Subj: Captioning of Videotapes
From: Yvonne T.
I am an African American woman and the owner of a small business in Southern California that provides captioning of videotapes and television programming for educational purposes and for the deaf and hard of hearing. I have been in business for about 1 1/2 years and I would love to get some feedback from you on how I can get the word out to minority organizations about the services that my company offers.
Captioning is now being widely used as an educational tool in minority communities to battle illiteracy and to help children and adults in improving their reading and grammatical skills. My company has a website which periodically brings us some business, but most of the contacts that I make with potential clients is through cold calling on the telephone. It is very difficult to get through to the right people that can make decisions about captioning their videotapes and programming. I've made telephone calls and sent emails to the heads of several black television shows that could be captioned, but I rarely get a response. Also, I'm in the process of producing some captioned educational videotapes that will be distributed to school districts to help children improve their reading skills. We are seeking sponsors to assist us with this project, but once again are having a tremendous problem getting anyone to simply call us back. Do you have any suggestions to help us get through to the right people? Anything that you can offer will be greatly appreciated.
Yvonne Thomas
Precision Captioning
www.precisioncap.com
AskRecy Response:
Captioning is an untapped resource in combating literacy. The increasing access to TV and VCR opportunities has allowed educators and others to use audio-visual materials in varying degrees and levels. Even closed captions are being used and broadcast on many television shows and recorded with many home rental video movies. People learning English for the first time find it easier to understand and learn idioms and other expressions when they see them in print as well as hearing them.
You are correct in saying that captioning could be a valuable motivating tool in encouraging the development of reading skills, especially for young children, teenagers and even who have been struggling to learn how to read
I visited your website to learn more about your business. Frankly speaking, your website needs a great deal of enhancements. However, if I were seeking your services and after using several of the major search engines, it was difficult to find your company using key words as “captioning, video tapping, education and reading tools, combating literacy, audio-visual tools and other key words,” used by you in your email and website in describing your business.
However, I did find your website using the words, “on-line & off-line captioning or close captioning.” If I was a frustrated educator or simply a person in a position with the necessary funds and desire to improve the literacy rate at my location, whatever that may be, because I have a perceived problem with literacy, the words “on-line caption, off-line caption and closed caption,” are not the search criteria I would use to locate your services.
Given that and let’s assume that I did locate your website on the Internet, it doesn’t provide enough information on how successful your company has been. For example, a few testimonials from successful clients would help. The success rates and achievements at some particular schools or institutions would be impressive. A more detail description most of all examples on the acronyms, i.e. close caption, on-line caption, encoding, etc would be of great benefit to the person that finally found your company on the Internet.
Printed advertisements in key magazines, education journals and yes even the yellow pages will help. Although this avenue cost money, it has been proven to work. Some less costly advertising media are pursing the National and California Childcare associations. These associations have annual and semi-annual conventions. You would be surprise at the typical “non-related” childcare businesses that attend those conventions to network and market their services. I would also make a booth present at any convention dealing with children and education.
When it comes to marketing your services, THINK NON-CONVENTIONAL. You will be surprised at some of the non-typical organizations that may need your services.
Good Luck!
AskRecy
Subj: Health planning
From: BGNW
I am a community health-planning specialist with experience in grassroots and organizational development. I would like to start my own business as a consultant to community groups who might need my services. How do I get started? How do I get the business off the ground if I am still employed? How do I get contacts and startup capital?
AskRecy response:
Any consultant worth his/her grain and salt must network to be successful. That’s how you get good contacts. You must market yourself by attending neighborhood and community group meetings. You can start by finding out if there is a Chamber of Commerce in the surrounding areas and seek membership applications in as the chambers, minority business councils, and community organizations that may and may not have a need for your services.
Getting started is easy. Just pick up the phone, find out when the next meeting and just go. You can still accomplish your goal even if you are still employed. If you serious and is ready to start marketing yourself, get a DBA (Doing Business As). Use your computer to print up a brochure and business cards about your new business and services that you will be offering. Startup capital? Why do you need start-up capital to start a consulting business? You need to build a foundation first, i.e. customers, before you have any credentials to market yourself to a larger client base. I suggest you read, Who Moved My Cheese? : An Amazing Way to Deal With Change in Your Work and in Your Life by Spencer Johnson, Kenneth H. Blanchard. AskRecy
Subj: Minority Owned Business
From: Julie C.
Hello Recy,
We are two young females who are exploring the possibility of opening a small business in the area of food concession. We live in Texas and want to open our business in this East Texas Area. We need to take out a loan for start up costs. Are there any special loan programs that offer low rates and financing for minority owned business ventures? Where should we start? Any contact information and/or helpful hints would be appreciated.
Julie and Chastity
AskRecy response:
You did not give me much information to help you. When you say food concession, are you referring to popcorn machines, cotton candy machines, Hot Dog Rollers, Sno-Kone Machines and supplies, Corn Dog and Funnel Cake Fryers, Shaved Ice, Nachos Equipment, Taco Wagon, Waffle Cone Wagon.
I know individuals operating such food concessions in each of the area listed above. My question to you, is this a Special event concession, for example selling concessions at baseball, football or any other special event category? Are the both of you considering quitting your jobs to do this full-time or just on the weekend? Believe me, it matters. I personally know of several individuals that makes a respectfully sum of money doing concession as a part time job.
However to answer your question, there is no grant or loan that I’m aware of that will get you started in this business. Email me back with both of your desires and let’s see if there is a way to get you started with little funds or capital.
AskRecy
From: JuC Puddin
Subj: Small bakery
Dear Mr. Recy:
I am a small business owner for a little over 3 years. My husband and I operate a small bakery in Texas and we are seeking your advice.
We started with a business plan-you know the short, mid and long-term vision. We have seen progress in our first few years.
Our goal is to have our bakery move from our home (kitchen) to a commercial location that is located in a high traffic area in the very near future.
Please advise us as to when you suggest is the appropriate time for us to move our business to the next level and what type of taxes will we have to deal with. We have been writing off the expenses consumed in our kitchen when we are baking for our customers.
Thanks,
Carol
El Paso, Texas
AskRecy response:
The time to move your home bakery business from the kitchen to a commercial location is when physical restraints and additional personnel hampers and prevent you and your husband from providing a quality product to your customers. Customer commitments, equipment requirements and demand for your products will dictate when the time has come. You may have already reached that point. When you are your own boss, a few of the new experiences you can expect are managing taxes, health insurance, and cash flow until revenues are generated. You should read Anatomy of a Business Plan : A Step-By-Step Guide to Starting Smart, Building the Business, and Securing Your Company's Future by Linda Pinson, Jerry Jinnett.
I am not a tax expert, but unless you incorporate, you should be paying the sales taxes, local property taxes and employee taxes. There is one organization called SCORE - Service Corps Of Retired Executives, a nonprofit association providing business counseling to small business owners. The U.S. Small Business Administration (SBA) also sponsors SCORE. Their email address is www.score.org.
AskRecy has modified his column to offer a small piece of advice regarding certain business subjects before answering readers’ questions.
Back to the Basics
Have you ever watched an entertaining commercial, the kind that must have cost hundreds of thousands to produce, and once it was over, you forgot what product it was advertising? Sometimes, a great deal of time, labor and effort is consumed by people attempting to make their company’s promotions or websites so slick and professional that they forgot or overlooked what they were aiming to do in the first place. In other words, the Basic Objective.
On each project affecting your business, step back from time to time and think about some basic questions. If it's a website, ask, "Ideally, what sort of person do I want to reach, and how do I want them to respond?" You can copy what everyone else is doing and you can even buy a template for your whole website that looks very professional, but will it draw the kind of inquiries or orders that you're looking for?
In advertising, you have to consider the target market. Who is your prospective customer, what kind of magazines or papers does he or she read? On the Internet, what type of site does he or she visit? Will that prospect be turned on by a conservative or a wild design? Sometimes the aim is not to get an immediate order but to build name recognition and a reputation for your company. Is your name out there, or is it hidden in the small print? You have to get back to the basics.
I'm no great expert on advertising, but I certainly see many promotions that miss their mark. As a small businessman, I can't afford to waste my advertising dollars, I need to see results! Sometimes it pays not to be so clever; look at Jim Mackingvale, President, and owner of Gallery Furniture in Houston, Texas. People laughed at his commercials, and how amateur they were (imagine a small frame man with a hand full of dollar bills, jumping in the air at the conclusion of the commercial, shouting "I want to save you money"), but he knew what message he wanted to get across - sticking to the point made him a wealthy man. Last year Gallery Furniture grossed over $100 million in sales. It pays to know exactly who and where are your customers. So, if you want to succeed, go back to the basics – find out who is really your customer and exactly what type of service or product they actually wants.
Dear AskRecy
Subj: Question
From: Michaela Christiana
I found your website on the Internet and need some advice/guidance. I am a minority
woman and recently started my own clothing design business after working with
other businesses in my specialty field for over 10 years. I currently work in
my home although I have a small office in a professional building where I meet
and do business with clients. Up until now, my own personal savings to put into
business development has limited me. Therefore, have only seen little success.
However, an opportunity has recently presented itself for me to purchase an existing profitable business, as the owner will be retiring. The business has an established name and clientele. The asking price is steep, but about 80-90% of the asking price is inventory, which I assume generally can be used as asset for the loan. The owner may be willing to carry a note for some of the purchase price, but I'd prefer not to have 2 lien holders.
My question is where can I go to find a loan quickly. Is my loan request feasible? The current owner is looking to move soon and I have heard that SBA loans sometime take 3-4 months. Plus, I'm not entirely sure I would qualify.
Any guidance would be greatly appreciated.
AskRecy response:
First, there are several things you need to know before purchasing a business. This critical decision without the proper knowledge can quickly create a debt full of problems, if you paid too much for the business. One important factor is to determine the true value of the business, especially since you stated the asking price is steep. You will need to know this vital and important information before rushing into a decision that could be costly and affect the future earning and success of the newly acquired business. Even if the SBA could speed up the lending process and is able to grant a loan within a few weeks, the business valuation is one of the factors in approving a business loan.
Let’s start there before answering your questions. There are several methods used to value companies. Typically cash flow, assets or replacement values, or a combination of these, are considered when determining the value of a company. Generally, the value of a company does not relate to the value of replacing the assets (inventory in your case) of the company. Sometimes the replacement value of the property and equipment is far higher than the fair market value of the operating business. Sometimes the value of goodwill, such as customer relations, company logo, and technical expertise may have a far higher than the replacement value.
Let’s consider a couple of scenarios, should circumstances beyond your control force you to liquidate the assets of the newly acquired business, and after paying off the company's liabilities, the net proceeds, if any, would accrue to the equity of the company. In this case, the operating business may have a higher value. It may be wise to appraise non-operating assets using an asset appraisal approach to determine their market.
Another factor to determine its value is the anticipated cash flow. The discounted cash flow analysis is a valuation method that isolates a company's projected cash flow that is available to service debt and provide a return to equity. The net present value of this free cash flow to capital is computed over a projected period based on the perceived risk of timely such cash flow receipts. If you assume the time value of capital, it is appropriate to value the company's cash flows using a discounted cash flow approach.
You can also "compare" companies’ similar size and performance to business you are thinking of acquiring. Review a similar company’s fair market value to some performance measure such as revenue, cash flow, or assets. This comparison should results in a multiple that can then be applied to the same performance measure of the acquiring company to arrive at the fair market value. For example, if a comparable company has an annually cash flow of $500,000 and base upon that it’s total sales are six (6) times cash flow, compare that analysis to the acquiring company.
It may be necessary to represent the value of the cash flow that can reasonably be expected to extend beyond the time projections. This value is often calculated by multiplying the future year cash flow by a multiple. The selected multiple may be discounted to reflect the company's performance or size characteristics relative to comparable companies. This is quite similar to dividing the cash flow by the weighted average cost of capital and including a growth factor.
I don’t want to confuse you but obviously there are several factors to consider when buying and selling a business. The value of a company is not a precise science and can vary depending on the type of business. Potential buyers and sellers rarely agree on a similar figure, therefore you should be well equip with the facts and your goal is to determine a ballpark figure from which the buyer and the seller can negotiate a price that they can both live with.
For reading material ---Handbook of Small Business Valuation Formulas and Rules of Thumb/Third Edition by Glenn Desmond, John A. Marcell.
My advice regarding quick loans. There is no such thing as a quick loan when it comes to buying a business. You have asked, is your loan request feasible? Yes, but have you prepared a business plan. The SBA has a program call The Business Plan - Road Map to Success. It is a tutorial and self-paced activity that can be downloaded or viewed as a text version. You can use this model as a guide when developing your very own business plan for your beauty supply store. You can find it at http://www.sbaonline.sba.gov/starting/businessplan.html
After you have successfully completed the business plan, now you are ready to go shopping for monies. First start with you local banker, then SBA, third check out the local Corporation for Economic Development in your area. This is a start, be persistent, and someone may point you in the right direction for possible funding.
Subj: Minority Owned Business
From: Julie and Chastity
Dear AskRecy,
Thank you for the previous response. Sorry for the lack of information.
Let me try again. My partner and I are interested in opening a food concession
business that will participate in special events or fairs. We are not
planning on full-time, mostly weekends and special occasions. We will
need to buy a wagon or trailer specially designed for food vending. This
can range anywhere from $10,000 to $20,000. We will also need supplies and inventory
to get started. We both make fair to good salaries with our full-time
employment, but want to expand for a little extra. We are not really looking
for a grant, but possibly a low interest rate loan. Again, where do we start?
Does any and every bank offer this type of loan? Would we qualify for a minority
business loan because of our gender? What are some considerations we may
not be aware of? We will be traveling slightly through the East Texas area to
different events; our main concern is the start up cost to purchase the concession
trailer.
AskRecy response:
I’m sorry but the odds of you getting a low interest loan for this type of business is not very favorable for several reasons. It’s a new business. You and your partner, in the eyes of the lending institutions, have little or no experience food concessions and this type of business is a gamble on their investment.
Your gender has little or no bearing on qualifications for this type of a business loan.
Since you and your partner need about $10,000 to $20,000 for need supplies and inventory to get started, have you considered finance leasing with a $1.00 buyout. There are numerous leasing companies available and ready to provide finance leasing opportunities at a low monthly price, Financing a small purchase shouldn't be a time-consuming process. Go to any one of the search engines like Hot Bot, Excite, Yahoo, etc., and type in leasing.
When you need a piece of equipment in the small-dollar range, you don't want to spend a lot of time filling out credit applications and forms. Typically, the time taken to communicate a decision back to an applicant after receipt of a completed application is less than 24 hours - often less than one hour.
Good Luck!
Subj:
By-Laws
From: Diana Brown
Hello:
My name is Diana Brown here in Maryland. I am working on opening a childcare
center and getting the Minority Business Certification, which require a
set of by-laws. I researched at the law Library and came up with a model
of one that was somewhat a "boiler plate" - Wrong - Now they want it simple
- Do you have one that is simple with the different articles? I was incorporated
last year.
AskRecy response:
The Bylaws document provides a set of bylaws for a corporation. Bylaws establish the rules governing the management of a corporation, such as annual meeting dates, quorum requirements, and officer's duties. Every corporation must have a set of bylaws.
Each corporation must adopt a set of bylaws shortly after the corporation is formed. The bylaws are usually adopted immediately after the corporation is formed or at the first meeting of the Board of Directors. The bylaws serve to establish many procedural standards for the corporation, such as the date and location of annual stockholders and directors meetings. The bylaws set up a mechanism for calling special meetings, set quorum requirements, and establish voting standards and procedures. The bylaws identify basic officer positions and the general duties of each office; they also protect those officers (see "additional information", below)
States have laws governing who may adopt the corporation's initial bylaws and in most states, only the board of directors may adopt the initial bylaws. In other states, the authority to adopt the bylaws is given to the incorporators, or sometimes even to the shareholders.
Before the corporation adopts a set of bylaws, you should make sure an attorney familiar with the law of the state where the corporation was formed is comfortable that the bylaws are appropriate.
For a sample form of bylaws, go tohttp://www.mncn.org/bylaws.htm
And since AskRecy is not an attorney, have the bylaws reviewed by an attorney after you have completed them.
Subj: Minority Business
From: Michal Key
Who do I contact about getting my Minority Business Certificate. I am
an American Indian with a Land Surveying and Engineering Firm. I would
like to be able to bid minority contracts. Can you tell me how to go about
this? I live in Missouri. Thank you.
AskRecy response:
The following information came from State of Missouri MBE/WBE Certification Program.
"The State of Missouri, Office of Administration initiated a policy, in compliance with Executive Order 98-21, requiring that only certified MBE/WBE expenditures occurring with the State be formally documented and credited toward MBE/WBE participation goals, effective June 30, 1999.
In order for your business to be recognized as an MBE/WBE with the State of Missouri and for the expenditures with your business to be included in the State's participation goals, your firm must be certified as an MBE/WBE. If you currently do business with MBE/WBEs who are not certified, encourage them to apply for certification. The basic requirements for certification are that the business is at least fifty-one percent (51%) owned and controlled by minorities or women.
Please use the available links provided to obtain a certification application and to acquire more information regarding our program or you may contact our office. Questions regarding requirements on specific solicitations should be referred to the buyer of record.
MBE/WBE Certification Program
P.O. Box 809
301 W. High Street, Room 430
Jefferson City MO 65102
(573) 526-1529 or (800) 592-6019
Fax (573) 526-3576
Monica Armstrong, Certification Coordinator
email: armstm1@mail.oa.state.mo.us
Nancy Heyer, Certification Specialist
email: heyern@mail.oa.state.mo.us
Subject: The Need for Affirmative Action Set Asides
From: Will Gainey
Hello, my name is Will Gainey and I am seeking information about Affirmative
Action laws and how they pertain to Minority Businesses that seek to bid on
contracts with companies that contract with the federal government. I am currently
employed with the 3rd largest printing plate and cutting die manufacturer in
the world and I have managed in this company for several years. I plan to open
my own company, and I want to bid on contracts for printing plates and cutting
dies for printing and cutting corrugated boxes. Every company needs packaging
for their products, and each package has information printed on them, and must
be die cut to make a box. Currently there aren't any African American owned
companies servicing this industry, but I have managed at the top in this industry,
and I know that many companies including G.M., Ford, General Electric, Microsoft,
Kraft Foods, Kellogg's and countless other companies buy boxes that need to
be printed and die cut. Many of these companies also contract to the federal
government and I believe they are subject to Affirmative Action laws, and therefore
they must "set aside" business for minority owned companies. If this is true,
I believe I have a very good chance to build a successful business. In fact
my present employer was very impressed with my idea and wants to support me
with financing and equipment, with hopes that I will land contracts larger than
I can handle so that I can sublet some of the work to him. If you can help me
in any way.
Thank You.
ASKRECY response:
You may be referring to the SBA's 8(a) BD Program, named for a section of the Small Business Act, is a business development program created to help small disadvantaged businesses compete in the American economy and access the federal procurement market. Contacting the local SBA district office serving your area in or near Holland, Ohio, is the first step. A simple phone is all that is required to learn about the program. In Houston, Texas, I was required to attend a 3-hour informational seminar/ workshop. Your local SBA district offices may also have 8(a) orientation workshops to provide additional information regarding the eligibility requirements and to review various SBA forms.
The basic requirements an 8(a) applicant firm are that they must be a small business, be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States, and must demonstrate potential for success.
In set-aside contracts minority firms received over $6.5 billion in 1998 vs. $6.3 billion in 1999 and women-owned firms received set-asides of $4 billion in 1998 vs. $4.59 billion in 1999. The SBA also reported that in 1994 there was 98,694 minority contracts awarded at an average of $78,018 per set-aside and by comparison, in 1999 81,399 minority contracts were awarded at an average of $77,397 per set-aside contract.
Good luck!
Subj: Investment
From: B. Keyes
Mr. Recy,
I am one of the founding employees of an automotive service company based in
Charlotte North Carolina of which I own a very small amount of "preferred stock."
The company (AutoPact!)
incorporated in may '98 and we opened the first two units in Sept '99. Since
we have now opened two more in Jacksonville, Florida with plans to open 2-3
more this year. The current investors are very pleased with our growth and success
rate and are exploring expansion possibilities, which is allowing a small window
for new investors to come aboard.
My question is, what programs (grants, etc.) are available to someone like me
to help increase my holdings. In a way start a company within another company.
I know the company's potential and I will continue to do all I can to make it
succeed.
I am the only minority involved with upper management, and would like the chance
to be involved deeper with the success story. I am crossing on unfamiliar ground
with this situation and am in need of guidance. Please help me.
Thank you for your time.
AskRecy response
I went to AutoPact’s website and the business concept of providing worry free automobile maintenance for a low monthly payment plan seems to be a good idea, provided that you have enough car owners enrolled in the plan. This idea concept works for Triple AAA.
As for programs or grants available to as you say, "to start a company within another company," I’m afraid that you are going to have to use a little imagination. Have you consider approaching management about starting your own franchise in other city for the company, perhaps with a leverage type buyout or equity payment plan that increases your ownership percentage as you pay down the note. Initially AutoPact will have controlling interest, with you as the franchise manager/owner and over time the business, if successful, become yours.
Subject : MBWE client
From: Steve Hansen
Hi Recy!
I just wanted to know, isn't there a form for minority business owners to apply with to help gain access to prospective clients? If so, can you please direct me to the place on-line to get one. Thanks, have a good week. By the way, nice web site!
AskRecy response:
Perhaps you are referring to the Texas Market Place, Minority Business Council, local City/State purchasing departments, etc. These are good sources for finding potential work for minority business owners.