NH BUSINESS FINANCE GUIDE — ISSUE GROWBUSINESS:YOUR Pursue Your Dreams With Financial Strength
Inside:2 EXPANDING YOUR BUSINESS: How and when to move forward in uncertain times.6 MEMBER SPOTLIGHT: Jen Legere brings children back to nature at her early learning center.8 COMMUNITY SPOTLIGHT: 10LENDER SPOTLIGHT: Chris Degenhardt, Service Credit Union Senior Lender, talks about services his department provides for businesses that are ready to Learn12expand.about Fin-Life, a mobile app that helps young people create — and stick to — a comprehensive financial plan. 13 Service CU can help your business enter the next phase of growth.
In this month’s issue, we’ll explore what you need to know about buying new property, replacing your fleet of vehicles, adding income streams, and most importantly, identifying the growth opportunities that make sense for your individual needs. Expanding your business can be intimidating, but it’s also an exciting time full of possibilities. We hope to be your financial partner as we grow together. Your partner in success,
No matter what growth looks like to you, you’ll need to do it in a financially sound way. Our skilled and experienced loan officers take pride in collaborating with you to provide the lending guidance to ensure your plans align with your dreams. We’re here to help you grow with financial strength. According to the SBA, there are 32.5 million small businesses in the US, which accounts for 99.9% of all U.S. businesses. Small businesses have been and continue to be America’s backbone, and taking your business to the next level strengthens our resolve in you, our nation’s largest employer. And even though you’re likely to face challenges, having a trusted financial partner will help you tackle difficulties in a more proactive manner.
DAVID ASSISTANTWEEDVICE PRESIDENT BUSINESS SERVICECU.ORG/BUSINESSSERVICES
servicecu.org | September 2022 1 Dear Reader, Are you ready to grow your business? Growth comes in many shapes and sizes. Perhaps you’d like to expand to a new location, add new offerings or even start a franchise?
Many businesses in New Hampshire are expanding or making plans to.
There are many stories like that in New Hampshire, and it’s the same around the country. National surveys show, despite some financial headwinds, a majority of small business owners are optimistic about the economy, confident about their finances, and are expanding or considering expanding to fuel growth.
Next, Cote says, determine how you’re going to expand: “Maybe you offer a new product, maybe you add on services, or maybe it’s a twist on what you’re already offering.” Then, she adds, determine how you’re going to offer it — whether it’s primarily online or in a storefront. If it’s a storefront, have you determined the bestAnotherlocation?”way to expand is to add employees. A business’ growth can slow, Cote says, if everyone is working at maximum capacity: “In the smaller businesses, one additional employee can make a world of difference. Being able to share the workload can increase everyone’s capacity and allow the business to grow.” But Cote
“If you want to continue to grow, you need to expand,” says Lori Cote, Team Leader of Small Business Lending at Service Credit Union. And many of the New Hampshire businesses Cote works with are expanding or making plans to. “They’re ready to break into something new. They want to take over a larger share of the market. They want to have a larger customer base. They want to be more well known for what they offer their community. They want to make a bigger name for themselves. They’re ambitious.”
If you want to continue to grow, you need to expand.’’
— LORI COTE, TEAM LEADER OF SMALL BUSINESS LENDING, SERVICE CREDIT UNION
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Before a business moves forward, though, Cote says there are foundational pieces that need to be considered. First, finances. She says review your business’ net income and projected revenue to make sure the numbers work. “Make sure you can cover the costs of expanding and that you’re prepared for something unexpected by having reserves.”
Business Expansion Checklist There are no short-cuts £ Ensuring the foundational pieces of your business are cared for is vital before moving forward. Check out our previous issues on StartUps and Business Identity which include helpful checklists for those foundational pieces. Listen to your customers £ Have you collected feedback from your clientele to learn what they would like from you? There are many possible tools to use: conduct a survey, interview customers, invite some of your regular customers in for coffee and discussion, read your own online reviews. Ask how they would like you to grow. £ Perhaps they really want you to open a 2nd location, or invest in your e-commerce operation so they can purchase from you online. You may discover that customers are willing to pay more for the goods/services they receive, if they can get exactly what they want. Numbers don’t lie £ Take a good look at the net income of your business. (BUSINESS GROSS INCOME – BUSINESS EXPENDITURES = BUSINESS NET INCOME.) Is your net income steady or increasing monthly? If so, you may be ready for some growth! £ If your business has multiple revenue streams — such as a physical retail storefront and an e-commerce website where you sell your goods — identify the stream of business that is providing the most profit and consider planning your growth around it. Research your industry £ What is the growth outlook for your industry as a whole? Are you in an aging industry? Your growth plan should include new trends and technologies that your industry is evolving towards, in order to help future-proof your business. cautions that adding employees may be challenging in this economic environment, with the unemployment rate at near-record lows. “Many businesses aren’t able to expand because they can’t find people to Anotherhire.”challenging part of the economic environment — rising interest rates — doesn’t seem to be a factor for most businesses looking to expand. “You would think higher interest rates would mean volume is slowing down, but it’s not,” Cote says. “I think that the businesses that have done well through COVID are just continuing on that trajectory, and they’re not rate shopping. They’re thinking, ‘This is what I need. I’m going to pay what I have to pay to do what I want to do for my business.’”
Cote gives the example of a business owner she’s working with who just expanded his fleet of business vehicles. “He just added three and is planning to add a couple more,” she says. “You would
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She adds that another important part of market research is listening to your customers, determining how they want you to expand — whether it’s a new product, a new service, longer hours, more locations or something else. That information can be gathered with informal chats, interviews, surveys and reading online reviews. Also, Cote says, research the outlook for your industry, determine whether it’s primed for growth — or not.
All the financial resources needed for business expansion — commercial mortgage, credit line, vehicle and equipment loans, business credit card and facilitation of SBA loans — are provided by Service Credit Union (see more details on p. 13). All commercial loans will have a fixed rate for a period of up to seven years, a plus when the rates are rising.
“We’re getting calls every day from people who see an opportunity and have decided the time to expand is now,” Cote says. “We’re here to provide them with the resources they need to succeed.”
Above: The Inn at Ellis River is expanding its business with larger guest rooms. Lower left: A new location generated more traffic for The Depot restaurant.
Recent reports say the fastestgrowing industries nationwide are real estate, hospitality and consumer retail. Once you’ve determined you’re going to expand your business, Cote says create a new marketing plan by asking, “What’s my target market?
Whatever risks there might be, Cote says they can be minimized by market research: “It’s important to see what there is for competition.
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“There’s no prepayment penalty,” Cote says, “so someone can pay down that principal balance as much as they like. If rates drop, they can refinance for a lower rate.” In a more stable economic environment, fixed rates up to 15 years are offered.
think, with interest rates going up and the cost of vehicles so high, it wouldn’t be the time to do it, but these times are not the norm.”
Is there a particular age group? What’s the best way to reach them? If it’s online, put your marketing money there. It could be newspaper advertising, though fewer people are reading newspapers. If you’re expecting most people to walk in, then the signage for your location is really important.”
And ask yourself, ‘What can I offer that isn’t what everybody else is offering? What is it that’s going to set my business apart? What will make people gravitate toward my business rather than others?’”
The movement is based on the belief that many of today’s children are suffering detrimental effects from what Louv calls “nature deficit disorders.” The cure, he says, is to reconnect to nature. Aside from simply being fun, it promotes health and wellness
If that sounds like used-to-be childhoods, when kids mostly played outside, it is. And that’s exactly the point of what Legere has created on the center’s 13 acres of land. When she bought the property in 2015, she had already spent years owning and operating a traditional childcare center. But, with 13 acres, she could pivot in a direction she had been wanting to go. Legere had discovered the work of Richard Louv, whose books inspired an international movement called “Leave No Child
Making a secret hideout under a giant lilac bush. Playing on the banks of a pond. Tracking deer through the woods. Identifying a woodpecker. Watering a garden.
MEMBER SPOTLIGHT Back to Nature JEN LEGERE’S EARLY LEARNING CENTER “LEAVES NO CHILD INSIDE.” Jen AdirectorfounderLegere,andofPlacetoGrow ‘‘It’s far more than the ABCs and numbers.’’ — JEN LEGERE 6 servicecu.org | September 2022
That’s a normal warm-weather day for the children at A Place to Grow, a nature-based early learning center in Brentwood. “We spend almost the entire day outside,” says Jen Legere, founder and director of the center. “The kids come inside to nap. That’s about it.”
For rainy days, the center has rain suits for the kids that Legere says “make them look like rainbow marshmallows.” Even in winter, they’re outside twice a day with hats, boots and mittens. “There’s no weather that’s adverse for my kids. They just figure out how to adapt and make the most of whatever is out there.”
Legere had started her first early learning center in Brentwood in 2005, and within three years it was fully enrolled and expanding. But seven years later, the owner of the building decided to sell and Legere had to quickly find a new space. The center was relocated in a church, a move that was supposed to be temporary but ended up lasting two years. Twice in that time, pipes froze, and the space was flooded. There were also worries the roof could collapse under the weight of heavy snowfalls. Adding to the struggles, Legere got divorced, and she and her two children became homeless. A friend took them in. Many of their meals were supplied by church pantries. Those times were hard, Legere says, but she adds, “Sometimes you need those hard times to find the strength to rebound and grow.”
by increasing mental acuity and creativity, and reducing obesity and the incidence of depression.
She’s looking forward to giving others the benefit of the knowledge she has gained, knowing that the franchise opportunities offered by A Place to Grow will give entrepreneurs the ability to provide quality childcare using a sustainable business model. “I’ve learned so much along the way, and I want to share it,” she says.
‘‘We spend almost the entire day outside.’’ — JEN LEGERE
The elements of the “Leave No Child Inside” movement have been incorporated into Legere’s A Place to Grow, where the children range in age from six months to six years. She started by creating two outdoor classroom spaces that were certified by Nature Explore, a national organization that uses researchbased, field-tested design principles for nature-based play and learning. “That allowed us to differentiate our school from others because no one else has done this,” she says. “We’re the only school in New Hampshire that has two Nature Explore outdoorcertified playground spaces.” They are also a certified Eco-Healthy Child Care facility and use solar energy. In addition to lots of outside time, the school also teaches the usual academic subjects but with the added dimension of a “whole child” approach. “We spend a lot of time talking about social and emotional health,” Legere says. “It’s far more than the ABCs and numbers — it’s making sure that we’re nice people, that we’re good friends. It’s also about physical health, knowing how to care for Changingourselves.”the business model of her early learning center to a naturebased curriculum has created a surge in enrollment. The center started with 20 children. Now, it’s at full capacity at 39, with a multiyear waiting list. Its success inspired Legere to offer franchises in order to expand the mission of the center and to provide childcare to communities that don’t have it. One franchise is underway; four more are in the discussion phase.
“Passing it along, that’s the most important thing to me.”
A turning point came when the owner of a 13-acre property Legere had been looking at listed the property for sale, and the insurance money from the flooding and frozen pipes meant she could afford it.
Legere took the opportunity and created the business she has today.
Legere’s innovative work was recently recognized by the U.S. Small Business Administration (SBA). It named A Place to Grow the SBA’s 2022 New Hampshire Woman Owned Business of the Year. Noted in the recognition description were “the pieces to begin her journey”—Legere’s background in science and math, as well as business management and early education. Also noted was the “great adversity along the way.”
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The milkweed plants at A Place to Grow attract enough Monarch butterflies to have it certified as an official Monarch Waystation.
Justin director.educationMunroe,andofexecutiveMunroe,directorGrowNashua,Jessicayouth
It all started with Justin and Jessica Munroe’s backyard vegetable garden. As they planted seeds one early spring day, the couple considered how important the garden was to them — for their physical health, their mental health, for the food they could provide for their family.
8 servicecu.org | September 2022 COMMUNITY SPOTLIGHT Helping Neighbors A NASHUA COUPLE IS SOWING THE SEEDS OF COMMUNITY WITH URBAN GARDENS AND EDUCATIONAL PROGRAMS.
Living in Nashua, they knew that many people in the city didn’t have the luxury of land to garden on. “We were thinking, maybe we could give a plot of land to one of our neighbors who might be in need,” Justin says. They were especially concerned about people Justin calls “new Americans,” refugees and immigrants from other countries. Their own yard was too small, so they reached out to St. Joseph Hospital, which had a large plot of land available, large enough for a community vegetable garden. They then reached out to people who might want to take part. “In our first season, we had 20 different families from 12 different countries gardening in that space,” Justin says. “That was a lot of fun. We learned from that, and we have been growing ever since.” That first season was seven years ago. Now, what became Grow Nashua has seven community gardens throughout the city and 150 families taking part. The raised-bed gardens are placed in “food deserts,” areas where people don’t have access to fresh produce within walking distance. “Ninety-five percent of our families are low-income families who struggle with access to nutritious food,” Justin says. “There are a lot of corner stores, but often they don’t have much to offer besides sugary drinks and chips.”
The seven community gardens are on land provided free of charge by the City of Nashua and the Nashua School District. The gardening expertise, also free, is provided by Justin and Grow Nashua’s host of “garden tender” volunteers. “We help with everything,” Justin says. “We’re coaching them about what to plant and when to plant.” To build a gardener’s knowledge, each month Grow Nashua offers virtual agricultural training programs. The effort to educate extends into the schools. Justin’s wife, Jessica, leads a Garden
‘‘If you want to go fast, go alone. If you want to go far, go together.’’ — AFRICAN PROVERB
A “Veggies at Home” cooking series complements the gardening. Each month, students take a recipe and a vegetable home to their parents. The hope is that the students’ experience of growing their own fresh produce will be carried into theirFreshadulthood.produce can also be found at Grow Nashua’s Lil’ Free Farmstands, where donated veggies are available to families in need. Justin says, “Service Credit Union helped us expand the program from one farmstand to three in different parts of the city. They’re also providing a veggie truck that can drive around the city, picking up extra veggies, and delivering them into neighborhoods where we’re not able to set up a permanent site.” Every year, the program gives out thousands of pounds of food.
Grow Nashua does its work with seven employees, some full time, some part time. The food waste collections provide some of the funding, but it mostly comes from fundraisers, grants and sponsorships like the one by Service Credit Union. Plus, there are 300 volunteers who are garden tenders, veggie couriers, Lil’ Free Farmstand greeters and digital tinkerers, people with digital skills who can help spread the word about Grow Nashua. Justin says, “We could not do what we do without the support we have.”
whatthemcoachingWe’reabouttoplantandwhentoplantit. ’’
“It’s experiential learning,” Justin says. “The kids are doing the planting, they’re getting their hands in the dirt, and they’re tasting the food that they grew.”
What’s left is eco-friendly compost.
Basics Builder program for fourthand fifth-graders in three of the city’s Title I schools, schools where on average 75% of the students qualify for free and reduced-cost lunches.
One of the seven urban gardens created by Grow Nashua since its founding in 2015.
To ensure bountiful harvests, Grow Nashua has a program to create compost. Residents who are part of the program pay a small fee for the curbside collection of their compostable food waste, which is transported to a processing plant that captures the harmful methane gas produced and turns it into energy.
“So far,” Justin says, “the program has diverted about 350,000 pounds of food waste from the landfill.”
Service CU helped expand the Lil’ Free Farmstand program.
As they’re learning soil basics, plant systems, garden nutrition and garden planning, the students put their knowledge to work in a garden on school property.
The intent of Grow Nashua is not only to provide healthy food to people in need and enable them to grow it themselves, but to sow the seeds of hope and community. “When you put your hands in the dirt with other people,” Justin says, “you build rapport. When you’re giving veggies to people, you’re building rapport. All those things create a stronger, more connected social fabric.” n
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— JUSTIN MUNROE
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LENDER SPOTLIGHT:
Chris Degenhardt, Senior Lender in the Business Services department at Service Credit Union
Ask Chris Degenhardt how long he has been in the field of commercial lending, and he says, “My entire career.” That’s more than 30 years. He got into the field right after he graduated from college in 1986, going on to work at a number of financial institutions. Eighteen months ago, Degenhardt brought all of that experience to Service Credit Union, taking a position as Senior Lender in the Business Services department. Aside from enjoying the variety of experiences the job offers (“It’s always something different”), Degenhardt gets great satisfaction from helping businesses achieve success (“Helping them meet their goals is really key”). We talked to him about what services his department provides for businesses that are ready to expand and what they should consider before they do. Q&A with Chris Degenhardt
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People start out in a business with what they know. Sticking with that tends to be the safest way to move forward.’’
When a business owner comes to you saying they want to expand, what is the first step? We explore why you want to expand and whether it’s a good time to do it. Is there an increased demand for your products and services? Are your customers asking you about expansion, to be open longer, have more locations or offer more types of products? That's a good indicator that your customers are looking for you to expand. Also, are your finances indicating it’s time to expand? Are you making a profit on a monthly basis? Do you have a financial cushion if something comes up? Are you in a growing industry? Then we talk about how we can help. Do you need additional capital?
A line of credit? Loans for more equipment or vehicles? A bigger space or another location? That’s what we’re here for. Explain the importance of a line of credit.
Yes, do research. Find out what both national and local experts are saying about where your industry is going. But also talk to your customers. Are they optimistic or pessimistic? Are they going to continue to buy, or cut back on your products and services? Pay attention to your industry, pay attention to your customers.
Contact Chris Degenhardt orcdegenhardt@servicecu.orgat603.686.3609
A small business might have a $10$20,000 line of credit; a very large company might have hundreds of thousands or millions of dollars in lines of credit. They’re doing the same thing, using it to continue to grow — bigger businesses are just doing it on a larger scale.
Talk about how Service Credit Union also connects business owners to loans provided by the U.S. Small Business Administration (SBA).
What is the advantage of working with a credit union to expand a business? We offer all the same products and services as a bank, but because of our size, the approval process for getting a loan doesn’t have multiple layers, so we can turn things around quickly. Also, a member can reach out and talk to us anytime they need to. We don’t have an 800 number where they’re going to get lost, they have our cell phone number and email address. We’re easy to talk to. And it’s a long-term relationship. Right, we’re looking for a relationship, not just a one-off, not just a transaction. We want to be a business’ one-stop shop, providing their line of credit, their equipment and vehicle financing, their deposit accounts, their cash management. That way, they know that there’s one person, one location they can call to get what they need.
A line of credit is like a credit card for a business. It used when your money is tied up in receivables, when a sale is made but you don’t get the money until your customer pays 30, 60, 90 days down the road. It’s also used when your money is tied up in inventory. The line of credit gives you working capital to support day-today operations until the receivables are collected or until you sell the inventory. And then, when you have more cash, you can pay down the balance. A line of credit is especially important for seasonal businesses.
The SBA is a government agency that helps with financing. Say, if a business owner approaches us and wants to buy a piece of commercial property, we would finance up to 75% of the price. With an SBA 504 loan in addition, that percentage can go to 90%. So, instead of the borrower having to kick in 25% to buy the property, they only have to come up with 10%. Are there ways to reduce the risk of expanding?
What is the biggest mistake businesses make?
It’s not sticking to their knitting, not sticking to what they know. People start out in a business with what they know — with a certain background, knowledge base and level of experience — and they become good at doing something. Sticking with that tends to be the safest way to move forward, as opposed to going too far off in another direction in a product line or area that they don’t have that much experience in. What industry is performing the best right now? Commercial real estate is very strong. The developers we’re working with are pushing forward with projects. Even though interest rates have crept up in the last six months, they’re not high enough that it’s stopping them. Some are doing refinancing, taking money from the equity in their properties to put aside for future investments. They’re locking in that lower rate.
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• Investments: How to make your money grow.
• Estate and wills: Find out why estate planning isn’t just for the wealthy.
Financial Literacy (or FinLit, for short)
•
Tax planning: How to stay on top of your taxes all year.
Among the themes:
• Retirement: Get peace of mind with early planning.
• Insurance: Know whether you’re properly covered and not overpaying.
• Debt: Learn the pros and cons of good and bad debt. There’s no investor-speak; it’s presented in plain English. It’s customizable, with the advice specific to your lifestyle and budget. All of your information is secured by 256-bit encryption. And, lastly, it’s quick and easy — it only takes 3 minutes a week.
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At Service Credit Union, part of our mission is to provide the resources needed to improve our members’ financial well-being. One of those resources is financial literacy, which allows people to make informed decisions about their finances. That’s especially important for the upcoming generations — millennials and Gen-Z — as they begin their journey to financial well-being.
Financial Planning Basics Studies show that 90% of people ages 18-34 are overwhelmed by financial planning, that 90% are missing at least one critical element in their financial planning, and that 5 out of 10 who think their plans are complete have significant gaps. Not to worry, there’s help at hand. As close as your phone. Service CU offers a downloadable Fin-Life app that will coach you to create — and stick to — a comprehensive financial plan. One that’s unique to you, your lifestyle and your goals. The program, powered by Pocketnest, will walk you step by step through 10 themes of financial wellness, while identifying gaps in your plan, guiding you to set meaningful goals, and mapping a pathway to achieve them.
• College savings: Understand what your needs are or will be.
Among the workshops offered: Small Business Marketing, Creating Eye-popping Graphics, Building a Sales Funnel, Understanding Affiliate Marketing and Developing a Financial Plan. You can also take advantage of the extensive library of articles specific to your industry. A sampling: Social Media for Small Business Owners, The Emerging Impact of TikTok on Small Businesses, Consumers Have Changed Their Shopping Behavior: Can You Keep Up?, and Is a Recession Coming? How to Prepare … Just in IfCase.you’re starting a business, there is a Startup Roadmap, a step-by-step, how-to guide that will help you with everyday business challenges by offering advice from a network of small-business peers and experts. If you’re faced with challenges to your business, such as economic downturns or a disaster, the Small Business Resilience Hub can give you the resources to make the best decisions for your Tocompany.makethe path to success easier for communities that may face added challenges in creating a business, the SCORE for All program offers targeted resources for Black, Hispanic, Asian American and Pacific Island, Women, Rural and Veteran entrepreneurs. SCORE’s client base is 60% women, 46% minorities and 9% veterans.
Expert Help: SCORE New Hampshire and Vermont
If you’re ready to expand your business, there is expert help available — for free. The nonprofit SCORE, a resource partner of the U.S. Small Business Administration (SBA), offers small businesses the expertise and support of mentors, people with a successful business background who have volunteered to share their real-world experience and give you the tools and skills to achieve your goals. The mentoring can be done in person, by email or virtually.
To get more information about SCORE and to request a mentor, visit nh-vt.score.org. You can browse mentor profiles to find your ideal expert, or just fill out the mentoring request form and you’ll be paired with the right mentor to help your business thrive.
In addition to the mentoring, there are low-cost or free instructor-led training workshops, either at a local SCORE office or online 24/7. Also offered, interactive courses to help you learn new business strategies.
3003 LAFAYETTE RD. PORTSMOUTH, NH 03801 603-559-4312SERVICECU.ORGFEDERALLYINSUREDBY NCUA NMLS# 491588
