“Up” generally has a good connotation: in high rise buildings ‘Up’ is considered to be preferable and generally commands a premium price, in management, we strive to move ‘Up’, Uptown is thought of as the place to be, and Upper-class status is sought by those without it. There is one thing, however, that most people agree should not go up, and that is inflation. Here is a brief look at what inflation is, what causes it, how it affects businesses and steps they can take to protect themselves from its effects.

What is Inflation?

Inflation can be defined as: A persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency. Economists often describe inflation as “too many dollars chasing too few goods.” This is a major factor in the inflation we are facing today as shortages in computer chips lead to rising automobile and electronic device prices, and shortages of building materials lead to a rise in home prices.

Inflation leads to a rise in the general price level so that money loses its value. When inflation is high, people may lose confidence in money as the real value of savings is severely reduced. Savers lose out if nominal interest rates are lower than inflation – leading to negative real interest rates. For example, a saver might receive a 1% nominal rate of interest on his/her deposit account, but if the annual rate of inflation is 3%, then the real rate of interest on savings is -2%. Inflation can get out of control because price increases lead to higher wage demands as people try to maintain their real living standards. Businesses then increase prices to maintain profits and higher prices then put further pressure on wages. This process is known as a ‘wage-price spiral.’ Rising inflation leads to a build-up of inflation expectations that can worsen the trade-off between unemployment and inflation.

We can also notice inflation when prices increase on products or services or when the quantity offered for a given price is reduced. A highly informal measure of inflation that I use is the “Kitchen Garbage Bag Index.” I have been purchasing the same brand and type of kitchen garbage bags for several years, and each purchase has fewer bags for the same price. A ‘jumbo’ box that lasted me for approximately three months once contained 150 bags. In subsequent purchases that dropped to 135, 120, and 90. My most recent purchase had 72 bags in the same size box for the same price they have been in the past. In inflationary terms, my dollar has lost more than 50% of its purchasing power in three years!

What Causes Inflation?

A simple example of inflation would be to imagine an economy in which there is only money and one commodity, for example, gasoline. If the amount of gasoline produced drops and demand remains constant, we would expect the price to rise. Thus, the price of gasoline becomes inflated as each dollar purchases a smaller amount of the commodity. So, one cause of inflation is if commodity supplies drop while demand remains constant.

Another cause of inflation would be if the demand for gasoline rose and supply remained constant. This can happen in a micro or macro-environment. Gasoline prices rising in the Northeast because a pipeline shutdown disrupted supplies while demand remained constant is a micro example. A macro example illustrates the current rise in prices of gasoline, even though U.S. consumption is constant or falling: there is a limited amount of the commodity worldwide and rising demand elsewhere is driving prices up. This effect is also driving prices higher as Chinese demand for steel, wood, and cement drives worldwide prices up.

Inflation can also be caused by the government, for example, increases in federal taxes put on consumer products such as cigarettes or fuel. As the taxes rise, suppliers often pass on the burden to the consumer; the catch, however, is that once prices have increased, they rarely go back, even if the taxes are later reduced. Inflation can also be caused by international lending and national debts. As nations borrow money, they have to deal with rising interest payments on the increased debts. As the countries generally increase the money supply as a means of paying that interest, the value of the currency is diluted and prices rise to compensate. Hence, the ongoing political debates about reducing national debt versus increasing the national debt limit.

To go back to the gasoline example, producers need to receive enough buying power per gallon of sale to pay for capital costs, raw material, labor, distribution, and profit. They achieve that by spending the money they receive for the product to pay for the above items. If the government increases the money supply by printing more, then each dollar has less buying value and more dollars will be needed to pay for costs, leading the company to raise prices in order to maintain profitability.

Wars are also a cause for inflation, as they generally increase demand for commodities and are financed by national debt which must be paid off. The rising debt level can result in increasingly greater amounts of a country’s Gross National Product (GNP) going towards interest payments instead of production of goods and services to replace those consumed in the war effort.

How Does Inflation Affect Businesses?

Inflation can disrupt business planning. Budgeting becomes difficult because of the uncertainty created by rising inflation of both prices and costs – and this may reduce planned capital investment spending. Lower investment then has a detrimental effect on the economy’s long-run growth potential. Businesses can try to compensate by offering less product for the same money, as in my ‘Kitchen Garbage Bag Index’. While this may work in the short run, consumers will notice and switch to an alternate supplier unless all suppliers follow the same practice.

Alternately, businesses can raise prices to maintain profitability, however, as supply and demand are elastic, at some higher price point sales will fall low enough that profitability can’t be maintained. The higher price advantage only exists if all competitors follow suit. In many industries, companies watch each other’s pricing and adjust their own accordingly. Examples of this are retail gasoline stations and airline ticket fares.  One company may raise its price; if others match them they will hold the higher price. But if the other companies retain the lower existing price, the company that raised them will be forced to lower its prices again or lose sales to competitors.

Businesses are also affected by wage inflation.  If a union contract or a raise in the minimum wage causes the same labor hour to cost more, companies have only three basic alternatives:

• Raise prices or reduce the quantity for the same price to maintain profits and hope that competitors raise prices as well to avoid loss of sales.
• Reduce labor hours with improved processes or automation. This action has led to ordering kiosks fast food services, automated checkouts at grocery stores, companies providing incentives for the customer to accept ‘paperless billing,’ and so on.
• Absorb the wage-price increase and accept reduced profit in the future.

How Can Businesses Protect Themselves From Inflation?

Fear of inflation has been present in the business world since the invention of money, and some historic solutions may again become useful. Inflation existed and was a worry long before general price levels were measured by government indexes. Today, some of the tool’s businesses can use to protect themselves against inflation are:

• Use an inflation index or surcharge in their sales contracts to allow price increases. This could be a delivery surcharge based on the price of fuel, a link to the Consumer Price Index, the Producer Price Index, or any number of metrics the government publishes to report on inflation.
• Use long-term fixed-price purchasing agreements to avoid rising costs.
• When future inflation is believed to be above the fixed interest rate on loans, borrow funds for operations today and pay them back with inflated dollars in the future.
• Use “cost-plus” pricing for service and manufacturing contracts.
• Put a time limit on any sales quotations sent out.
• Implement productivity improvements to reduce labor costs.
• Implement automation where possible to increase profit margins.
• Tie wages to productivity rather than employee tenure.
• In periods of high inflation, use the LIFO (Last In, First Out) inventory method to reduce taxes.

As it is impossible to discuss all the implications of inflation in this blog, it should be considered as an overview. For further explanation, conduct an Internet search on inflation for further background and tips that can help your business.

The Florida SBDC at UNF’s no-cost business consultants can also assist you by reviewing your marketing strategy and plan as well as by conducting financial analysis to identify the potential for increasing your profit margin.

Filed under: Economy, financial readiness, Inflation by Small Business Resource Center Monday, August 30th, 2021
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There are a number of “four letter words” related to the ins and outs of inventory; that necessary evil of business: both loved and cursed because it represents hope for profit, enables making a sale, generates cash, but also represents a cost, and if not controlled can be lost, or at least result in a loss. To examine inventory in greater detail, read on…

Dictionary.com includes definitions of ‘inventory’ both as a noun and as a verb. Three of the noun definitions that apply to small business are:

1. A complete listing of merchandise or stock on hand, work in progress, raw materials, finished goods on hand, etc., made each year by a business concern.
2. The objects or items represented on such a list, as a merchant’s stock of goods.
3. The aggregate value of a stock of goods.

The most appropriate verb definition for small business purposes is “to keep an available supply of (merchandise); stock.”

Profitable management of inventory requires both use of internal controls and effective planning. Your business needs inventory to make sales and inventory represents hope for profit (you will sell at a price above cost that leaves a margin for profit), but inventory also has a cost of acquisition and carrying, as well as represents a value that can be lost by obsolescence or theft. Inventory considerations include the following thoughts.

How much is enough? Obviously, you must have enough inventory on hand to meet customer demands. However, you should also balance lead time between reorder and delivery with your rate of sales. As your inventory is either financed or represents a cost of capital if you paid for it outright, every day it is “on the shelf” represents a cost that is reducing your potential profit. During periods of slower sales due to economic conditions or seasonal factors, you should adjust your inventory downwards to reduce costs. Similarly, in anticipation of increased sales activity you should increase inventory in order to be able to meet demand. Inventory levels should be dynamic and relate to sales activity… you should never “always have six on the shelf.” A large stock of hula-hoops and Slinky’s may have been acceptable in the 1960’s. Today they are just curiosity items. Technological obsolescence should also dictate inventory levels. Having too many older version iPhones in stock when new ones are issued can be a liability.

When is a bargain a bargain? Periodically, there are opportunities from suppliers to purchase additional stock at a discount. Paradoxically, these opportunities increase during periods of slower sales as manufacturers try to keep their production volume up.  Should you increase inventory levels during slow sales periods if you can save 12%?  What about 18%? Or 25%? You need to consider the cost of carrying the inventory.  How long will it take you to sell, what the finance or carrying cost amounts to, and how that affects your profit margin must be considered to decide if the offer is worthwhile or not.

Just how old are you? You can not manage your inventory effectively unless you can answer that question about every item it contains. Most small businesses have an accounts receivable aging, but fewer have an inventory ageing. Your inventory in total may “turn three times yearly,” but that calculation is an average. There might be items turning over 12 times and some that have been in inventory three years. At some point the carrying cost will exceed the profit margin and each additional month the item is in inventory your loss will be greater. Which leads us to…

Out with the old, in with the new! If you have inventory that is not selling, and in fact is eroding your profit margin each day it “sits on the shelf,” you need to convert it to cash as soon as possible. Cash will allow you to purchase different inventory that is turning over and generate profits. Sometimes you will have to sell inventory at a loss to do this, but the overall result will be positive. Let’s look at an example and, for simplicity, ignore inventory financing, although if considered, it will make the point greater. If your markup is 100% and you have an item that cost you ten dollars which has a price of twenty dollars, you potentially have a profit margin of ten dollars. If that item has been in inventory a year and might be there another year, you would be better off selling at “25% off” for $15. Now you will have $15 cash (I’ll ignore profit, as you may even have a loss due to inventory financing cost) which can be used to purchase three $5 items you can sell for $10 each. If those items are popular and turnover four times a year, you will make a $5 profit margin times three items times 4, or $60 in profit margin from the $10 that was tied up in non-moving inventory.

One person’s trash…  Is another person’s treasure. You will have to discount non-moving inventory to sell it, but there will always be a buyer. If you don’t want the image of your store to include discounted merchandise, you can sell unwanted inventory at flea markets, on the Internet (even as single items on eBay), or via an inventory liquidation company or off-site auction. Remember the goal is to turn non-moving inventory into cash that can be used to purchase new inventory that has a high turnover. Some other ideas are to package one-of-a-kind items into a gift basket, or to swap (barter) with another retailer in the area as what moves slowly in one type of establishment may sell in another.

Show me the money…  Inventory can be financed in a number of ways:

• By cash purchase, in which case the cost is equal to your cost of capital (the return you could earn on the money if used in an alternative investment).
• Floor planning, also called trust receipts, is another form of inventory financing where the loan is secured by using the firm’s inventory as collateral. Floor planning generally tracks individual inventory items and is used for higher value merchandise usually having serial numbers.
• Blanket inventory loans are also secured by using the firm’s inventory as collateral, but only tracks inventory value.
• Open lines of credit, which may be unsecured or secured by something other than inventory, are another financing method.
• The lowest cost of inventory is on a consignment basis, where the vendor is paid when the item is sold. This is generally used on higher priced inventory like high value electronics, appliances, and equipment.
• Various forms of vendor financing may include one or more of the above. Vendor terms can be considered a form of financing if they are for a period (45-60 days for example) during which the inventory is expected to turnover.
• Now you see it, now you don’t…

Now you see it, now you don’t…  Inventory that is stolen, either by shoplifters, employees, or vendors with access to your showroom has a large negative effect on your profit. If your pre-tax profit margin is 30%, and an inventory item that cost you $50 is stolen, then you must sell another $167 of merchandise just to recover your $50 (50/.3)! If you don’t have management controls in place to deter, prevent, and monitor those losses, your business may be deemed an “easy mark” and the thefts will reoccur. Some thefts are insidious but can be deterred with management controls. Do your service personnel keep a supply of parts in their trucks? Unless you account for it against jobs and treat the truck inventory as petty cash, they may have a “side business” on weekends using parts you paid for. While not strictly an inventory issue, if you have a fleet of vehicles, do you track gas mileage of each one? While it will vary from vehicle to vehicle due to vehicle age and routes, they should all be in the same range. If all vehicles in your fleet range from 10 to 15 miles per gallon, but one gets 5 mpg, then there has to be a reason. Among them are the vehicle idles all day and the others don’t, the vehicle needs a tune-up or repair, or somebody is siphoning fuel out of it. All of those possibilities reduce your profit, and all can be corrected. You need to know!

Get an Attitude!  Think about inventory as a wasting asset. Unless you are dealing with wine or single malt scotch whiskey, inventory does not improve with time. Although it seems like one of the less dynamic or demanding aspects of your business, inventory management can actually be the lynchpin between you and profitability, so make sure you’re proactive about it.

By Dr. Phil Geist, Associate Director (West), Small Business Consultant, Florida SBDC at UNF

Filed under: Cash Flow Projections, Inventory, Small Business, Small Business Blog by Small Business Resource Center Monday, July 12th, 2021
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For those of us living in Florida, we received an indication that the Hurricane Season is beginning when the first named storm formed in May (Tropical Storm Arthur). While it did not pose a threat to Florida, it was a good reminder that businesses should prepare (for those that do not have them) or update their contingency and emergency plans. This alert also applies to those of you not likely to be affected by a hurricane, as every area has natural threats of some kind. Whether they are from earthquakes, floods, hurricanes, tornados, or volcanic eruptions does not matter. What matters is that your business is prepared to protect its staff, mitigate any risks, regroup after the event, and sustain its operations.

Protecting Staff – Your business should already have a fire drill plan, first aid kits, and posted emergency numbers to deal with any issues in the workplace. You should also have primary and secondary emergency contact numbers for staff. Primary ones are immediate family, and secondary ones are family or friends they might go to if they had to evacuate their home. Contacts should include cell phones as well as email addresses. You should give your staff the resources they need to create family emergency plans as well. A good source of information can be found at www.ready.gov/make-a-plan.

Mitigating Risks – For known or expected risks, you should have mitigations in place. If an area has potential for earthquakes, securing shelves to the floor or wall can prevent them from falling on anybody. Keeping breakable and heavy items at a lower level will lessen the danger to people if they fall off a shelf. Areas with floods can keep flood dams on hand to keep water from entering doorways and could make sure that drains and drainage areas are kept clear. Hurricane shutters can keep windows and doors from being broken or blown open, and a backup generator can protect any perishable items a business may have. A safe room can protect customers and staff in the event of a tornado and be used as a storeroom as long as sufficient space for people is left open. Volcanic eruptions, at least in the U.S. seem to provide some advance warning, so the mitigation in this case might be to have an alternate location in mind, and pre-planned access to trucks for moving equipment and inventory if the area is likely to be evacuated in the near future.

Regrouping After the Event – When the event is over, having your insurance policies and contacts at hand will speed up the process of making claims if needed. If there is damage and you are fixing it or having it fixed, remember to take photographs first to document the damage. Having your tax returns and financial statements on hand will expedite applications for any emergency grants or loans that may be available. All information should also be in hardcopy form in the event that access to electronic versions is not possible due to Internet issues, power failure, or hardware problems.

Reopening – Contact your staff, customers, and vendors (you should have lists for all of them) and let them know when you plan to reopen. If your site is too damaged to reopen quickly, having a potential alternate location to operate from temporarily may be the best approach. Especially if you have to relocate temporarily, but otherwise in all events, use news, press releases, and social media to let the community know you are open for business again.

Sustaining Operations – If possible, have a commercial line of credit (or even a credit card) on standby for disaster recovery as it will help with one-time costs and offset any initially low cash flow following reopening. It will also provide a buffer between any costs incurred and when insurance or emergency loan monies are received. Review what happened, which mitigations worked, and which ones didn’t, and update your plan for the next time a business disruption occurs. If your premises were damaged and you have to rebuild, incorporate future mitigations into the construction. Stronger windows, additional drains, and other similar items can eliminate or reduce future damage.

You should never fear storms or natural events… they happen! In business, disruptions happen. What you should do is be aware of what may happen, make plans to minimize the impact, and plans to recover from any outcomes. Planning and preparing for disruptions will make your business more resilient and sustainable.

By Dr. Phil Geist, Associate Director (West), Small Business Consultant, Florida SBDC at UNF

Filed under: Disaster Plan, Florida SBDC at UNF, Hurricane Season, Small Business by Small Business Resource Center Thursday, June 3rd, 2021
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According to The White House Initiative on Asian Americans and Pacific Islanders (WHIAAPI), Asian Americans and Pacific Islanders are the fastest growing racial group in the United States.  There are more than 1.9 million AAPI-owned enterprises in the United States; nearly 10% of all businesses in the United States, or about 1 out of 10 businesses. During AAPI Heritage Month, we are honored to recognize the tremendous accomplishments of AAPI entrepreneurs, especially as all small businesses across the nation are striving to recover and excel through today’s global pandemic.

While we celebrate the many contributions of the Asian-American, Native Hawaiian, and Pacific Islander American populace to our Nation, we also recognize that AAPI communities and small businesses face challenges accessing capital and opportunities.  Many of the AAPI-owned small businesses need assistance to access available resources such as business development counseling, small-business loans, and government procurement opportunities.  This is where the SBA steps in.

Last year, the SBA backed $11.5 billion in traditional 7(a) and 504 Loans to AAPI entrepreneurs. These loans contributed to the $814 billion in revenue that is produced by AAPI-owned employer firms per year. To help maintain these levels of success, many AAPI entrepreneurs took advantage of the recovery programs provided through the Economic Aid Act as well as found success through SBA’s fundamental small business programs.

By Janita R. Stewart, U.S. Small Business Administration’s Southeast Acting Regional Administrator, serving Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee

Filed under: SBA, Small Business Blog, UNF Small Business Blog by Small Business Resource Center Tuesday, May 18th, 2021
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With programs like the Employee Retention Tax Credit, the Economic Injury Disaster Loan (EIDL) program, and the Federal Reserve’s Main Street Lending program set to expire on December 31, small businesses may be wondering where they can go for capital. Florida’s banks were among those leading the nation in Payment Protection Program lending, according to Florida Bankers Association CEO Alex Sanchez. The new year, he said, will likely bring with it a strong economic recovery driven by a reliable vaccine and pent-up demand for activity. Banks, he continued, will be ready to lend the money that drives a significant portion of economic activity – including a possible second round of PPP loans. [Source: Miami Today]  While small businesses wait for an agreement over the next stimulus package and the re-authorization of the PPP forgivable loan program targeted at small businesses, here are a few things that small businesses can do to prepare.

1. Using your tax return as a strategic instrument in accessing capital in 2021.  You need to file it early and show enough net income + depreciation + interest to cover any new debt payments at a ratio of at least $1.25 for every dollar of debt.  If you are going to apply for a loan you don’t want to show a business loss, file late or for an extension on your taxes.
2. Spend time closing out your 2020 books and get your finances in order.
3. Start contacting lenders to find out if they are participating in the PPP program.
4. The Florida SBDC at UNF highly recommends meeting with one of our consultants before seeking finances.  We can assist you with your business plan, packaging your loan, financial projections, etc.
5. If you are unable to wait to speak to an SBDC consultant here are few links to some lending opportunities:
   1. Ameris Bank (Apply at your local bank)
   2. https://us.accion.org/
   3. https://www.umwsb.com/
   4. https://ffcfc.com/Rebuild-Florida-Business-Loan-Fund
   5. https://www.lisc.org/covid-19/small-business-assistance/rural-relief-small-business-grants/

To read tips from ASBDC resource partner Rhonda Abrams, CEO of the PlanningShop on how to take advantage of programs under the small business provision of the new stimulus package click here.

For the most up-to-date information on how the SBA will implement legislation, please visit www.sba.gov or subscribe to email updates at www.sba.gov/updates.

By the Florida SBDC at UNF

Filed under: Small Business Blog by Small Business Resource Center Friday, December 18th, 2020
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Strategic planning is an organizational management activity that is used to provide direction to an organization. Through this activity, the mission, vision, values and goals are identified. While not always an easy process, the results are well worth the effort. Going through this process allows the organization to set priorities, determine where to focus energy and resources, strengthen organizational operations, ensure that employees and other stakeholders are all working toward common goals, establish agreement regarding intended outcomes/results, and assess and adjust the organization’s direction, as needed, in response to a changing environment. A product of strategic planning is the generation of fundamental documentation that answers the following organizational questions:

Who am I?
Who do I serve?
What do I do?
Why do we do it?

These questions should be answered with a focus on the future. Effective strategic planning not only takes a look at your current position, but articulates where an organization is going and the actions needed to make progress and includes how the organization will know if it is successful.

Minimal Components of a Strategic Plan

The strategic plan is the documentation created from the strategic planning process. While there are many variations and templates of what should be included, most agree that the following are minimal components.  Continue reading here.

Filed under: Florida Small Business Development Center at UNF by Small Business Resource Center Tuesday, September 1st, 2020
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A lot of adjectives have been used to describe our current situation: chaotic, once in a lifetime, strange, unusual, and unprecedented, along with others that are less politically correct. Everybody using one of them agrees that this is not a normal time. But what is normal? Dictionary.com defines ‘normal’ as “conforming to the standard or common.” It defines ‘normalcy’ as “the quality or condition of being normal, as the general economic, political, and social conditions of a nation.” I think we can all agree that the general economic, political, and social conditions we are experiencing today do NOT conform to what is (or was) standard or common.

When the pandemic is declared over, the conditions we experience will not be the same as before, they will be what is commonly referred to as “The New Normal.” To be prosper and be sustainable, businesses will have to adapt and adjust to the New Normal. The situation we face will not be unusual; following virtually every major disruption of the previous norm, the generations that were affected by it, either economically, physically, or psychologically, developed new business and consumer practices, personal preferences, and social mores. 

The Spanish Flu pandemic of 1918 resulted in an international awareness of conditions that spread disease, the need for people with cold symptoms to stay home and not circulate in society, and the need to create and maintain hygienic conditions in food processing, medical spaces, and public venues. The Great Depression of the 1930’s brought about the federal government’s oversight of financial markets, federal aid to states, and programs like Social Security. The older generations developed a focus on frugality and the need to save for the future rather than spend for today as the economy recovered. World War II changed society’s perception of the role of women in the workplace. As the economy boomed in the aftermath of the war, the age of consumerism began with households vying to purchase ‘the latest and greatest.’ More recently, the attack on the World Trade Centers on 9/11 changed our perception of security, social mores, and public acceptance of background checks.

How does this relate to today, and more specifically to business owners? We can expect that when the pandemic ends, what we viewed as normal conditions and standards will change. What we don’t know is how it will change, and which changes will be permanent versus those that are temporary. We do know that business owners must begin now to anticipate what might change, make adjustments to their business model and then monitor it and adapt to actual and future changes. They must be proactive rather than reactive and must be willing to make decisions with imperfect information. That is not to say they should not research customer needs and industry and market trends. It is saying that they must make decisions based on the best information available at the time and then adjust as conditions change and develop.

An example of early decision making is a story by Cameron Ridle, posted on 4/21/20 on the RTV6 Indianapolis website in which he describes how Jasen Lockwood, owner of the Runway Barber and Beauty Lounge is preparing for reopening by getting gloves and masks for all barbers and customers, setting up shifts for the barbers so only every other barber station will be used at a given time to create social distancing, and obtaining disinfectant sprays so each customer can see the clippers and scissors being cleaned before they are used on them. Jasen has checked with his barbers and customers and has taken actions that will make them feel comfortable when he is able to reopen.

On April 21^st IndustryWeek.com posted an article about what manufacturing will look like after Covid -19. It notes potential trends to employ more automation to lower costs as more processes are brought back to the USA instead of using overseas suppliers, and describes how plants and processes will be restructured to provide more social distancing and have additional personal protective gear available for employees. Functions that can be performed remotely may be shifted to work-at-home to allow greater spacing between office employees. Supply chains and vendors will be re-examined for reliability and multiple sources of key components will become normal. 

Whether your business serves consumers in a retail setting, is in healthcare, manufacturing, travel or recreation, or any other category, it will be affected by the New Normal. Whether your business is in an essential category and open now, or waiting for the lockdown to be lifted, you are not likely to return to ‘business as usual’ in the future. You must begin now to research customer preferences, employee concerns, industry trends, and regulatory changes to be able to prepare for the future. Chambers of Commerce, industry associations, news outlets, universities and other reputable organizations are all posting data, information, predictions and trends that you can use. You should also be polling your customers, employees and vendors to determine their concerns and preferences for the future. 

Your business needs to be READI for the New Normal:

R – Research the New Normal including emerging trends and review information periodically for updates.

E – Engage others in your review process: customers, employees, suppliers, and vendors.

A – Adapt your business model to the New Normal conditions.

D – Decide on what actions you need to take for your business to prosper in the New Normal.

I – Implement your plan, then review periodically by returning to “R” and repeating the process.

By Dr. Philip R. Geist, Area Director, Florida SBDC at UNF

Filed under: Florida Small Business Development Center at UNF by Small Business Development Center Thursday, April 23rd, 2020
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Federal appropriations for the SBA EIDL (loans and advances) and the Payroll Protection Program (PPP) have been exhausted.  Additional funding is being considered by Congress.

The Florida SBDC at UNF is here to provide access to the disaster capital and resources your business needs to recover, rebuild and grow. For businesses adversely impacted by COVID-19 here is information on low-interest federal business disaster loans. 

Paycheck Protection Program Loan Guarantee and Forgiveness
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. The Paycheck Protection Program will be available through June 30, 2020. You can apply through any of the existing SBA 7(a) lenders or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Here is a link to the application.

U.S. SBA Economic Injury Disaster Loan (EIDL)
The U.S. Small Business Administration’s Economic Injury Disaster Loan (EIDL) Program. Impacted businesses, small agricultural cooperatives, and private nonprofit organizations may apply for low-interest loans through the U.S. Small Business Administration’s Economic Injury Disaster Loan (EIDL) Program. A $10,000 advance on an EIDL may be available even if your EIDL application was declined or is still pending, and will be forgiven. Click here to learn more and apply.

SBA Debt Relief Program
The Debt Relief Program provides immediate relief for new and existing borrowers of SBA’s regular loan guarantee programs. For existing borrowers with a regular 7(a), 504 or micro-loan, SBA will automatically make payments on your behalf for a period of six months. For new borrowers, SBA will automatically cover payments due prior to September 27, 2020.  Click here to learn more.

Local Jacksonville Small Businesses
The City of Jacksonville and VyStar Credit Union are collaborating on a loan program to assist local small businesses affected by the COVID-19 response. Click here to learn more and apply.

For more information to help you with your business recovery efforts, including details about Small Business Disaster Loan Programs; information on Where to Find Assistance; Additional Resources; and more please visit our regional and state SBDC website pages at:
Florida SBDC at UNF Coronavirus Small Business Resource Page 
Florida SBDC Network COVID-19 Business Disaster Assistance Page

Filed under: Florida Small Business Development Center at UNF, SBA, SBA Loan, Small Business Blog by Small Business Development Center Monday, April 13th, 2020
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Paycheck Protection Program Loan Guarantee and Forgiveness

Program Overview 
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.  SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.  The Paycheck Protection Program will be available through June 30, 2020.  

Who Can Apply 
This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.  Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.  Small businesses in the hospitality and food industry with more than one location could also be eligible at the store and location level if the store employs less than 500 workers. This means each store location could be eligible.

How to Apply
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.  

Lenders may begin processing loan applications as soon as April 3, 2020.  

What Do You Need to Apply

• Application
• 3 Years Business Tax Returns (Signed and Dated)
• 3 Years Personal Tax Returns (Signed and Dated) If 2019 is not complete, send copy of extension and W-2.
• Interims (if you don’t have 2019 taxes done, make sure you have P&L and Balance Sheet for 2019 and copy of the extension
• Interims for this year (January – March)
• Mortgage Statement or Lease Agreement
• Utility Bills
• SBA Personal Financial Statement
• Details on the costs outlined below. Monthly data here for expenses incurred prior to February 15, 2020. They are looking for the average monthly costs from the last year.
  • Payroll information:
  • 1099 (If you have independent contractors)
  • IRS Forms 940 and 941
  • Payroll Summary
  • If you are a business where employees get tips and they include in their tips in their W-2’s, copies of those W-2’s

Please continue to visit our websites for updates to resources for your small business:

Florida SBDC at UNF Coronavirus Small Business Resource Page

Florida SBDC Network COVID-19 Business Disaster Assistance Page 

Filed under: SBA, UNF Small Business Blog by Small Business Development Center Wednesday, April 1st, 2020
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Florida small businesses impacted by the Coronavirus (COVID-19) may now apply for short-term, interest-free loans through the Florida Small Business Emergency Bridge Loan program.

The purpose of the loan program, which was activated by Governor DeSantis, is to help business owners bridge the gap between the time the economic impact occurred and when a business secures other longer-term resources, such as insurance proceeds or federal disaster assistance through the U.S. Small Business Administration (SBA).

Through the program, qualified small businesses with two to 100 employees affected by COVID-19 can apply for loans up to $50,000 for one-year terms. To be eligible, a business must be located in Florida, have been established prior to March 9, 2020, and demonstrate economic injury as a result of the virus.

To complete a bridge loan application by the May 8, 2020 deadline, and for more information about the program, please visit www.floridadisasterloan.org.

• Apply online and upload required supporting documentation (preferred method) or
• Download an application, complete it and mail it with the required supporting documentation to the Florida Department of Economic Opportunity (DEO) at: Florida Department of Economic Opportunity, C/O Small Business Emergency Bridge Loan, 107 E. Madison Street, MSC-160, Tallahassee FL 32399-4120.

Connect to other resources for your small business here.

Filed under: Disaster Loans, Emergency Bridge Loan, SBA Loan by Small Business Development Center Wednesday, March 18th, 2020
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