If your business has 51 percent female ownership, you could be eligible for new government contracts. On February 4, 2011, the U.S. Small Business Administration (SBA) announced a new contracting program for women-owned small businesses (WOSB). The first contracts that will be awarded under the SBA program are expected to be awarded by the fourth quarter of fiscal year 2011, according to the SBA. Find out if you qualify and learn how to apply. Some economically disadvantaged women-owned small businesses (EDWOSB) also qualify for the program.
Whether you have been in business for ten years or ten days, approaching potential investors is all about selling yourself. You may have the best product on the market, or a revolutionary service or idea, but if you do not effectively explain what investors really want to know, your chances of obtaining funding for your start-up business or expansion project are slim to none.
To increase your business’ chances of obtaining funding, provide the following pertinent information about your business in all materials you provide to the investors, including the business plan and funding request letter:
Strength of Management—Showing the level of expertise of the owner(s) and managers can help put the lender’s mind at ease, and increase your chances of getting funding for your business; which is especially imperative for start-up businesses.
Strength of Brand—Showing proof of an established, strong company brand is critical in this process. A company Web site with traceable traffic generation information, evidence of discussion of your products or services and company on online forums, or other proof of market awareness of your brand can strengthen the lender’s confidence that your company will flourish. In some cases, company brands can be used as collateral, if deemed strong enough.
Business Strategy—Development and showcasing of a sound business strategy will show your potential lenders that you business has direction and sustainability. The only way lenders can picture where your business will be in the next 5, 10 or 20 years is if you show them.
Target Market—You must effectively convey the fact that you know whom your target market is for your business’ products and/or services. Your business can offer the most revolutionary products or services, but targeting these products and services to the wrong niche market will lead to the inevitable demise of your business. Conduct thorough research to determine the demographic information for your target audience. Potential lenders will trust that this will be a common practice for your business in the future, which will enable you to keep up with changing markets—leading to the longevity of your business.
Competition—Just as in the case of understanding your target market, if you show your potential lender that you understand who your competition is, the lender will believe that you will consistently conduct research to keep up with industry trends, and offer cutting-edge products and services to contend with top competitors.
Big Name Clients—Having well-known clients in your repertoire simply means that it will be easy for your company to continue to consistently attract more companies of similar stature.
Innovation—Supplying the same products and services to crowded markets is the best way to have a business that never quite gets off the ground. Develop innovative products or services that will ensure new clients (and lenders) will come flocking to your business.
Intellectual Property—Along with innovation, showing actual ownership of a product design or service idea will further demonstrate that your company will be bringing something new to your particular industry or market, which increases the long-term stability of your company.
Recommendations—If other financial institutions and businesses trust your business, lenders will be more apt to trust your business as well. Slipping in a few solid recommendations could be the difference between an approved application and a denied application.
There are two great assistance programs available to small business owners through the U.S. Small Business Administration (SBA) that could help give your business the boost it needs during tough economic times. The assistance programs, the small disadvantaged business (SDB) certification program and the 8 (a) business development program, can be an asset to any type of business, regardless of length of operation. In addition to increased funding and training, becoming classified as an SDB or 8 (a) business can substantially increase your chances of receiving government grants or federal and state contracts.
The first step in becoming certified is to understand what a small business is, and then you must know the difference between each certification/classification. According to the SBA, a small business is defined as an independent business having fewer than 500 employees, although the definition used for government programs and contracting varies by industry. If you qualify as a small business, in order to receive SDB or 8 (a) certification, the owner of the business must be economically and socially disadvantaged. However, the key difference between the two classifications is the owner’s personal net worth (I’ll talk about this more later).
In order to be considered socially disadvantaged, the owner must “have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group,” according to the SBA. Typically small business owners who are Hispanic, Native American, Asian or African American meet this requirement. There is also a broad statement saying that “other individuals can qualify if they show by a preponderance of the evidence that they are disadvantaged.” Due to this rather ambiguous language, many women small business owners can be considered socially disadvantaged as well if they can prove that they have been a victim of long-term gender-based discrimination. For example, if a woman faced discrimination from professors and administrators at a military college due to the fact that she went to a predominately male school, she could claim that the discrimination hindered her ability to form a business later in life. Women who have previously filed sex discrimination cases are more likely to be able to qualify as socially disadvantaged. Contrary to popular belief, White males are also not excluded from the “socially disadvantaged” group. If a White male has a disability or is handicapped in any way, there is a possibility he could qualify as socially disadvantaged. Those suffering from mental health issues, such as depression, or those who may feel as though they are socially disadvantaged due to religious preference could qualify, but must prove that they were discriminated against solely for those reasons.
Now that you know whether you would be considered a socially disadvantaged individual, you must figure out if you can also classify as an economically disadvantaged individual. This is where the difference between SDB certification and 8 (a) business certification comes into play. Small business owners can qualify for SDB certification if their personal assets are worth less than $750,000. If a small business owner’s personal assets do not exceed $250,000, he or she can qualify for the 8 (a) business development program. Please note: The SBA does not consider home equity as a personal asset. If a business is classified as an 8 (a) business, it is automatically SDB certified. However, all SDB businesses are not 8 (a) businesses due to the personal asset qualifier.
If you believe you qualify for either the SDB or 8 (a) SBA programs—or both—do not hesitate to apply to the programs. For more information, visit www.sba.gov.
To learn more about how Writings by Design can help your business apply for funding or certification programs, or connect with customers, clients and other key stakeholders, please visit us at www.writingsbydesign.com, email your question to inquiry@writingsbydesign.com or call us at (866) 937-2361.
Writings by Design, LLC, is a business writing consulting firm, offering targeted, cost-effective products and services to meet the operational needs of various businesses. We specialize in business development, client outreach and promotion, and strategically generate publicity using proven methods, including but not limited to, Web copy revitalization, blog creation and maintenance, article construction, newsletter compilation and distribution, business plan and proposal writing, ebook/ghost writing and editing services that will help your business reach its target audience and key stakeholders. Tell us about your project today!
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About Writings by Design
Writings by Design was founded by J. Mariah Brown, an experienced technical research writer and public relations practitioner who has worked in an array of industries including, but not limited to, Non-Profit, Language Services, Health and Wellness, Legal and Energy Conservation.
Writings by Design helps businesses deliver custom writing products to customers, create a strong online presence to generate publicity and increase membership/customer base by strategically connecting with key stakeholders, program participants, investors, customers, clients and other interested parties in a more direct manner by personifying organizations.
This is accomplished through the development of articles, press releases and case studies; the creation of customized online publications; search engine and social media optimization and other cost-saving strategies and methods. Writings by Design adheres to the strict ethical codes set forth by the Public Relations Society of America and the Society of Professional Journalists.
Providing lenders with a sound, well-constructed funding request letter is a critical step in the business funding process. Your funding request package should contain a letter of inquiry, a proposal cover letter and the actual proposal. See the following examples of key components in a funding request package:
Letter of Inquiry
Busy executives do not always have the time to read your full proposal. To increase your chances that your proposal is read in a timely manner, write a strong letter of inquiry to peak the reader’s interest.
Sample Letter of Inquiry
Proposal Cover Letter
The proposal cover letter will further demonstrate why your company’s venture is of value to the lender. Leave the extensive details for the proposal. Use the letter as a brief outline of what the lender can expect in the proposal, as well as a very brief overview of your company and vision.
Sample Cover Letter
Proposal
In the initial stages of the proposal review, it is likely that executives will “browse” through your proposal. Since you do not have control over what is viewed first, it is critical to make sure all aspects of your proposal are equal in strength and effectiveness. Include the following information in your proposal:
Composing an effective funding request is a critical aspect of the process of obtaining funding for your business. Regardless of the level of perceived success you have of your business, top-level clients you have or wish to cater to, or how many innovative products or services your business will offer, potential business partners, lending institutions or other financial providers will not be aware of these factors unless you effectively convey this information in your proposal.
Your goal is to make whoever reads your proposal understand that your business is different from the millions of other start-up businesses or business expansion projects out there. This can be achieved by providing pertinent information in regards to the following:
Strength of Management—Showing the level of expertise of the owner(s) and managers can help put the lender’s mind at ease, and increase your chances of getting funding for your business; which is especially imperative for start-up businesses.
Strength of Brand—Showing proof of an established, strong company brand is critical in this process. A company Web site with traceable traffic generation information, evidence of discussion of your products or services and company on online forums, or other proof of market awareness of your brand can strengthen the lender’s confidence that your company will flourish. In some cases, company brands can be used as collateral, if deemed strong enough.
Business Strategy—Development and showcasing of a sound business strategy will show your potential lenders that you business has direction and sustainability. The only way lenders can picture where your business will be in the next 5, 10 or 20 years is if you show them.
Target Market—You must effectively convey the fact that you know whom your target market is for your business’ products and/or services. Your business can offer the most revolutionary products or services, but targeting these products and services to the wrong niche market will lead to the inevitable demise of your business. Conduct thorough research to determine the demographic information for your target audience. Potential lenders will trust that this will be a common practice for your business in the future, which will enable you to keep up with changing markets—leading to the longevity of your business.
Competition—Just as in the case of understanding your target market, if you show your potential lender that you understand who your competition is, the lender will believe that you will consistently conduct research to keep up with industry trends, and offer cutting-edge products and services to contend with top competitors.
Big Name Clients—Having well-known clients in your repertoire simply means that it will be easy for your company to continue to consistently attract more companies of similar stature.
Innovation—Supplying the same products and services to crowded markets is the best way to have a business that never quite gets off the ground. Develop innovative products or services that will ensure new clients (and lenders) will come flocking to your business.
Intellectual Property—Along with innovation, showing actual ownership of a product design or service idea will further demonstrate that your company will be bringing something new to your particular industry or market, which increases the long-term stability of your company.
Recommendations—If other financial institutions and businesses trust your business, lenders will be more apt to trust your business as well. Slipping in a few solid recommendations could be the difference between an approved application and a denied application.
J. Mariah Brown is the owner of Writings by Design, LLC., a comprehensive business writing service company. To learn how Writings by Design can help your company receive funding with an effective funding request, visit www.writingsbydesign.com, email inquiry@writingsbydesign.com or call us at 866-937-2361.
