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The state of small business in Florida

After five years of hunkering down, Beverly Raphael, owner of a Deerfield Beach general contracting firm, has added staff and taken on new projects. “It’s already promising to be a good year,” Raphael says. Her sentiments echo those of the majority of Florida’s small businesspeople, who are bullish on their prospects this year after slogging through some difficult years.

Most of Florida’s small-business owners are planning to expand for the first time this decade. A Florida Department of Financial Services’ 2013 Small Business Survey revealed that 87% of nearly 1,100 small-business owners said they plan to grow their businesses in the next 12 months. They are looking at hiring, making capital investments and offering additional products or services.

“Most of our new lending to small businesses has been to support growth,” says Will Davies, a senior vice president and corporate banking executive with City National Bank in Miami. “They need equipment to support inventory needs. We’re encouraged by the type of loan demand. It makes us feel optimistic about the prospects for Florida’s small businesses.” 

Florida industries hard hit by the recession are beginning to recover, and the small businesses that service big employers are rebounding as well. Raphael, whose RCC Associates builds out restaurants, retail, hotels and nightclubs, says those who ramped up in advance of the rebound have been best positioned. She now has nearly 90 fulltime employees and 40 construction projects scheduled for this year, including many in Florida.

“Those who downsized and did not get ramped up fast enough were late in the game,” she says. “We have learned that you have to anticipate when things are going to come back and make sure you aren’t caught without the people or capacity to perform the work.”

Alice Bredin, a small-business adviser at American Express OPEN, agrees that small businesses need to think ahead. But most have modest expectations for 2014, she says. “Revenues are where their minds are at. Most of them are focused on getting customers in the door and keeping them.” 

One of the biggest challenges for Florida’s small businesses is getting access to money to finance growth, particularly for those businesses less than 6 years old, the state survey shows. More than half of businesses surveyed by the Florida Department of Financial Services believed they would be unable to get a bank or credit union loan, citing the fact that loan standards now are higher than before the recession, particularly for small businesses.

Instead of bank loans, some small businesses are opting for alternative forms of financing. Mike Tomas, president and CEO of Bioheart in Sunrise and chairman of Florida International University’s Global Entrepreneurship Center, says he has started to see venture capitalists and private equity firms funding small businesses in the state. “It is not just tech companies but consumer-driven businesses too,” Tomas says. “The climate is improving for Florida’s entrepreneurs.” 

In addition to obtaining loans, smallbusiness owners report facing challenges in finding professional advisers and developing new markets. Michael Myhre, interim state director for the Florida Small Business Development Center Network, says his organization works to provide support in those areas. “Small businesses have unique opportunities here that don’t exist in other states, such as the opportunity to access international marketplaces, but they need assistance,” says Myhre, whose consultants provide small-businesses support from 40 offices in Florida.

He says the outlook for Florida’s small-business owners this year represents a change: “They are willing to invest in their business more than they have in last 10 years.”

“Those who downsized and did not get ramped up fast enough were late in the game.” 

— Beverly Raphael, president/CEO, RCC Associates, Deerfield Beach

Small Business by the Numbers 

87% of 1,093 small-business employers in Florida surveyed plan to grow their business during the next 12 months. Among those, 30% plan to hire, 27% plan to spend more and 19% plan to expand their product lines.

Of the small-business owners who wanted loans, 63% of young frms did not feel they would obtain a bank or credit union loan in the current lending environment.

Nearly half of small-business owners (46%) have seen sales increase over the past 12 months, and 45% increased their spending over the past 12 months.

56% of small-business owners expect the economy to improve this year, and 65% expect the economy to improve during the next three years.

While nationally 11% of women-owned frms are owned by Latinas, in Florida 24% are owned by Latinas.

Florida ranks fourth in the number of women-owned businesses with 572,900.

Biz2Credit, a from that matches small businesses to fnancial institutions, has ranked Broward and Miami-Dade counties the ffth-best for small-business growth in the country. Orlando came in 12th; Jacksonville, 21st.

Florida businesses with fewer than 50 employees contribute about 77% of the state’s $754-billion gross domestic product.

“Revenues are where their minds are at. Most of them are focused on getting customers in the door and keeping them.”
— Alice Bredin, small-business adviser

Big Borrowers 

Florida small businesses that borrowed $5 million for fscal year 2013 through the SBA

Certifying Women- Owned Businesses

From an offce in Palm Beach County, Janet Harris-Lange works with women business owners across the country to obtain the certifcations that give them access to lucrative private and public sector contracts.

As president of the National Women Business Owners Corp., Harris-Lange has helped thousands of women complete the intensive certifcation requirements. The nonproft was the frst national certifer of Women Business Enterprises (used by the private sector) and an approved Third Party Certifer for Small Business Administration’s Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business contracting program (used by federal government agencies). Businesses and government agencies often set aside contracts for certifed minority and women-owned business.

Obtaining certifcation is an important strategy, Harris-Lange says. “Companies want to count their spending with minority and women-owned businesses, but they want them to prove their ownership status.” 

To validate ownership, Harris- Lange and a committee of accountants, attorneys and business professionals reviews documents and visit companies. “They either get approved or denied, but they can appeal.” 

Harris-Lange says she sees women who are running unusual and successful companies in Florida and across the country. The certifcation helps them grow their companies and usually results in an economic impact in their communities, she says. “They hire; they buy materials; and they give back.”

“It is not just tech companies but consumer-driven businesses too. The climate is improving for Florida’s entrepreneurs.” 

— Mike Tomas, president/ CEO, Bioheart, Sunrise; chairman, Florida International University’s Global Entrepreneurship Center

10 Tips 

Marketing doesn’t have to be a major undertaking. Something as simple as sending out a weekly email will keep you on customers’ minds.

When choosing a business partner, look for someone with complementary strengths, not someone just like yourself.

Get clear on who your customers are and what social media they use.

Grow your business by hiring experts, delegating and mentoring staff to free up your time for business development.

Hire wisely. The ideal new employee will help grow your business while the wrong choice can be an expensive mistake.

Use technology to rethink your business. It may require looking into cloud storage, email marketing or project management software.

More than half of American adults own smartphones: A mobile friendly website can boost sales.

Ask for referrals. Most satisfed customers are happy to give them but won’t think of it unless you ask.

Test the waters for raising prices by doing so on a few products and smaller clients.

Use discounts and deals sparingly. Excessive use of coupons, daily deals and sales can hurt your margins and attract customers who buy based solely on price.

Source: Women’s Success Summit, Small Business Development Center (SBDC)

Resources 

Florida Small Business Development Centers (floridasbdc.org). Counseling and training at 40 centers around the state, including a new partnership with Florida International University serving small businesses in Miami-Dade County 

SCORE Workshops (score.org; scoreflorida.org). Online training and free coaching at local branches 

Florida Women’s Business Center (flwbc.org). Provides training, mentoring and resources to women entrepreneurs. 

The Commonwealth Institute (commonwealthinstitute.org). Helps women entrepreneurs, CEOs and corporate executives build businesses through peer mentoring programs; annually honors top women-led businesses in Florida.

Women Executive Leadership (welflorida.org). Helps Florida women business owners build professional networks and become board-ready 

The Hispanic Business Initiative Fund of Florida (HBIFflorida.org). Non-profit, with a Miami office, provides free bilingual seminars, workshops and technical assistance to Hispanic entrepreneurs launching or expanding businesses in Florida.

Startup Florida (startupfl.org). Programs and training; registration for Startup America initiative 

Partners for Self-Employment (partnersforselfemployment.com). Offers training, technical assistance and loans.

SBA’s Online Learning Center (sba.gov/tools/sba-learning-center). Offers counseling, mentoring and training

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