Many budding businesspersons come up with great ideas for innovative ventures, but they often become stymied between concept inception, the grand ribbon cutting, and the intended eventual profit margin. They need someone or something – a blueprint of sorts – to help them achieve their entrepreneurial dreams. In this special section, we discuss everything a new-to-business person needs to know, such as financing the venture, the importance of location, staffing issues, promotion, and more.
Financing your Small Business: How to Get Your Idea Off the Ground
When starting a business, funding is a critical component to success. To make your dream a reality, there are several financial solutions. It is vital to understand your personal financial position and how that will impact your business financing in order to choose the best funding option for you. Whether you decide to self-finance, apply for a small business loan, involve investors, or utilize crowdsourcing, the first step in funding your business is to have a business plan with realistic financial projections. “A sound business plan with detailed projections on income and expense are not only important for the bank to review, but also helps the client visualize the potential revenue that could be earned,” noted Michael Stulb, JD Bank Commercial Loan Officer.
Self-funding is an attractive option, as it allows you to retain complete and total control of your business, however, you do take on all the risk. Self-funding can come in the form of turning to family and friends, using your savings accounts, or even tapping into your 401(k). When going this route, it is important to understand how much risk you are able to take on and also what penalties are involved if you tap into your retirement account early. To ensure that you are able to self-finance, it is important to speak with your financial advisor before making any decisions.
If you do not have the money to self-finance, a business loan allows you to borrow the money you need, while maintaining control of your business. When preparing to present your request to a financial institution, ensure that you have a comprehensive business plan and detailed projections on the income and expenses. It is important for aspiring business owners who seek a bank loan to finance a startup to understand that most banks will not finance the full cost. The business owner should have at least 10-20% of the startup costs available in cash for an equity injection into the business. “By having this amount available to invest in the business, this will show the banker that the business owner is committed to starting and operating the business and is not relying solely on the bank to help get the business started,” said Mark Lewis, JD Bank Commercial Loan Officer.
An investor can provide the funding to start your business, but traditionally wants an ownership role in the company (think “Shark Tank”). When you consider working with an investor, first do your research and due diligence to ensure the investor is reputable.
Finally, crowdfunding raises money from a large number of individuals who are not investors. People who participate in crowdfunding do not expect a share of ownership or a financial return on their money. They expect a “gift” that could be a product you plan to sell or another perk. Before you go this route, make sure to read the fine print. All crowdfunding platforms are different, and you need to be aware of your financial and legal obligations.
Choosing the right funding option will help shape the future and success of your business. Having a solid understanding of the industry you are considering, along with the proper financing, will make your dreams of owning your own business a reality.
For more information contact a local JD Bank lender today at (337) 616-5040.
Choosing the Best Location for Your Business
by Kristy Como Armand
“Location, location, location.” That’s how the real estate cliché goes. Every cliché is based on truth, and this certainly applies to choosing a location for your business.
Sharel Hebert, Realtor with Century 21 Bessette Realty, Inc., says a business owner should be focused on choosing the right location, but there are many factors that go into that decision, and these aren’t the same for every business. “You need to consider how the location will or will not contribute to the success of the business and choose accordingly. A perfect location for a clothing boutique, for example, may not be the best location for an auto mechanic. An internet-based business may not need a highly visible physical storefront. The same is likely true for a service provider who does most of their work at their customers’ locations. These are just a few examples of why your business location should be an integral part of your overall business plan.”
Hebert offers some guidelines to help evaluate a potential business location:
How much can you afford? Remember, the monthly payment is not the total cost of the location. Be sure to include the costs of utilities, taxes, renovations and upkeep in your budget.
Will the space fit your needs? When choosing business space, the biggest consideration is sometimes not where it is but what it is. The space should be appropriate for – or adaptable to – your business and the equipment, staff and supplies you need to operate it.
Is there room for growth? Consider the potential growth of your business when choosing a location. A small space might be cheaper, but the size might limit your business in the future, which could cost more over the long term.
What’s the area like? You want to be sure your business won’t be surrounded by competitors. It’s also a good idea to investigate other local businesses to see how they are doing. If they are all struggling, this might not be the best location. If they are doing well, your new business could benefit from proximity, particularly if you are targeting the same type of customers. Your goal is to choose a location where you’ll be a good fit.
How easy is the location to find and access? Make sure you will be able to put up highly visible signage so your customers can find you. Consider how much parking space you will need, for both your employees and customers. Don’t forget your suppliers! If they can’t easily get to your business to delivery your supplies with ease, you won’t be in business long.
What are the zoning regulations? Make sure there are no local regulations that would limit how you can use the space you are considering in a way that would impede your business.
According to Hebert, the final decision on a business location is often specific to the business and its owner. “You know your goals and budget – take the time to thoroughly evaluate the pros and cons of your location options. The choice you make will have a big impact on your success – or lack of it.”
Learn more about commercial real estate at www.century21-bessette.com or call (337) 474-2185.
Getting the Word Out: How to Promote your New Business:
by Lauren Morris
You’ve made the leap to start a new business. You’ve got your plan tied up nicely with a bow, paint is going on the walls, sign will be up soon; everything is coming together. It’s an exciting time but also a nervous one. You feel like you’ve covered all your bases, but what about marketing? You may feel that you don’t have it in your budget to spend money on marketing of any sort, but Kristy Armand, owner/partner at Healthy Image Marketing Agency says, “If you don’t plan and budget for marketing, you might not be in business very long.”
There are many reasons that businesses fail. According to a 2019 report by the Small Business Administration, about 20% of small businesses fail within their first year, and half will close their doors within five years. Failure to market the new business is a contributing factor to this daunting statistic. The good news is that building a marketing strategy into your business plan can help you avoid this.
Many people mistake the word “marketing” for “advertising.” Armand explains that the two words are not interchangeable. “Advertising is a part of a good marketing strategy, but there is a lot more to marketing that just advertising, including public relations, social media, online visibility, networking and much more.”
Today, there are more ways than ever for ensuring your business is present in the minds of potential customers, and one of these – a very important one – is establishing an online presence. “Make sure you budget for at least a simple website, social media and Google business listing,” Armand says. “This is essential for all businesses, and especially new ones. The first place people search for products and services is online, so it’s important that when they go online, they can easily find you. They’ll see that billboard or TV commercial, but then they will still go online to find your website, and/or your phone number, address and other details about your business. This is why you need more than one element to your marketing strategy. The elements you choose should work together to get customers to you.”
Everything online is connected, so the better and more thorough your presence is, the more return on investment you’ll see. It’s important that your online presence succinctly states who you are as a business and what you offer in a way that differentiates you from your competitors. “When it comes to a new business, be sure to stay focused and be consistent in your communication,” Armand adds. “You want your initial marketing impact to be clear and concise; you want people to ‘get it.’ If you don’t know how to communicate who you are and the benefits you offer, how will your customers be able to connect?”
Armand explains that when you take the time to build out your budget, marketing should be an item on the list from day one. If it’s built in from the beginning, you’ll never feel the sting of adding it in later. “The type of marketing you do and the media you include will be driven by your budget, but not doing anything or waiting until later is not the best way to launch a business. If you do your initial marketing well, you’ll establish visibility and name recognition that will provide an invaluable foundation for your future growth and success.”
Armand also suggests that new business owners budget another asset: time. “One of the most affordable ways to make your business’s presence known is to do the real boots-on-the-ground work; go to events, better yet, sponsor events, join your local chamber, find any outlet you can for building relationships face to face. Be a visible, active part of the community. This element of networking is invaluable. Remember you are your own brand.”
Experts recommend that small businesses spend about 7-8% of their gross revenue on marketing and advertising. If you start with a healthy budget, then your business is more likely to be successful, and you can continue to grow your overall public presence and be top-of-mind in your community. Don’t shy away from spending simply because your business is new. In fact, this actually gives you all the more reason to put some money down and invest in the future of your business. Armand adds, “Don’t adopt an ‘If you build it, they will come’ mindset. Rather, if you build it . . . and market it well . . . then they will come.”
New Business? The Bottom Line is in the Details!
by Stefanie Powers
It’s finally time to put the wheels in motion to start your own business—something you’ve been carefully planning for a long while. You’ve drawn up your business plan and your finances are in place. Now it’s time to get down to the nitty gritty—all the details that come with owning a business. There are a lot of them—and none of them are minor. They could make or break your business.
First, come up with a name for your company, and then decide which corporation form you’d like to register your business under, be it a corporation, limited liability company (LLC), partnership, or sole proprietorship. The FEIN is the business equivalent for a Social Security Number for an individual. Whichever form you choose, you will need to register for one—unless you’re a sole proprietorship without employees. Then, you can use your own Social Security Number. There is no cost for a FEIN, and it only takes a few minutes to request. All new businesses in Louisiana need to register with the State of Louisiana. The State has simplified the registration process by centralizing the sign-up process, which allows a business to register a Louisiana Tax Account Number for their sales tax license, employer registration, and more.
The protections you get from choosing a business structure like a limited liability company (LLC) or a corporation typically only protect your personal property from lawsuits, and even that protection is limited. Business insurance can fill in the gaps to make sure both your personal assets and your business assets are fully protected from unexpected catastrophes. In some instances, you might be legally required to purchase certain types of business insurance. The federal government requires every business with employees to have workers’ compensation, unemployment, and disability insurance. For more information, visit our state’s website (www.louisiana.gov).
If your business isn’t home-based, there are rent and utilities to be paid, along with the cost of any improvements that you need to make on the space. Then, you’ll need a permit to run your business out of that location. The building must be up to code, and you’ll need fire extinguishers and smoke detectors, along with an alarm system.
Aside from inventory and any equipment specific to your business, you must have office furniture, computers, internet service, phones, and anything else necessary to keep your company going. It is imperative that you find a good IT company that you can call on when you’re having computer problems. Your business can completely shut down when this happens—and it’s going to happen. Be prepared!
Hiring and keeping employees is a huge deal. You will need to make a lot of decisions that include salaries, benefits, vacation time and sick leave, etc. Will they get bonuses? How often will you do performance reviews? How will you pay them? Direct deposit, or check? How often?
Look into using a payroll service. Many employers prefer to use them to help ensure their employees and taxes are paid accurately and on time. The service will also file your federal, state and local taxes.
It’s not cheap to get the word out there, so you need to put aside a chunk of money initially to market your business. Luckily, social media has been a big help, but folks need to know that you’re around. Do your research and decide how and where your advertising dollars should be spent: radio, TV, billboards, print, etc. Think about donating your products or services at live and silent auctions to benefit charities. Set up a booth at trade shows. Offer giveaways and run contests on your Facebook page. Always stay in the public eye.
Resources for Budding Entrepreneurs
Starting a new business is an exciting adventure, but it comes with challenges. Taking the time to plan and prepare before opening your business is an important step toward success. There are many things to consider when starting a new business, so knowing where to begin can be difficult. The team at the Louisiana Small Business Development Center (LSBDC) has put together a detailed guide for starting a small business that you can download at bit.ly/lsbdcstartup.
Before diving into entrepreneurship, it’s a good idea to assess yourself as a business owner and determine the feasibility of your idea. An honest self-evaluation will allow you to ascertain your ability to meet the demands of entrepreneurship. There is a common misconception that starting a business can be an affordable way to take control of your financial future and your work-life balance. In reality, being an entrepreneur usually requires a capital investment and long hours beyond 9-to-5.
If you think owning a business is for you, you can continue working on your business idea by identifying potential competitors and examining market research. Resources like your local library, census data at data.census.gov, the state library at state.lib.la.us and your local LSBDC can help you access research materials.
When starting a new business, you need to determine what your business structure will be to formally establish ownership. If you are unsure which structure is right for your business after comparing the different types, you may want to consult with a lawyer for more information. Registering your business with the Secretary of State can be done at geauxbiz.sos.la.us. You can also build a free checklist to find resources that help with planning for your business and produce a list of possible licenses and permits required for your industry. Writing a business plan is an essential part of preparing for your new business.
Developing financial projections can make a big difference in the success or failure of your business. You can find more information and some sample business plans at sba.gov and sbdcnet.org. Unfortunately, there are rarely grants available for new businesses. The majority of business financing comes from owner contribution or local lenders. Understanding credit is a vital part of starting a business, so you may want to begin building your credit as soon as possible.
There are organizations that specialize in working with potential entrepreneurs to start or grow their business. The Louisiana SBDC offfice at McNeese State University provides no-cost business counseling and planning services, as well as entrepreneur workshops and training. You can register for business consulting services and training events at our website, louisianasbdc.org.
SCORE is a nonprofit organization that assists pre-venture businesses through education and mentorship. You can find information about their resources at score.org.
Louisiana Economic Development (LED) offers special programs like the Small and Emerging Business Development (SEBD) Program and Pathway to Assist Veteran Entrepreneurs (PAVE) for potential entrepreneurs, which you can find information about at opportunitylouisiana.com.
The Southwest Louisiana Entrepreneurial and Economic Development (SEED) Center is located at 4310 Ryan Street, Lake Charles, and serves as a one-stop shop housing organizations such as the Business Incubator of Southwest Louisiana, the SWLA Alliance and the LSBDC at McNeese State University.
Courtesy of the Louisiana Small Business Development Center network, which is funded in part through a Cooperative Agreement with the U.S. Small Business Administration and Louisiana Department of Economic Development. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA.
Regional Business Incubator Awards New Wave of Entrepreneurs
On October 18, the 9th Annual SEED Center Business Pitch Competition was held – in person with COVID-19 protocols – after a long delay due to the pandemic and hurricane recovery. However, participants, judges, and partners demonstrated their resiliency by entering and supporting the event.
The Pitch is a showcase for entrepreneurs and their creativity. Each participant in each category goes through an online vetting process before the big night where they make their five-minute pitch in front of a panel of judges. The winner in each division received $5,000 and in-kind awards for legal, marketing and accounting services. Over $65,000 in cash and services was available to participants!
The Pitch is not only a SEED Center Business Incubator premier event; it is also a means for local and national businesses to support and seek out future vendors through sponsorship of the program. SASOL (Title Sponsor) and Capital One Bank (Presenting Sponsor) have been long-term supporters of the Pitch as well as the O’Carroll Group, Lake Charles Coca-Cola Bottling, JWalker & Company, and new supporters First Horizon Bank and the McNeese Foundation, which gave $5000 scholarships to the winners of each category.
College/University Category Winner: FoodTruckR
Simbarshe Mambiri and John Julien presented their idea for Food TruckR – a food tech startup with a mobile application allowing users to purchase meals from mobile food trucks wherever, whenever. Once created, the FOOD TRUCKR app consolidates registered food trucks and their menus onto a database that can be accessed on the app interface. Using a GPS-enabled feature, the app will notify any user which food trucks are within a specified radius, and what menu is available. The app will also specify the food truck hours of operation. This benefit operators of food trucks to flexibly schedule their operating hours, and market their menus on the app. The app will also feature a food delivery system, where customers can order from the food truck and have their food delivered to their doorstep.
Technology Category Winner: Goodfriend International
Mitchell DeVillier presented his concept of a modern update to employee compensation that could change the way workers are paid the world over utilizing a “Variable Hourly Pay” (VHP) concept which allows employers to pay at higher hourly rates when it makes financial sense to do so. Using the cash register as referee, the PerfPay platform – short for “performance-of-business pay” – leverages the organization’s electronic Point of Sale (POS) system to make VHP a reality.
General Business Category Winner: On Call Lab Draw, LLC
Sheena Martin presented her company, a mobile phlebotomy service which can visit individuals and/or facilities to collect blood, urine, stool, cultures, strep, flu, and COVID-19 swabs, and sputum ordered by physicians. On Call Lab Draw operates outside of standard business hours, Sunday-Monday 3:00 a.m.-8:00 p.m., accommodating patients with fasting labs. They also accommodate TIMED/STAT ordered labs. While in transit, their Mobile Phlebotomy Specialist maintains the stability and integrity of each specimen to better achieve accurate results.
Overall 2nd Place Winner: Priceless Inspirations
Lynette Edwards shared her one stop writer shop for readers, writers, bloggers and more, which provides resources through technology for all their creative needs. This mobile app provides free workshops, blogs, event listings, annual conferences, new book releases, a book club and links to your favorite writers. The concept is simple. It connects its users to a world of literacy through free workshops, blog links, contest information, and the ability to send messages for literary needs directly to the app developer.
Winners are eligible for:
• Six months free rent in Business Incubator Co-Working Space
• $5,000 scholarship from the McNeese Foundation
• Basic accounting services for three months
The Business Pitch is open to all residents of Southwest Louisiana (Allen, Beauregard, Calcasieu, Cameron, and Jeff Davis Parishes). There are four categories: high school, college/university, general business and technology. The goal of the Business Pitch Competition is to increase awareness of the SEED Center Business Incubator, and increase entrepreneurship in Southwest Louisiana. The SEED Center Business Pitch competition has grown into the premier event of its type in the five-parish region.
The next Business Pitch will be held during spring 2022. If you have any questions about the Pitch or building a new business, contact Adrian Wallace at email@example.com.
Preventing Invoice Fraud at your Business
by Kristy Como Armand
If it can happen to Google, Amazon and Facebook, then it can happen to your business. These mega-corporations were all victims of business invoice fraud, resulting in millions of dollars lost through the payment of fraudulent invoices.
Business Invoice fraud, also referred to as business email compromise (BEC) has increased dramatically – over 350 percent – since the COVID-19 pandemic began, resulting in the loss of billions of dollars.
Aimee Gilmore, Lakeside Bank Vice President and Moss Bluff Branch Manager, explains that fake invoice scams are a simple but effective way for criminals to steal money from unsuspecting businesses. “Scammers send fraudulent invoices to businesses for goods or services they never ordered, then pocket the payment. The scam succeeds mainly because the invoices look legitimate and unsuspecting employees who process them don’t look closely enough to see it’s not real. Every business, regardless of size, deals with numerous invoices every day, with more and more of these being received and paid electronically. This makes it easier for a fake invoice to slip through.”
Gilmore says there are some red flags to watch for to help you spot invoice fraud. “These criminals are smart. The invoices they send will look similar in format, and even in name, to legitimate invoices, but there are some warning signs you can look for if you are vigilant.”
• Names. Verify the company name and recipient name on each invoice. Criminals will often use a similar name or change just one letter in a name so it will slip by.
• Amount Billed. Look at the amounts. Compare the amount billed with what was ordered. Be suspicious of evenly rounded amounts that are billed and duplicate amounts on an invoice.
• Other Numbers. Examine other numbers on the invoice, such as account numbers, invoice numbers and addresses. This will often be off by one number or have a series of consecutive numbers, such as 12345 instead of a real account number or address.
• Logo. Check the logo on the invoice. Instead of normal invoice format, false invoices may have a logo in a white box that looks more pasted onto the form. Some may have a logo that looks close in design to one for a real company you do business with but is slightly off.
“Unfortunately, invoice fraud is becoming more common and tougher to spot. Have a process in place for carefully screening invoices and get approval by more than one person before invoices are paid, especially for electronic payments, to help prevent financial loss from invoice fraud,” says Gilmore. “It’s worth taking the extra time to protect your company’s finances.”
For more information about business banking services and invoice fraud prevention, call Lakeside Bank at (337) 474-3766.
Password Protection Strategies
We all know that the more complicated a password is, the better. They should include a mixture of numbers, punctuation marks and symbols, and uppercase and lowercase letters.
Or should they? Recent research into password security has shown that much of conventional password wisdom is not only wrong, but possibly dangerous.
Facebook, Twitter, Yahoo, and LinkedIn have all fallen prey to online attackers who have stolen entire databases full of passwords. The passwords are scrambled for security, but this offers little comfort when computer programs can make millions of guesses in just a few hours. Because most passwords are based on words in a dictionary combined with a number or symbol, it can take these sophisticated programs even less time to hack them. The end result is that common password policies don’t prevent the theft of many users’ passwords, which creates a complex, sophisticated, and lucrative shadow industry. Stolen passwords can fetch big money on the black market.
So, what does that mean to you? It means that every password you’ve created is a valuable and vulnerable commodity worth protecting. To do so, you should go a step beyond choosing passwords that are hard for a human to guess. Your passwords need to also be difficult for a computer to figure out. Here are some tips.
Favor Length Over Complexity
Longer passwords are more difficult to crack. A minimum of 12 characters is recommended. Consider stringing together the first couple letters of a favorite movie quote, song lyric, or poem. For extra-sensitive accounts, it may make sense to change your passwords on a regular basis. If you like the idea of optimal password protection, but worry you won’t be able to handle many, frequently changing passwords, password managers can help you organize, store, and use multiple passwords safely.
No Plain English
Simple strings of numbers, along with passwords that can be found in the dictionary, are the easiest to crack. Microsoft suggests that your password should contain one or more uppercase and lowercase characters, numbers, symbols, and even unicode (using letters and symbols from languages around the world) characters.
Mix It Up
Many people use the same password for multiple accounts because it’s easier to remember. But this could lead to serious consequences. You may not be too concerned about the personal information stored in your LinkedIn or Twitter accounts, but what would happen if hackers used your compromised password to access your email, brokerage, or bank accounts? If you have trouble remembering multiple passwords, you may want to keep a list on your computer, but don’t store it on your desktop or in your inbox. Give the file a misleading name and bury it in a folder where only you can find it.
There’s no such thing as an impregnable password. Still, putting personal information behind a basic password is like leaving your Porsche in a parking lot with your keys on the dash. By taking preventative measures to strengthen your password, you may be able to help safeguard your sensitive personal data and your privacy.
Securities and Investment Advisory Services offered through Woodbury Financial Services, Inc. Member FINRA and SIPC, and Registered Investment Adviser. Ferdinandsen Financial Group is not affiliated with Woodbury Financial Services or registered as a broker-dealer or investment adviser.
Source: Ferdinandsen Financial Group, www.ferdinandsenfinancial.com.
SWLA Alliance Offers a Workplace Redoux
The Chamber SWLA/SWLA Economic Development Alliance wants to help its members and other businesses within Southwest Louisiana reshape and refresh how they do business.
This year, the Alliance is rolling out the Workplace Redoux! Does your office need a new look, a chance to destress, and/or the expertise to revamp their workplace policies?
Businesses can log into www.allianceswla.org/Redoux to lock in their chance to have three regional experts in different fields come to their offices and advise them on their office space, office morale, and office policies as well as $1000 to help them make it happen! It’s a workplace makeover raffle!
Tickets are $150 and only 250 will be sold. Chances are limited to businesses of 20 or less full-time employees, or departments within larger companies/organizations.
Regional experts that have signed on for the 2021 program:
• Keri Forbess-McCorquodale of Solution EAP is a Licensed Professional Counselor and Certified Employee Assistance Professional. She provides for the wellness needs for numerous companies in Southwest Louisiana.
• Myriam Hutchinson, ASID, of Myriam Hutchinson Interior Design provides her commercial and residential clients with functional, affordable, and stylish interior design. Previous projects include the renovations of the Rosa Hart Theater, the West Calcasieu Event Center, Kyoto Japanese Steak House, and the Lake Charles Regional Airport Terminal Building.
• Ross Raley of the Stockwell, Sievert Law Firm is an expert on labor and employment law. He serves as Legal Counsel for the Chamber SWLA and has often lent his experience and time-sharing information on business law and human resources.
This year’s winner will be drawn and announced at the Annual Banquet on January 13, 2022. All consulting must be coordinated within the first six months of 2022.
Funds from this raffle will benefit the SWLA Alliance Foundation which over the past few years has managed a business recovery center after Hurricanes Laura and Delta and the May 2021 flood. The Foundation also gave out over $400,000 in grants to small, locally owned businesses that were in desperate need.