The three critical “l”s of a retail lease

If your community is like ours, you are seeing some of the long-vacant retail space start to fill up once again. Hopefully it’s one of many signs that business is getting better, customers are returning and storefronts are not going to ever be totally replaced with online shops.

Finding the right retail space is tricky. It’s a lot more complicated than just location, location, location, although that is a major consideration. Leasing may be the best option, particularly if you are just starting out. But leasing brings forward terms like base operating days, subrogation, indemnity, options to extend and escalation clauses. Still with us? The lease you sign can make or break your business. So what are the most important factors to consider in negotiating a lease for your business?

Length.  If you have clearly defined your market, have realistic projections, are confident of our product mix and can acquire a location that is near your target audience, a longer term lease might be appropriate. This is where careful planning comes in. Those are a lot of ifs, however, and you need to think carefully about your product mix and operating capabilities. If you are uncertain about any of these factors, you should think carefully before signing a long-term lease.

Leverage. There are three factors that can provide leverage for better lease terms when negotiating with a potential landlord or property manager:

• Unique product or shopping experience. You’ll likely get the most negotiating leverage from a proven, profit-making product mix unlike that of other retailers. If you can make a profit selling what no one else is selling, property managers will want you—meaning leverage to negotiate better terms.
• Market awareness. Not every business can offer a unique or breakthrough product, but almost every one can improve leverage by understanding the local marketplace — local per capita income, unemployment rate, business occupancy rates, average square-footage rates and typical lease terms, for example. The more you understand the business neighborhood in which you plan to locate, the more successful you’ll likely be in negotiating a good lease.
• Legal advice. Ultimately, there’s no substitute for legal counsel. Leases can range from a few, easily digested pages to 100 or more pages. Such a lease is impenetrable to the legally untrained business owner, but not to an attorney specializing in real estate transactions. Having an attorney look over the lease may not lend you an advantage, but it may prevent someone from taking advantage of you.

Location. Location, location, location: It’s a huge consideration in retail as in every other type of real estate. Yes, sheer traffic volume matters to most small businesses, but simply being in a high-traffic area may not be enough. You need to have ready access and good parking nearby. In a mall, look for a location near entrances, escalators and food courts.

For assistance in assessing a prospective location or for research to help you make the best selection, contact your nearest SBTDC; find the one nearest you here: http://www.missouribusiness.net/sbtdc/centers.asp.

Contributed by Neal Fandek, communications specialist

Don’t believe everything you read: While federal spending may be going down, the government is still the largest spender in the American economy, generating billions monthly. And that translates to great opportunity for small and emerging as well as established businesses. Unfortunately, many businesses don’t know how to find these opportunities.

But whether you want to contract directly with the government or carve out a niche as a subcontractor, here are five key things to know about winning government contracts.

1. Know your business.
The number varies from day to day, but there are anywhere from 25,000 to 31,000 federal contacting opportunities listed on fedbizops.gov, the government’s clearinghouse website. Going through them all to see which ones you might want to compete for is impossible. A better strategy is to know your company and what you have to offer. That will narrow the scope of your search considerably. Until you can articulate what you do, you can’t really sell yourself to the government.

2. Know who you are.
The government has formal set-aside contracting programs for women owned businesses; members of economically or socially disadvantaged groups (called the 8 (a) Program); veteran and service-disabled veterans; and businesses located in certain underprivileged communities (the Historically Underutilized Business Zones or HUBZone Program. Beyond these programs, the government tries to set aside a quarter of its contracts for small businesses.

3. Register with Uncle SAM.
To do business with the U.S. government, you must first register with the System for Award Management (SAM, https://www.sam.gov/portal/public/SAM). You’ll need a DUNS number, a NAICS code, an EIN and other items to do so.

4. Build lasting human relationships.
Relationships are important, even in government work. Yes, filling out the paperwork is a must, but there’s no substitute for face-to-face meetings with decision makers both in government and with large contractors for whom you could subcontract. Subcontracting need not be petty cash. Some specialized firms have subcontracts worth millions annually.

5. Get to know MO PTAC.
8(a), FedBizOps, HUBZone, DUNS numbers, NAICS codes—it’s enough to make your head spin. Luckily, the procurement specialists at the Missouri Procurement Technical Assistance Centers (MO PTAC) located statewide are here to help you understand the contracting process then seize the right bid for your business. Learn more about MO PTAC at http://www.missouribusiness.net/ptac/index.asp

After a brutal late winter in virtually every part of the state, spring is finally here, and that means spring cleaning. By all means, bundle up those clothes for your local charity thrift store, clean out the garage and get the lawn ready, but what about your business? It could probably benefit from a little tidying up, too. Plus studies indicate clutter isn’t just annoying, it can sap productivity.

Here are six spring cleaning business tips.

Do it: That idea you’ve had on your to-do-list forever, the one that keeps getting pushed aside because it just seems too big or there are more pressing matters. Maybe it is too big. Or maybe you just need to break it down into manageable steps. After all, eBay wasn’t built in a day.

Shred it: Most of us hold on to reams of paper documents for tax and other purposes. Is it really a good idea to have all that sensitive data lying around? Use a scanner to scan these documents into your system, then send them straight to the shredder. You’ll never have to wonder which shoebox or envelope holds that important document again.

Update it: If you’re like most small business owners, you hand out your card everywhere you go. It’s your opener. Is it clean, clear and professional? If not, find a graphic designer to redesign it. If someone doesn’t understand what business you’re in at a glance, your card is not doing its job. Double-check all your information on the new card, too. Even the most detail-oriented of us miss proofreading errors sometimes. (more…)

You’re busy running your business, and the urgent matters always get in the way of the important ones. But take a moment to read the latest newsletter from the MO SBTDC. You’ll find interesting news items and tips, and you might just gain some inspiration from the story of Karalee Laney who stood up out of the rubble of her home following the devastating Joplin tornado and went right back to work — even with broken ribs — providing the valuable service of ultra sonography to her patients. Hao Li, a professor at the University of Missouri, has been working for years to attract investment to his biomedical device company. It sometimes takes years for innovation to actually make it to the marketplace, but Hao is very close, and very grateful to those who have helped along the way.

Take a moment to be inspired! Read more at: http://www.missouribusiness.net/newsletter/0413.asp

Biomedical device firm Nanova Inc., formed by two University of Missouri professors and a chief scientist with the assistance of an expert team from the Missouri Small Business & Technology Development Centers (MO SBTDC), has signed an agreement with the WuJin Economic Development District, Chinese venture capital firm SummitView Capital and other Chinese investors to produce bioabsorbable bone screws, coronary stents and new dental health products based upon the company’s core nanomaterial technology. About $6 million will be invested directly in Nanova.

Nanova was founded by Dr. Hao Li, associate professor of mechanical and aerospace engineering in the MU College of Engineering, and employs Dr. Qingsong Yu, MU associate professor of mechanical and aerospace engineering and Meng Chen, Nanova chief scientist.

“We received multiple investment offers,” said Li at a March 26 ceremony held at MU to commemorate the investment. “We declined quite a few.” Li added that he and his partners were waiting for investors who could move the firm’s products to commercialization.

Dr. Jim Gann, director of technology business development with the MU SBTDC, has advised Li and Yu since the business was founded in 2006. Gann and a team of MO SBTDC technology business development specialists including Denise Fields of the University of Missouri-Kansas City (UMKC) SBTDC and Bill Stuby of the MO SBTDC’s sister program, the Missouri Procurement Technical Assistance Centers, helped the scientists with business planning and development. This included conducting intensive market research, obtaining federal Small Business Innovation Research Program (SBIR) and National Institutes of Health funding and facilitating introductions to key stakeholders in Columbia and in Missouri.

Li estimated that Nanova, with MO SBTDC help, has already received $10 million in product research and development funding before consummating the current agreement. (more…)

Social Currency

Vivaldi Partners, a strategic business consulting group, recently completed a study ranking well-known businesses in terms of what they call “social currency” – or how effective they are in using social media to communicate with customers. In the study, 5,000 individuals worldwide were asked about their perceptions of popular brands. Here are the results:

Subway was the big winner, playing on its ability to customize their sandwiches and turn that characteristic into online and social media interactive tools. Subway has a huge Facebook and Twitter audience and very high user engagement on both platforms. They are constantly promoting deals via social media.

Google came in second with more than 500 million users and more than 5.5 million Twitter followers. Target leads in retail, and was recognized for what is a called a 360-degree presence via numerous channels. And Heineken leads in, well, food and drink, with more than 11 million fans, vs. about 3 million for Budweiser.

Surprise! Dunkin’ Donuts was one of the first pioneers in social media, and one of the first, according to the survey, to realize that it does not OWN its online media channels – it merely moderates them. They were among the first to add social media staff to their employee roster. (more…)

The Buffalo Bike gets attention wherever it goes.

A customized 1980 FLT Harley-Davidson completely draped in buffalo hide, including a giant buffalo head with horns, beard and all, the Buffalo Bike is the brainchild of Ron Stratman, founder of Harley apparel business-to-business manufacturer and retailer RK Stratman, Inc., in Wentzville. The bike certainly attracts attention to the company, but it also reflects the deep passion, playfulness and joy Stratman and most of his employees feel about motorcycles.

It’s that same passion that led Stratman into manufacturing Harley Davidson apparel. The road has been a long and winding one.

In the 1960s, Stratman owned a thriving painting company; his hobby was competitive motorcycle racing. To support his avocation, his family sold souvenirs at racing events across the country. In 1969, he and his family began producing Harley and other shirts and racing items from his garage; at that time, companies didn’t license merchandise as well as they do today.

Eventually, in an effort to regain control of its brand, the Harley-Davidson Motor Co. required all Harley merchandisers to be licensed. Stratman was granted one of the original 12 licenses in 1983 and decided to focus his company’s attention solely on Harley-Davidson T-shirts and other apparel. Today, the firm employs more than 320 people in its sprawling, 305,000-square-foot facility, which includes an art design division, screen printing, sales and marketing.

Harley’s is one of the world’s most recognized logos, and Stratman’s shirts, singlets, tanks, sweatshirts and thermals are sold by Harley dealers worldwide. Authorized Harley dealers order the apparel from a line of four annual Stratman catalogs, then Stratman customizes the garment’s back with the dealer’s name, logo and other pertinent information, be that dealer in Philadelphia, Zurich or Beijing. (more…)

Many Missouri businesses think they are too small to compete in the global market. However, according to the SBA, 97 percent of all U.S. exporters are small businesses, and 95 percent of the world’s consumers live outside the United Sates. This represents an enormous opportunity for small firms.

But knowing where to start can be tough.

According to a recent SBA survey, 40 percent of businesses surveyed expressed concern about entering new overseas markets because they didn’t know how to begin.

That’s where the Missouri Small Business & Technology Development Centers’ International Trade Team can help. Headed by Larry Dill, director of the International Trade Center based in the St. Louis SBTDC, the team can help Missouri businesses in four broad areas:

• International market research
• Management capacity and planning
• Supply chain and logistical support
• Trade finance.

“Our mission is quite simply to help Missouri small businesses export their products to other parts of the world,” says Dill. “And we have the best partnership in the country to do so.”

The International Trade Center strongly believes in collaborating with private and public partners to create or secure export plans, networking opportunities, vital contacts, finance, logistics and more. The Center works closely with the U.S. Department of Commerce, SBA export programs, Missouri Department of Economic Development Office of International Trade and Investment, Missouri Department of Agriculture, the World Trade Centers in Kansas City and St. Louis and other entities. (more…)

In our last post, we discussed how to set rates for freelance work, specifically if you are planning to charge by the hour.

But what if you want to charge by the project? Here are some things to consider if you’re not sure which is best for you.

Charging by the hour may be a good way to go with steady clients who bring you a regular and predictable work flow. It can be an easy way to predict revenue and time needed to complete each project. But, if you are particularly efficient with your work, and it takes less time for you to complete each project, you may be better off charging a set fee for each one.

A per project price is good for things you can produce quickly. But it’s not the best way to go with a new client or a new project. It often takes time to establish a way to work with each new customer, and until you have a sense of how efficiently you can satisfy each client’s demands, you should protect yourself with an hourly rate. “Project creep” can rear its head, causing you to add more hours of work to a project without being able to recoup the cost.

Experienced freelancers have learned to clearly define the scope of their services ahead of time to avoid misunderstandings. For instance, if you are a freelance writer given an assignment for an in-depth article, consider how much research you are willing to do, how long it will take to produce a first draft and how long it will take to incorporate the client’s edits and changes. Consider how many edits and revisions you are willing to do up front. Make it clear to your client that if the piece involves more revisions than originally itemized in the scope of work that you will add an additional charge for that service.

Clear expectations upfront can help you avoid awkward negotiations later. By putting some parameters around the project, the client can agree to a clear scope of work at a fixed price.

Freelancing offers innumerable benefits, not the least of which is flexibility in your work schedule, the excitement and challenge of new projects and the opportunity to do a variety of work. However you decide to charge for your services, don’t underestimate your value. Just because you may not keep “regular” hours doesn’t mean they are not valuable hours!

It’s a question that our SBTDC counselors hear a lot.

How much should I charge for my freelance services?

The growth in self-employment (nearly 21 percent over the past 10 years) is the result of many phenomena. Many highly qualified professionals have either been down-sized or have opted to take early retirement. Skilled college graduates in some industries are having difficulty finding jobs. And many families are seeking additional income to support their living expenses and other activities.

The result? Freelancing is growing as an alternative. But what to charge to remain competitive but still make the work worth the time? If you get it right, you’ll be busier than you can imagine. If you get it wrong, you’ll compromise the value of your service and be disappointed with your cash flow.

Here are some factors to consider:

• What is the going market rate for the service you want to provide?
• What experience do you have?
• Do you have a solid track record of meeting deadlines?
• What do you need to charge to sustain the freelance business?

One common equation for establishing freelance rates is the following: (more…)