Contracting with Metro

 

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On October 1st 2015, I wrote an article about a friend of mine, who after three years of convincing, finally saw an opportunity to contract with Metro. To explain to you the diversity of contracts available with Metro, my friend is a videographer, and this particular contract was to be for a three year contracting opportunity to video and edit various Metro commercials. In the article, I explained how we were able to get my friend approved within a two week time frame. We did this by opting in to the expedited application process which Metro allows if there is a specific bid available which they need the certification for. During the waiting period for approval, we had to work diligently to prepare the Request For Proposal (RFP), so that once he was approved for Metros Disadvantage Business Enterprise (DBE), we can submit his bid on time.

 

We received the notification of his DBE approval just in time for us to be eligible for the bid. About a month later, my friend called me with great excitement notifying me of the contract he was awarded for three years at nearly $15,000 a video. For a Small Business, getting any type of customer is crucial, but receiving an award to work on projects for a Government entity opens up new doors which will not only bring legitimacy to his company but also open doors to work with other agencies due to the resume he has started to build with Metro.

 

Paul Mazbanian CEO Small Business Community Consultants, Inc. www.sbclending.com (818)551-9400
Paul Mazbanian
CEO
Small Business Community Consultants, Inc.
www.sbclending.com
(818)551-9400

2014 In Review and Looking Ahead to 2015

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2014 was a great year for us. Since our services are geared toward Small Businesses, we have seen them thriving more this year than the previous 7 years. Perhaps it is due to the change in the Economy or perhaps people are understanding the benefits of obtaining their Certifications more than before. What ever the reason may be, Small Business Community Consultants, Inc. has helped more businesses this year in obtaining their Federal, State and Local Certifications than ever before.

You may have read our National Press Release for the first half of the year (click here to read), which outlined our accomplishments of 13 approved certifications, including:

  • 8(a) Certification————————————– 1
  • DBE Certifications———————————— 2
  • WOSB Certifications——————————— 4
  • SB Certifications————————————– 3
  • DVBE Certifications———————————- 1
  • WBE Certifications———————————– 2

TOTAL:                                                          13

We are happy to announce that we were able to approved 17 more Certifications for the remainder of the year giving us a total of 30 approved Certifications. Our total numbers for the year are as follows:

  • 8(a) Certifications———————————– 2
  • DBE Certifications———————————- 5
  • SBE Certifications———————————- 4
  • WOSB Certifications——————————- 7
  • WBE Certifications——————————— 2
  • SB Certifications———————————– 9
  • DVBE Certifications——————————- 1

TOTAL:                                                          30

As we head in to 2015, we have 28 certifications that are either submitted waiting for approval, or are in the process of being submitted. Below is a list of our “in process” Certifications heading in to next year.

  • 8(a) Certifications———————————– 5
  • DBE Certifications———————————- 9
  • SBE Certifications———————————- 8
  • WOSB Certifications——————————-1
  • WBE Certifications——————————— 2
  • SB Certifications———————————– 1
  • MBE Certification———————————- 2

TOTAL:                                                          28

In 2015, we are looking to offer new and exciting services to our clients, including but not limited to, access to local, State and Federal Contracting opportunities as well as Seminars. We will also be launching a new website which will be more user friendly and will give our clients the ability to learn and educate themselves prior to starting the Certification process.

Paul Mazbanian SBC Consultants, Inc. www.sbclending.com/ paul@sbclending.com/ 818-551-9400

Paul Mazbanian
SBC Consultants, Inc.
www.sbclending.com/
paul@sbclending.com/
818-551-9400

www.sbclending.com/


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Over the past 11 years, we have been assisting Small Businesses get Certified with either the Federal or State Government. Typical questions always comes up.

1. Why do I need to Be Certified?

2 . How will it help me?

3. How much Does it cost?

4. What We Recommend.

These are all very important questions of course, which all business owners deserve to know. In this article, we will try to answer these questions and hope that it will give you the ability to determine if indeed it ‘s worth it r not.

It is first important to understand that there are many different certifications available. There are Federal, State, County and City Certifications with different variations for different departments such as metro, airport commission etc. We will be speaking in general terms. Knowing which one would benefit you most is critical. This article will focus on the general topic of certifications.

1. WHY DO I NEED TO BE CERTIFIED?

For the more complex  Certifications such as the SBA (8a certification) or the States Disadvantage Business Enterprise (DBE) Certification, you will need to make a determination if you can bid and win contracts to increase revenues. These certifications are harder to get due to their complexity and more expensive if you desire to hire a professional consultant to guide you through the process. It is an investment, which if utilized correctly can prove to be very rewarding.

For the less complex Certifications, such as the Women Owned Small Business Contracting program (WOSB) there are two reasons to get the certifications.

1. contracting- To bid on Government jobs.

2.Marketing- Use it to market yourself as a Federally Certified Company.

2. HOW WILL IT HELP ME?

Small Businesses like us are always looking to find new revenue streams to increase sales. We sometimes add new services, give discounts etc. to entice people to buy or choose us and not our competitors. The Government has created programs to help Small Businesses compete in a more fair environment. They realize that the backbone of this economy are Small Business and if we don’t survive, its 2008 all over gain.

In order to keep things fair, the Government requires that all Federal, State and Local agencies give a percentage of their contracts to certified companies, disallowing large corporations to take part. For example, let’s say for argument sake that there are 1000 construction companies in the United States. 500 are 8a certified and 500 are not. Only the 500 that are 8a certified are able to bid on that particular contract reducing the competition to 50%.

3. HOW MUCH DOES IT COST?

This is a difficult question to answer. There are plenty of consultants out there who make money assisting businesses get certified for the different certifications. Depending on the complexity of the Certification price ranges will vary. For example, the SBA 8a Certification will be significantly more expensive then say the Women Owned Small Business Certification. There is certainly more work to be done and a lot more hours put in to the 8a compared to the WOSB.

4. WHAT WE RECOMMEND:

A. Work with a local firm: These Certifications require a lot of one on one time and proprietary information being shared, such as tax returns. A local firm can meet with you in person making the process easier.

B. Experience: The experience a firm hold is crucial in getting approved. It is always a benefit if the consultant has a certifications background but also educated in finance, accounting and law.

C. Return on Investment: What is the potential of increasing sales through contracts? If you are paying $1000 for a certification and the contract is for $10,000 is it worth it?

SBC Consultants, Inc is Government trained. We pride ourselves in working with only local firms giving us the ability to give the best customer service as possible. To learn more about our certifications please visit the certifications page on our website HERE.

Paul Mazbanian

Paul Mazbanian

CEO

Small Business Community Consultants, Inc.

Email: paul@sbclending.com/

Tel: (818) 551-9400

What to Expect in 2013:

As 2012 passes us by and 2013 becomes reality, Business Owners are wondering what changes will take effect be in 2013 compared to 2012. Our answer is simple, a lot of the same old same old.

 Business Loans:

  • Lenders are always introducing new programs to entice Business Owners to apply, but the lending guidelines will not change. That is, as our April 18, 2012 article (http://sbclending.wordpress.com/2012/04/18/hello-world/) states, the 5 C’s of credit will very much be in effect. Lenders will continue to be strict in order to minimize their risk.

Business Certifications:

  • While lending guidelines continue to remain tight, Business Owners SHOULD always be thinking of ways to grow their customer base. Certified Companies will always have more opportunities then non-certified companies. That is, the Government has reserved new opportunities only to those businesses that are certified. Intern, those who are not certified will not be able to bid on that job. Here is a link to our Certifications page, we hope you will find it helpful. 

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Loans for New and Existing Businesses

The subject of our first article was about the 5 C’s of Credit (Character, Capital, Capacity, Collateral, and Conditions). In addition to credit, lenders are looking for businesses that are financially stable, which I will discuss below.

Existing Businesses

Lenders prefer to do business with existing companies due to their multiple years in business. Lenders prefer this route because they can track the progress an existing business has made over the years, which is done in multiple ways:

  1. Collecting previous years tax returns
  • Tax returns are the only official document which allows the lender to see how much a company has made in the past. Cash flow is a term used by lenders to determine pay back ability. Gross receipts will show the sales of a company, but the net income will show the companies profit after expenses.
  • In some cases, companies are making more then is being reported to the IRS. A few weeks ago, a client who owns a coin laundry business contacted me for a loan. Client claimed to make over $1,000,000 in sales. His tax returns however showed revenues of $20,000 and a net loss of ($10,000). When I asked the client what happened to the $1,000,000 in sales, he replied “we are a cash business and don’t report the income.” As you can imagine, this was a problem. Since he is receiving cash, he is not reporting the income to the IRS and therefore it is not being reflected on their business tax returns. Since the tax returns are the only reputable report to verify income, the lender can not take his word on his total sales.

        2.  Financial Statements

  • The profit and loss statement: During any given year when the company has not yet filed for their taxes, the profit and loss statement will allow us to see the year to date revenues and expenses of the company. This will give us a good idea how the company pairs up compared to previous years. I would ask this document to be prepared by a CPA  for authenticity.
  • The balance sheet: It will give us a good idea where the company stands with their assets and liabilities thus giving us the eventual net worth of the company. This document is important to see how the company manages its debt. It will show all assets compared to its liabilities giving us either a negative or positive. A negative net worth tells us that the company has more debts then assets which means they owe more then they own. A Positive net worth tells us the company owns more then it owes. This should also be verified by a CPA.

The above mentioned items will allow us to get a grasp of a companies pay back ability. There are however, other documents needed while processing a loan. They include but are not limited to:

  1. Business debt schedule
  2. Personal financial statement
  3. Personal Tax returns

New Businesses

Since new businesses can’t provide tax returns from previous years, it is crucial to have excellent credit and a sound business plan when applying for a loan. All new business owners must realize that having great credit is crucial when requesting for financing. The following two items are just two of the most important items needed for New Businesses. However, when getting a loan package together there will be additional items requested.

Needed Items

   1.  Credit

  • As our previous article states, credit will determine how risky you are to a lender. Hence, having a low credit score will give a lender the impression that you are not trustworthy. Therefore, understanding your credit report, how much you owe on credit cards relative to the limits on those cards are important. Lenders will take in to consideration how much debt an individual already has. The lower debt you have the less of a risk you are to lenders.
  • Also, having a high credit score does not necessarily mean that you will get approved. The days of approving based on your score are over. Lenders now are more interested on what makes up your credit score and will want to make certain that your credit report is clean.
  • Example: I received a call from a client who had just moved to the states a few years ago. He does not have any credit cards but does have a vehicle he is leasing. He has never been late on his payment. His credit score is a 720, a respectable score by today’s standards. The client wanted to start a business with some money he had been saving and inquired about a Small Business Loan. When I asked for his credit report, I saw that it wasn’t much of a report. The only reported credit he had was the lease on his vehicle. I advised the client not to apply for a loan, but rather begin building his credit by obtaining small credit cards. By using and paying them off every month, he would have established credit slowly. He did however decide to apply for the loan and not take my advice. He was declined!
  • Why did this happen? The main reason for the decline was due to lack of credit history. The client did not have enough credit at the time for an approval. Lenders are looking for business owners to have a good amount of years behind them borrowing and paying off debt.

2.   Business Plan

  • A business plan is crucial for start up companies because it is the only way to show a lender how they will be repaid. Thus, creating a sound business plan will be crucial in obtaining any type of financing. A business plan should explain everything about the business and its owners. A business plan can be the determining factor of an approval or a decline.
  • Creating a Business Plan takes effort and time. Our last article outlined the Table of Contents we feel is crucial in creating a great business plan.
  • Please visit our business plan link on our website http://sbclending.com//services-business-plans.php

Paul Mazbanian (2011 SBA Young Entrepreneur of the Year – Los Angeles District Office)
SBC Lending
http://www.sbclending.com/

Business Planning

As a business consultant, the first skill that I learned when I first began working in the industry is how to develop a business plan. I learned that if done right, the business plan will be the most effective tool in achieving business goals and it will act as a road map for your business.

The following highlights important information a proper business plan should cover:

1. Executive Summary

  • A summary of the following longer report.

2. Use Of Funds

  • If requesting for financing or an investment, this section will lay out in detail how much is being requested and what it will be used for.

3. Investor Proposition

  • If requesting an investment you will need to write the proposition you are proposing, which will include the rate of return.

4. Company Ownership

5. Company Location

6. Exit Strategy

7. The New Concept

  • In this section, you will need to describe what the industry is currently doing and how your concept will be changing the industry.

 8. Departments and Services

  • In this section, you will need to explain the different departments and services in detail (what are you selling the customer?).

9. Market Analysis Summary

  • Researching the market. Your goal is to enter the market and share the piece of the pie with your competitors. Knowing how big the industry is and the per capita spending is very important You will also need to identify your demographics in this section as well.

10. Market Segmentation

  • This section will need to explain the segments of the market in which you anticipate will buy your product and/or service.

11. Market Needs

  • What is the market lacking that you are going to provide?

12. Industry Analysis

  • How large is your market? What has happened to the industry in the past couple of months? What do you think the industry will do in the future and why? What has the trend been for the industry?

13. Competitive Comparison

  • Identify your competitors. Who they are and what do they do? Conduct a SWOT analysis

14. Strategy and Implementation Summary

  • In this section, you will be identifying your goals. Label as short term and long term goals. Usually shot term goals will range from the day you start until the end of the first year. Long term goals will be any goal you have after the first year. Additionally, you will also have immediate goals. What you must accomplish before you open your doors are your immediate goals. All of the aforementioned goals are crucial to identify pre-startup.

15. Marketing Strategy

  • Identify the different marketing strategies you will implement. This includes but is not limited to social media, print advertising, and online advertising. Be clear and specific (how much will each cost?).

16. Management Summary and Gaps

  • Identify the key players in your business. Who will be running the day to day operations of the company? If you plan on hiring new employees in the future, identify the key positions needed and when you anticipate on hiring them.

17. Financial Projections

  • Financial projections should be used as a goal. Identify how much money you would like to make per year or per quarter. Once completed, you will have a good idea of how much you need to sell of one product.

What You Need to Know About Credit

For the past 5 years, we have been assisting clients in starting, sustaining, and/or expanding their business. During this time, the number one concern for the majority of our clients has been about credit. “My credit is bad, can you help?” and “there are a few negative items on my credit that I paid off, what can I do?” are just two of the many common questions every individual we have worked with has and must know the answers to in regards to their credit.

What do you need to know about credit?

It is all about risk. Credit is the most important tool you have available to you. It is so important that it can drastically effect your future, both in positive and negative ways. Having a good credit score is so crucial that a 5-10 reduction in your score can have a significant impact on what you are trying to accomplish.

What is credit and why do we need it?

Credit is a tool an institution such as a bank, auto dealer, department store, etc. uses to determine the risk of an individual. This risk assessment has a score attached to it. There is a special formula that is used to calculate each individuals score and this score that is given to each individual allows the creditor to either approve or decline based on an individuals past performance. Aside from the score, there is a credit report highlighting the details of your credit, which is directly associated with your score.

  • A low credit score of 540 automatically tells a creditor that there is something wrong. Typically, it will mean that an individual borrowed money from a credit card and has been late multiple times or they simply neglected to pay as promised. It may also mean that their vehicle was repossessed due to non-payment.
  • A high credit score of 740 usually tells a creditor that this person is trustworthy and pays all their debts on time. Lenders love to deal with people with great credit scores because they are low risk.

So what can you do to fix your credit if it is low?

  • First: Get your credit report and begin reviewing it. There may be items on there that do not belong. For example, credit card balances that have been paid but still show as a balance or a medical bill which you paid but was never reported as paid. These items can truly hinder your score, which is why printing your report and understanding it is the first step.
  • Secondly: If there are any items falsely reported begin a call of action. List all wrongly claimed debt. If you know that you have paid that debt, get a copy of the receipt and call the creditor. If you are able to prove to them that they have made a mistake, then ask them to give you a letter stating that it has been paid.
  • Thirdly: Take all letters proving your payment and send it to each credit agency. Once received, it will take about 30 days for the changes to be made and you will see an increase in your score.
  • Fourthly: If you borrowed money from a credit card and were unable to make payments for any reason, it has probably been sent to a collection agency or it may have been charged off. A charge off is the worst possible mark you can have on your credit. It means that attempts to collect the funds were tried over a period of time but were not and the creditor has given up and reported it as a loss in their books.

So what do you do at this point?

  • Depending on your current financial status you would have to think about how to make amends with these lenders. The only way to do that is if you contact them and see how much of that debt you can pay down. If you owe $25,000 in debt and that amount has been charged off, then you would want to call the lender and ask them to either put you on a repayment plan or to settle it for a lower amount.
  • It is your duty as the borrower to pay back the money they trusted you with in the first place. The only way to increase your credit score is by tackling these issues one at a time.
  • A creditor would prefer to get something back rather then nothing and it is always better to have a “settled” on your credit report rather then a charge off.
  • Example: If someone borrows $100 from you and promises to pay you back within 3 months and doesn’t do so, you would likely not trust that person again. In your eyes that person’s character has been tarnished. A few months go by and your friend calls you to apologize and offers to pay $50 of the $100 balance. Would you take it? Of course you would, because recovering some of the money rather then no money is always better. The same philosophy is applied to credit. It’s all about trust and your history along with your credit score proves how trustworthy you are.

What is a good credit score?

  • We are always asked by clients “what credit score do I need to qualify?” Our answer: The credit score is important, however lenders are not looking at the credit score these days. They are looking at the report and what makes up the credit score. The break down is as follows: Anything below a score of 660 is in the red, scores ranging between 660- 699 is average, and anything above 700 is very good.

A friend of mine just moved to the United States from Europe and over the past year he has tried establishing his credit. His credit score is currently above a 700. Does this mean he has good credit? Sure it does, but only for the 1 year he has had available credit. Lenders are also looking at the longevity of an individual’s credit history. Even though my friend has a 700 credit score, he will likely be declined if requesting a loan of some sort. That is because creditors do not have enough information or history to take make a good judgment.

In closing, remember that it is all about risk. Less risk means more money, higher risk means less money. Minimizing risk is key!

Paul Mazbanian (2011 SBA Young Entrepreneur of the Year – Los Angeles District Office)
SBC Lending
http://www.sbclending.com/

What You Really Need to Secure a Business Loan

What is the secret for receiving an approval for a Business Loan?

There are 5 critical characteristics a lender takes into consideration for businesses seeking a loan, commonly known as the 5 C’s. Although many know what they are, below is an explanation of each specifically from the perspective of the lender.

  • Character: The most important tool a lender uses to determine how risky you are is your credit history. It enables lenders to see your history of transactions and if you have been late or not on your payments. Your personal credit history is the best way to determine the reliability of your character.
  • Capital: In addition to your credit, lenders will determine their risk based upon the project at hand. In a perfect world, lenders would like to have zero or the least amount of risk as possible. In most cases this does not happen, which is why lenders like to see how much money or capital you have personally invested into your project. The more you invest in the project, the less risk a lender takes; therefore the more likely your project will be funded.
  • Capacity: The ability one has to repay the loan. Due to their short history, new businesses lack this. However, existing businesses can provide capacity by providing previous years tax returns. This is the only way to evaluate how the company has done in the past and to measure the potential it has to grow in the future. Nevertheless, new businesses can provide capacity through secondary sources of income or an outside source of revenue that does not come from the business, such as a spouse’s income or rental real estate.
  • Collateral: Any individual asking for a loan should be ready to give up something to satisfy the lender. A lenders objective is to minimize risk and one way to accomplish this is by taking collateral. Collateral can include anything from equipment to real estate, depending on the amount of the loan requested. In some cases collateral is not necessary, but individuals seeking a loan in excess of $25,000 should be prepared to offer some form of security.
  • Conditions: Conditions largely relate to circumstances that we have little to no control over. In recent years, the economic recession has been a condition in which lenders have taken a more conservative stand on lending and have instituted stricter guidelines. If your business is sensitive to economic downturns, lenders will want to know that you are competent at managing productivity and expenses.

Typically, lenders like to see a borrower secure 4 out of the 5 C’s when applying for a loan. This way, they can be certain that their money will be repaid in a timely manner and in full. If you do not secure 4 out of 5, then we recommend putting a plan together to map out how you will be securing at least 4 out of the 5 C’s in the future.

Paul Mazbanian (2011 SBA Young Entrepreneur of the Year – Los Angeles District Office)
SBC Lending
http://www.sbclending.com/

Source: http://EzineArticles.com/?expert=Paul_Mazbanian