Big Thinking for the Little Guy

The Small Business Development Center, based at the College of New Jersey, has not found a way to transform one day’s 24 hours into 37, but it has mapped out a two-pronged campaign to make business time more customized and efficient. The first effort is the establishment of web-based training for small businesses in a variety of fields. Second, the SBDC is adding a procurement center to its toolbox, to help small firms bid on government contracts.

Regional SBDC director Lorraine Allen called in Dan Kirton, a state government veteran, to copilot these two projects and bring them to fruition. Kirton has spent the last 20 years as a small business booster in both the public and private sectors. As a child in Barbados, he worked in the various small businesses his grandparents and parents had started. He graduated from Fairleigh Dickinson University in l985 with a bachelors degree in business management. After settling in Princeton, he earned his graduate degree in human resources administration from Rider University.

After a brief stint working for private firms in the human resource field, Kirton joined state government in l989.

“It was a particularly volatile time for small and minority firms,” Kirton remembers. “All the affirmative action strictures had been lifted and there was a panic that these minority firms would all be snuffed out.”

Among other government positions, Kirton served as vice president of the New Jersey Commerce Economic Growth & Tourism Commission, and as the New Jersey Turnpike Authority’s compliance administrator. He is particularly proud of his achievement in this last position,in which he began breaking down contract jobs into more manageable pieces, allowing smaller companies to compete with the big players.

Traditionally small business development centers have nurtured startups and those getting ready to fly with their first product launch or contract bid. But increasingly, company owners have been returning to the SBDC nest two and even three years out, seeking help in expansion. SBDC Director Allen saw these projects as the best way to provide a longer term aid.

“After all, we hate to feed startups and then just cut them off in their most vital period of expansion,” says Kirton. Among the offerings:

Web-based training. Web-based training has the advantage of allowing basic information to be passed around members of the business or viewed together inspiring in-house discussion.

Some of the initial topics Kirton plans to include in the web curricula are basic marketing, handling cash flow, managing startup registration, and handling governmental paperwork. He hopes to unveil the first of these programs by early next spring. The offerings will begin with a basic lecture series delivered in real time. “In the future we would like to schedule Q & A real-time sessions, with onsite mentors solving problems as business owners log in,” says Kirton.

Accessing government. Ignorance of the process and overwhelming documentation traditionally have posed the greatest stumbling blocks to landing state contracts. The SBDC Procurement Center is being designed to help with these and other bid access problems.

“First time bidders of all sizes mostly come in with no idea of what the state is seeking,” says Kirton. First, he cites the misconception that government always goes with the lowest bid. Rather they are required to seek out the lowest responsible bid. This makes state reviewers naturally more attracted to any bidder presenting a history of on-time, within-budget projects.

Kirton finds that, not only are entrepreneurs reaching out for contract information, but also for help in the human resources area.

“When businesses expand, owners must deal with human resource issues they never had before. We can help them with those problems.”

Kirton has assembled a team of legal reviewers and state contract experts to guide small firms in understanding the scope of RFPs (request for proposal) and specific projects. Even though the paperwork may seem mountainous, state reviewers want it all filled out. They figure if they have to read it all, you should complete it all. Any missing pieces send up automatic red flags.

“The state is not changing the game with contract proposals,” says Kirton. “They are saying, as they always have, ‘This is what we want to know; this is the kind of company record we are seeking.’ If you fill that bill, you have a good chance to win a state contract.”

— Bart Jackson

The State of Garden State Nonprofits

IRS statistics show that since 2004, when 218,000 charitable organizations filed 501c(3) returns, another 500,000 have applied for tax-exempt status. On top of that, the competition for donation dollars has turned into a feeding frenzy, and all but the sharpest charities are quickly falling by the wayside.

The Rev. DeForest Soaries knows what it takes to be one of the sharpest. Soaries was New Jersey’s secretary of state during the Whitman administration. As senior pastor of the First Baptist Church of Lincoln Gardens in Somerset, his leadership has created a new $20 million church complex and a host of other not-for-profit groups (www.fbcsomerset.com). And because he has served both church and state, as recipient and donor, Soaries can claim a full perspective on the state of nonprofits in New Jersey.

Born in Brooklyn, the son of a Baptist pastor and teacher, Soaries grew up in Montclair. He attended Rutgers and Fordham universities, graduating with a bachelors degree in religion in l984; he earned a master of divinity from Princeton Theological Seminary and a doctor of ministry from United Theological Seminary.

After serving a small Baptist church in Montclair, Soaries worked as associate pastor at Trenton’s Shiloh Baptist Church, and in 1990 he became pastor of the church in Somerset. In 1999 Governor Christie Whitman appointed him secretary of state. In 2003 President Bush named Soaries public director of the Federal Home Loan Bank of New York. Later that year, the president made him chair of the United States Election Assistance Commission.

Today’s nonprofits suffer from more than mere competition, says Soaries. Qualifying for grants is more difficult. Accounting must be more transparent, since government oversight has increased. The donating public is becoming more cautious as well, demanding a fuller accountability. Individual givers are going online and checking on IRS status, the percentage of donations actually spent on the nonprofit’s project, and following the spending trail.

In the face of all these increased pressures, then, how is a nonprofit to thrive?

Service consolidation. With more than half of the nation’s charitable organizations valued at $500,000 or less, the need to minimize operating expenses and personnel is prime. Soaries suggests that separate nonprofits can best savemoney by uniting on certain service costs, such as accounting, human resources, or health insurance.

Enterprise sidelines. The organization that becomes entrepreneurially active in some profitable side venture is not necessarily tainting itself. It may be saving itself. Soaries’ own church has bought into housing developments and currently owns two restaurants.

For nonprofits unsure about launching their own for-profit business, investing in small existing companies can provide additional revenue for new projects. After all, the goal of a charity is to perform the good works. The necessary funding, whether donated or self-generated, is merely a tool.

Fee Services. Most non-profits are very good at pleading and grant writing. So good, in fact, that they ignore the entire scope of funds available from governments and even private companies, for performing various outside services. The Red Cross makes millions annually by transporting sick individuals to doctors’ visits and hospitals. In this age of outsourcing, the non-profits that thrive must consider the many fee-for-service avenues.

People first. “Charities are going to have to wean themselves away from institutions, and learn how to tap wealthy individuals, instead,” says Soaries. Foundations of all types and sizes have grown increasingly tougher to approach. Impersonal forms filled out online, even if accepted, result usually in measured payments trickled cautiously to recipients.

Households with annual incomes between $100,000 and $200,000 often can comfortably afford to donate $2,000 to $5,000.

“I would much rather have 20 $5,000 donations from individuals, rather than a single $100,000 check from the government, or even a foundation,” says Soaries. Institutions give with strings. They demand more paperwork, more reporting, and much narrower use confines.

Get businesslike. “The biggest challenge facing nonprofits today is tighter governance,” Soaries says. Organizations must beef up scrutiny of their cash flow and make all expenditures transparent. It’s all right for board members to be socially selected, but each member must be an active contributor. It is a frequent nonprofit recipe for disaster to have the whole cause and whole organization center around a single person, with a willing board of followers.

Ideally, board members should have some basic financial training, even if the charity itself must set up a simple course. “I had 10 years of education training me to run a church,” says Soaries, “and not 15 minutes of it included how to handle a budget.”

This does not mean that board members’ sole task is to see how they can reduce operating expenses. It just pays to have business sense. — Bart Jackson

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