Small Business

5 Resources to Navigate Small Business Success

Public-Sector Assistance

By Anthony Birritteri, Editor-in-Chief On Oct 7, 2019

Successful entrepreneurs are of a special breed. They have a constant drive that, like icebreaking ships, overcome obstacles that impede their journey. Their spirits are stalwart so that mistakes, economic letdowns and naysayers do not discourage their dreams and visions.

But on this same journey, there are ropes to learn, advice to be heeded and mentors to guide entrepreneurs, all of which act as the navigational compass pointing to the shoreline of success.

In the Garden State, the elements of this compass consist of state and federal public-sector entities that provide the tools and personal services entrepreneurs need to reach their destinations. On the following pages, New Jersey Business profiles some of the major players.

The New Jersey Economic Development Authority (NJEDA)

The NJEDA, which offers various financing and tax incentive programs to businesses small and large, created two offices last year to drive economic development for small businesses. One is the Small Business Services unit, which facilitates support for small business owners, particularly for historically underrepresented firms. The unit connects entrepreneurs to resources that best fit their businesses’ current stage and cultivates relationships for the future when they may be eligible for other types of NJEDA support.

The other unit is the Office of Economic Transformation (OET). According to Tim Sullivan, NJEDA chief executive officer, “OET has been instrumental in rolling out programs and working with partners in the innovation ecosystem to fulfill Governor Murphy’s vision of an innovation ecosystem and provide capital, rent support, and networking opportunities to entrepreneurs throughout the state.”

Other new small business assistance programs that fall in line with the governor’s economic development strategy, which was revealed last October, include:

Small Business Lease Assistance Program: Reimburses businesses and nonprofit organizations 15% of annual lease payments for two years when they rent market-rate, first-floor office, industrial or retail spaces for a minimum five-year term. The program is available for small businesses in certain areas of the following 13 cities: Atlantic City, Bridgeton, Camden, Jersey City, Millville, Mt. Holly, Passaic, Paterson, Phillipsburg, Plainfield, Salem, Trenton and Vineland. Within each municipality, the NJEDA can approve a total of $100,000 in lease assistance per year for three years.

Access pilot lending program: Provides financing to small businesses – either in the form of direct loans through the NJEDA or though loan participations and guarantees in partnership with an NJEDA Premier Lender. Access is different from other NJEDA financing programs in that it provides greater flexibility to borrowers by placing greater emphasis on the borrower’s cash flow and less emphasis on hard collateral.

Small Business Bonding Readiness Assistance Program: Provides a comprehensive series of classroom trainings, workshops and strategic counseling sessions that cover a variety of topics relevant to small businesses, including bonding and insurance, business development, financial presentation, construction and contract law, construction management, estimating and credit. At the end of the program, participating businesses receive a Bonding Readiness Segment Report, which is an in-depth assessment of their strengths and weaknesses to help them plan for the future.

Furthering Governor Murphy’s vision to reclaim New Jersey’s role as a leader in innovation, the NJEDA has also launched programs to support early-stage technology and life sciences companies. They include:

NJ Ignite, which helps startup companies realize the benefits of collaborative workspaces – incubators, accelerators and coworking spaces – by providing up to nine months of rent support for startup technology and life sciences businesses that are moving to an approved collaborative workspace.

Expanding the Angel Investor Tax Credit Program to 20% of a qualified investment in a technology startup, with an additional 5% bonus available for investments in a business located in a qualified Opportunity Zone, low-income community, or a business that is certified by the State as minority- or women-owned. The program offers refundable tax credits against qualified investors who support technology businesses. These companies must conduct research, manufacturing or technology commercialization in the state.

The proposed New Jersey Innovation Evergreen Fund to increase the amount of venture capital in the state. The NJIEF would raise approximately $250 million in capital by competitively auctioning new state tax credits to New Jersey corporations who want to participate in the innovation economy. The fund would then invest the auction proceeds, alongside at least $250 million in funds from venture capital firms, into promising startups with the potential to scale up and create jobs.

According to Sullivan, “The NJEDA provided approximately $90 million to 138 small businesses in 2018 through our small business financing and assistance programs. That translates to nearly three businesses benefiting from NJEDA programs every week.”

NJ Business Action Center (NJBAC)

NJBAC, a division of the Department of State, is a business-first resource that helps businesses get answers from appropriate officials or contacts, facilitates meetings and follow-ups with regulatory agencies and more.

According to Melanie Willoughby, NJBAC executive director, the most often-used service provided by the center is assisting business owners who are trying to navigate the proper registration process for a new entity or the process of updating a corporate record for existing businesses. “This may sound like something simple, but many business owners spend hours trying to understand the process and will hire companies to help them (e.g., hiring someone to register an LLC). This money could be better used as working capital for their business and the NJBAC will help them at no cost,” Willoughby says.

NJBAC operates a Business Help Line at 1-800-Jersey-7 (1-800-537-7397), which responds to approximately 25,000 calls per year. Its export promotion unit assists small businesses that want to expand into the global economy by helping them with market research and navigating regulatory challenges. Through the NJ State Trade Expansion Program (NJSTEP), NJBAC has provided financial assistance to 70-80 businesses per year that want to attend international trade events.

NJBAC’s focus in recent months has been primarily in outreach to small businesses. “There are a few new small business programs offered by our partners that businesses can learn about through the NJBAC – these include new apprenticeship programs and a new lease assistance program for businesses moving into certain distressed municipalities – but our biggest focus has been on improved outreach,” Willoughby says, adding that the NJBAC “has been working with the governor’s Office of Innovation to find ways of improving access to state services through an improved and interactive website that will be launched soon.”

Willoughby adds, “NJBAC has increased its outreach efforts because so many in the business community don’t know where to go to get help, or are reluctant to ask for help. We have the answers to many of the challenges business owners face every day, but they need to know where to ask for that help.”

Last year, the NJBAC assisted approximately 30,000 businesses. Through July 2019, it has assisted approximately 26,000 businesses. Any business that needs assistance or is facing challenges should call 1-800-Jersey-7 or https://www.nj.gov/njbusiness/

US Small Business Administration (SBA)

The New Jersey district office of the US Small Business Administration helped 15,000 people in 2018 and it is estimated that it will help the same number of entrepreneurs by the end of 2019. Its core programs center around business counseling (provided by eight SCORE Chapters in the state, 12 Small Business Development Centers (SBDCs) and two Women’s Business Centers). Additionally, the SBA’s lending programs are provided by a network of more than 100 financial institutions. By the end of the year, SBA New Jersey District Director Al Titone estimates his office, in conjunction with lenders, will make 1,900 loans valued at $825 million.

The newest addition to SBA’s products and services is its Ascent online learning platform targeted for women business owners. Launched this fall, the program “utilizes a modern approach to e-learning,” Titone explains. “All the content has been developed and backed by research on the needs of women business owners. The SBA felt there was a void for women entrepreneurs, so the need was to create an online platform, one that engages clients and makes online learning more interactive for our clients.

Of all the programs that are available through the SBA, Titone says the counseling services are the most used. “For many small business owners, counseling is the first stop along the road to starting or expanding a business. The counseling helps small business owners get that loan to help finance their business or assist them in understanding what it takes to sell their products or services to the federal, state or local government.”

SCORE

At SCORE’s Northeast New Jersey chapter, Chapter Chair Curtis Springstead underscores Titone’s comments when he says that mentoring is his chapter’s mostly used service.

“Our mentoring guides the client through the process of starting or improving a business versus a consultant who works on, say, a business plan,” Springstead says. “We also provide a good deal of moral support when times get tough and offer a sounding board. Our mentors care about clients’ successes and have no other agenda. Our workshop programs also provide nearly 50 hours of additional education yearly to hundreds of people who use mentoring or not.”

Last year, the Northeast New Jersey SCORE chapter helped 1,300 individual clients and Springstead expects this to increase slightly by the end of 2019. “Business is booming in New Jersey, in many different fields. Our client volume is strong, and we see all kinds of business ideas from traditional retail to software apps and b2b website offerings,” he says.

Overall, Springstead says that despite a sense that the job market is strong, “people still seek satisfaction and financial goals in owning a business. The trend of ‘solopreneurs,’ as we call them, is growing every year. Fewer people seem concerned about creating big organizations, but instead want to do the work they enjoy in a manner that offers them control over their lives.”

There are eight SCORE chapters in the state divided into regions, representing some 50 offices.

NJ Small Business Development Centers

The state’s 12-center NJSBDC network provides personalized, no-cost, one-on-one counseling/management consulting, concerning diverse business development/expansion topics and needs. The areas of comprehensive assistance include business planning, strategic planning, cash flow analysis and accounting, pricing strategies, knowing the competition, marketing strategies, turnaround objectives as well as digital media planning, website development, sales-building, access to financing, loan packaging, sustainable practices and more. Additionally, NJSBDC locations at higher education institutions also maximize opportunities for faculty/student engagements with clients.

According to Deborah Smarth, NJSBDC COO and associate state director, the centers also “provide specialized assistance to science-technology companies to win federal grants as seed capital for technology innovation so they can further attract angel investors, and venture capitalists for future ventures and product/technology innovations. They also provide support for international trade, exporting and new financial overseas opportunities. Additionally, they are identifying areas for public and commercial procurement contract opportunities.”

About 60% of all of the NJSBDC network’s clients are existing/established businesses from varying industry sectors with different ranges of sales revenue and employment levels. All NJSBDC offices around the state are also focused on high-impact clients with more than $1 million in sales and greater employment levels. “Attracting these types of clients and maintaining these relationships drive greater economic development, NJSBDC network impact, and contributions to the state economy,” Smarth says. “Providing the support needed to take existing clients with lower revenues to a million dollars or more in revenues also drives job generation.”

In 2018, the NJSBDC network counseled and trained more than 10,800 small businesses and entrepreneurs, delivering 18,943 total counseling hours and an additional 1,528 training hours. For the first half of 2019, the network counseled and trained more than 6,800 small business owners and individuals, delivering almost 7,000 total counseling hours.

“With the NJSBDC’s assistance in 2018, our counseled clients obtained $118.8 million in financing (loans and equity),” Smarth reports. NJSBDC’s clients generated an estimated $1.472 billion in sales revenues, conservatively generating $60 million in sales tax revenues to the State Treasury, notwithstanding additional business taxes paid to New Jersey. In 2018, NJSBDC clients retained and created 15,216 jobs in the state. For the first-half of 2019, the SBDC network helped its clients obtain approximately $50 million in financing. During the same time period, NJSBDC clients saved and created more than 15,000 jobs.

Commenting on the current economy, Smarth says that while the national and state unemployment rates have declined, and the Federal Reserve has indicated it will maintain stable or lower interest rates, there are still concerns that an oncoming recession and market corrections may occur. “During the 2008-2009 Great Recession and its immediate aftermath, the NJSBDC network provided its clients with its Recession-Proof counseling-focus and specialized training curriculum. Should the economy falter again, this initiative will be re-initiated so that small business clients can actively take steps to better handle a potential economic downturn.”

NJIT PTAC Provides Technical Assistance for Contracting Opportunities

Based at NJIT, the Procurement Technical Assistance Center is a valuable resource for doing business with the public and private sectors.

The New Jersey Institute of Technology’s Procurement and Technical Assistance Center (PTAC) offers free technical support, guidance, training and resources to help New Jersey-based businesses sell products and services to federal, state and local government agencies and their prime contractors.

Established more than 36 years ago and funded through a cooperative agreement with the US Department of Defense’s Defense Logistics Agency and NJIT, PTAC has assisted over 4,000 small businesses in the state obtain more than $1 billion in contract awards since August 2016. It serves 20 of the state’s 21 counties with offices in Newark and Atlantic City. Two new locations will be opening in Totowa and Camden in the coming months.

According to Raul Mercado, director of the PTAC, the center provides clients with customized one-on-one counseling. “Our counselors are able to learn and understand what clients’ needs and niches are. Then, we try to connect them with opportunities in both the public and private sectors.”

PTAC offers group training to get businesses registered with the federal System for Award Management database at SAM.gov. Completing a SAM profile is the first step in taking part in the federal government procurement and contracting process.

By January 2020, PTAC will expand the monthly SAM Registration Workshops to Camden and Passaic counties.

The PTAC Supply Chain Matchmaking Conference will be held on May 28, 2020. To register for PTAC assistance, businesses should visit www.njit.edu/ptac.

To access more business news, visit NJB News Now.