News From the Louisville SBDC

MY TOP 3 TAX TIPS

by Toni Sears

As a first-time business owner, you are looking for ways to produce the lowest taxable income. In other words, you want the highest tax savings by taking advantage of all applicable tax deductions. How do you figure out what is deductible and what is not? I took the time to research some resources and compiled my top three.

Internal Revenue Service – The IRS is a great ally. They provide written publications that are easily accessible at www.irs.gov. My favorite is the Guide for Small Business, Publication 334. This document makes it easy for tax preparation of Schedule C or C-EZ users. The discussion of business expenses begins in Chapter 8 (page 31 of the 2016 edition.). This document is the Grand Prix for tax resources. If you opt for an app, check out IRS2Go. This app gives you daily tax tips, lets you know about tax legislation upon release, and connects you with a qualified tax person in your local area.

Louisville Free Public Library – It always amazes me as to the vast resources our local library provides. The Louisville Free Public Library has some great books written by the crew at www.nolo.com. Excellent reference books for any entrepreneur. Check out these two books, Tax Savvy for Small Business and, Deduct it. They use everyday language to help you understand many aspects of the Internal Revenue Code. The most wonderful thing about these books is that you can download them free! Simply go to www.lfpl.org and use the Small Business Reference Center. (Hint: You will need a valid Louisville Free Public Library card and password. Click on research tools then business and money to access the Small Business Reference Center database. Look under Browse Popular Sources.).

Toni Sears

Louisville SBDC Center

Expensify – Claiming to be the #1 expense management app, Expensify allows users to track receipts through patented SmartScan OCR technology to eliminate manual data entry. You literally snap a picture of your receipt and Expensify does the rest. Android and iOS compatible.

Bonus- Want another option for tracking receipts and generating reports on the go? Check out the app Shoeboxed Receipt Tracker. This mobile app links to your personal account on www.shoeboxed.com. This integration (web and mobile) is a powerful tool for tracking business expenses.

Before gulping down gallons of coffee or squeezing the life out of a stress ball, check out these resources. Hopefully, they will help maximize your tax savings.

Don’t hesitate to reach out to the Louisville SBDC if you would like to share your thoughts regarding this article or simply want to start a meaningful conversation with one of us. We’re here to help. The main office number is (502) 625-0123.

NEW PROGRAM HELPS KENTUCKY MANUFACTURERS GROW SALES AND PROFITS

The Kentucky Procurement Technical Assistance Center is a new resource for companies looking to grow by selling to the government. This new tool in the “Grow Kentucky Toolbox” integrates seamlessly with the course being set by the state as a whole.

Governor Matt Bevin often makes one, very pointed statement during his travels around the state: no state owns the brand on quality. You see, as Governor Bevin illustrates, if you were to be asked what country produces the highest quality goods in the world, you would not flinch, pause, or stutter. You would quickly reply with “Germany.” However, the same cannot be said for any state in the US.

Some states excel where others do not. California is known for technology, Texas for oil and gas, New York for financial services. However, no state can claim the industry standard on high quality production. Governor Bevin is clear in his proclamation, “Why not us?”

One Entrepreneur at a Time

But why stop at manufacturing? Why can’t Kentucky be known simply as a state of high-quality. Kentucky is uniquely positioned to own this identity. However, this requires individual-focused support intended to walk each entrepreneur along the path to success. It requires a support infrastructure that nurtures good ideas, good people, and good companies to help them grow.

Almost unanimously, companies recognize the need to grow. The vast majority of businesses are small, with much room to scale. Those same companies will also tell you that they don’t have a clear path forward. Now they can turn to the Kentucky Procurement Technical Assistance Center.

The Kentucky PTAC is a new partnership between the Cabinet for Economic Development, Kentucky Innovation Network and the Defense Logistics Agency that offers a suite of business growth services specifically for Kentucky companies selling to the government (federal, state, and local). The services are designed to help navigate the requirements for landing contracts with Federal, State and Local agencies via a bid-match system and technical coaching on procurement practices.

The KY Advantage

The DLA funds ninety-four PTACs across the country. However, Kentucky is the only one with an expansive front-end architecture intended to actively bring these services to clients’ doorsteps.

“By integrating with the Innovation Network, we have roots in all 120 counties,” explains Rick Johnson, State Director of the Innovation Network. “Whereas the staffs of most PTACs are around four people, intended to cover large regions, we now have twelve Innovation Network offices that are driving clients to us. Our procurement counselors can spend the bulk of their time working with clients, without worrying about finding them.”

A team of Professionals

The KY PTAC is led by Darrall Henderson, a retired Army Colonel with a long history of working for defense contractors and as a consultant to small businesses.

“Darrall was our first choice,” says Rick Johnson. “He has deep family roots in Kentucky and genuinely cares about helping the business leaders of this state. His background is a plus, but his personality sold us.”

Darrall brought Jon Olsen and Nancy Brown on board as well. Jon Olsen has a wealth of experience in contracting and procurement, working for the DoE in Colorado. His technical expertise will serve as an excellent tool for companies navigating the intricacies of procurement procedures. Nancy Brown worked for the Queen of Jordan, as well as spending six years with Valvoline and the Wal-Mart Foundation Dress for Success. Nancy’s unique set of skills makes her well suited for working with clients to prepare them on how to market their services to varying customers.

“Our primary goal is having a diverse set of tools available. This is because we don’t just want to walk clients through a database of bid opportunities. We want to have novel, original ideas on how they can pivot their thinking and iterate their model to broaden their sales with the government,” explains Henderson.

The Paths to Growth

Companies can take several paths to achieve business growth. The Kentucky PTAC team has the experience and skill to help companies achieve their growth goals no matter which path they pursue. These services will include specialized assistance for finding opportunities with federal, state, and local government agencies.

This will include:

Contract proposal writing
Iterating your business model and sales opportunities
Marketing to the government
Advice on pricing, subcontracting, GSA schedule, etc.
Determining eligibility for certifications (8a, HUBZone, etc.)

The Kentucky PTAC will be holding regular events around the state, including Lunch ‘n Learn Open Houses to talk one-on-one with companies about their services. In addition, the Kentucky PTAC will be holding Business Growth presentations in-person and online for companies interested in learning more in-depth content.

For more information on how KY PTAC can take your company to new heights, visit their website at http://kyptac.com/ or email the team at KYPTACinfo@kstc.com.

SBDC and Access Ventures Create a Partnership to Help Finance Small Businesses

After a couple of years of steady growth, there’s just not enough space at your current location to keep up with demand. To make matters worse, you’ve had to turn down some great opportunities because you just can’t make and store enough product. You need to move to larger facilities and add more production equipment. A quick call to the only person you know at your bank deepens your depression when you’re told you don’t have enough assets, or been in business long enough, or don’t have enough cash flow to qualify for a business loan. Sound frustrating? Just ask Darryl Goodner, one of the founders of Louisville Cream, a local small batch, ultra-premium ice cream manufacturer. Plenty of success and opportunities but no capital to make it a reality.

This is the situation that often stymies small businesses from becoming medium businesses – they just aren’t bankable.

Enter Access Ventures, a local impact investment firm and the folks responsible for the great success of KIVA Louisville. What’s an impact investment firm? It’s a firm that provides capital and resources to promising entrepreneurs that can have a positive impact on people and the community.

In late 2014, Access Ventures launched their Growth Loan program to help solve the lack of capital sources for un-bankable but promising businesses. Since then, Access Ventures has approved more than $350,000 in non-collateralized Growth Loans to an array of small business owners throughout the Louisville and Southern Indiana region. Currently, loan proposals are vetted and approved by a volunteer loan committee made up of small business owners, attorneys, bankers, microfinance experts, and community representatives.

Since the loan program’s inception, the Louisville SBDC has steered many clients toward David Taliaferro and the Access Ventures team for capital. The SBDC has been there for many business owners after receiving loans to advise them as they grow. While we have enjoyed a great relationship with Access Ventures, both organizations wanted to do more and work more closely. As we move into 2017, we’re partnering with Access Ventures to provide enhanced technical assistance for Growth Loan applicants, loan package generation, and borrower advocacy to the loan committee.

This partnership is mutually beneficial but the real benefits will be enjoyed by the borrowers. We think it’s critical that every applicant emerge having benefited from the loan application process regardless of approval. The professional consultants at the Louisville SBDC will provide high-quality, one-on-one assistance to borrowers through feasibility analysis, targeted market and competitor studies, a compelling set of financial projections and we’ll even produce a professional loan package that can later be used for other capital sources. The SBDC is also a well-established connector of small business resources, information and expertise that borrowers can tap for as long as needed.

…………Back to Darryl Goodner and Louisville Cream

Darryl Goodner, Lynette Ruby and Zach Hardin all co-own Louisville Cream. Louisville Cream is a local small batch ice cream company that produces ultra-premium ice cream. They make all of their mix-in’s in house and partner with other local businesses to create interesting locally inspired ice cream. Darryl is a “flavor genius” and is continually on a quest for that perfect flavor and texture. Their commitment to quality local ingredients cannot be overstated enough. Darryl works with a specific farmer to create the most ideal milk possible as the base for their delicious ice cream.

Louisville Cream was born out of a passion for creating unique ice cream flavors that has been years in the making. Darryl has been creating ice cream since childhood with good friend Zach, but it was never more than hobby. Lynette eventually joined the mix and the three decided to launch Louisville Cream as a mobile concept. Many Louisvillians likely remember their first taste while shopping at the hip Flea off Market downtown.

Business has steadily increased over the past two years, and the next big step in leveraging their early success was to expand production facilities and to open a brick and mortar scoop shop. There were some savings but not enough to complete the build out, purchase new equipment, train new employees, and buy all of the wonderful local ingredients. Again, through the social underwriting process and with help from SBDC’s Dave Oetken, Louisville Cream was able to leverage a mixture of character, performance, and potential to access a large portion of the capital they needed to expand. Like many small businesses owners, the road to bankability often involves layering in capital from multiple sources. Louisville Cream has also benefited from crowdfunded 0% interest Kiva loans as well.

If you’re a small business in need of capital and think an Access Ventures Growth Loan may be a fit, we’d love to hear from you! Click here to complete a brief questionnaire. Along with our new partner, Access Ventures, we will work to determine if a Growth Loan is right for your situation and help you fund that next opportunity.

Still want more info? Contact me and I’ll be ready to help

Dave Oetken
doetken@greaterlouisville.com
Louisville Small Business Development Center
502-625-0123