handler’s licenses that everyone working with food will need to obtain. A food handler’s license will show that you have the required information about food safety including proper cleaning, preparing, and storage.
Beauty Salon/Cosmetology License:Â All workers in a beauty salon must be licensed by the state. While these licenses are the responsibility of the individual cosmetologists, an owner of a salon should be acquainted with the rules and regulations regarding licensure and renewals.

Most small businesses do not need a federal license unless they fall into a specific industry that requires one. According to the SBA, the industries that require federal licenses for small businesses are in the following categories:

Agricultural:Â You will need this license from US Department of Agriculture if you transport animals or animal products, biologics and/or biotechnology, or plants across state lines.
Alcoholic Beverages:Â If you manufacture, wholesale, import, serve, or sell alcoholic beverages, your business will need licenses issued both by your state/local alcohol control board and the federal Alcohol and Tobacco Tax Trade Bureau.
Aviation:Â If your business involves aviation maintenance, operating aircraft, or transporting people/goods via air, you will need a license from the Federal Aviation Administration.
Commercial Fisheries:Â If you business involves commercial fishing, you will need a license from National Oceanic and Atmospheric Administration Fisheries Service.
Firearms, Ammunitions, & Explosives:Â If your business manufactures, deals, and imports firearms, ammunitions, and explosives, you will need a license from the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Fish & Wildlife:Â If your business involves the import/export of wildlife or derivative products, or actual wildlife, then you will need a license from the US Fish and Wildlife Service.Â
Maritime Transportation:Â If you provide transportation on the ocean or if you are a company that ships product by sea then you will need a license from The Federal Maritime Commission.
Mining & Drilling:Â Grab a license from Bureau of Safety and Environmental Enforcement if your business drills for natural gas, oil, or any other minerals on federal land.
Nuclear Energy:Â For all those small businesses out there who produce nuclear energy, or are in the business of nuclear distribution or disposal, please get a license from the US Nuclear Regulatory Commission.
Radio, Television, & Broadcasting:Â Businesses that broadcast via radio, television, wire, or cable will need a license from the Federal Communications Commission.
Transportation & Logistics:Â Transportation permits are handled by state offices, but the US Department of Transportation can direct small businesses to the right department.

How Much It Costs To Get A Business License

Initial license and renewal fees will vary depending on location, business size, and business activities. When you apply for a license, you will pay for the license itself and a fee. Some licenses have an expiration date: always check to see how long your license will last and when to renew. Factor renewal costs into your business expenses.

Business licenses will range anywhere from $50-$1500, and are largely determined by business industry, business size, and location. For example, Erie County, New York, permits for food establishments range from taverns with no food prep at $79, but an establishment that serves food and has over 50 seats has a $282 permit fee. However, if you are opening the same business in LA County, California, the fees are more expensive, the categories for businesses are more varied, prices are based on square-footage, and prices increase for restaurants deemed “high” vs. “low” risk. A restaurant between 501-1999 square feet will pay $1530 in permit fees.

How Long It Takes To Get A Business License

The amount of time it takes to get your license will largely depend on the city/county/state or federal office where you’ve applied — different jurisdictions and industries require more or less time. A smaller city might have quicker processing times than a larger metropolitan area; also, county offices will be generally faster than federal offices. (Online applications also have shorter waiting times than a traditional mail-in application.)

After filling out the applications and paying the fees, you will usually have to wait a few weeks before your license is official. Waiting times vary from industry to industry and the state where you apply. Account for this time when you apply for your license — don’t wait too long to get your business legal and compliant. If you are in a hurry, most places offer expedited permits for an additional fee.

How To Get A Business License Step-By-Step

For most small business owners, the nitty-gritty of licenses, permits, certifications, and paperwork is not nearly as fun as some of the other aspects of entrepreneurship. However, applying for a license is a monumental and important task when starting a business, and can be accomplished in three easy steps:

Research Your City/County & Industry’s Licensure Requirements: The bulk of your time in the licensing process will be researching which licenses and permits are needed. If the process seems overwhelming or you want to make sure you don’t miss any important components (for example, some licenses will require proof of insurance; this varies state by state and industry by industry), you may choose to hire a business law attorney or use SBA’s local assistance helper to find free help in your state. Merchant Maverick’s tip is to create a spreadsheet listing all the permits needed, the permit’s issuing authority, cost of the permit, application date, and renewal date. Most applications will need a business code and a business name, so research your industry’s business code.
Locate & Fill Our Application Forms: Use local websites and/or the SBA website to locate the necessary license application forms. Submit your application, pay the fees, and include any information the application may need, such as:
- Business address
- Name of business
- Name of business owner
- Number of employees
- Federal ID number
Display The License When It Arrives: Some city locations might require the business owner to come and pick up the license at the office. However, other entities will mail the license. When the license arrives, check with the issuing body to see if there are requirements for posting the license in a clearly visible spot in your business location. Make a note of the renewal date and keep on top of making sure your licensure is current.

Get Started With These State & Federal Resources For Business Licenses

Each state, county, and city offers different license requirements and fees. State websites will often direct you to the local counties that operate as issuing boards for licensure.

Alabama: All businesses are required to register with the Alabama Department of Revenue for a Privilege License in order to conduct any business in the state. Small business owners in Alabama can head to the website AtlasAlabama, Alabama’s government website with information about licenses and collecting taxes, including links to the required government agencies, to research the state’s requirements.
Alaska:Â Businesses in Alaska can register online through Alaska’s Department of Commerce, Community, and Economic Development. The website provides great information about licensing in the state and offers an immediately downloadable license if you qualify.
Arizona:Â Small business owners in Arizona can register through the Arizona Department of Revenue.
Arkansas:Â Business owners in Arkansas will need to check with the Government of Arkansas‘s website in their business section to see what rules/regulations apply. Businesses will need to register with the state in order to collect and pay taxes.
California:Â Small business owners in California should use the Governor’s Office of Business and Economic Development to ask questions about business and business licensure in the state. Businesses should also check with the Department of Consumer Affairs, where you can find a link to online business licensure forms and up-to-date information about California’s licensing boards.
Colorado: MyBizColorado is the state’s website for online forms and business licensure information. Coloradans can also check out business information, see what businesses need a license, and file with the state on the Secretary of State website.
Connecticut:Â Small business owners can use the Advanced Connecticut website for a step-by-step guide to registering and licensing a business in the state.
Delaware:Â Check out the Delaware Government’s Division of Revenue to use their small business license checklist.
Florida:Â My Florida’s government website has a checklist on starting a business that discusses licensure information. Small business owners can also check licensure requirements on the Department of Business and Professional Regulation website.
Georgia:Â Small business owners in Georgia can apply for a license online with the Georgia Secretary of State.
Hawaii:Â To register your business in the state of Hawaii, visit the Hawaii Business Express or check for licensure requirements with the Hawaii Department of Commerce.
Idaho:Â Small business owners in Idaho can use the state’s the Business Wizard to ask questions or fill out an online form for licensure.
Illinois:Â The Illinois government has access to license and permit information on its website.
Indiana:Â According to the Indiana Government’s website, “Indiana does not have any one single, comprehensive business license.” Instead, the government has provided a Business Owner’s Guide to walk small business owners through the process of becoming compliant in Indiana.
Iowa:Â Iowa’s licensing requirements are determined primarily by industry. Licensing information can be found on the Iowa Economic Development Authority’s Business Concierge page.
Kansas:Â Business owners in Kansas can find information on licenses located in the Kansas Government’s Department of Revenue website.
Kentucky:Â Kentucky’s One Stop Business Portal includes a search for whether or not licensure is needed for your particular industry.
Louisiana:Â In order to apply for licensure in the state of Louisiana, small business owners need to recreate an account at geauxBIZ — the government’s program for processing all business registration
Maine:Â All small business owners in Maine will need to apply for licenses at the city or county level. Maine’s Government website has a link to assist with searching which town or office business owners will need to visit to apply.
Maryland:Â Small business owners in Maryland can contact Maryland’s Department of Labor, Licensing, and Regulation for a list of agency contacts and general information about licenses based on industry.
Massachusetts:Â Information about licenses and permits for businesses in Massachusetts can be found on the Massachusetts Government website. From there, business owners can check to see if licenses are needed, check the status of a license, or apply online.
Michigan:Â Small business owners can find answers to their licensing questions at the Michigan Small Business Development Center. Not every business in Michigan needs a business license, so you can check to see if you need one at the Michigan State License Search site.
Minnesota:Â General information about Minnesota and small business license requirements can be found on the Licenses and Permits section on the Minnesota Government’s website. Businesses can also search for licensing agencies via the License Minnesota E-licensing portal.
Mississippi:Â Small business owners should use the guide on the Mississippi Small Business Development Center website to determine the state and local requirements for business licensure. The state of Mississippi also has a One Stop Shop Business website to help answer FAQs for small business owners.
Missouri:Â Small business owners can register their business with the Secretary of State and the Department of Revenue at once through the Missouri Business Portal.
Montana:Â The great state of Montana’s licensing mostly happens at the local level. To see if your small business needs a license in Montana, check out the Montana License Lookup to check both state and local licensure requirements. For other business questions regarding licensing, owners can check Montana’s Small Business Development Network.
Nebraska:Â Nebraska’s Secretary of State provides information on its website in the Licensing Division about requirements for small business licensure in the state.
Nevada:Â The SilverFlume Business Portal contains a step-by-step guide to small business licensure in the state of Nevada.
New Hampshire:Â New Hampshire has various licensure requirements for small business owners and the Department of Revenue website answers license FAQs. According to their site, “Regulated businesses may be subjected to certification, registration or accreditation and may experience routine inspections. Trades such as accounting, architecture, child-care, chiropractors, restaurants, and many more quire permits in order to being operation.”
New Jersey:Â Small business owners in New Jersey check the New Jersey Business Portal for an extensive list of license and permit news.
New Mexico:Â Licensing requirements in New Mexico vary between counties and municipalities. Small business owners can check the New Mexico Regulation and Licensing Department to check for online applications for common licenses.
New York:Â The New York State Business Express website contains a Business Wizard with business checklists to walk small business owners through the process of discovering what licensure requirements exist for their industry.
North Carolina:Â “The State of North Carolina does not issue a single business license. Your business may be subject to state, city, county and/or federal requirements,” according to the website for the Economic Development Partnership of North Carolina.
North Dakota:Â State of North Dakota provides licensing information on the North Dakota New Business Registration website.
Ohio:Â All businesses in Ohio need to register with the Secretary of State. On the Business in Ohio government website, small business owners can find a comprehensive list of licensing and license agencies.
Oklahoma:Â In Oklahoma, you don’t need to obtain general business licenses. However, certain industries will require special licensing. You’ll need to check out the Department of Commerce’s website to see if your industry applies as well as to see if you need any other requirements as an employer.
Oregon:Â In Oregon, you’ll want to visit the Oregon Secretary of State’s website to get started. There you’ll find a step by step plan for starting your business and you’ll be redirected to the Business Xpress website for specifics on licenses and other certifications you may need.
Pennsylvania:Â The Keystone State also has an online portal that lets you quickly handle all of your licensing needs. The Pennsylvania Licensing System (adorably acronymed PALS) is a one-stop-shop for all things licensing.
Rhode Island:Â Rhode Island provides forms on its business website. There is also a feature that allows you to search through the types of licenses your business might need by industry and there is a helpful guide of things you’ll need to get your business up and running.
South Carolina:Â There isn’t an overarching state business license in South Carolina, but individual cities will require their own licenses. To figure out what you’ll need, you’ll want to head to the state’s website where you can register your business, and apply for and renew licenses. There are also links and portals to other useful services for small businesses just starting out.
South Dakota:Â Check out South Dakota’s state website for a variety of links related to new business owners. You can download licensing forms there and register your business. You can also search to see if your particular business will need more than one type of license.
Tennessee:Â The Tennessee Department of Revenue says that “If you are subject to the business tax, you must register to pay the tax.” If your business generates more than $3,000 a year, but less than $10,000, you will need a minimal activity license.
Texas:Â Small business owners can check with the Texas Department of Licensing and Regulation for a list of industries where licenses are needed and a list of issuing agencies in the state.
Utah:Â The State of Utah’s Department of Commerce issued a Business Licensing and Registration Guide for small business owners. The guide lists all counties in Utah that require licenses for business to operate; it also includes information to connect owners to the state’s free services at the Small Business Development Centers.
Vermont:Â Vermont’s Department of Taxes small business guide recommends registering with the Secretary of State. and to use the resources at the Small Business Administration about license requirements.
Virginia:Â Virginia’s One-Stop Business Shop sends interested small business owners to the City Applications informational site about Virginia’s business licenses. The site says, “The common form of local business license in Virginia is the license tax. Typically, this is an annual application that all businesses must file where the fee is a calculation based off your gross receipts from the previous year.”
Washington:Â The Washington State Department of Revenue’s Business Licensing Wizard will walk small business owners through a business activity search to determine what type of license a small business might need.
Washington DC: All businesses in DC will need to register with a Basic Business License. Some categories are able to apply and print their license immediately.
West Virginia:Â According to the West Virginia State Tax Department, “Before engaging in business activity in West Virginia, every individual or business entity must obtain a West Virginia business registration certificate from the State Tax Department.” Small business owners can also check out the WV One Stop Business Portal.
Wisconsin:Â The State of Wisconsin’s Department of Agriculture, Trade, and Consumer Protection has an A-Z list of business licenses available in the state.
Wyoming:Â The Wyoming Business Council’s licensing and permitting FAQs have numerous resources for small business owners including a Guide to Licensing and Permitting.

As you can see, each state is different and varied in their license requirements, and it’s no small task to research your own state and industry requirements and to do your own due diligence. Use the Small Business Administration guidelines as a resource, and use their free access to SCORE for business counseling if you feel overwhelmed. Starting a business is an exciting time, and the paperwork might seem exhausting, but with this important step out of the way, you’ll be that much closer to your dream.

The post How To Get A Business License: Expected Cost, Timeline, & Resources To Get You Started appeared first on Merchant Maverick.

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July 7, 2020

Get Ready To File Your Business Taxes Soon: The July 15 Tax Deadline Is Coming Up Fast

In March 2020, the Treasury Department and Internal Revenue Service put into place a three-month tax deferral as a result of the economic impact of the Coronavirus pandemic. The extension provided individuals and small businesses extra time to get their finances in order without interest or penalties.

But that deferral is almost over, and the new tax deadline of July 15 is rapidly approaching. The IRS is encouraging small businesses to file as soon as possible.

Tax Day Extended to July 15 — Another Extension Unlikely

Small business owners who took advantage of the opportunity to hold on to some capital during the 90-day deferral will now need to reconcile their taxes on July 15 (this does not include Partnerships or S-Corporations, both of which should have already filed on March 16, prior to the IRS extension).

Initially, close to 21 million individuals and businesses took advantage of the deferral. The most recent statistics from the IRS show that compared to the 2019 tax season, 5.3% (approximately 7 million) fewer returns have been filed. Some small businesses and individuals might be holding out hope that the tax deadline will be extended again, particularly after Treasury Secretary Steven Mnuchin hinted at another 90-day reprieve from filing. However, the IRS commissioner Charles Rettig says not to count on itÂ even as pandemic-related uncertainty grows.

As part of the economic relief from the Coronavirus pandemic, payroll taxes from the first quarter of the year were also delayed until the July 15 deadline. That means Q1 & Q2 payroll taxes are both due on July 15.

Need an extension? File with the IRS for an extension and give your business until Oct. 15 to file a return.

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Important Note: An extension to file is not an extension of payment — failure to pay on July 15 opens your business to late fees and interest (both of which were suspended during the three-month deferral).

Businesses need to take the new tax credits into considerations when filing and can consult the IRS Coronavirus Tax Relief hub for information on how the IRS is offering tax help for small businesses impacted by COVID-19. This includes a link to frequently asked questions regarding the new tax credits and further COVID relief.

The IRS also has a free taxpayer advocacy program for individuals and businesses who aren’t served by the one-size-fits-most forms and whose situations might differ from the norm.

Learn More About Filing Your Business Taxes

Small businesses that need to file by July 15 can read Merchant Maverick’s Complete Guide to Businesses Taxes for tips and assistance for navigating the new summer tax season. Some of Merchant Maverick’s tips include:

Use Accounting Software: According to Merchant Maverick’s Small Business Tax Tips, using accounting software is the number one best practice for small businesses. Find an accounting program that helps you track all your business finances, including sales, inventory, or even payroll. Accounting software even helps with deductions and keeps your files in one place in the event of an audit.
Learn Which Tax Forms You Need To File: There are many different types of tax forms small business owners need to know:
- Form 1040 (used to submit individual tax returns)
- Schedule C (used to report profit or loss)
- Schedule SE (used to calculate social security and Medicaid taxes on self-employment income)
- W-2 (reports employee wages and taxes)
- W-3 (form sent to the Social Security Administration along with W-2 reports)
- 1040-ES (used to calculate and pay quarterly taxes)
- 1099-MISC (sent to the IRS and independent contractors that were paid at least $600 by your business).

With many businesses pivoting and struggling amid the global pandemic, there might be unique small business deductions or write-offs available to claim this year. If the process is daunting and overwhelming, contact your local IRS departmentÂ for assistance. Some local departments are open for in-person appointments; you will be asked to wear a mask, maintain social distancing, and cancel your appointment if you are ill.

When in doubt, direct your questions to a tax professional or go to the IRS website for specific tax-related questions.

The post Get Ready To File Your Business Taxes Soon: The July 15 Tax Deadline Is Coming Up Fast appeared first on Merchant Maverick.

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June 3, 2020

Small Business Riot Damage Relief: What To Expect & How Your Small Business Might Be Able To Get Assistance

Over the past week, countless individuals across the US have protested police brutality following the death of George Floyd while in custody of the Minneapolis Police Department. These protests, though sparked by the recent tragedy, have roots stemming from decades of civil inequality. Even though many of those demonstrating their First Amendment rights have engaged in peaceful protests, some individuals have reacted violently towards both public and private property.

It is far too soon to calculate the full brunt of the damage caused by violent riots, although initial reports indicate the destruction to be quite extensive. In Minneapolis alone — the heart of the now-national protests — several hundred businesses have been vandalized, looted, or otherwise harmed by fire, broken glass, or water.

Elsewhere, in cities such as Chicago and Los Angeles, business owners have had to plead and negotiate with those looking to damage and loot stores. No matter the exact extent, the total blow to businesses throughout the country is certainly astronomical.

In response to the rioting, some major retailers have backed the protests while downplaying the destruction to their stores. For instance, the department store giant Nordstrom stated in a press release that it can âfix the damage to [its] storesâ while adding that âwindows and merchandise can be replaced.â A few smaller businesses, such as a Bangladeshi-Indian restaurant in Minneapolis that lost its building to a riot-related, have also voiced support for the sometimes aggressive demonstrating.

This damage caused by rioting isn’t unprecedented — past riots in Los Angeles, Detroit, and Miami also caused heavy destruction. In those instances, governments and private organizations stepped up to aid local businesses. Unfortunately, such aid may not always be enough to heal local economic devastation — and especially so for those whose entire livelihood was tied up in businesses destroyed by a riot’s wake.

The History: How Violent Unrest Affects Local Businesses

The United States has had a long and complicated history with public protesting. The Boston Tea Party of 1773 was an organized and targeted protest that opposed the tyrannical reign Britain had over its New World colonies. The women’s suffrage movement picketed, paraded, and participated in other forms of demonstration in the early 20th century, encouraging the acceptance of a woman’s right to vote. Throughout the mid-20th century, civil rights protests helped break down racist laws.

It is not uncommon for violent rioting to accompany protesting, even if most participants are engaging peacefully. And while protesting has been shown as an effective agent of social change, violent forms of protest can inflict substantial economic wounds on local communities.

The 1967 riots in Detroit cost between $40 and $45 million (just over $300 million in today’s money) while the 1992 Los Angeles riots caused as much as $1 billion in damages. Riots born outside of civil unrest can be also pricey — the rioting that ensued after hockey’s Vancouver Canucks won the 2011 Stanley Cup damaged roughly 4 million Canadian dollars worth of property throughout downtown Vancouver.

On top of the immediate impact, it can take years for communities to recover. Five years after the 1992 riots, Los Angeles had an unemployment rate that was about 3 percentage points higher than the national average, based on a 1997 New York Times report. By 2002, the city had lost nearly $4 billion in taxable sales in the decade following the riots, according to a 2004 study published in the Urban Studies journal.

More recently, Ferguson, Mo. — home to rioting in 2014 — continued to have never-returned-to-businesses boarded up as late as 2019. The small city’s unemployment rate also sat at 5.5% in June 2019, which was over 2% higher than the Missouri state average.

Aid might also fail to reach the places that need it the most. For instance, an estimated $40 million in property was damaged during the Los Angeles-area Watts riots of 1965. However, the Small Business Administration only doled out 26 loans worth $400,000 to businesses impacted by those riots.

In the aftermath of the Detroit and Newark, N.J., riots that took place two years later, the SBA was a bit more generous, giving out $3.4 million in aid to affected businesses. Some small business owners still felt slighted, though. Edward Deeb, while representing a Detroit grocers association, argued in a 1968 Senate hearing that “the small businessman feels it unfair that only one side is being told, and that side is based on sensational charges designed to arouse and inflame a community.” Deeb further claimed that businesses in areas hit by rioting were discriminated against — insurance companies deemed these areas “high-risk” and so had increased insurance premiums for business owners.

Following the 1992 Los Angeles riots, some Korean-American business owners struggled with the English-language application forms for the SBA-issued disaster loans. Meanwhile, other owners felt “the system was designed to discourage them,” as a Los Angeles-based advertising executive told the Associated Press. All told, four months after the Los Angeles riots, only 1,400 merchants out of the roughly 10,000 businesses damaged or destroyed had received loan checks; thousands hadn’t gotten anything or simply didn’t complete the application process.

In some cases, other factors doom damaged businesses. According to the Cincinnati Enquirer, 32 of the 70 businesses that received city-made emergency loans defaulted on their loans five years after the 2001 Cincinnati riots. Business owners in the southwestern Ohio city told the paper that “aftershocks of the riots” and increased violent crime and panhandling made people feel unsafe or unwilling to go downtown — ultimately harming many of the local businesses impacted by the rioting.

There are still seeds of hope, however. Some businesses, such as a clothing boutique in Ferguson, are able to survive and thrive after receiving aid money. Additionally, it’s important to remember that the very real and justifiable anger of rioters can help further positive societal change. Those incited by Martin Luther King Jr.’s assassination hastened passage of the 1968 Fair Housing Act.

The Aid: Where Businesses Can Look For Riot Relief

The question of who pays for damage following riots is often a tricky one. Business owners generally have several avenues to pursue: insurance, government aid, and/or private support through loans or donations. Success in these avenues can vary wildly from business to business, however.

Insurance coverage for riot-related damage, in particular, will depend on the business. In some cases where landlords don’t require inventory or equipment insurance, policies may cover very little and business owners may be on the hook for losses and repairs. If you have property insurance, however, you should receive coverage for rioting and civil unrest.

As for government aid, the SBA operates a disaster loan program. In the past, disaster loans have been issued for businesses impacted by rioting, such as those damaged during the 2015 Baltimore riots.

To qualify for a disaster loan, your business will need to be located somewhere the SBA has declared a disaster area. To monitor currently declared disasters, visit the SBA website. At the time of writing, the SBA has yet to declare any disasters relating to the nationwide riots, but that may change as the situation progresses.

In some cases, the federal government has provided other support channels. For example, after the 1992 Los Angeles riots, the government issued a $600 million relief package that was made available for residents, landlords, and business owners through the Federal Home Loan Bank Board system.

Beyond federal assistance, local governments and banks have also been known to step in. The state of California handed out emergency bridge loans following the 1992 riots, while city and county governments proposed emergency loans to businesses after the Cincinnati’s 2001 riots. A special loan program for businesses hurt by those 2001 riots was also made available by a local bank and chamber of commerce.

Other local organizations can also provide aid to hurt businesses — the Ferguson clothing boutique mentioned above received $20,000 from Phi Beta Sigma, a local fraternity. More recently, the Lake Street Council, a Minneapolis-based small business advocate, has raised nearly $4 million in aid money for local businesses ravaged in the recent riots. With similar organizations also chipping in, it may behoove businesses suffering from riot-based damages to seek out non-government funded sources.

Some businesses have also found success using donation platforms like GoFundMe. Examples here include a Minneapolis bar that has already raised over $1 million after its building burned down during the recent riots. Meanwhile, a Vietnamese restaurant in Tampa, Fla., just met its $80,000 donation goal after its location had been ravaged by rioting.

The Wrench: COVID-19

Purely in economic terms, the riots come at a hard time for many small businesses. Scores of businesses have been affected by the economic turmoil churned out by the COVID-19 pandemic. According to a Facebook report, roughly 10% of small businesses surveyed don’t plan to reopen after facing financial struggles due to the coronavirus — a number that may only rise.

Because the SBA has struggled to provide adequate support during the pandemic, we don’t know how the federal government will react once the unrest settles down. It’s possible the SBA will indeed be able to help businesses hurt by the rioting through its disaster loan program. However, with the SBA currently processing record numbers due to businesses struggling from COVID-19, it’s possible that any riot-related relief will take longer than usual to flow out.

State and city governments are also facing economic woes thanks to COVID-19 forcing back tax due dates and dropping overall revenues. This could affect how much monetary aid local governments can provide to businesses in the coming weeks and months. Additionally, more unemployment claims will simply add more stress to already struggling unemployment departments.

The Action: What You Can Do To Help Your Business

We currently live in an unprecedented time where there are no easy answers. Between the looming pandemic and the civil unrest that has gripped the nation, many small businesses will have a difficult time rebuilding in the months and years to come.

If your business has been hit by rioting and looting, we recommend that you first reach out to your insurance provider. If you don’t have adequate coverage, be sure to keep an eye out for SBA action or aid planned by your local governments.

You can also look to local organizations that raise money for small businesses or set up your own donation fund through a service like GoFundMe. If all else fails, we urge you to tell your story to local news organizations or simply by sounding off in the comments below.

The post Small Business Riot Damage Relief: What To Expect & How Your Small Business Might Be Able To Get Assistance appeared first on Merchant Maverick.

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May 28, 2020

Essential Guide To Choosing A Website Designer

This post originally appeared at Essential Guide To Choosing A Website Designer via ShivarWeb

So you need to know how to choose a website designer.

But here’s the problem.

“It depends” is both the most correct and the most unhelpful answer.

There have never been more choices in the website design industry than now. But paradoxically, all those choices make actually choosing more difficult than ever.

The secret to choosing wisely is to understand exactly what you need rather than attempting to sort & filter all the choices on offer.

Like any other large purchase… a house, car, appliance, etc – ditch the idea of a “best” – and instead, write out your exact needs, requirements, and goals. The best option for you will usually self-select itself.

In other words, choose a website designer through elimination based your goals rather than searching out the one right fit.

With that concept in mind, here’s how to walk through the process of elimination to choose the right website designer for your project.

1. Define Your Technology Needs

How do you need your website to function?

Are you looking to build a “brochure site” – a place with your basic information and contact information?

Or are you looking to build something with certain functionality?

This step is critical because it decides what type of web designer or developer or agency you’ll need to hire.

A pure-play web designer usually does not actually work with HTML / CSS, much less traditional web languages like Javascript, PHP, etc. Pure-play web designers usually work in Photoshop and focus on branding, color palettes, imagery, feel, and user experience.

A pure-play web designer will often work with a front-end web developer to implement a design. The front-end of a website is what the user sees & navigates. A front-end developer will know HTML / CSS and Javascript – and will be comfortable with “back-end” technologies.

Back-end technology involves databases, scripts, and APIs – and generally making sure the computers are all talking to each other correctly.

Now – you’ll likely hire someone who is an expert in one, is knowledgeable in another, and is familiar with the third. If you hire an agency, then they’ll have all three.

Additionally, many designers / developers / agencies will work with certain platforms that already have core functionality built-in. When they work with these platforms, it will speed up the process and lower the costs…but also means that the client (you) needs to have some familiarity with what tools they are using.

But the main thing you need to think about is how much functionality does your site need? This will determine what type of website designer you’ll need, and how to discuss their process.

What To Consider

What functionality do you want now?
How do you want your website to grow?
Do you need to edit & manage your site content?
Do your visitors need to work with the site at all?

What To Avoid

Avoid using vague concepts or ideas.
Avoid accidental technology lock-in.

Example Scenarios

Think about a new fashion brand. Are you more focused on developing content or retailing clothes? Do you need to manage inventory? Do you want to build a community? How do you want to integrate your social presence?

A web designer could build a self-hosted WordPress website to handle the content and then add-in ecommerce with an ecommerce plugin, but it might be harder to manage inventory & social integration. They could also build an online store with Shopify to focus on ecommerce & social, but might hamstring your big content plans.

Think about a new non-profit website. Do you have expertise to manage & maintain the website? Do you need donation abilities or portal logins? Do you need to integrate with certain profiles?

A web designer could build a self-hosted WordPress website that could easily integrate donations and would be cheap upfront, but it would be harder to maintain long-term without someone who can train on the platform. They could also use a hosted website builder like Wix or WordPress.com that might have fewer upfront capabilities, but would be much easier to maintain in-house over the long-term.

Now – the designer that you choose should be flexible but also knowledgeable. It’s better to trust someone that you trust…but also verify that they deeply understand your needs.

2. Define Your Design Needs

How do you want your website to look and feel?

Unless you’ve had to design something for a client, it’s hard to understand how difficult it is to translate a vague idea in someone else’s brain into a tangible creation.

Sure, there are bad designers out there, but usually, the more specific you are about your design needs, the better product you’ll get.

Draw out something – anything – to show even the most basic direction you’d like to go.

Collect websites that you like – and note what you like about them. Here’s a bunch of example round-ups that I’ve written.

Wix Website Examples
WordPress Website Examples
Professional Personal Website Examples
Online Portfolio Examples
Weebly Website Examples
GoDaddy Website Examples
Restaurant Website Examples
Church Website Examples
Shopify Website Examples

Write out your frustrations with existing designs.

Additionally, keep in mind that it’s possible to develop some design assets yourself and let a web designer translate those existing assets into a website design.

For example, I’ve had clients use a photographer and bring in a web designer to build a site layout around their amazing professional images. I’ve built sites around a 99designs logo that clients have already made. Some clients even use automated design generators like Tailor Brands to create a look that a web developer can plug & play into a theme or template.

Once you have all your specifics down – you can use it to choose the right web designer.

What To Consider

The right web designer will be able to tell you how achievable certain features, looks, etc are.
Think about what process you’d like to work with. Do you want choices at every stage? How do you like to give and receive feedback? What are the most important parts of the design? When budget inevitably comes up, what are you willing to cut or prioritize?

What To Avoid

Avoid designers who can’t tell you how they’ll approach a design problem. Look for designers who do not have a stated process.
A written design process is best for you and them. Feedback stages can go on forever and make everyone frustrated.
Avoid vague wishes – even with emotions, be as specific and as concrete as possible.

Example Scenarios

Think about a restaurant website. An established restaurant will likely already have quite a bit of design assets in its physical location. Between logos, fonts, colors, ambience, etc – a web designer should already have a good bit to work off. Hiring a designer will be less about getting the design right and more about the layout, navigation, and design asset conversion right.

Think about a brand-new yoga studio. A startup might need a website design that can translate offline and throughout social media. Here, the owner will need to make a choice about developing a logo & brand feel separately (via a specialist graphic designer or logo contractor or AI brand software) or letting the website designer drive the look of the business.

3. Define Your Business Needs

What role does your website serve in your business?

Some of this will go back to your design and technology needs, but it’s especially pressing to consider before you define your budget & scope.

Think about how your business gets customers and how you do your marketing.

How will/does your website drive leads/sales? Is it something that your referrals & salespeople will offer as a brochure…or will your website need to drive new leads from online visitors?

Will it need to integrate with any business processes such as inventory or bookkeeping or order-taking? Do you want to move your business processes to the website via marketing/sales automation?

Are there any existing software providers that you want to integrate with your website now or in the future?

What To Consider

Think about both the near and medium term needs of your business.
Think about your domain names – and how you want to setup your email and online services.
Think about the incremental value of your website – what number of leads could it drive? What is a new lead worth?

What To Avoid

Avoid too much complexity – integrations and versatility make your website last.
Avoid thinking of your website as a cost – it’s an investment.
Avoid designers who do not work with integrations or cannot build out features that you need.
Avoid designers who cannot make a business case for changing your existing business processes.
Avoid designers who cannot explain how & why their approach will work through the medium term.
Avoid quick, “duct-tape” solutions.

Example Scenarios

Think about a local property management. An accounting firm could do well with a “brochure website” that simply funnels people to the phone and in-person consults. A nice brochure website (i.e., a website that simple provides information) might do fine. But what if the firm wants to add in client tools, secure portals, content marketing, direct listings, etc? Those features would require a website that can expand and develop over time. It might be worth developing a self-hosted website with a designer on retainer.

Think about a new jewelry business. A jewelry business might do business exclusively on Etsy, and want a blog to connect with customers. It might be easy to get a custom theme on a hosted platform like WordPress.com. However, it also might be a better choice to go a different direction at the beginning to integrate Etsy or lay the foundation for a non-Etsy online store.

4. Define Your Budget & Scope

How much money and time do you have to spend right now?

And “as cheap as possible” is not an answer – if this is your thinking, you should not be looking for a custom website designer. You should look for alternative options.

Your website is an investment, not a cost. If you approach it the same way you’d approach bulk-buying office pens…then you’re not going to get the result you want.

Now – I understand the desire to get the biggest return for your investment. But remember that it’s usually better to maximize your return rather than minimize your investment.

What To Consider

Think about your existing cashflow situation. Write out what a single new lead is worth.
Write out existing costs of having a poor or non-existent website.
Write out features, functionality, and design choices that you’d prioritize.
Think about payoff period and amortize your budget. In other words, if you budget $10,000 – and you expect the site to last 50 months, then that is $200/mo. Does that match your expected value?

What To Avoid

Avoid thinking about your budget in a silo – always tie it to scope or value.
Avoid thinking that you can have everything. Think about keeping your options open.
Avoid thinking about having a one and done project. Think about ongoing costs to either you, your staff or your designer.

5. Define Your Sources & Alternative Options

What type of designer do you want? And how do you find them?

The bad news is that most good website designers are not super-easy to find.

The good news is that your competitors don’t know that. If you put in a bit of work to find the right website designers – you’ll have a much better range of choices.

What To Consider

Good website designers have plenty of work. If someone is spending a lot of money on advertising & acquisition, then they are probably a giant agency with a churn and burn process.
Good website designers want to work with good clients. I used to work with web design clients, and I would take a great client for half-pay over a bad client. In fact, at a certain point, there’s not enough money in the world to take on a bad client.
Conversations and back and forths are not billable. That is not good for you or the designer. The more specific you are, the better.

What To Avoid

Googling what everyone else is googling.
Expecting more from a person or platform than is reasonable given how much effort you’ve put in.

Where To Look

Now – you could always do a Google Search. But I promise that you will likely be disappointed. Here are some better places to look.

For local designer / developer

Local web designers are usually horrendous at marketing their services. But many clients want a local designer that they can talk to in person.

Your approach will depend on your metro area, of course, but here’s where I’d look.

Look for meetups to stalk. Web designers are always looking to upgrade skills and you can usually find some at a local workshop, class or meetup.
Do a really specific Google search – one with search operators. Like this.
Ask your favorite local businesses for referrals.
Use city specific directories – this works especially well in smaller metros.

For a WordPress designer / developer

WordPress is an incredibly versatile content management system. It’s not ideal for every site, but it’s like 4 door SUV / Sedan of the Internet. It’ll probably do the job for you.

Now – the issue is that basically anybody can call themselves a “WordPress developer” – even if they really don’t know how the software works at its core.

It’s important to do #1 and #2 – because you’ll need to know if you are hiring a designer / developer who works with WordPress as their software of choice vs. someone who actually develops websites with WordPress.

Here’s where I’d look –

Stalk local WordPress meetups.
Stalk the attendees of WordCamps – big gatherings of designers who use WordPress.
Stalk the community support forums of WordPress.org
Do an incredibly specific Google search with something like intext:”Work with me”

One side note about WordPress designers – since they’ll likely use certain themes/theme frameworks – you’ll be able to negotiate a bit more on scope and do more with DIY.

For [other platform] designer / developer

Now there are plenty of other software options out there – especially “hosted options” like Squarespace, Weebly, Shopify, Wix, Bigcommerce, etc.

The key here is to understand the technology and what exactly you are buying (ie, you are paying more for a custom design over functionality since the hosted option bundles lots of functionality in with your hosting).

Lean heavily on the services’ support forums and Experts Exchange to find prospective designers.

For a general designer / developer

The great thing about web design is that you can work with a global talent pool if you want. There are challenges to working remotely but a lot of upside if you can do it well.

Again, for this search, I’d recommend relying more on internal platforms over random searches. Here’s a few examples.

99designs is a good option for contest-run design only competitions. I’ve implemented designs that my clients have bought through them. Here’s my general review.

Dribbble is the big hangout for designers doing cutting edge work.

Most developers will have a profile on Github or StackExchange or HackerNews. Look for ones who have good answers.

Fiverr is a surprisingly good platform if you are willing to try a few gigs before committing to a single designer. I’ve used them for several side projects.

Upwork is also good if you are willing to do a test project with several designers before choosing.

Tailor Brands is an AI-powered self-service platform that will develop a logo and entire branding setup for less than $100.

You’ll also find that vendors on ThemeForest will do custom work in addition to other marketplaces like CreativeMarket.

The point here is that a bit more effort into searching for good designers will give you much better options than general googling.

Alternatives to a Custom Website Designer

Now if you’re thinking “ok – I just need a simple, straightforward website, not a roundabout search” – then you’ll want to look into some Alternative Options.

Skip down to some alternate ways to get a website without having to choose a website designer.

6. Ask for Proposals

Now that you have a few website designers to choose from, the next step is to send out a proposal.

The better your proposal, the better your options will be.

Think about how you would like to be approached if you were a web designer.

Would you prefer a vague email asking how much a website costs? Or would you prefer a detailed description of a the project along with a ballpark budget range?

What To Consider

Providing a ballpark budget is the fastest, simplest & most accurate way to get on the same page as a website designer. Your budget does not determine your end cost – but it does determine who you even talk to. As an analogy – it’s how website designers know whether you are shopping for a used Toyota Corolla or a brand-new Ferrari.
Make your project easy to say yes to. Keep the next step & primary ask simple and straightforward (ie, “are you interested in the project?”, “if interested, what additional details do you need?”)

What To Avoid

Avoid sending lots of feeler emails with no intention of hiring.
Avoid sending an email with too much information or too many asks.

7. Follow up with Questions & Request for References & Portfolio

However the designer communicates upfront is how the project will progress. Communication never improves over a project – it only degrades. Look for a high benchmark to start.

What To Consider

You are using your requirements, questions, and details to get prospective web designers to rule themselves out.
Think about your priorities – sending too many questions is just as bad as too few.

What To Avoid

Avoid dictating the entire process. Remember that the designer’s questions for you can tell you as much as your questions for them.
Avoid making the designer do too much back and forth. If you think a call will be necessary during the design process, do this entire step via a phone call.

8. Request Contract & Project Plan (and declines)

Tangible expectations in writing help everyone in every engagement.

At this point, you should be able to choose a website designer.

The next step is to request a contract and a project plan from the designer that you want to work with.

A written contract helps *everyone* in the project. The contract should spell out “deliverables”, costs, responsibilities, intellectual property rights, and an adjudicating body.

A project plan helps *everyone* understand expectations, responsibilities, and timelines. This does not have to be complicated. It should communicate clearly though who is responsible for what and when.

Lastly, for the designers that you did not choose, be sure to send a polite decline. Even if it’s as simple as “Thank you for providing this information. We have decided to work with another company. We will keep your company in mind for future project & referrals.” You’ll save the everyone needless follow-ups.

9. Follow up & Communicate Clearly

A good website designer cannot help a bad client.

What To Consider

The website is going to be *yours* so you need to make sure you have all the information you need to make decisions.
Make sure you have all the technical documentation in your control.
Remember that a lot of design work depends on fast, accurate feedback.
Budget for not only time but also money for incidentals (ie, photography) and technical issues.

What To Avoid

Interrupting the project plan and micromanaging.
Providing the wrong feedback at the wrong stage.
Avoid verbal conversations without follow-up written documentation. Phone call notes are essential.

Conclusion & Next Steps

Choosing a website designer does not have to be a daunting process full of frustration and unknowns.

It does require that you clearly understand what you want, when you want it, and to clearly communicate your expectations.

If you are trying to find a good website designer – follow the process and you’ll be set!

Alternate Conclusion & Next Steps

Now – if you have read this post and found it useful…but…

You’re thinking “I just need a website! It’s 2020 – I just need a simple, affordable, quick standard website – not a complicated purchase with contracts and whatnot”

I hear you. I have friends who have been there. And there are options out there – but it’s not a quality custom website designer.

Here’s some options –

#0 – DIY w/ Automated Branding & Design

Many design options (including the ones below) require you to coordinate your branding, even if you are able to purchase assets like a logo or social media photos. But that leaves a lot up to you.

There is one company that focuses on completely automated branding – Tailor Brands. I’ve begun using them for my side projects. They AI and machine learning to create a whole range of design assets & guidelines.

They also have a bundled website builder or you can use them to complement #1 through #3. Check out Tailor Brands here. Read my review here.

Other website builders also bundle a logo designer with their software. Wix has a template driven logo designer as does Shopify.

#1 – DIY with a Website Builder

There are companies that specialize in businesses with a budget and no design or technical expertise. They provide hosting and pre-made templates all for a single monthly subscription. You might not get all the functionality that you want…but you will get a secure, fast, good looking website.

To find the right website one, take my website builder quiz or see my recommendations here.

I also have an online store builder quiz with recommendations here if you need ecommerce.

#2 – DIY with self-hosted WordPress

WordPress is a the most popular, most supported, and most versatile “content management system” on the Internet. It’s free community supported software that you install on a hosting account (ie, you rent part of a server from a hosting company). The software has a learning curve, but you’ll have 100% control and 100% of your options open. You’ll also be able to call in specific experts on specific problems. Or install do-it-all themes / templates.

I wrote a WordPress Website Setup Guide here.

#3 – Purchase Website Design from a Hosting Company

This option is a blend of #1 and #2 – if you want full control over your site with unlimited options for the future…but don’t want the learning curve of setting up a design yourself, then you can sometimes purchase website design services from a hosting company. They are usually able to provide these services much cheaper than an independent website designer since you’re also using their hosting services.

For these projects, I recommend InMotion Hosting – they have great support and are the hosting company for this website. See their design services here.

Other resources include –

How To Try WordPress Before Purchasing
Choosing Your Website Color Palette
Features Customer Want in a Local Website
Building Different Types of Websites with Templates

For any specific questions, see my contact page.

“”

May 20, 2020

Small Business HR: What Is HR & How To Manage Your Business’s Human Resources

For some people, knowledge of Human Resources begins and ends with Michael Scott’s relentless feud with HR-manager Toby during several cringe-worthy (and amusing) episodes of The Office. HR can seem like the prerogative of a bigger company, but not necessarily something a smaller business could benefit from. However, in reality, the role of HR is vast (and commonly misunderstood) and can operate as a bridge between your employees, you, and the practical side of having and managing people.

Wondering whether a Human Resources Manager, a full Human Resources Department, or an outsourced service is the best fit for your business?

Keep on reading to find out what HR is and whether or not your small business could benefit from adding human resources.

What Is HR?

HR, as a department within your business, is the branch of operations that is responsible for managing a company’s human resources (or human capital; or employees). The Human Resources (HR) department streamlines many important facets of your business and becomes an important link between the leadership of a company and its employees. The umbrella term HR covers the various ways employees are led and developed within a business. For that reason, there are numerous avenues of expertise within HR itself or different ways an HR department can function within a small business.

In general, the tasks delegated to HR can include onboarding, hiring/firing, running payroll, managing employment laws and compliance, addressing employee complaints, running employee training programs, and analyzing job duties and descriptions. HR specialists can bring their own pet passions to a company, but in general, the tasks orbit around employee management and growth.

HR VS. HRM

Human Resources (HR) is the department set apart to manage employees and employment; Human Resource Management (HRM) is the approach to how a company manages its employees. Some of those management approaches are related to recruitment, hiring and firing, employee education and training, employment compliance, and maintaining company culture. An HR Management team will work with a company’s human resources (employees and leadership) to implement processes and set goals.

Sometimes the terms are used interchangeably.

What Duties Does HR Fulfill?

From talent acquisition to letting people go, the HR department follows the life-cycle of an employee and works with you as the small business owner to effectively manage your team. An HR professional needs to be knowledgeable about the law but also informed about the specific niche-needs required for your particular business. A person working in HR wears many hats and often becomes a de facto counselor while also juggling compliance, training, and navigating employee relationships. With that in mind, your HR department is the face of your company to a new employee and they should set the tone and display the culture you desire.

Specifically, in the HR job description, your HR department will take the lead on payroll, hiring and firing, employee benefits, employee documentation, compliance, continued training, and helping maintain company culture. The role is a fine balance between paperwork and people–business objectives that don’t often go together.

Payroll

The facilitation of payroll is something a small business owner might be happy to hand over to someone else. Payroll can be a long and convoluted process, especially if you’re currently running payroll without assistance. Opportunities to outsource payroll are expanding as more businesses make their systems available for small businesses at competitive prices, and many of those leaders in payroll are expanding their platforms to include HR and benefits management online.

Online payroll systems like Gusto, SurePayroll, Paycom or Intuit offer cloud-based payroll platforms that streamline the payroll process and can assist with onboarding and maintaining employee records. Companies like Namely, however, not only offer payroll services but delve into a broader spectrum of HR services, too, and work best for small businesses with over 50 employees to manage.

Hiring (& Firing)

The HR department (either a team or a single person) will greet a new hire with a request for quite a bit of paperwork, and it is the department’s responsibility to maintain those documents related to hiring, compliance, and job performance. (Paperwork, however, is slightly anachronistic as most of HR’s tasks have been relegated to the digital world.) The entire life-cycle of an employee belongs to HR: It is HR’s job to help the company with best practices related to recruitment through termination.

In that capacity, an HR department can relieve some of the burden from a small business owner by shouldering the minutiae of managing employees. HR works with company leadership to outline an ideal job candidate, write job descriptions, conduct interviews, follow-up with reference checks, outline performance reviews, and monitor/manage all employee records.

HR can also take on the task of having difficult conversations with employees who are under-performing. In the event that an employee is terminated, HR will set up an exit-strategy for your employees and develop a system: HR can conduct an exit interview, remove the former employee’s access to company communication, and run a final payroll.

Positively, HR manages employee growth and education within a company, including announcing pay increases and bonuses. Companies thrive when there is a clear growth model, and HR can take on the task of creating a uniform growth model and communicating performance requirements to employees.

Employee Benefits

According to the Transamerica Center for Retirement Studies, a 2018 survey of full-time employees reported that 94% of workers said health insurance was “very important” to them when looking at an employer. Up until recently, some small businesses were shut-out from opportunities to offer affordable health care or retirement.

Setting up benefits, communicating those benefits to employees, answering questions about benefits, and monitoring open-enrollment periods are all functions of HR. Also, HR professionals also have the resources and knowledge to negotiate lower rates to help control benefit costs.

Documentation

Paperwork: Infinitely tedious but monumentally important to your business. Ensuring proper documentation is a crucial component of mitigating risk and protecting both your business and your employees. An HR department will manage and facilitate documentation on the following issues:

Employee training/certifications
Paperwork required for hiring
Job performance reviews that lead to a promotion/demotion
All discipline related to an employee
Harassment and discrimination complaints

Failure to document might leave your business in a fragile position, and one of HR’s purposes is to guide a business when situations with employees become tenuous. HR can also be a neutral place for employees to feel safe voicing concerns and can advocate for employees who need a go-between them and management.

Compliance

During my tenure as a public school teacher, I routinely spent warm August nights renewing my first aid and CPR certifications. It is a legal requirement that schools must maintain a certain ratio of adults with certifications to students in the building, and it is HR’s responsibility to have those numbers and photocopies of first aid cards in case they are needed. Every few years, I’d get nudged to renew my qualifications.

When it comes to HR and compliance, an HR manager’s job is to guard your company against employment/compliance lawsuits. Risk management is a huge part of the HR job description, so hiring someone with specific knowledge of your industry is important.

Company Culture

In recent years, company culture has become an important part of managing employees.

Company culture conveys not only your company’s personality, but also its fundamental value-system. More than ever, prospective employees are interested in a company’s values as a prerequisite before applying. People want to work where they will feel valued, supported, and understood, and it is your cultural environment that sets the foundation for your employees to feel that value, support, and understanding.

HR may be the first face of your company to new recruits and interviewees, and so it’s vitally important for HR to have a strong sense of the company culture you wish to convey. What does that look like? As a small business owner, you choose the culture of your company. So, hire someone who is well-equipped to assess your employee’s skills and know the needs within the company. HR needs to understand the small nuances within your business and must employee messaging that consistently conveys company culture.

Does Your Small Business Need HR?

All small businesses could benefit from some type of HR platform or person to help assist with the more tedious aspects of employment (payroll, documentation, compliance).Â Do you need an in-house HR manager? Maybe not yet. But the good news is that we are entering a golden age for cloud-based/remote assistance for small businesses in areas that were traditionally closed to smaller companies.

As companies grow, it’s important to know when it might be time to devote more attention/resources to HR. Think of the amount of time you spend on clerical documentation of employees or payroll; think about how confident you are in your knowledge of employment law; contemplate the systems in place for employee complaints– are you leaving areas of your business open to employment liabilities? Does new-hire paperwork take up a significant portion of your time?

HR professionals are equipped to navigate these facets of employment, but whether or not you need to hire in-house or outsource is up to you. If you still aren’t certain if you need HR at all, reflect upon some of the key functions of this department and see if they fit with your needs:

Streamlines the hiring process and takes over new-hire documentation
Runs payroll and manages benefits
Assists with employee retention and satisfaction
Manages employment law compliance
Writes and updates the employee handbook
Organizes training
Resolves employee conflicts and can mediate human resource difficultiesÂ

How To Choose The Right HR Option For Your Small Business

How much HR will your business really use? With one or two employees, simple payroll needs, and low turnover, you may find you’re not ready to invest in outsourcing or hiring when you can DIY. But companies that can afford to outsource the administrative tasks of HR should consider looking at the options available. In recent years, some old names in HR have developed new online platforms to assist businesses with every aspect of HR. Some of the bigger names like Namely are only available for companies with 50 or more employees; however, many other options, like Trinet, serve small businesses of all sizes.

Three HR options available for small businesses are:

1. The Startup Mindset: Handle HR Yourself

It may be a cliche that small business owners have an excess amount of drive and energy, but the evidence seems to support the image. When a business is starting, every saved penny is necessary to put back into the company, and those early months need all the stretching they can get. Simply put: If you can do it yourself, then you just do it yourself.Â With tight margins and an unclear path for the future, some business owners need a lot of convincing to pay someone to do tasks that they are capable of doing themselves. And it can be done.

Free accounting programs can assist with payroll and you can make yourself available to talk with employees. You can download or pay once for the creation of an employee handbook, and with time and creativity you could provide employee training. If you feel comfortable with employment law and know that you have the time and emotional resources to be a neutral advocate for your employees, then by all means, handle HR yourself.

2. Hire An In-House HR Manager

There are some businesses that are well-suited to have an in-house HR manager vs. heading the digital outsourcing route. Does working with employees require a significant amount of face-time? Do you hire/fire several times throughout the year? If you said yes to either of those questions, you might need to hire an in-house HR manager. People who work in HR are trained in a variety of different methods regarding the best practices for employee retention and keeping morale high, so you will want to find a good match. (Two different views about how to manage people or what to value in an employee could get complicated. Explore what types of HR methodologies match your business style before you set out to hire someone.)

Also, there is the possibility of hiring an in-house HR manager and then equipping that person with the ability to outsource some of their duties to a Professional Employer Organized (PEO) or Human Resources Management (HRM) company.

3. Outsource Your HR

There are also options to fully outsource your entire HR department to a PEO or an HRM. Employees and business owners alike might find that it’s easiest to streamline aspects of the employee life-cycle using online software. This automated system usually comes with a fee per employee, and offers in-software functions that cover many HR requirements. The best software includes easy employee log-in and navigation, mobile access, payroll, time and attendance platforms, expense tracking, benefits administration assistance, access to training modules, and a customer rep to call directly in the event of a question or concern.

Most of the savvy HRM platforms are designed to look like social media platforms and operate as a place to connect socially as well as send out important employee announcements. As the need increases, integrations grow and the software pivots to respond to client demand; and in that regard, outsourcing is a sure-fire way to stay on top of HR trends.

Final Thoughts On Human Resources

Maybe in the next reboot of The Office everyone works remotely and HR is a robot. That might have seemed like a left-field prediction a few months ago, but now, who knows? If you are spending an exorbitant amount of time on HR administrative tasks, it is highly likely that an HR professional (either in-person or via the cloud) is an important step to grow your business and give your brain a rest. While outsourcing costs can vary between platforms, the mid-line options are less expensive than hiring a full-time HR manager.

Above all, whether you hire in-house or outsource, the HR platform you implement should reflect your business values and make your day-to-day management of employees easier and more streamlined. For growing businesses with a handful of new hires a year, the benefits (and protection) outweigh the costs.

The post Small Business HR: What Is HR & How To Manage Your Business’s Human Resources appeared first on Merchant Maverick.

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May 16, 2020

When You Should (& Shouldn’t) Return PPP Money & How To Return PPP Funds If It’s Not The Right Fit After All

It was a long time coming for many small businesses seeking relief through the Paycheck Protection Program (PPP). Now that they have the money and have read some of the fine print, some business owners are discovering that the program may not be a great fit for their specific circumstances.

If you have received a PPP loan but are having second thoughts about whether or not it’s a good idea to keep the money, you are not alone.

Many Small Businesses Are Discovering That PPP Funds Aren’t The Right Fit

With normal business patterns shattered into a million pieces by the COVID-19 pandemic and associated lockdowns, many small businesses looked to the PPP as a lifeline. Particularly appealing was the promise that businesses would be able to have the loan forgiven if they met specific criteria. But after a rocky rollout that took two separate rounds of Congressional funding (so far), the SBA is only just now formally releasing the specific guidelines and application for loan forgiveness. Early reports suggest more than 30% of PPP borrowers have returned their funds so far.

Preliminary guidelines for PPP loans had established that the loans would be used to keep employee paychecks going for eight weeks. Forgiveness was contingent on at least 75% of the loan being used for payroll. Less, but still some, of the loan could be forgiven if the business decreased payroll by way of staff or salary reductions. The uncertainty about what these thresholds are, and what other expenses the money can be applied to beyond payroll, have many business owners questioning whether they made the right decision. Complicating matters further is some confusion between the PPP and the SBA’s other major coronavirus intervention, Economic Injury Disaster Loans.

Reasons To Return Your PPP Funds

Not sure if you should keep or return the money? Let’s look at some test cases.

1) You’ve Weathered The Crisis Pretty Well And/Or Don’t Need The Money

While the pandemic has been a disaster for many businesses, some were better positioned to pivot to the new paradigm than others. A smaller number may even have unexpectedly seen their sales go up. Since this is all new territory for most businesses, no one could blame you for preemptively applying when you expected the worst.

The Treasury Department does require that borrowers certify in good faith that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

The good news is that if you borrowed less than $2 million through the PPP, the SBA and Treasury Department have stated in their latest guidance that they will assume you asked for the loan in good faith. While you won’t have to worry about any legal issues, you may still want to consider returning the money to avoid paying interest.

If you borrowed $2 million or more and aren’t certain you can convincingly demonstrate good faith, you should return the funds immediately to avoid any potential auditing and legal troubles (at the very least, you won’t qualify for loan forgiveness and will be expected to repay the loan). The “Safe Harbor” grace period to do so currently ends May 18, 2020.

2) You Don’t Think You Qualify For Loan Forgiveness

A 1% interest loan is nothing to sneeze at, but the fact remains that many PPP borrowers took out the loan with the expectation that it would be forgiven. To qualify for full loan forgiveness, PPP funds could be used for:

Payroll Costs:Â Capped at $100K/annually per employee, with sole proprietors and self-employed individuals also qualifying. No full-time salaries may be reduced by more than 25%. If you did have to cut wages, you have until June 30, 2020, to restore the salaries. It was expected that 75% of the loan’s value would cover payroll costs, including benefits.
Mortgage Interest: Of the remaining 25%, funds may be spent on obligations incurred before February 15, 2020.
Rent:Â Of the remaining 25%, funds may be spent to cover rent payments for two months so long as the lease agreement for the property was in effect before February 15, 2020.
Utilities:Â Of the remaining 25%, funds may be used to pay for utility bills.

You are, of course, expected to provide documentation of your expenses. If you struggled to retain headcount and don’t see it returning to normal until July or later, you may have anticipated meeting the guidelines but fell short in practice. If it doesn’t make sense to have a loan on your books, you may want to return the funds.

3) You Don’t Think You Can Pay The Loan Back In Two Years

If you don’t qualify for forgiveness, or only qualify for partial forgiveness, you’ll be stuck with an installment loan. A 1% interest loan with a six-month deferment is, by any objective measure, an absurdly good loan. That said, if your business is struggling, you may not have the spare revenue to pay it back within that time. In that case, it may make more sense to return the funds, especially if you want to qualify for federal loans in the future.

4) Your PPP Loan Conflicts With Another Program

The confusing patchwork of CARES Act programs can be hard to navigate, especially when you’re trying to figure out which ones are mutually exclusive. For example, if you want to qualify for the Employee Retention Credit (ERC), you can’t also receive PPP funds. This might be especially annoying for businesses that didn’t know about the ERC when they initially applied for a PPP loan.

Luckily, you can still claim the tax credit if you return your PPP funds by the May 18 deadline.

5) You’re Not Going To Make It

The unfortunate truth is that it will probably take a while for the economy to rebound and business to return to normal even after the lockdowns have ended. If your projections for your business aren’t looking good, you should ask yourself whether or not it makes sense to carry this debt.

How To Return Your PPP Funds

Contact whichever lender through which you applied for your PPP loan. They can guide you through the process of returning your funds to the Treasury Department. Remember that the Safe Harbor provision expires on May 18, 2020, so if you require leniency on the good faith provision, and/or you want to qualify for the ERC, you should begin the process immediately. Other borrowers who are considering returning their funds have a little more time to make that decision.

FAQs On Returning PPP Funds

Do Safe Harbor rules apply to small businesses, and what happens if I return the money after the Safe Harbor deadline?

In this regard, the most recent guidance does not appear to distinguish between the sizes of the businesses that received funds, only the amount they borrowed. If you borrowed less than $2 million, not much will happen to you; you’ll just miss the opportunity to qualify for the ERC. If you’re simply worried about not qualifying for full forgiveness, you can still return the money after the Safe Harbor period ends.

On the other hand, if you borrowed more than $2 million and can’t demonstrate that you borrowed in good faith, you may be subject to audit and possible further legal action.

Will I have to pay interest if I return the money?

If you return your PPP loan during the Safe Harbor window, you effectively never had the loan. After that, if your loan hasn’t been forgiven, you may be considered to have made a prepayment (check with your lender to be sure). There are no prepayment penalties on PPP loans.

Are PPP forgiveness rules going to change?

Difficult to know at this point. There are still some questions regarding how strictly the 75%/25% payroll/expense split will be enforced, how partial forgiveness will work, whether the eight-week loan period will be extended, and so on. Merchant Maverick will keep you updated on any changes that come down the pipe.

The post When You Should (& Shouldn’t) Return PPP Money & How To Return PPP Funds If It’s Not The Right Fit After All appeared first on Merchant Maverick.

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May 14, 2020

Take Advantage Of These Small Business Grants For Coronavirus Relief

The COVID-19 pandemic has left the small business world reeling, with businesses forced to shut their doors, lay off staff, or change the way they operate. These sudden and unexpected changes have hit many business owners hard as they struggle to follow social distancing guidelinesÂ and comply with government orders. Unfortunately, many small businesses are already struggling financially or may be in the near future.

Small business aid made available through the Coronavirus Aid, Relief, and Support Act has been making headlines, but many small business owners missed out on funding, do not qualify, or did not receive enough money to sustain their business for an extended period of time. The good news, though, is that many companies and organizations are offering millions of dollars in grant money to small business owners.

Instead of spending hours scouring the web for legitimate grant programs available to businesses affected by the coronavirus, keep reading. We’ve done the hard work for you by finding the best grants available to help your business clear the hurdles that this year has thrown at us … and the inevitable challenges that lie ahead.

Sam’s Club Small Business Relief Grants

Eligibility Criteria: Small businesses that have been affected by COVID-19, particularly underserved communities
Open & Close Date: Round 3 of funding will open on May 14, 2020

Sam’s Club has provided a $1 million grant through the Local Initiatives Support Corporation (LISC) that will be distributed to small business owners affected by COVID-19. Through this program, small business owners can receive up to $10,000 to cover immediate expenses. Qualified uses for grant funds include payroll costs, rent and utilities, outstanding debts to vendors, upgraded tech infrastructure, and other operational expenses.

Any business that has been affected by COVID-19 can apply for the grant. Priority will be given to underserved communities including businesses owned by women, minorities, and veterans, as well as businesses that are particularly challenged by the COVID-19 pandemic.

Two rounds of funding have already been closed, and the third round opens on May 14. A close date for submitting applications has not yet been announced. Interested business owners can visit the LISC website to learn more about this grant, sign up for email updates, or submit an application.

Verizon Small Business Recovery Fund

Eligibility Criteria: Small businesses that have been affected by COVID-19, particularly underserved communities
Open & Close Date: Round 3 of funding will open on May 14, 2020

Verizon Wireless has donated $7.5 million in grant funding that will be distributed through LISC. Businesses may qualify to receive up to $10,000 to use for immediate operational expenses, including outstanding debts to vendors, rent and utilities, payroll costs, and other purposes.

Businesses that have been affected by COVID-19 can apply. However, priority will be given to business owners in underserved communities that are unable to secure funds elsewhere. Businesses that have been particularly challenged during the pandemic will also receive priority.

The grant funds will be distributed through three rounds of funding. The first two rounds are closed, and the third opens on May 14. A close date for the submission of applications has not yet been announced. If you’re interested in this grant, you can apply, sign up for email updates, and learn more through LISC.

GoFundMe Small Business Relief Fund

Eligibility Criteria: Available to independently owned and operated businesses affected by COVID-19. All recipients must raise at least $500 through the GoFundMe platform.
Open & Close Date:Â Currently open; submissions will close when funds have been depleted

GoFundMe has launched its own fundraiser to help small business owners. The GoFundMe Small Business Relief Fund has raised over $2 million that will be used to provide matching grants of $500 to qualified business owners.

Any business is eligible to apply provided they meet a few requirements. Businesses must be independently owned and operated. Businesses that are nationally dominant in their fields are not eligible to receive a grant. Furthermore, all recipients must have been affected by COVID-19 and must use funds to pay employees or ongoing operational expenses.

To be eligible for a $500 grant, all recipients must register to confirm their small business status. Recipients must also launch a GoFundMe fundraiser and raise at least $500 in funds. All fundraisers must include the hashtag #SmallBusinessRelief to qualify. Grants will continue to be distributed until all funds are depleted. The GoFundMe Small Business Relief Fund campaign page and the program FAQs provide all of the information you need to secure your grant.

FedEx #SupportSmall Grants

Eligibility Criteria: For-profit businesses in the US that have been in operations for at least 12 months, have fewer than 50 employees, made less than $5 million in sales revenue in 2019, and have shipped or plan to ship
Open & Close Date: Submissions will be accepted from May 25, 2020, through June 12, 2020.

FedEx is showing its support of small businesses by providing a total of $1 million in grant funding to eligible applicants. The 200 recipients of this grant will each receive $5,000 plus a $500 FedEx Office credit that can be used for posters, banners, and other marketing and promotional materials.

To be eligible, all applicants must be at least 18 years old and operate a US-based business. Only for-profit businesses can apply. Qualifying businesses must have been in operations for at least 12 months, have less than $5 million in sales revenue from 2019, and have fewer than 50 employees. All applicants must also have shipped within the last 12 months or are planning to ship within the next 12 months. Franchises, resellers, independent consultants, nonprofits, and previous winners of FedEx Small Business Grants are not eligible.

The application period opens on May 25, 2020. Applications will no longer be accepted after June 12, 2020. Interested business owners can apply directly through FedEx.

Nav’s Small Business Grant

Eligibility Criteria: Any Nav customer with a social media account
Open & Close Date: The current round runs from February 24, 2020, through May 30, 2020. A new submission period opens quarterly.

Nav’s Small Business Grant isn’t specifically for businesses affected by the coronavirus — any Nav customer can qualify. Every quarter, three recipients are selected to receive grants. The winner of first prize receives a check for $10,000. The first runner-up receives a grant for $2,000, while the second runner-up receives $1,000.

To qualify for this grant, you must be a Nav customer. Then, you must create a post and share it on Facebook, Instagram, or LinkedIn. Your post should discuss a challenge that your business has faced and how you plan to use your grant. Nav encourages participants to get creative with their posts by including photos, creating videos, or recording audio. Nav must be tagged in the post for the submission to be considered.

This grant program is ongoing and accepts new submissions each quarter, so if you miss out on this round, don’t worry — you can take part in the next round. Check out past submissions, tips for creating your post, and learn more about this grant by visiting Nav.

COVID-19 Business for All Grants

Eligibility Criteria: Any US-based business affected by the coronavirus
Open & Close Date: This contest is open from March 26, 2020, through July 16, 2020.

Hello Alice has partnered with companies like eBay and Verizon to distribute funds through the COVID-19 Business For All Grant program. Through this program, qualifying small businesses can receive a $10,000 grant.

Qualifying for this grant is easy. The program is open to any US-based business that does not engage in illegal or illegitimate activities. All entrants must sign up for a Hello Alice account and complete the online application. Winners will be selected based on their need for funds and how grant funds will be used. You can learn more about this grant and submit your application through Hello Alice.

Supermaker’s Entrepreneurial Dream Project

Eligibility Criteria: New businesses or businesses that haven’t yet launched, less than $2.5 million in gross annual revenue, and an active business website and social media account
Open & Close Date: Applications are due by June 15, 2020

Supermaker’s Entrepreneurial Dream Project is aimed at new businesses or businesses that haven’t even gotten off the ground yet that have been impacted by the coronavirus. Two winners will be selected to split a grant of $100,000. Ten additional winners will be selected to receive mentoring through the Supermaker Mentor Network.

Businesses that made their products available in 2019 or later are eligible. Businesses that have not yet launched may also apply. Existing businesses must have less than $2.5 million in gross annualized revenue. Products must currently be sold or ready to sell within six months of applying to qualify. Eligible entrants must also have a US-based business, an active website, and social media accounts showing entrepreneurial activity.

Winners will be picked based on criteria including the business’ mission statement, sustainability, and proposed use of funds. Interested applicants can go directly to Supermaker to check out FAQs, read tips for submitting a good application, and apply for this grant.

The Conductor Foundation

Eligibility Criteria: Nonprofit organizations
Open & Close Date: Ongoing

The Conductor Foundation grant program is different than other grants on this list. First, it’s open to nonprofit organizations. This also isn’t a monetary grant but does offer more opportunities for growth and online visibility.

Winners of this grant will receive Conductor Searchlight SEO technology, Keyword Discovery Services, and ongoing support from the team at Conductor.

Applicants do not have to be affected by COVID-19 to qualify, and this contest is ongoing. Interested nonprofits can learn more and submit a one-page application directly through The Conductor Foundation.

Amazon’s Neighborhood Small Business Relief Fund

Eligibility Criteria: Small businesses with less than $7 million in annual revenue or fewer than 50 employees that are located in select neighborhoods in Seattle and Bellevue
Open & Close Date:Â Undetermined

Amazon has created the $5 million Neighborhood Small Business Relief Fund to provide financial assistance to small businesses located in select Washington State neighborhoods. The amount of each award varies and will be determined based on information received during the application process. Funds should be used to cover day-to-day operational expenses and to improve cashflow.

To qualify, businesses must be located within close proximity of Amazon’s offices in Regrade, South Lake Union, and Bellevue. All eligible entrants must have less than $7 million in annual revenue or fewer than 50 employees. The grant program is open to any business that is open to the public and relies heavily on foot traffic.

Amazon has a page that allows you to determine eligibility and register to apply. The company also has a list of FAQs and additional information to help interested business owners find out more about this funding opportunity.

PBA COVID-19 Relief Fund

Eligibility Criteria: Licensed beauty professionals unable to work as a result of COVID-19
Open & Close Date: Ongoing until funds are depleted

Licensed beauty professionals that have been unable to work due to the coronavirus can apply for a grant through the Professional Beauty Association COVID-19 Relief Fund. Eligible entrants will receive a $500 Visa gift card that can be used to purchase supplies or cover immediate expenses.

A lottery process is used to determine winners of this grant. To date, over $1 million has been distributed to help beauty professionals, and the contest will be ongoing until funds are depleted.

Interested applicants must submit an application. The PBA also offers FAQs giving more details on this funding opportunity.

CND x BCL Nail Professional Relief Grant

Eligibility Criteria: Licensed nail professionals employed for at least 12 months that are currently not receiving an income
Open & Close Date: Submissions will be accepted through May 30, 2020

Beauty Changes Lives, through a donation by CND Creative Nail Design, will be awarding grants to nail professionals that have lost their income as a result of COVID-19. Each winner will receive temporary financial relief through a one-time $1,000 grant.

This program is open to licensed beauty professionals that have been employed for at least 12 months as of March 16, 2020. Eligible applicants must also reside in the US and must not be currently be receiving an income.

In addition to submitting an application, entrants must also write an essay of more than 200 words and provide documentation proving identity, number of dependents, licensure, and other information. Submissions will be accepted through the end of May 2020, and winners will be selected through July. Check out Beauty Changes Lives to learn more about this program and to sign up for a chance to win.

The Red Backpack Fund

Eligibility Criteria: Woman-owned businesses and nonprofits affected by COVID-19
Open & Close Date: Application rounds will open on June 1, July 6, and August 3

The Spanx by Sara Blakely Foundation has donated $5 million and partnered with GlobalGiving to help female entrepreneurs through The Red Backpack Fund. This fund will provide a minimum of 1,000 grants of $5,000 each to female entrepreneurs impacted by the coronavirus. Recipients will also receive an All-Access Pass to MasterClass for mentorship opportunities.

This grant program is open to US-based businesses that are at least 51% women-owned. Eligible entrants must have an EIN, at least one employee but no more than 50, and annual revenues not exceeding $5 million.

There will be multiple rounds of funding for these grants. Application periods are June 1 – June 8, July 6 – July 13, and August 3 – August 10. If your business is interested, check out the FAQs or submit your application. If the fund currently isn’t accepting applications, you can sign up for email updates to be notified when the next round of submissions is open.

The Doonie Fund

Eligibility Criteria: Black female entrepreneurs affected by COVID-19
Open & Close Date: Undetermined

The Doonie Fund was launched by digitalundivided CEO Kathryn Finney to support and empower black female entrepreneurs. The fund was launched on April 5, 2020, and has helped over 500 women to date.

To qualify, all entrants must be an entrepreneur that identifies as both black and female. Eligible recipients must also have been impacted by COVID-19. Recipients will receive $100 to help their business. This is an ongoing fund with no announced submission deadlines.

To get started and to learn if you qualify for the program, submit your application. You can also check out The Doonie Fund page to learn more about the program.

Grants Worth Watching

While some grant programs aren’t currently accepting submissions, there are a few that may offer more funding opportunities in the future.

Visa Foundation COVID-19 Emergency Relief

The Visa Foundation has committed $10 million to provide immediate relief to organizations on the frontlines of the COVID-19 pandemic. So far, the foundation has distributed $8.8 million in grant funds to organizations including UNICEF, Feeding America, and Red Cross.

Visa Foundation Small & Micro Business Program

The Visa Foundation has also committed $200 million over the next five years to support small businesses, micro businesses, and the economic advancement of women. Of these funds, $60 million will be allocated to non-government organizations worldwide that support small businesses and micro businesses. The remaining funds will be allocated to investment partners that generate returns for these businesses.

Facebook Small Business Grants Program

Facebook is providing small business grants to up to 30,000 recipients through its Small Business Grants Program. The two-week window to submit an application for a portion of the $100 million fund is closed to US businesses, but businesses in other nations may still be eligible to apply. Additional resources may be made available in the future.

Horst Rechelbacher Relief Fund

The Horst Rechlebacher Relief Fund provides $1,000 grants to unemployed licensed beauty professionals or students enrolled in a licensing program. Although the submission deadline has already passed, interested professionals can keep an eye on the Beauty Changes Lives website for updates.

Other Resources For Coronavirus-Affected Businesses

If you need immediate funding or don’t qualify for any of these grants, you still have options to keep your business afloat during this pandemic. An abundance of resources are available through our COVID-19 hub, including industry-specific survival guides, emergency funding options, credit card payment assistance, and more. We’re continually updating and adding new content to make sure that business owners like you have the financial support and resources needed to weather this storm. Good luck!

The post Take Advantage Of These Small Business Grants For Coronavirus Relief appeared first on Merchant Maverick.

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May 13, 2020

Small Business Spotlight: Portland’s The Commissary Reopens With A PPP Loan

When Kim Wilson closed up her two Commissary Cafe locations in Portland, Oregon on March 21 in response to the national Coronavirus emergency, she believed sheâd never reopen.

The savvy small business owner, a graduate of Le Cordon Blueâs Patisserie program who carved out a niche for herself in the coffee-shop-flooded city, laid off her 12 employees, posted, âThatâs a wrap,â from her Instagram, and allowed herself time to mourn and grieve the loss of her dream.

Wilson opened her NW Portland cafe in 2013. Named after movie studio commissaries where the stars of yesteryear would grab a sandwich on set, the Commissary Cafe quickly became a Slabtown neighborhood staple. With fresh ingredients, homemade soups, and buttery biscuits, Wilson threw herself into making her business a success. Six years later, she was rewarded with the opportunity to open a second location.

It is the knowledge that she will likely close the second location for good that keeps her up at night.

âItâs hard to see what my long-term plans should be, but Iâm in mourning and having to really pivot,â Wilson said.

She also knows that in some ways, sheâs lucky.

After receiving a Payroll Protection Loan via the CARES (Coronavirus Aid Relief and Economic Stability) Act, Wilson re-opened her flagship location for a trial run.

“I’m a single mom, a small business owner used to working 80+ hours a week, and I’ve never been this tired, ” she admitted. Since Wilson had closed her doors late March, the landscape of her business changed overnight. But she understands that keeping herself in-tune with that revolving landscape will be what helps her keep open long-term.

âIt is a daily rollercoaster in the neighborhood. I have friends who own businesses here and they have closed their doors. Iâm approved for the PPP loans, some of them didnât see that money, and they have had to throw in the towel,â she added. The general mood among business owners is dismal.

Even those that received PPP loans don’t know what will happen when the eight-weeks of spending are over.

Photo by Jesse Rowell, Jr.

“You are spending money fast and I’m happy and grateful to do it now, but what happens when the eight weeks are over?” she asked. “This is not sustainable spending long-term.”

Wilson applied for a Payroll Protection Program loan with the bank where she has her business account. She was quickly approved and saw the loan deposit less than two weeks after approval. Per the SBAâs instructions, she understood 75% of the loan needed to go into payroll and employee retention during the next two and a half months in order to be eligible for forgiveness. There is ample trepidation about following the governmentâs directions.

âWe are nervous about misusing the money because there is limited information or protocol, and no one at the bank really [knows about the program]. But thereâs an understanding that we are all in the same boat, so Iâm giving it some time before I check in,â Wilson said.

The quick timeframe attached to the spending is forcing Wilson to get creative.

âThe money needs to go to labor. I am hiring a nightly cleaning crew and hiring people to get work done around the shop,â she specified, but she was not able to use those funds specifically to hire back her former employees.

Wilson discovered when she went to rehire her employees that not everyone was ready to come back. From her staff of 12, eight employees declined an offer to come back to the cafe. Their reasons for not returning fell into three camps: the governmentâs unemployment benefits outweighed potential part-time earnings; there was fear and worry about the pandemic and putting oneself at risk; or the employee held misinformation about re-opening instructions.

âMy line of work relies on younger people or people who are changing careers. I have baristas with bachelor degrees. For some, this particular job can feel dispensable. Thatâs a tough road and learning lesson for people who havenât ridden out or maneuvered through roadblocks,â Wilson said. She understands their reasons for not coming back to work, but there is a cost to the lost training and expertise.

The pandemic requires everyone to dig a little bit deeper.

She is currently training a group of five new hires, some of which are displaced workers from the wedding industry.

Wilson is not unfamiliar with shifting to adapt to a new landscape. “In many ways, the recession in 2008 really revitalized the culinary experience,” Wilson said. She ruminated on how some of the best coffee shops and restaurants were born from people who lost their jobs; it gave rise to the notion of the bootstrap chefs. “This is a competitive marketplace. Places that want to survive will have to adapt.”

And Wilson is adapting daily.

âWeâve changed the way weâre operating. I have platforms outside for guests and no one is allowed inside the store. I am requiring my employees to use a face mask 100% of the time, too. There is no exchange of money and weâre using online ordering only. But that can be tricky when people walk up to the cafe and want to hand you cash, and you have to walk them through a process,â Wilson said. “Sometimes people who are stuck at home want to be helpful and support us, but they don’t always know how to be safe.”

That support from the community, however, has been a bright ray of light.

“I didn’t realize how hard it was not to see my guests every day,” Wilson admitted. “We are having such quality conversations, and I’m realizing how much of this business is a kindness to the people in this community. They want to help. My regulars want to come here in person and make that connection.”

As small businesses break down in communities around the nation, the effect is not entirely economic.

“I really hope this helps change the perspective about the service industry. We are out here right now taking care of people. This has always been about the connection to our community,” Wilson said. Her baking kits and how-to videos, new since the pandemic shut her doors, are ways she wants to reach out and remind people that the Commissary is still here.

Wilson is navigating the changing news with a renewed perspective. For someone focused on her business, the extra time with her son was a helpful reset. “This has definitely been a forced slow down and it’s making me rethink how I can permanently slow things down as an owner, as an employer,” Wilson said. “If I could go back in time, I’d remind myself to stop and reflect on the people important to me. I’d tell myself to have a life outside of business and give myself a break.”

For now, the Commissary will operate its NW Portland location as the law allows (Oregon counties will be allowed to petition to open restaurants at 25% capacity as part of a Phase 1 reopening) and Wilson will build her team back up. “At the moment, I’m glad to be able to pay my local vendors,” she said. But if businesses remain closed long-term many owners don’t know how it’s possible to retain newly hired employees after the PPP loan’s 8-week requirement expires.

The post Small Business Spotlight: Portland’s The Commissary Reopens With A PPP Loan appeared first on Merchant Maverick.

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