Author: Jeff Nicely

How Do I Hire A New Employee in VA?

Published: Published: | By Author Jeff Nicely

When you’re ready to hire a new employee in VA,  you’ll need to consider several key elements to ensure you get your hiring done right the first time.

Employee or Independent Contractor?

Determine whether you want an employee or an independent contractor. There are certain factors that define a worker as an independent contractor.

An independent contractor does not rely on the business as the sole source of income, works at his or her own pace as defined by an agreement, is not eligible for employer provided benefits and they have a degree of control and independence.

Hire A New Employee

1. Develop a job description for the position. What do you want this person to do? What are the clear expectations?
2. Develop a job posting and interview questions.
3. Get an Employer Identification Number (EIN)
4. Register with the Virginia Taxation department
5. Register with the Virginia Unemployment Commission

Forms For VA New Hires

Once you are ready to hire there are new hire forms you will need.
1. Ensure new employees return a completed W-4 form and VA-4 tax form
2. Have the employee complete the I9 form.
3. Have the new hire complete a Contact Information form and Direct Deposit
Authorization form
4. Work with a bookkeeper to do your payroll or learn the state and federal tax laws and
how to report and pay your taxes.
5. Schedule pay periods to coordinate tax withholding for IRS
6. Each employee should have an employee file. If you offer benefits there should be a
separate file for anything health related.
7. Develop an employee handbook
8. Create a compensation plan for holiday, vacation and leave
9. Decide who will manage your payroll system
10. Learn which records must stay on file and for how long

The IRS maintains the Employer’s Tax Guide, which provides guidance on all federal tax filing requirements that could apply to the obligations for your small business.

The State of VA Taxation department has a business checklist.

 

**Thanks to our SBDC Director, Christine Krize for these insight.

Do You Want to Bake Your Business?

Published: Published: | By Author Jeff Nicely

You’re asking what does “Bake Your Business” even mean?

I like analogies, so bear with me.  

If you wanted to bake a cake you would need certain ingredients, like flour and eggs and maybe butter or some flavoring, right? And you may have to get some culinary training to be able to bake the best cake you can bake, right?

When you make a cake you want everyone to rave about the cake and you want people begging for more, right?

Having your own business is something like working to make the best cake that others will want to eat.   

There are some common ingredients you need in order to be succesful.

KNOW THE PROBLEM

You need to know what problem your products and service will solve.

How is your product or service going to uniquely solve this problem better than anyone else?

WHO IS YOUR CUSTOMER?

Once you know who you customer is, ask yourself, “Where is my customer today?”  “Where is my customer spending time today?”  “What social media platform(s) is my customer hanging out on today?”  

Every successful business needs to solve a problem that their customer already perceives is a problem.

If your target customer doesn’t see their problem, you are going to need to invest a lot more time and money to educate and convince your customer that there is a problem. 

You may want to start with the problem your customer already understands and recognizes before you start solving a problem your customer doesn’t see or recognize. 

QUESTIONS TO ASK YOURSELF 

  1. Who is my target customer?
  2. Where is my target customer
  3. Are there enough of these target customers in my market?
  4. Identify everything you possibly can about your customer?  What is their age?  What is their financial situation?  What is their level of education? You should be able to describe your target customer as completely as you can. The better you understand your customer the better your product or service will solve their problems and fit with their needs.  This, my friend, is a major key to your success or failure as a business owner. 
  5. Do the research. Going with your gut is not always a good plan.   You think you know how to make that cake and you think you know the flavor that people will want, but are you 100% sure? There are direct ways to do your research like observation, interviewing. There is also research tools that can give you an overview of the market and the particulars of that market, like profitability, fixed and variable cost ratios, but this does not take the place of being in and knowing the market.  Getting experience or partnering with someone who does have the knowledge.
  6. Talk about your idea with folks who are likely to be in your target audience.   You need to test your concept. If you want, you can use a non-disclosure agreement but you do need to get other people’s perspectives.  
  7. Consider where you want to locate your business.  Consider what particular skills will you need, who you will serve, and think about how much capital will you need to make your business work in this locality.

Whatever you do, please make sure you have a particular audience that you want to serve, now their problems and solve those problems better than anyone else in your industry.

I know that starting small requires a slower approach than most people would like.   But the slower approach is also the least expensive way to set up your business for long term success.

Before you sink a lot of money into a new business idea, test the market and see if there is a market for your product or service.

Our team is always available to help you with these tips and more.  We want to see you launch, run, grow, and make your business successful.  We’re here when you need us.  You never have to run your business alone…you have experienced, trusted partners in us.

Reach out to us anytime!

**Thanks to SBDC Team Member Dale Maza for these insights. 

Should I Register As A Business?

Published: Published: | By Author Jeff Nicely

Whether you are a full-time independent contractor or are operating your own small business, you may not need to register as a business.

However,  you may be required to obtain a business license from your municipality if you make over a certain amount of money in a year.

By not registering as a business, though, you may miss out on personal liability protection, legal benefits, and tax benefits.

By registering as a business, you separate the entity itself from you as an individual, which in turn helps you avoid certain legal and financial liabilities that may occur for your business.

What this means is that if anything is to happen to the business, your personal property or credit may not be impacted or affected as strongly.

Second, it is much more credible and safe for a consumer to work with a business over an individual. As a registered business you are able to protect your personal assets, which is important in the event something goes wrong with your business.

Another great benefit of going the business route is the tax benefits.

As a registered business, you can take advantage of business expense deductions, which means you can use all your business expenses to offset the earned gross income of your business.

Another big advantage is that by taking dividends instead of a salary, you have more flexibility with the company’s income, which allows you to meet diverse needs, especially when starting out.

In conclusion, incorporating a business may not be required, but it is a benefit with a rather small cost.  I say that it is worth registering as a business to avoid potential losses.

For more information:

https://www.sba.gov/business-guide/launch-your-business/register-your-business#:~:text=If%20you%20conduct%20business%20as,legal%20benefits%2C%20and%20tax%20benefits

https://corporatedirect.com/blog/tax-advantages-of-incorporating-your-business/

 

**Thanks to SBDC Team Member Diana Patterson for these insight

Why Do I Need A Business Plan?

Published: Published: | By Author Jeff Nicely
Why do I need a business plan and how in the world will I know what my sales will be?
 
Great question, your business plan is the story of your business. 
 
It is there to provide proof of concept and without that we can’t get a banker to understand what you are doing and how they are going to get paid back for the loan we need them to provide.  Making the story clear and concise is the design of the business plan and the numbers need to be validated by the text. 
 
The sales are definitely tricky. 
 
Most people struggle with this, but think about why you think this business will be successful. 
 
You have in your head an idea, a goal, a dream about that you will generate X number of sales and revenue and turn those into profit.  Let’s pull that from your head and put it down on paper so we can begin to prove the model. 
 
Most will prove the model by gathering 3rd party data, which can be done from different market reports as well as other similar businesses in similar areas.  If you find businesses that are not competition for you, they may be willing to provide some information to assist you so you don’t run into the same pitfalls they did.
 
**Thanks to SBDC Team Member Cort Maddox for this insightful article.  

2022 State of the Restaurant Industry Report

Published: Published: | By Author Jeff Nicely

On February 1st the National Restaurant Association issued a report that included forecasts for 2022 and the “new normal” eateries face as the nation attempts to move away from COVID.  The report provided the following industry insights:

  • Industry sales are anticipated to reach $898 billion in 2022
  • Foodservice jobs will likely grow by 400,000, for total industry employment of 14.9 million
  • 2022 will not be normal for multiple reasons, including food, labor, and occupancy costs, which will be elevated, all of which will impact industry profits
  • 96% of operators experienced supply delays or shortages of key food or beverage items, starting in 2021 and likely to continue
  • 51% of adult consumers stated that they aren’t eating as often as they would like, an increase of 6% from pre-pandemic levels
  • 70% of eateries state that they are not adequately staffed to serve customers
  • 50% of operators believe that hiring and retaining staff will be their greatest challenge in 2022
  • The industry anticipates adding 200,000 jobs per year for the next decade
  • 75% of operators plan to devote more resources to recruiting and retaining employees
  • Operators plan to reduce their menu offerings and work to improve the quality of take-out and delivery food products
  • 88% of consumers stated that they would be likely try take-out or delivery options if restaurants would use packaging that helps the food maintain the same temperature, taste, and quality as when it’s served in the restaurant
  • Technology advances will continue to help the industry, with fully 80% of members stating that their use of technology helps to give them a competitive advantage
  • Many operators will expand online ordering, reservations, mobile payment, or delivery management, along with back-of-the-house technology
  • Consumers also prefer technology where it doesn’t diminish hospitality
  • Outdoor dining is also favored by many consumers, and 40% indicate that they would select eateries with such options over those that do not have it
  • To-go alcohol sales are also popular with consumers
  • 54% of adult consumers say that takeout or delivery food is essential to their lifestyles, including 72% of millennials and 66% of Gen Z 
  • 50% of operators think the availability of sidewalk, parking lot, or street seating will become more common during 2022
  • 70% of Gen Zs and 62% of millennials stated that to-go alcohol along with take-out or delivery orders would make them more likely to choose one eatery over another without these options

As with many other surveys and data dumps, the results for this critical industry are mixed at best.  For those operators that have successfully pivoted during the pandemic and those that continue to do so, 2022 should be OK, but for those that remained viable only due to federal support programs, the coming year will not be a return to “happy days”.  

Article thanks to Mike Austin of the VASBDC network.

How to prepare for Virginia’s 31% Minimum Wage Increase

Published: Published: | By Author Jeff Nicely

Small Business Consultants Winchester VA - Virginia Minimum Wage Increase 2021

Hello there, I’m Cort Maddox.

I’m an adviser with the Laurel Ridge SBDC and today I get to come to you and talk about changes coming to the Virginia minimum wage.

Not sure if you’ve heard about this but as of May 1, 2021, in the state of Virginia, the minimum wage will go from $7.25 to $9.50.  

After that, we will see an increase on January 1, 2022 to $11.00 per hour then every January 1st thereafter until January 1, 2026 if will increase $1.00 per year until it eventually gets to $15.00 per hour.

All of this barring any adjustments from a Federal level, but right now, that’s the plan for Virginia.

Now I want to dive into how this is going impact your business then talk about things you can do to prepare.  

First, this is a 31% increase.  This is a dramatic increase and one we have not seen in the past.  This is going to impact your small business.

I want to go over a potential example to show we as consumers can expect to see and then show how businesses can try to manage this as well.

On January 1, 2022 the minimum wage will increase an addition 16% when it goes from $9.50 to $11.00 per hour.  This is a 52% increase which is a big increase given that the average business has an average overhead of about 20-30%.

When you increase your overhead expenses by roughly 52% you can see the impact.

In addition, this will mean an estimated increase of 13% in employer/employee taxes that you will pay on behalf of your employee.  This is about a $.50 increase per hour that will need to be taken into account.

Now, let’s consider a $15.00 product.  

In order to account for the estimated 59% increase, 52% wage increase plus $.50 per hour in taxes, you will now need to charge $23.85 for that same item to accomplish about the same margin.

That is a heavy hit for customers.

This is why we want to help you to come up with resources to lessen the impact.  We want to help you be prepared to make this adjustment without negatively impacting your current customers.

Our team wants to help you keep the number of disgruntled customers as low as possible.  We’re all dealing with a lot of things in life right now.  Adding another possible stressor to our lives right now is not something we want.

But, this change is coming and you need to be aware of what this change means.  

Please make sure you do not violate any labor laws during this process because the consequences will greatly impact your business as well.  

We will be hosting an online workshop to provide you more resources.  We want to help you navigate these changes because they are going to impact your business.

In the meantime, if you have questions or need help with any business challenge, reach out to our team, we’re here for you at no charge. 

Remember, we are funded by the state and local Economic Development Centers, not by small business owners.  We are here to serve as your resource.  Let us know how we can help!

 

 

Struggles Can Bring Out Our Best and Bring Us Together

Published: Published: | By Author Jeff Nicely

Has life taken it’s toll on you and your business the last few months?  Do you feel overwhelmed, stuck and exhausted trying to keep your business going?

You’re not alone.  Your struggle is real.   Yet our struggles can bring us together.

And yet there’s great news. 

As humans, we are made to work with each other.  We are wired to look out for each other and to help each other.  And when we do, we are more likely to get things done.

By ourselves we cannot lift heavy loads and by ourselves, we cannot solve complex problems.  But when we work together, we are remarkable.

If you’re struggling, you do not have to struggle alone.  If you have business problems that need to be solved, you do not have to solve them alone.

Our team of experts is ready and available to work with you at no cost.  We can work together to solve complex problems and be remarkable with you!One local business owner reached out to our team and had this to say:

“Thank you so much to such a great organization and an amazing community! This feels more like home than anything ever has, for I know my voice and needs are not just heard, but also fulfilled.”

If you haven’t felt pressure in your business, you may.

Some small businesses are going to feel the impact of the Virginia Minimum Wage increase that goes into effect May 1, 2021.

Minimum Wage will increase from $7.25 per hour to $9.50 per hour on May 1, 2021 then on Jan 1, 2022 it will increase to $11.00 per hour.  Wages will continue to increase until it reaches $15.00 per hour on Jan 1, 2026. 

Let’s make sure you’re prepared with a strategy in place.  Our team can help you prepare, at no cost to you.  We are funded by state and local Economic Development Centers, not by you the small business owner.

Together, we want to solve complex problems and be remarkable.  This is why we exist.  We’re here for you!

GO Virginia Grant Brings Lasting Change to Local Small Businesses

Published: Published: | By Author Jeff Nicely

The Small Business Resiliency Training (SBRT) has been working in partnership with the Virginia Initiative for Growth and Opportunity (GO Virginia). 

The SBRT Team is made up of members of the Shenandoah Valley and Laurel Ridge Small Business Development Centers.   

Thanks to GO Virginia, small business grants were made available and those grants are having a lasting impact on small businesses throughout the Shenandoah Valley of Virginia. 

When the Shenandoah Valley Small Business Development Center partnered with Jon Henry General Store in New Market, VA change was quite noticeable.  The impact is still being felt.

When Jon Henry came into the SBRT program, he was feeling a bit overwhelmed.  Without systems and tools and place to keep his inventory as organized as he’d like, the SBRT program was his solution.

Thanks to the GO Virginia grant, Jon’s small business got a much needed boost. 

Listen in as Jon tells about the impact this program had on his small business.

 

———————————-

The Small Business Resiliency Training (SBRT) was made possible by a grant from the Virginia Initiative for Growth and Opportunity (GO Virginia).  This is a business-led initiative formed to foster private sector business growth along with the Small Business Administration and the Virginia Small Business Development Centers.  Participating localities include:  Augusta County, City of Harrisonburg, City of Waynesboro, City of Winchester, Clarke County, Frederick County, Rockbridge County, Rockingham County and Shenandoah County, VA. 

If It’s Free, There Must Be A Catch, Right?

Published: Published: | By Author Jeff Nicely

Small Business Consultants - There Must Be A Catch

Have you ever said it?  Have you heard others say it?

Many people say it all the time.   “If it’s FREE, there’s got to be a catch.”

Look, I know a ton of small business owners that say the very same thing. 

But does every small business owner who gets free, personalized business coaching fail to grow their business?  Of course not. 

Just ask Jon Henry, owner of Jon Henry General Store in New Market, VA.

Jon thought that because our services were free there had to be a catch. 

After a year of working with our Small Business Development Counselors free of charge, he has implemented new tools and processes into his business that have given him back his time, lowered his stress, and helped him stay more organized which is making him more money.

Jon says that after a year of working with our counselors for free he feels like he should be paying us money, but he isn’t because we are funded by local Economic Development Administrations, not small business owners.

Now you have a choice to make.

You can keep working hard to figure out what to do to grow your small business, or you can do what Jon Henry did.

Reach out to one of our experienced small business counselors who can partner with you to take away the stress of running your business alone. 

Give us a call:  540-868-7093

How Jon Henry General Store Made Advancements During the Pandemic

Published: Published: | By Author Jeff Nicely

Small Business Resiliency Team (SBRT) Program Helps Jon Henry General Store Implement Changes Needed to Respond to Pandemic

When the Jon Henry General Store opened in New Market in 2018, owner and proprietor Jon Henry could never have guessed that in less than two years he would have to drastically overhaul the way he did business due to a global pandemic. Henry’s vision was to revive the historic Abbie Henkel House (1802) to its past use as a general store and build on his family’s longtime history of Shenandoah Valley farming (and recent pastime of produce peddling along Virginia’s Route 11). 

The business quickly made a name for itself by carrying a wide range of products from local makers, growers, and artisans from across the Commonwealth of Virginia, with a primary focus on items from the Shenandoah Valley and a growing number of women and minority-owned companies. Jon Henry’s is also known for actively partnering with local churches, schools and sports teams as sponsor, donor, and participant.  This commitment to the local community and the principles of shopping small garnered the company a Future of Shopping Small Grant from Main Street America in partnership with American Express.

But when the pandemic hit in early 2020, Jon Henry needed to quickly make major changes in order to meet customer needs. The store shifted to a touchless point of sale and inventory system to ensure the safety of customers and reduce contamination, and added Supplemental Nutrition Assistance Program (SNAP) and Electronic Benefits Transfer (EBT) services so that more people could access the fresh, nutritious foods the store provides. But the store’s team still faced significant challenges with upgrading outdated software, training employees on new systems, and accomplishing increased accounting tasks.

In late 2020, Jon Henry heard that the Shenandoah Valley and Laurel Ridge Small Business Development Centers had been funded to form a special team that could help. The Small Business Resiliency Team (SBRT) program was created through a grant from GO Virginia and the support of the Cities of Harrisonburg, Waynesboro, and Winchester and Counties of Frederick, Clarke, Rockingham, Shenandoah, Augusta, and Rockbridge. The program deploys Business Resiliency Navigators to guide growth-oriented businesses towards incremental and sustainable growth. SBRT is designed to assist with financial management, eCommerce, and marketing needs for businesses in the tourism, retail, professional services, and healthcare sectors.

Henry applied for help with upgrading the business to QuickBooks Online and extending the services of his bookkeeper to complete the system migration and fully train employees for best practices on the new systems. Henry talked about how the process played out once he had been approved for the SBRT program:

“Helen spent good time with me on demos and wrote up new closing process for staff etc. with our new systems. It was a bit of a hog on time to convert and [reconcile] with Clover [his POS system]. [It has been] very helpful to finally have the inventory all aligned with our new POS and QuickBooks.”

After a few weeks with the new systems, he said: “I am loving it [QuickBooks online] already. The cellphone app allows me to snap invoice pics, which is great with our on-farm pick-ups.”

Henry went on to say that the SBRT program provided the time and expertise needed to work the kinks out of the new procedures, review the added services for cost effectiveness, and gauge how well they were being adopted in the community. He hopes to use this information to tweak the systems going forward.

Jon Henry’s work with the SBRT Navigators also led to being connected with James Madison University’s BizLab, a digital services group matching JMU students with small businesses and non-profits to help companies strengthen their online presence.  Students work with customers to create websites, design logos and other graphics both for online and print.  “I am loving the website, and it’s amazing the commerce that we’ve already run through it!” Henry said about the collaboration.

“The process of applying for the SBRT program is really simple, and the SBDC can usually engage locally-available providers for the services our clients need.  We hope that more businesses in the counties of Augusta, Clarke, Frederick, Rockbridge, Rockingham, and Shenandoah; and the cities of Harrisonburg, Waynesboro, and Winchester will apply to take advantage of this program,” said Joyce Krech, Director of the Shenandoah Valley Small Business Development Center.

If the walls of the Abbie Henkel House could talk, they would probably agree. Making good use of your local community resources, especially during times of crisis, are an important part of resiliency and longevity. What could SBRT do for your business during these tough times?

For more information on the Small Business Resiliency Teams, visit the SBDC websites: www.ValleySBDC.org or www.laurelridgesbdc.org,  or contact Joyce Krech, (540)568-3227, [email protected] or Christine Kriz, (540)868-7094, [email protected].

For more information on GO Virginia, visit the Shenandoah Valley Partnership (https://theshenandoahvalley.com/) or Virginia Department of Housing and Community Development (https://www.dhcd.virginia.gov/gova).

 

About Small Business Development Centers. The SV and LF SBDCs are two of 29 Small Business Development Centers across Virginia providing professional business advice, training, and information resources to help grow and strengthen local businesses and Virginia’s economy. They are hosted respectively by James Madison University and Laurel Ridge Community College in partnership with George Mason University and funded in part by SBA and local governments. The Virginia SBDC Network (www.VirginiaSBDC.org) is the most extensive business development program in the Commonwealth and part of America’s SBDC – the nation’s proven, cost-effective, and accredited infrastructure focused on small businesses – America’s job creators.