Monthly Archives: November 2016
The United States government spends over $4 trillion per year with large and small businesses. While the government places extra emphasis on awarding its contracts to small businesses in general (about a quarter of all contracts), there are also set-aside contracts for small businesses owned by women, minorities and veterans, including military personnel with disabilities. Paul Karch, president of SelltoGovernment.com, which helps small businesses earn government contracts, said that the application process is a lengthy one, so now is the time for small businesses to start laying a foundation. If you’re launching a small business or want to start landing government contracts as an existing small business owner, read on to learn how you can take advantage of these special opportunities.
The first step is to identify what you want to sell, using the codes of the North American Industry Classification System (NAICS). Those codes are listed on the North American Industry Classification Systems Association’s website. The codes classify the economic sector, industry and country of a business. Be aware that you may need to have several NAICS codes, depending on your product offering or service capabilities, so look carefully. Make sure that your business has that NAICS code, because it’s one of the first things that the government will look at to determine your eligibility as a government contractor; contracts aren’t awarded without one.
The Small Business Administration also recommends that businesses interested in securing a federal contract obtain a free Dun & Bradstreet D-U-N-S Number — which is a unique, nine-digit identification number for each physical location of a business — as well as an Open Ratings Past Performance Evaluation. These evaluations are an independent audit of customer references and calculate a rating based upon a statistical analysis of performance data and survey responses. In addition to a NAICS code and D-U-N-S Number, small businesses applying for a government contract will need to obtain the following to help identify their business, industry and product categories: a Federal Employer Identification Number (FEIN) for filing taxes; Standard Industrial Classification (SIC) code; Product and Service Codes (PSC); and Federal Supply Class Codes (FSC).
Congratulations! You’ve just closed a deal to purchase an existing business. But what do you do next? If you’re investing in a franchise, your freedom to make operational changes is pretty limited, but if you’re taking over an independent company, you likely have a lot of new ideas you want to implement. Regardless, you can’t just burn down the existing business model and rebuild it from scratch without losing the trust and respect of the staff — which you’ll need if you want to succeed. To make the management transition easier on you and any employees who may be staying on board after the acquisition, here are the next steps you should take after you buy a business.
1. Do an audit of the existing processes and practices.
While you were planning the acquisition, you probably became quite familiar with how your new company works. However, there will still be a learning curve, and you’ll spend your first few weeks getting to know the ins and outs of the business.
“Regardless of the entrepreneur’s background and the amount of due diligence conducted prior to an acquisition, the entrepreneur will never truly understand the business until he or she starts to operate it,” said Michael B. Shaw, chair of Much Shelist law firm’s business and finance group. “Every company is unique, and an entrepreneur needs to truly understand that business before deciding what changes to make.”
From a practical standpoint, one important consideration is the business’s security practices. Steve Manzuik, director of security research at Duo Security’s Duo Labs, advised business owners to do a thorough audit upon acquiring a company to identify and address any key gaps, especially if you’re buying a startup.
“A lot of startups are so focused on building their business that they postpone implementing a basic security program,” Manzuik said. “In addition, traditional security mechanisms can be complicated to operate and expensive to procure, leaving many startups and small businesses unable to afford them at the early stages. Any entrepreneur who is acquiring a business … needs to investigate what existing security controls are in place.”
Here are a few of the key security measures Manzuik said to look at:
- What systems and/or cloud services are being used by the business (customer-facing and internal)?
- How is access to these systems controlled (unique user accounts, password requirements, two-factor authentication, etc.)?
- How are the systems managed? Are there documented standard processes for patching and configuring them?
If it’s within your budget, consider bringing in a third party to audit security processes, review systems and look for weaknesses in your new company’s systems, Manzuik said.
2. Communicate with the existing staff members.
Acquisitions don’t often bode well for the existing staff of the acquired company. It’s unlikely that the new owners will have the funds to keep everyone on board, especially if they plan to bring in more staff of their own. Mark Davis, CEO of Puro Clean, said one of the biggest challenges a new owner will face after an acquisition is fear throughout all levels of the organization.
“There is fear of the unknown, fear of change, fear of benefits being modified, fear of the direction of the company, etc.,” he told Business News Daily.
The solution? Be transparent with employees. Talk to them as soon as possible, and make sure they know that you’re interested in getting to know them and their company, Davis said.
“After every new acquisition I have made over the past 20 years, I have communicated directly with all employees and team members within 24 hours of the announcement,” he said. “I have found it helpful to communicate the announcement verbally … and in writing, along with an FAQ that is posted throughout the organization [and] emailed to every employee. It is impossible to overcommunicate the initial message and the FAQ.”
What do business owners, professionals and experts expect 2017 to hold for small business? After a tumultous election season, entrepreneurs can finally expect a little bit of certainty and stability. Keeping an eye on key trends and new developments, of course, is always imperative for any business that wants to position itself advantageously. Business News Daily got in touch to find out what are some of the biggest things for you to keep an eye on as your business prepares for the dawn of a new year. Here are 40 key ideas, trends and predictions to keep in mind in order to make the most of 2017 for both your business and the people it serves.
“In 2017, increased confidence among small business owners regarding the economy and their overall performance could lead to trends in business investment. Both the economy and stock market have shown signs of strength during the final weeks of 2016, and this helps increase business owner optimism.” – Carla Freberg, Director of Sales, Vendor Services Group, Balboa Capital Niche companies will find success “Business success wil come from further focusing on smaller, very specific audiences. Going extremely deep with customized messages and specialized platforms to a highly receptive and loyal audience will replace wide approach “shot gun” marketing. [We’ll see] more soft or no ask/call to action marketing focused on community building, experiences and lifestyle over product specific messaging.” – Kyle Golding, chief strategic idealist at The Golding Group Finance and investment Crowdfunding will play a key role in financing small business “Crowdfunding will continue to be an invaluable resource for entrepreneurs.
Crowdfunding platforms allow entrepreneure to easily validate and fund a new product or service all while growing their customer base.” – Michael Banks, founder of FortunateInvestor.com Investment assets will shift to reflect an uncertain market “We’ll see more money go into cryptocurrencies, probably Bitcoin as it’s still the leader, and potentially precious metals. Stocks, bonds and real estate are all in bubbles of one sort or another. One of the consequences of central bank intervention with money printing is that all the mainstream asset classes are tightly correlated. So with the economy worldwide looking precarious right now, we’ll see people managing risk by shifting capital from over-valued asset classes into an under-valued class. When all the major asset classes are in bubbles, there is no ‘cheaper’ asset class to shift capital into, so it has to go elsewhere. I can see gold and cryptocurrencies absorbing that money and rising appropriately.” – Brandon Ackroyd, head of customer insight at Tiger Mobiles