Alaska Business Resource Guide

First NatioNal BaNk alaska presents:

2013

AlAskA Business ResouRce Guide An essential part of any Alaskan’s business network 2013 Alaska Business Resource Guide Page 1

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Welcome to the

Alaska Business Resource Guide

Small businesses are the heart of Alaska’s economic well-being. And running a successful small business takes dedication, perseverance and sacrifice, in addition to the necessary skills involving finances, inventory, customer service…the list goes on.

It is a daunting journey, but it’s not one that has to be taken solo.

First National Bank Alaska, the Alaska Journal of Commerce and the Alaska Small Business Development Center have again teamed up to provide a resource for Alaskans who want to start a new business or who are looking for guidance on expanding a current endeavor. The expertise these entities offer Alaska businesses is impressive – a total of more than 150 years.

First National opened as a small Alaska business 91 years ago. The privilege of working with and serving Alaskans sets the bank apart. It’s the key to success for this $3 billion local bank that today continues to offer its wealth of local experience and knowledge to Alaska businesses.

The Alaska Journal of Commerce has been chronicling the public and private commerce of the state for 36 years, while the Alaska Small Business Development Center is in its 27th year of offering information and guidance to Alaskans in business.

This guide provides tips on how to manage your business, including a financial management checklist, tips on finding the right banker, and lists of places to go to seek further help. You’ll also find inspirational stories of Alaskan business owners who have pursued their dreams and made them a reality.

Whether you are just getting your venture off the ground or are a seasoned business veteran, a successful business owner recognizes the need to adapt and grow the operation in today’s ever-evolving marketplace. We hope this guide will provide you with the tools you need to make that happen.

2013 Alaska Business Resource Guide Page 3

PAGE 04 PAGE 06 PAGE 08 PAGE 10 PAGE 13 PAGE 14 PAGE 16 PAGE 20 PAGE 24 PAGE 28 PAGE 30 PAGE 31 PAGE 33 PAGE 34 PAGE 36 PAGE 38 PAGE 39 PAGE 40 PAGE 41 PAGE 44 PAGE 45

INSIDE THE GUIDE BISHOP’S JEWELRY GALLERY CASH MANAGEMENT ALASKA MEDICARE CLINIC YOUNG’S GEAR LLC KNOW YOUR BANKER TACO LOCO PRODUCTS, INC. FOUNTAINHEAD ANTIQUE AUTO MUSEUM ONE HOUR FIREWEED DRY CLEANING THE CYBER THREAT PROJECTIONS TAKING THE MYSTERY OUT OF FINANCIAL STATEMENTS FUNDAMENTALS OF PRINCIPLED LEADERSHIP NETWORK OF PROGRAMS BIG DATA FOR SMALL BUSINESS IS THE GOVERNMENT BUYING WHAT YOU SELL? SBA-BACKED LOANS FOR SMALL BUSINESSES MAKING ‘CENTS’ OF YOUR BUSINESS MARKET RESEARCH AT THE ALASKA SBDC REVL COMMUNICATIONS & SYSTEMS AKSBDC LOCATIONS AND SERVICE HUBS THE FISCAL CHECKLIST On the cover: Bill and Rita Bishop of Bishop’s Jewelry Gallery. See story, page 4.

Page 4 Alaska Business Resource Guide 2013

SPECIAL THANKS

TO THE ALASKA JOURNAL OF COMMERCE REGIONAL VICE PRESIDENT: LEE LESCHPER LEE.LESCHPER@MORRIS.com ADVERTISING DIRECTOR: tom Wardhaugh tom.wardhaugh@morris.com Managing Editor: Andrew Jensen andrew.jensen@alaskajournal.com Production Manager: Maree Shogren maree.shogren@alaskajournal.com Layout AND design: nadya gilmore nadya.gilmore@MORRIS.com

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Page 6 Alaska Business Resource Guide 2013

Shining examples Bishops discover more than 30 years of success as Alaska jewelers Taking inspiration from the gold miners in their family, Bill and Rita Bishop spent years making wholesale jewelry for museums, gift shops and galleries throughout Alaska, Japan and Canada.

Then in November 2008, they took their expertise and turned in another direction by opening their own retail store, Bishop’s Jewelry Gallery in Fairbanks.

“We were not sure about retail at first, it was so different than wholesale where we were used to being behind the scenes,” Rita said. “But we discovered we got to work with customers one-on-one. We just loved helping make their dreams come true.”

Bishop’s location features more than 1,000-square feet of showroom and 1,200-square feet of studio space. More importantly, Bill and Rita designed an area where customers can sit comfortably while designing their heirlooms.

On the wall hangs a 52-inch screen displaying 2,000 customizable designs called Counter Sketch.

“We were the first jewelers to bring this kind of technology to Fairbanks,” Rita said. “If Counter Sketch doesn’t have a design to satisfy our customers, we will sit down and draw for them.

“Bill will work in a more powerful CAD (Computerized Aided Design) program.”

Bill Bishop has been working with CAD computer programs for more than 15 years. Counter Sketch has designated designs to work with, but CAD is a clean drawing board where you can make anything from scratch.

The Bishops have yet to turn down a customer’s idea.

“We have had some wonderful challenges come our way,” Bill said. “One customer hiked up a particular mountain range every summer to a certain rock located at the top of the range. He had a picture of the mountain range and the rock. We designed a channel 1440 University Ave S ring with the same mountain range in the design and Fairbanks, AK 99709 put a diamond where the rock would be. Our customer climbed the range with his loved one and proposed to (907) 479-7001 her with the ring at their special spot.

“You just can’t get more personal than that.” www.bishopsjewelry.com Bill said another customer imagined swan wings coming down the sides of the ring with the head of the swan curling Photo: Bill and Rita Bishop opened around the center stone. It was quite the challenge.

Bishop’s Jewelry Gallery As the Bishops changed business courses from in 2008. _________________________ See Bishop’s, Page 9

Bishop’s Jewelry Gallery

2013 Alaska Business Resource Guide Page 7

FROM PLANS TO SUCCESS

CASH MANAGEMENT Meet your cash flow needs

IN

Incoming funds Make incoming funds work faster and more efficiently as they come into your business.

USING YOUR FUNDS Maximize your profits and control operating costs by making use of available cash.

OUT

OUTGOING FUNDS Keep your money working for you, with just-in-time disbursal.

Page 8 Alaska Business Resource Guide 2013

Monitoring cash management well is a crucial element to any successful business. But according to the Small Business Administration, cash management is one of the most overlooked items in business models.

So what is good cash management? Knowing when, where and how your cash needs will arise and what tools you will use to meet those needs. Whether your money is coming in or going out, the right cash management tools can help you build and maintain a successful business.

To learn more about these tools, visit FNBAlaska.com or contact First National Cash Management specialists at 777-4685 or 1-800-856-4FNB (4362) from communities outside Anchorage

Bishop’s Continued from page 5 ______________________ wholesale to retail, First National Bank Alaska was there to lend a hand.

“First National has been a part of everything we have done,” Rita said.

“The bank financed us and trusted in our abilities.

“After 30 years of support from FNBA, we felt once again encouraged to grow and develop opportunities in our business that we could share with our Fairbanks neighbors.”

Whether it’s been 30 years or just the start of a new life together, the Bishops believe the jewelry business is all about people and cherished times.

“We create heirlooms that we hope will be around for hundreds of generations,” Rita said. “Jewelry lasts and bears the person’s name from one generation to the next and we love being part of the process.

“Jewelry is also the investment one makes in their family heritage, for the next generation.”

A quality relationship for quality business Bill and Rita Bishop at Bishop’s Jewelry Gallery enjoy it when First National Bank Alaska bankers Jenny Mahlen or Bill Renfrew visit the shop. By creating and maintaining a solid, quality relationship with a knowledgeable banker, entrepreneurs like the Bishops have a great local resource to help better understand the best ways to use business funds more effectively.

Learn more about building a great relationship with your banker on Page 13.

To speak with a local business banking expert, call First National Bank Alaska at 777-4FNB (4362)/1-800-856-4FNB (4362) or visit FNBAlaska.com.

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2013 Alaska Business Resource Guide Page 9

Alaska Medicare Clinic 11260 Old Seward Hwy, Ste 107 Anchorage, AK 99515 (907) 433-5100 www.alaskamedicareclinic.org Photo: Alaska Medicare Clinic medical aide Jennifer St. Armand and Executive Director Kirsten Gurley.

A clinic worth counting on Alaska Medicare Clinic offers immediate remedy for its patients Looking back on almost two years of the Alaska Medicare Clinic, executive director Kirsten Gurley concentrates on the bottom line.

Or make that bottom lines.

“Part of being a 501(c)(3) non-profit organization means we have dual bottom lines,” Gurley said.

“There’s the financial one, but we also have the social bottom line.

“Being able to provide a service to the community that’s needed and appreciated puts us in a unique, fulfilling position. With all the challenges we’ve had along the way, being where we are right now is special.”

The Alaska Medicare Clinic opened in South

Page 10 Alaska Business Resource Guide 2013

Anchorage in May 2011.

It provides Medicare-eligible seniors, who may not have options for primary health care, an option for quality services from doctors, registered nurses and medical aides.

The product of a consortium of four community organizations – Alaska Physicians and Surgeons, Alaska State Medical Association, Alaska Hospital and Nursing Home Association and Providence Health and Services Alaska – operates based on payments from Medicare and a multitude of community and agency partnerships.

Medicare is the federal health insurance program for people 65 and older. Many primary-care doctors won’t take new Medicare patients these days because they say the reimbursement rates are set too low.

This has left some Medicareeligible patients without a primary care doctor, sometimes for years.

The Alaska Medicare Clinic offers an immediate remedy.

The clinic holds down costs by relying on teams of registered nurses and

medical aides to spend more time with patients, reserving final decisions for the one doctor on staff. Gurley said the clinic will soon add a second physician and a third is expected to join the team later this year to eventually meet the needs of the 170 patients currently on the clinic’s waiting list.

“We’re still tweaking to maximize all the efficiencies we can,” Gurley said.

“And we’re growing.”

Spearheaded by local cardiologist, Dr. George Rhyneer, the clinic received a $1 million grant from the state to get started. It also prescribed itself a healthy relationship with First National Bank Alaska. The bank immediately offered the clinic a line of credit, which Gurley said it has yet to use.

“Without a bank, a business does not function,” Gurley said. “First National’s willingness to support us has been wonderful. (Vice President) Melissa Reiser and the others we’ve worked with have always been supportive and

_________________________ See Clinic, Page 14

Direct deposit payroll saves time and money Whether your business has five or 500 employees, paydays can be hectic.

But they don’t have to be that way. Not with First National Bank Alaska’s direct deposit payroll service available to streamline the process. Using Business Advantage, companies can electronically deposit paycheck directly into employee bank accounts. Direct deposit payroll eliminates the time and hassle of issuing and reconciling paper checks and employees benefit from quick and convenient access to their pay – without a trip to the bank.

OUT

To learn more about direct deposit payroll, visit FNBAlaska.com or contact First National Cash Management specialists at 777-4685 or 1-800-856-4FNB (4362) from communities outside Anchorage 2013 Alaska Business Resource Guide Page 11

Young’s Gear LLC 239 E. International Airport Rd Anchorage, AK 99518 (907) 561-2106 www.youngsgear.net Photo: Young’s Gear LLC co-owners Justin Herrin (left) and Doug Coon were named the Small Business Administration’s 2013 Alaska Small Business Persons of the Year.

“Gear guys” make for great business Coon, Herrin named SBA’s 2013 Small Business Persons of the Year A couple of self-proclaimed “gear guys” used to getting their hands dirty fixing vehicle drive trains, Doug Coon and Justin Herrin won’t get too rattled when it comes time to accept the Small Business Administration’s 2013 Alaska Small Business Persons of the Year award.

“Nah, we clean up pretty well,” Coon said.

Well, certainly since the long-time coworkers turned business partners bought Young’s Gear LLC more than five years ago, they’ve tidied up nicely.

Coon and Herrin have seen their retained earnings more than double since 2008 and Young’s has earned a solid reputation with its Southcentral Alaska customer base.

The Anchorage-based automotive parts and service business specializes in on- and off-highway vehicle drive trains. From cars and trucks to SUVs and larger vehicles, Young’s staff of 10 full-time and three-part employees repair and work on manual transmissions, clutches, brakes and chassis. But the company may be best known for its expert

Page 12 Alaska Business Resource Guide 2013

differential, driveshaft and four-by-four repair services.

“That’s our bread and butter,” Coon said.

Both Coon and Herrin started with the company years ago. Coon began working in what was then Young’s shop in Fairbanks as a 17-year-old high school student back in the early 1980s. Herrin joined the company when Young’s opened its Anchorage location in 1997.

Those early days were filled with sweeping floors and running for parts.

But they allowed the two men to learn the ins and outs of the business.

“You start off as a parts runner and worked your way up through the chain,” Herrin said. “Plenty of people were there to help me out and show what to do and how to do it.”

As time went by, both men ventured away from Young’s to try other professions. But they were drawn back to the business in 2007 when they partnered to purchase it with the help of the Small Business Administration and the Alaska Small Business

Development Center.

“We had nothing to lose but to try,” Herrin said. “The assistance from the SBA and SBDC was invaluable. We started laying out steps about doing one thing and they’d tell us to hold on and do this instead.

“We got things done in the proper sequence.”

Coon and Herrin implemented more and more creative operational improvements as they adapted to being the bosses. After using a SBA 7a loan to purchase the business from the original owner, the company obtained

_________________________ See Gear Guys, Page 12

Money can work more efficiently Make your money work faster and more efficiently as it comes into your business.

Accepting credit and debit card payments is a huge convenience for your customers. Many business owners find this an easier way to reconcile their accounts each month, saving time and frustration.

Other ways to get your money working quickly and efficiently include Lockbox Service, for collection of customer payments, Wire Transfer, 24-hour deposit drop boxes, ACH Debit Origination, Contract Collections and Business Manager.

IN

Learn more about these tools by visiting FNBAlaska.com or contact First National cash management specialists at 777-4685 or 1-800-856-4FNB from communities outside of Anchorage.

2013 Alaska Business Resource Guide Page 13

Photo: Doug Coon (L) and Justin Herrin bought Young’s Gear LLC in 2007

Gear Guys Continued from page 11 ______________________ a second 7a loan guarantee in 2008 to clear the note held by Young’s founder. Eventually, the men added third and fourth vehicle lifts inside the 7,000-square foot building.

The increased profit and cash flow allowed them to repay the second 7a loan years ahead of schedule.

Coon and Herrin also know good employees are hard to find. Twenty-four

Clinic Continued from page 9 ______________________ vested in what we’re doing.

“In my mind, it’s a great business relationship.”

The Alaska Medicare Clinic’s growth is expected to continue along with Anchorage’s population. Gurley cited Page 14 Alaska Business Resource Guide 2013

percent of every sales dollar goes to pay wages and Young’s offers its team healthcare and retirement benefits, something of a rarity for such a small outfit.

“Happy employees are essential,” Coon said. “Right now, we probably have the best crew we could hope for.”

And it’s that entire Young’s Gear LLC team that will share in the SBA recognition.

“We’re all kind of overwhelmed, but we must have done something right,” Coon said. a University of Alaska Anchorage Institute of Social and Economic Research (ISER) study that suggests the number of Medicare patients in the area is expected to double by 2020.

“If those numbers are true, we’re going to see 200 patients a month age into Medicare,” Gurley said. “We’ll be here to meet that demand.”

Know your banker

By Brendyn Shiflea Vice President First National Bank Alaska

You’re working hard to build a thriving business, but in order to take your business to the next level, you need to establish a good relationship with someone who can give you the financial support you need. A knowledgeable banker can do just that.

Finding a good fit The first step in building a relationship with a banker is to find one with history and ties in the community who has experience dealing with your particular type of business. This person will understand the ebb and flow of your business activities and, in turn, will be able to help you understand the financial tools needed to help you succeed in your industry. Make sure to also find a banker you can trust and with whom you are comfortable discussing your financial details.

Maintaining a good relationship A good banker stays abreast of issues and information relevant to your industry to better understand your business challenges. You can also help them understand your business and better serve you by keeping the lines of communication open.

Like maintaining any healthy, flourishing relationship, ongoing communication is the key. Tell your banker when there are changes to your business, good or bad. This will help your banker understand where your business stands in order to offer you sound financial options and help you make the right decisions for your business.

Update your loan file Make sure your loan file is as up-to-date as possible.

Your loan file drives the decisions that go into approving a loan. It should be updated at least once a year and include the following: ✔ Current financial statement for the business and any guarantors ✔ Year-to-date profit and loss statement ✔ Complete copy of the most recent business tax return Not only does this information help you and your banker stay connected, it is crucial if you ever find yourself in need of quick funds for your business. If your banker has your updated financial information on file, often times you can get a decision on a loan very quickly.

Whatever the next level is in your business, there’s a good chance your banker can help you get there and the more they know, the greater your chances for success.

2013 Alaska Business Resource Guide Page 15

Taco Loco Products, Inc. 600 W. Int’l Airport Rd Anchorage, AK 99518 (907) 561-1648 www.tacolocoalaska.com Photo: For more than 30 years, Taco Loco has provided Alaskans with fresh-made corn and flour tortillas, flavored tortillas, corn chips, taco shells, tamales, burritos, dried chilies and canned goods. Siblings Anabel (pictured) and Adam Galindo took over the business from their parents in 2002.

Nothing crazy about smart business Taco Loco worked with First National, Business Manager® program to grow family business In more ways than one, Anabel Galindo and her brother Adam have raced around Taco Loco Products, Inc. for as long as they can remember.

“It goes back to my brother pushing me around on a hand cart, sprinting around the factory,” Anabel said.

“We’ve grown up in this facility, in this business.”

All the while, the business grew around them.

For more than 30 years, Taco Loco has provided Alaskans with fresh-made corn and flour tortillas, flavored tortillas, corn chips, taco shells, tamales, burritos, dried chilies and canned goods.

_________________________

Page 16 Alaska Business Resource Guide 2013

See Taco Loco, Page 19

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Fountainhead Antique Auto Museum 212 Wedgewood Drive Fairbanks, AK 99701 (907)450-2100 www.fountainheadmuseum.com Photo: Fountainhead Antique Auto Museum in Fairbanks features more than 84 American-made antique automobiles and showcases the heritage of the automobile during Alaska’s post-Gold Rush era. Tim Cerny is the owner.

Dreams and drive Fountainhead Antique Auto Museum gains speed in Fairbanks Tim Cerny’s love affair with antique cars and transportation history dates back to his childhood days in Arlington, Va. It followed him to his adopted home of Fairbanks and flourishes today at the Fountainhead Antique Auto Museum.

“I don’t really remember what hooked me, but I always had an interest (in antique automobiles),” Cerny said. “But having the museum just became kind of a personal dream of mine.”

The dream started becoming a reality about seven years ago.

The museum collection features more than 84 American-made antique automobiles and showcases

_________________________

Page 18 Alaska Business Resource Guide 2013

See Fountainhead, Page 21

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Taco Loco Continued from page 14 ______________________ The Galindo siblings spent many a childhood day assisting their parents at Taco Loco and continued doing so once they were adults. Anabel and Adam took over the family business in 2002 and maintained the family tradition as one of Alaska’s largest in-state food manufacturers.

“We both want to see the business continue to succeed and grow,” Anabel said. “We would also love to see our own children get involved and take it further.”

Continued growth and smart business has been a staple of Taco Loco for years.

But with the growth came the need to keep up with an expanding customer base, maintenance and staffing needs.

Some five years ago, Galindo talked with her favorite First National Bank Alaska experts and decided to give Business Manager® a go.

“WE REALLY ENJOYED THE PROGRAM”

Business Manager is a cash management tool that helps companies live in a world where payments for services rendered are received the very next day. Business Manager merchants like Taco Loco outsource payment processing to the bank and in turn convert accounts receivable into cash in as short as 24 hours.

“There have been times when we were almost growing too fast,” Galindo said.

“As our equipment got older, we’d have to swap out a motor here or there. A lot of larger stores arrived in the state and expected even better quality from us.

“As we expanded and began offering more products to more people, Business Manager was there to offer

the nice influx of cash needed to do all the things that needed to be done. We really enjoyed the program.”

Galindo said First National’s Business Manager experts were there every step of the way, making the program easy to understand and use. From set up to keeping up with necessary computer downloads, she said the bank was right on top of things right until Taco Loco concluded the program last year.

“First National’s people were always there to help us,” Galindo said. “Because of Business Manager, I feel we’re in a much better position now than maybe we were 10 or 15 years ago.

“We’ve been able to go after more business around the state, doing things we never really touched on before. We were able to get new equipment when we needed it.”

COUNTING ON ONE ANOTHER

Taco Loco fits the bill as a small business’ small business. Galindo said the company employs as many as 25 people on a regular basis.

“We’re still small enough so we’re able to get to know a little about our employees,” she said.

Looking ahead, the Galindos plan to keep on building the family business.

“In small business, you’re married to it 24/7 if you want to see it succeed,” Anabel said. “My brother and I know we can always count on one another. We’re proud of what we’re doing and don’t plan on going anywhere any time soon.”

Part of the pride stems from Galindo’s relationship with First National and Business Manager.

“The bank has always bent over backwards for us and I would recommend Business Manager to anyone,” she said.

2013 Alaska Business Resource Guide Page 21

One Hour Fireweed Dry Cleaning 500 E. Fireweed Lane Anchorage, AK 99516 907-272-3478 www.fireweedcleaners.com Photo: JT Hampton, Katie Hampton, Randy Earp and Julie Earp (left to right) put the “family” in familyrun business at One Hour Fireweed Dry Cleaning. The Earps are slowly moving towards retirement and the Hamptons – son-in-law and daughter – will take over.

The family that cleans together One Hour Fireweed Dry Cleaning thrives through generations, with First National at its side The funniest thing about Katie Hampton and husband JT Hampton taking over ownership of Anchorage’s One Hour Fireweed Dry Cleaning may be the way the plan fell into place.

Because someday running her family’s 45-yearold business after parents Julie and Randy Earp retire was never part of her plan.

“The most important thing to me now is keeping it in the family,” Katie said. “For the longest time, running and working at the cleaners was the last thing I wanted to do. I started working around here when I was 9.

_________________________

Page 22 Alaska Business Resource Guide 2013

See Cleaners, Page 22

Fountainhead Continued from page 16 ______________________ the heritage of the automobile during Alaska’s post-Gold Rush era. It also features an outstanding collection of historical fashion clothing.

“It’s not just a car museum,” Cerny said. “We like to think we have something for everyone.

“We try to bring Alaska transportation history to life with an extensive array of historical photographs and video as well as the cars themselves.”

The Fountainhead Antique Auto Museum is located at Wedgewood Resort, minutes from downtown Fairbanks. The resort features a hotel, seasonal restaurant, meeting facilities, banquet services and an adjacent wildlife sanctuary.

“As for the museum, we just finished our fourth season and are still working to get the message out that we’re here,” Cerny said. “We’ve used referrals, car shows, magazine articles and the Internet to grow our visitor numbers.”

Most of the automobiles in the museum look like they just rolled off the showroom floor.

Photos of Alaska motoring history fill the walls. More than 70 antique photographs depicting the first automobiles to reach Alaska and its mining camps are on display. Along with this impressive display of antique photographs, the museum includes exhibits and antique movie footage that illustrate the extraordinary challenges faced by Alaska’s pioneering motorists.

Visitors will see examples of how Alaskans modified vehicles to travel on

snow, cut firewood, ride the rails, and even power a paddlewheel boat down the Yukon River.

Museum visitors have taken notice as evidenced by comments like the following left on travel websites.

“What an unbelievable collection,” the visitor wrote. “How all these cars ended up in Fairbanks is amazing.”

Last year, the museum earned a prestigious “Best in Class” distinction at the Pebble Beach (Calif.) Concours d’Elegance, one of North America’s best-known car shows.

“There was an audible gasp among the crowd when people learned (the honored car) belonged to a museum in Alaska,” Cerny said. “But we’re proud to know we have several-award winning cars here, as well as some of the rarest antique automobiles left in America.”

Visitors to the auto museum almost universally come away from the place pleasantly surprised. There is nothing surprising about the way Cerny feels about his longtime relationship with First National Bank Alaska and veteran bankers Bill Renfrew and Jenny Mahlen.

“The fact many of the First National’s employees have been with the bank for so long and supported their customers over a matter of decades is really valuable,” Cerny said. “The bank knows our business in the best possible way and it enables its bankers to react quickly to what we need.”

Cerny looks forward to keeping the dream going as the museum attracts more and more visitors.

“We’re just getting started,” Cerny said.

2013 Alaska Business Resource Guide Page 23

Cleaners Continued from page 20 ______________________ “Today, taking over for my parents means so much. This is our company, our family. I can’t imagine anyone else running things.”

After those formative years learning the business from her parents, Katie left for college and met JT at freshman orientation. JT studied business and talked about post-college aspirations.

“He wanted to have his own business, and I said ‘I think I have one,’” Katie said. “We didn’t have to start our own.”

The couple returned to Anchorage in 2010 after graduating together.

COMMUNITY MINDED

Family-owned and operated since 1967, Fireweed Cleaners prides itself in providing top quality dry cleaning and laundry services. The main store is currently in its third location on Fireweed Lane in midtown Anchorage.

The Earps, who began operating the business in 1993, opened a second store in South Anchorage in 2000.

The family business employs about

20 people – not including Katie, JT, Julie and Randy – and is well known and respected for taking care of the needs of its customers and community.

Fireweed won the Anchorage Chamber of Commerce’s Gold Pan Award in 2008 in part because of the family’s commitment to the annual Coats for Kids Drive, which collects, cleans and distributes coats to needy children prior to the start of the school year.

“Being heavily involved in the community is and will forever be important to us,” Julie said.

First National Bank Alaska shares the sentiment. Fireweed Cleaners and the bank have worked together for years, whether it’s been for savings and checking accounts, mortgage or equipment loans.

“I probably opened my first account at the Eastchester Branch in the late 1960s or early 1970s as a teenager,” Randy said. “The bank has always been there for us.”

Ownership and day-to-day operations of the business is transitioning to Katie and JT from Julie and Randy. Not too long ago, Julie and Randy were traveling

Simplifying business banking Many business owners spend so much time making sure their business is running smoothly that they welcome any help they can get to streamline the effort. One way to manage your business’s cash flow more efficiently is by using online banking services, like First National Bank Alaska’s Business Advantage. With this convenient banking tool, you can access your funds 24/7 from anywhere with an Internet connection. Check account balances, transfer funds, pay bills and much more.

To learn more about banking tools that can help your business, contact First National cash management specialists at 777-4685 or 1-800-856-4FNB from communities outside of Anchorage.

Page 24 Alaska Business Resource Guide 2013

and payroll checks needed signatures.

Katie and JT didn’t have signing privileges, but soon will. First National quickly stepped in with a remedy.

“The way the bank took care of us made us feel like a big company when you realize we’re just a small business,” Julie said. “We’re just so comfortable with First National. The service the bank has provided us has always been really awesome.”

BARCODES: KEEPING UP WITH THE TECHNOLOGICAL TIMES

Fireweed Cleaners and First National share similar approaches to customer service, and have showcased an unwavering ability to monitor their respective industries and introduce new products and services.

The bank is proud of its enhanced suite of online banking features like Business Essential and electronic statements. Online banking offers convenience, efficiency and is environmentally friendly for business and consumer customers alike.

Fireweed kept up with the technological times when it introduced barcode labeling a little more than a year ago.

Barcode labeling works like this.

When clothes are cleaned every order is identified and each garment receives a tiny barcode heat sealed somewhere it won’t be noticed. The barcode is scanned into a computer system and creates a life-of-garment history.

“At first, we didn’t know what to make of the barcodes,” JT said. “We knew this was where the industry was going, so we hashed everything out and learned all we could. We thought about every scenario, got all our questions answered and this

last year has run smoothly.”

Everyone agrees the barcode labeling has increased efficiency, enhanced customer satisfaction and reduced costs.

Randy said it’s hard to pinpoint how much money has been saved by not attaching a small paper ticket to each garment at each cleaning, but it’s considerable.

Other environmentally-friendly services provided by Fireweed are email reminders sent when orders are ready for pick up and the recycling of hangars.

“Our customers seem to love all this,” Julie said.

TIGHT KNIT FAMILY CREATES PRIDE IN GOOD BUSINESS

Julie and Randy plan to soon semiretire and spend more time at their second home in Arizona.

“We can slowly get out and Katie and JT can slowly learn everything about the business,” Randy said. “It works out well for everyone.”

But Katie and JT recently welcomed the arrival of their first child, potentially the family’s fourth generation to someday get involved with the company. This means Julie and Randy certainly won’t be strangers – not if they’re grandparents.

“We won’t want to be too far gone,” Julie said. “We’re too tight knit a family.

“The fact we’re handing the company over to two capable young people is rewarding to us. They have that same pride we do.”

Katie and JT welcome the responsibility, especially after they received check-signing authority from their parents.

“Oh yeah,” Katie said. “I really had to work on my signature.”

2013 Alaska Business Resource Guide Page 25

The Cyber Threat: Is your business doing enough to protect itself? Criminals view small businesses as a goldmine

By Mike Mason First National Bank Alaska E-Payment Support Supervisor

Cyber intrusions are on the rise. Hackers are becoming more sophisticated in both the methodology and scope of their attacks. Since 2009, cyber-security experts and other officials report a 17-fold increase in computer attacks on American infrastructure. The majority of these attacks were initiated by criminal gangs, hackers and other nations.

This rapid increase in sophisticated cyber-crime multiplies your business risk. Today, your business faces a greater-thanever-chance of losing privileged data or being victimized by criminals initiating fraudulent transactions.

What plan does your business have in place to stay ahead of cyber-criminals? Doing the bare minimum isn’t enough to protect against a determined attacker.

Take action now to secure your intellectual and financial assets against those who commit crimes to profit at your expense. Businesses must adapt to the new fraud environment and implement multiple layers of prevention and defense.

Don’t let your employees be easy targets; address both technical and human vulnerabilities in thoroughly written and enforced computer security policies that govern employee behavior.

• On the technical side; establish policies to ensure the security of all technologies used, including internet and email servers, databases, firewalls, internal routers and other embedded network devices, remote access points, custom and off-the-shelf applications and digital telephone systems.

• On the human side; secure employee access levels and permissions, ensure that both employees and business partners take computer security seriously, and that they understand the risks involved with doing business online.

Criminals have a full bag of tricks designed to gain the trust of computer systems and people. Scammers may send a phishing or spear-phishing email to an employee, set up a fake payment website to lure in a wide net of targets, or use social engineering to gain sensitive data from an employee through a direct call.

Almost all cyber attacks, whether they occur as a result of clicking on a link or document attached to an email or by giving out your IP address to an unknown caller, share one common characteristic — they exploit vulnerabilities in commonly-used programs. Avoid becoming a victim and follow cyber security best practices.

Cyber Security Best Practices: Train employees to be aware Establish basic security practices and policies for employees.

Page 26 Alaska Business Resource Guide 2013

These should include rules that require the use of strong passwords. Clearly outline appropriate internet usage and define how to handle and protect sensitive data. Employees should know how to recognize suspicious emails or abnormal program behavior, who to contact if their PC does become compromised and the potential risks of a compromise.

Use strong passwords and authentication techniques Require employees to use unique passwords and change them every three months. Consider implementing multi-factor authentication, such as a physical Secure ID token, which requires additional information be input beyond a simple password to gain entry. Check with vendors that handle your sensitive data to see if they offer multi-factor authentication login solutions.

Bank securely online The National Automated Clearing House Association recommends that companies who process electronic payments (e.g. ACH or Wire transactions) separate the job duties of their payment staff. One individual should not be capable of auto-initiating payments without approval by a second staff member. Users with administrative access should not initiate payments on a regular basis, or if they do, the administrators should also be placed in dual control.

If possible use a standalone computer for banking that is never used for browsing or email.

Protect information, computers and networks Multiple layers of protection should be in place, security patches applied as soon as possible and all PC’s protected by anti-virus and a firewall. According to a 2012 report on Exploit Protection by NSS Labs, 75- to 85-percent of the North American market is poorly protected because of missed patches or inadequate antivirus protection.

• The ideal anti-virus software provides realtime protection and is set to run a scan after each update. Updates must be performed frequently for anti-virus to detect a threat and

even then anti-virus alone is often inadequate for protection against the newest exploits in use today so care must be taken with how the PC is used.

• Firewalls should be continuously adjusted based on the threats faced by the business and intrusion logs monitored by qualified IT personnel. If employees work from home, their home system should also be protected by a firewall and the connection method must be properly secured by encryption and strong passwords.

Limit data access and software installations Do not provide any one employee with access to all data systems. Instead, employees should only be given access to the specific data systems needed to perform their job duties.

No employee should be able to install software without permission. Java should be disabled unless absolutely necessary for the employees to accomplish their daily work.

Control physical and logical access to your computers Prevent access or use of business computers by unauthorized individuals. Lock up laptops when not in use and ensure staff report lost or stolen equipment. Create a separate user account for each employee and require strong passwords. Ban outside USB devices and put endpoint device control measures in place to prevent unauthorized use of USB flash drives by employees. Administrative privileges should only be granted to the IT staff and key personnel who require that level of access.

Secure your Wi-Fi networks If you have a Wi-Fi network for your workplace, use the highest possible level of encryption and hide the network from attackers. To hide your Wi-Fi network, set up your wireless access point or router so it does not broadcast the network name, known as the Service Set Identifier (SSID).

Ensure the router is not set up with the default

_________________________ See Cyber Security, Page 29

2013 Alaska Business Resource Guide Page 27

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Page 28 Alaska Business Resource Guide 2013

Cyber Security Continued from page 25 ______________________ administrative password as this is a common weakness of Wi-Fi. Employ best practices to secure your payment processing terminals Work with banks like First National Bank Alaska to ensure that your credit card terminals and procedures for accepting card payments are in compliance with industry standards. Using approved terminals, encrypting transmitted data, and protecting stored payment information are some of the basic steps that will significantly reduce your risk of becoming the victim of a data breach.

Restrict employee payment card access Credit or Debit cards issued to employees pose an additional risk to your business. Determine what spending behaviors are necessary for employees to perform their job duties while reducing unnecessary exposure in the event that their card is compromised. By simply lowering the credit limit, restricting merchant

category codes, or by limiting cash advances you mitigate these risks by reducing the fraudster’s opportunity to steal.

Recognize the mobile threat Mobile devices can create significant security and management challenges, especially if they hold confidential information or can access the corporate network. Require users to password protect their devices, encrypt their data and install anti-virus and security applications.

Establish reporting procedures for timely notification of lost or stolen equipment.

Make backup copies of important business data Regularly backup the data on all computers to an encrypted location. Critical data includes business documents, electronic spreadsheets, databases, financial data, and human resources files. Backup data automatically and take steps to mitigate the risks of intentional or inadvertent data loss or compromise.

Remember: If you don’t have a backup copy of something then it can be lost at the push of a button.

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Projections: The best starting point when growing your business

By Bryan Zak Director Alaska Small Business Development Center South West Region Soldotna

For many entrepreneurs, the thought of growing their own business seems impossible. For some, it’s a financial matter.

Others may find the planning stages too daunting. And, some simply have no idea where to begin.

Start with the Numbers A good first step for growing any business is gathering as much financial information as possible. What additional costs will there be? What recurring expenses will you see over time?

How will increases in sales affect your margins?

By focusing on the financial implications of growth, business owners can plan for the future and maintain a balanced approach for managing that growth as it occurs.

One of the tools the Alaska SBDC uses with it clients is the “Financial Model”, which is available for download off its website http://aksbdc.org/tools/.

Using this tool, Alaska SBDC business advisors like myself are more than happy to assist you with the completion of a financial projection, or two, or three. As a business advisor, I offer free one on one confidential business assistance to two to six clients each day and the vast majority of my assistance with each individual starts with the creation of a projection using this financial model tool.

The Financial Model The financial model is an excel workbook organized into specific tabs. Tab 1 is setup to capture initial costs for new businesses; Tab 2 is for entering salaries and wages; Tab 3 for entering fixed operating costs; and Tabs 4 and 5 are where you capture the cost of goods sold and sales forecast.

After entering your information, the tool will produce a complete 3-year forecast for your business, allowing you to make any necessary changes necessary to meet your goals.

For example, if the projection shows a loss, or not enough of a profit, it’s easy to see how possible adjustments you make now will impact your business down the road.

Test Multiple Scenarios Once you have created a projection you might want to create a second and a third projection for one business that includes different scenarios.

Perhaps in your first projection you plan on leasing your business location, in another scenario you project purchasing your business location and taking on a loan, and in a third scenario you purchase your business location but don’t take out a loan. Each scenario will have

Page 30 Alaska Business Resource Guide 2013

The Alaska SBDC offers a workshop called “Profit Mastery” that is dedicated to helping business owners understand these ratios and use them to make decisions. And as an additional “cherry on top of the sundae” we’ll help you compare your ratios to other similar businesses to see how you compare, thereby providing you a clear roadmap of how to strengthen your company. different financial end results, and by seeing these different scenarios next to one another you’ll have a clear understanding of how your decisions will drive your business.

Performing financial projections now, and updating them on an ongoing basis, is a key component of managing your business. Many factors contribute to business failure, and perhaps the three most common factors are inadequate planning, not having enough money, and insufficient financial records. You can increase your odds of being successful by using the free financial model tool available from the Alaska SBDC. Beyond Projections One additional benefit of using the financial model is the access you’ll gain to your key financial

ratios. Think of your key financial ratios as a scorecard for you business, that will allow you to quickly see how your business is performing.

The Alaska SBDC offers a workshop called “Profit Mastery” that is dedicated to helping business owners understand these ratios and use them to make decisions. And as an additional “cherry on top of the sundae” we’ll help you compare your ratios to other similar businesses to see how you compare, thereby providing you a clear roadmap of how to strengthen your company.

If you would like to explore your business ideas with an experienced business owner and advisor, the Alaska SBDC has offices in Anchorage, Bethel, Fairbanks, Juneau, Palmer, Wasilla, Soldotna, Seward, and Homer, and we’re available anywhere in the state by phone.

Finding the right funding When business is booming, entrepreneurs often consider expanding to keep the growth going in the right direction. Doing so almost always requires a large investment of time and money. Companies often obtain business loans to help finance the construction of facilities. Every business is different, so which loan is right for you? Talk with an experienced local Alaskan banking expert to find the right option for your business.

IN

To learn more about what financing options are right for you and your business, visit www.FNBAlaska.com or speak with a First National Bank Alaska business specialist at 777-5625 or 1-800-856-4FNB from communities outside of Anchorage.

2013 Alaska Business Resource Guide Page 31

Taking the mystery out of financial statements The Alaska Small Business Development Center (AKSBDC) offers a variety of workshops and webinars to assist small business owners in many aspects of their business. One of the most highly-praised classes offered at the SBDC is the Profit Mastery program. This 16-hour training easily explains the financials of a business and takes the mystery out of what they’re trying to tell you.

“Anyone who is a business owner, regardless of how long you have been

countants, and other financial players on your team.

The AKSBDC goes a step further after Profit Mastery ends by helping clients in free one on one confidential business counseling sessions to go over the information provided in the course and help the business owner apply it directly to their business.

“Anyone who is a business owner, regardless of how long you have been in business, owes it to themselves to take advantage of the ‘Profit Mastery’ program. The investment is small and the benefits are HUGE! This class helped me understand the difference between running a business and having your business run YOU!” –Angela Pekich, Alaska Premier Closets in business, owes it to themselves to take advantage of the ‘Profit Mastery’ program,”said Angela Pekich of Alaska Premier Closets. “The investment is small and the benefits are HUGE! This class helped me understand the difference between running a business and having your business run YOU!” As a financial management tool, Profit Mastery helps business owners improve their ability to make business decisions based on the financial implications. It also demonstrates how to communicate more clearly and with greater knowledge with lenders, acPage 32 Alaska Business Resource Guide 2013

AKSBDC Advisers help attendees understand their financial statements, determine the root cause of low or declining performance and control spending and pricing with up-to-date financial reporting.

The fee to attend Profit Mastery is typically $395 however, due to some funding from the 2012 Jobs Act, the AKSBDC is able to offer the class for $200, a $195 savings for the attendees.

For more information on the AKSBDC and available workshops, visit aksbdc.org.

Fundamentals of principled leadership

Leadership has a significant impact on our lives.

That impact tends to be positive or negative depending on its quality and style. Sometimes leadership can be highly effective, but unprincipled â&#x20AC;&#x201C; for example, totalitarian leaders.

Here are a few fundamentals associated with effective, principled leadership: The organization is more important than the interests of any individual.

This does not mean that people are less important than the organization. It means that principled leaders put the interests of those they lead ahead of their own.

Leadership should be considered a stewardship.

Stewardship is not giving things away. It is managing resources and fulfilling responsibilities for the greatest good, to the greatest number, in a sustainable manner.

By Mel Nichols Owner, Nichols Consulting former President of DOWL Engineers Nichols teaches the 40 Years of Principled Leadership workshop at the Anchorage Small Business Development Center.

Have a few basic principles and hold them inviolate.

Be flexible and tolerant on everything else. There is right and wrong, and style â&#x20AC;&#x201C; know the difference. The list of what is right and wrong is much shorter than is the list of different ways to approach a specific task.

We do a lot better when we are united and in alignment.

Have a clearly defined long-term strategic plan. Have an annual business plan that lays out how you are going to reach your strategic goals. Clearly define your goals and then hold yourself and others responsible for meeting those goals.

Life is not a zero-sum game.

Your success does not have to come at the expense of others.

Concentrate on growing the pie, rather than grabbing the largest piece of the pie.

It is human nature to blame failure on something that is beyond our control.

Then we can avoid responsibility for that failure. A good leader is takes responsibility rather than looks for reasons outside his or her control when failure occurs.

_________________________ See Leadership, Page 34

2013 Alaska Business Resource Guide Page 33

Leadership Continued from page 31 ______________________ Most people can do more than you think.

They will rise to the occasion if challenged. Delegate everything you possibly can. Give clear directions and lucidly outline your expectations, then get out of the way and let them do their job. Have them report regularly on their progress. When you critique their performance focus on the results and not on the way they did the task.

It is often easier to do the right thing than it is to figure out what the right thing is to do.

We generally make better decisions when we counsel with people. This is much different than operating by committee.

Rules are important and obedience to the rules is important.

No individual or organization that flaunts the rules can thrive and survive. However, most people want a rule for everything so that they do not have to think. Demand that people think for themselves and use their judgment.

Help people develop confidence in their judgment rather than confidence in yours.

Trust people and continue to trust them until they prove themselves untrustworthy. When someone makes a mistake do not punish the innocent by creating another rule.

Everyone wants to be treated as an individual yet they expect to be treated equally.

It is impossible to treat all the people fairly all the time. You must do the best you can. Employees join companies and leave managers.

Mistakes are inevitable because we are all flawed.

Effectively handling mistakes is one of the most difficult tasks for a principled leader. If you are too harsh or too lenient, performance suffers. Getting it just right is hard and takes thoughtful judgment.

Be quick to praise and slow to criticize.

Most people have a low tolerance for criticism.

Praise in public and correct in private. Always be harder on yourself than you are on others.

Always tell the truth.

That means you also must be forthright.

Keep confidences. Remember that your silence means consent so speak up when you do not agree.

perks for business owners and employees First National Bank Alaska’s Employer Advantage Checking offers businesses and their employees direct-deposit, interest-bearing checking accounts with all sorts of advantages like: • No minimum deposit required to open • Free online banking • Free safe small deposit box (wherever available)

• Unlimited check writing • And much, much more!

OUT

Plus, receive a coupon for $500 off the closing costs of an approved mortgage loan at First National Bank Alaska when you open an Employer Advantage Checking account.

Contact a First National Cash Management Specialist to learn how your employees can benefit from Employer Advantage Checking accounts. Visit FNBAlaska.com or call 777-4685 or 1-800-856-4FNB from communities outside Anchorage.

Page 34 Alaska Business Resource Guide 2013

NETWORK OF PROGRAMS The Alaska Small Business Development Center (AKSBDC) offers free, one-on-one, confidential business counseling, low cost workshops, and small business resource libraries.

Whether you’re starting a business, growing an established business, moving into government contracting, seeking free online marketing or web presence tools, have questions on innovation and research, or are looking to create a world-class business, the AKSBDC (or one of its partner programs: BuyAlaska, PTAC, ROPE or TREND) can help you on your journey.

AKSBDC staff members are certified business advisors who offer entrepreneurs assistance and tools to help their businesses succeed. Experienced AKSBDC advisors cover topics like business planning, financial analysis, marketing, accounting, cash flow projections, and new business feasibility.

TEAMWORK BuyAlaska http://buyalaska.com BuyAlaska strengthens communities and economies throughout the state by making the infrastructure available to shop local vendors. Through its web portal – www. buyalaska.com – the program provides a free Internet presence to any business with a brick and mortar location in the state, thereby establishing a continually growing searchable database of more than 3,500 businesses in 131 Alaskan communities. By offering the ability to post news and specials and interact automatically with a variety of Social Medial platforms, the program has created a powerful marketing platform for members to self-promote their products and services.

Procurement Technical Assistance Center (PTAC) http://www.ptacalaska.org PTAC helps businesses secure federal, state and local government contracts. PTAC can help with services such as bid and proposal assistance, negotiation support, cost accounting, Federal Acquisition Regulations, pricing principles, subcontracting, supplier certification, and marketing strategies. PTAC’s mission is creating and keeping jobs, fostering competition and lower costs for government agencies, and helping sustain readiness for U.S. armed forces.

Technology Research and Development Center of Alaska (TREND) http://trendalaska.org/ TREND helps Alaska small b usinesses and entrepreneurs develop new products and services to support government research efforts. TREND assists with pre-market strategies for businesses and independent inventors commercializing technology through the Federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

2013 Alaska Business Resource Guide Page 35

Big data for small business

By Yonggang Lu Ph.D, FRM

In today’s business world, every company, regardless of size, collects and stores data on a daily basis. Decision making driven by data information has become more and more popular. The impact of the recent trend on small business will be significant.

Thanks to lightning-speed development of computer and information technologies, small business owners are changing their ways of doing business. More and more owners rely on internet to operate their business, which allows them access to a much bigger pool of potential customers beyond what was imagined 20 years ago.

As a result, small business owners are capable of storing vast amounts of customer data in their information systems as simple as a laptop computer. When businesses migrate into the digital environment, it is both a challenge and an opportunity for small business owners to properly run data analytics applications in order to investigate their collected data and turn raw data records into priceless information treasures for better decision making.

On the one hand, large collection of data enables us to summarize meaningful historical business patterns to better understand customers’ purchasing behaviors, and also construct a reliable prediction model to forecast important business measures in the future. In the meantime, studies on variation shown in high volume of collected data will allow smaller business owners to earn more insights into risk of their business activities and identify risk factors associated with their businesses.

How popular is the idea of data analytics for small business?

A simple Google search returns more than one million results for the key word of “data analytics” plus “small business.”

On the other hand, small businesses are typically more resource-constrained than large corporations. Lack of IT infrastructure prevents small business owners from fully enjoying the benefits of analyzing their business data.

In this regard, one possible solution is online analytic cloud appliances service, e.g. cloud data storage and web analytic, provided by companies including Google and AT&T. Small businesses may take advantage of those available services to improve their operational efficiencies and earn more competitiveness.

However, concerns over adoption of cloud deployments have been on the rise. First of all, storing private data online and allowing unknown third parties to analyze it causes business owners to worry about security of their business information.

Meanwhile, cloud analytic solution often provides simple and

_________________________ See Big Data, Page 41

Page 36 Alaska Business Resource Guide 2013

2013 Alaska Business Resource Guide Page 37

Is the Government Buying What You Sell?

By Carolyn Pratt Program manager Alaska Procurement Technical Assistance Center, a partner program of the Alaska Small Business Development Center

Itâ&#x20AC;&#x2122;s no secret that market conditions in the United States have been unpredictable for several years. Yet as 2013 got off to a start, a new batch of Alaska businesses have sprouted and are already making contributions to their respective industries. Even the government contracting field is opening new possibilities and paving the way for more small businesses to build and expand.

Market research is an essential tool for any business, especially when doing business in the government marketplace. Good market research can identify trends that affect sales and profitability. Good market research will let you know which contracts are due to expire, to be rebid or terminated and can identify your competitors. Market research tells you which agency buys your product or service. The purchasing trends of any agency are one of the best ways to get to know your customer. And, good market research is an effective use of your business development time and money.

Letâ&#x20AC;&#x2122;s look at some federal government spending information first.

In 2013, government agencies are expected to spend less on federal contracting projects. However, there are a number of fields that contractors have to build their strengths on because of the projected increase in demand for the products and services in healthcare, conservation, energy and cyber security. Knowing agency spending

Page 38 Alaska Business Resource Guide 2013

forecasts can stir a strategic shift in your business and being ready for that shift is a critical factor in continuing to build your firm’s success. For instance, not being able to count on future work prevents contractors from being able to effectively manage their current workforce. Do you have a forecast for your firm’s future workforce?

As a contractor you also need to know that while some agencies have decreased budgets, some have actually increased. Which agencies are those? It is extremely valuable to know budget decreases or increases being projected not only for this year but also for 2014. The agencies with budget increases in 2013 are Interior, Commerce and Treasury, NSF, Education, Veteran’s Affairs and Energy.

Let’s look closer to home. It’s well known that the Department of Defense has a major impact on Alaska’s economy. In 2011, DOD awarded $3.1 billion in contracts to 740 companies in the state. In 2012, more than 26,000 government contracts agency-wide were awarded to businesses throughout the state. Not all the contracts go to Alaska’s large businesses. A significant amount of contract dollars go to small business as well. While the DOD spending on projects in Alaska is expected to drop at least 18 percent this year, that percent is not catastrophic and DOD is still a viable source of contracting opportunity for both primes and subs in 2013.

Looking past DOD, do you know what other agencies are doing business in Alaska? With 40 percent of Alaska’s economy based on government spending, there may be opportunities contractors are overlooking. For example, more than $58 million was spent on federal highways and more than $33 million on National Oceanic and Atmospheric Administration (NOAA) projects in the state last year. What were they buying?

What purchases do they have forecasted for 2013? Each agency is required to post its spending forecasts and you can find that information by going to an individual agency’s website and keyword search “forecast.”

The federal government may be the world’s biggest buyer, but in FY 2013, the Division of General Services issued more than $19 million in contract awards. The state of Alaska purchases all kinds of equipment, supplies, services and construction that afford Alaska businesses an excellent opportunity for growth and better long-term stability. State government purchasing regulations are typically less restrictive. Competitive bidding is the norm on larger contracts, but many contracts and purchases orders up to $50,000 are awarded simply by negotiating with known vendors in compliance with existing state regulations.

Several preferences apply to all State of Alaska procurements, regardless of their dollar value, except when restricted by federal regulations.

The Alaska Bidder, Veteran and Offeror preferences are the three most-common preferences involved in the State of Alaska procurement process.

While the past money spent and purchasing trends can provide valuable data for understanding the government market, it also helps to know about how they purchase, for example the Alaska bidder preferences.

Once a contractor knows what future buys are anticipated by a government agency or the buying habits of an agency, effective strategies can be developed to enter that marketplace.

Researching the government marketplace will require you to set aside a few hours each year, but is an effective use of your business development time and money that can have a positive impact on your bottom line. It can increase your success rate, requires only a computer, a pencil and a piece of paper.

And it’s free!

The Alaska Procurement Technical Assistance Center (PTAC) provides businesses with the training and tools needed to compete and perform successfully on federal, state, and local government contracts. Visit the website to learn when the next “Market Assessment Opportunities: What does the Government Buy?” workshop is being offered at www.ptacalaska.org.

2013 Alaska Business Resource Guide Page 39

SBA-backed loans for small businesses Starting and growing a small business can be an expensive endeavor that requires a mix of personal resources, investors and loans.

The Small Business Administration (SBA) business loan programs provide a source of financing for small businesses with viable plans that do not qualify for long-term stable financing.

Here’s more information about what SBA-backed loans are (and are not) and whether they are right for your small business.

SBA Business Loans When determining if an SBA Business Loan is a viable option for you, it is important to keep in mind the dollar amount you seek to borrow and how you will spend those funds.

Once you apply for an SBA Business Loan, there are three major players involved in the process: the business entity, the lender and the SBA. The lender will still determine whether they will approve or deny the loan to the business entity. If the loan is approved, the SBA guarantees a portion of the loan to the bank if the business entity defaults.

The purpose of the SBA Business Loans program is to make it easier for small businesses to get approved for a loan by reducing the amount of risk put forth by the lender. However, this does not mean that the lender will automatically approve the loan to the business entity.

Before applying for the loan it is important to have a business plan prepared which explains what resources will be needed to accomplish the desired business purpose of the sought after funds as well as what your monetary contribution will be to the endeavor, what collateral is available and an explanation of how you plan to repay the loan in a timely manner. For help with your business plan you can visit your local Small Business Development Center.

Once you have submitted your business plan, the lender will analyze it to see if it meets their criteria as well as the SBA’s requirements.

Page 40 Alaska Business Resource Guide 2013

7(a) Loan Program The most popular loan the SBA provides is the 7(a) loan program.

It is the most utilized non-disaster financial assistance program. This is due to its flexible loan structure, variety of proceed uses, and overall availability. It also has broader eligibility requirements and credit criteria than other programs. To qualify for an SBA loan, a small business must meet the lender’s criteria and the 7(a) requirements. The lender must certify that it would not provide this loan under the proposed terms and conditions unless it can obtain an SBA guaranty. Finally, if the SBA is going to provide a lender with a guaranty, the applicant must be creditworthy and the loan structured under conditions acceptable to the SBA. Eligibility The 7(a) loan eligibility is based on four factors (for more details on eligibility visit SBA.gov/apply): • Size: Your business must be classified as “small” by the SBA. • Nature of Business: The SBA cannot guarantee loans on businesses involved in certain areas such as pyramid schemes, illegal activities, or non-profit organizations.

• Use of Proceeds: The loan must be used for any of the preapproved business operations outlined by the SBA such as expanding or renovating facilities, launching a start-up, or constructing a commercial building.

• Miscellaneous Factors: This is the “catchall” requirement which includes the use of personal assets, anti-discrimination rules, etc.

The Small Business Administration has helped many businesses secure capital in order to start or grow their business with the SBA loan programs.

Although the 7(a) program is the most popular, there are many different loan programs available.

For more information on the different loan programs, eligibility requirements and how to apply, visit SBA.gov.

Making ‘cents’ of your business Web-based tool helps understand financial data How does your company stack up to your competitors? How efficiently are you performing? Are there ways to squeeze more cash or profits out of your operations? To answer questions like these you need data, and lots of it.

That’s why the Alaska Small Business Development Center (AKSBDC) is proud to bring the in-depth financial and historical power of Sageworks ProfitCents to clients – for free.

Sageworks has been providing private companies with financial information and developing financial analysis solutions for more than 15 years.

The web-based application helps small-business owners understand their financial information to stay on top of their finances and ahead of their competitors. ProfitCents uses your business’ historical data to provide analysis of your current operating efficiencies and provide recommendations for improving your

Big Data Continued from page 34 ______________________ basic analysis results only scratching surface of the data, which has limited value for small business owners to earn detailed and deep business insights.

So, what is the take-home message for small business owners? At first, if you have never taken a second look of your collected customer data, it is time to start doing so in that you will benefit more than you can expect.

Secondly, if you have tried to utilize some

financial management in the future.

Here’s how the process works: 1) You and your AKSBDC advisor work together to make sure your financial records are accurate and timely.

2) Using a slick integration method – we feed your data into the secure ProfitCents tool.

3) ProfitCents compares your data to other similar businesses and compiles the results in easy-tounderstand narrative and charts, like the ones below.

4) You work with your AKSBDC advisor to discuss ways you can use this powerful information to make your business more efficient and profitable.

Over coming months and years, you and your AKSBDC advisor can work together as your business changes.

Contact your local AKSBDC to get started.

online cloud analytic solutions, you probably want to consult with some experts in this area to understand whether what different cloud service providers can offer matches well with what you need and what you want.

Finally, if you begin to really enjoy the idea of data analytics and are ready to do more with it in your business, start to do it by yourself or work with some analytic professionals to customize your business data analysis.

Yonggang Lu is an Assistant Professor of Quantitative Methods at the University of Alaska Anchorage College of Business and Public Policy.

2013 Alaska Business Resource Guide Page 41

Market Research at the Alaska SBDC Growing businesses that strive to meet the evolving demands of their customers need to know where their industry is heading. IBIS World Industry Reports is one tool the Alaska Small Business Development Center (AKSBDC) uses to meet their customersâ&#x20AC;&#x2122; needs.

IBIS World is the worldâ&#x20AC;&#x2122;s largest independent publisher of U.S. industry research. The company hires teams of experts whose analysis covers 700 different market segments. Each industry report is presented in an objective, easy-to-understand format, providing hard-to-find answers to top market research questions.

IBIS World reports can be used to measure progress, projections and prospects.

Each report provides the most detailed supply-chain information, and it features historical and forecasted revenue data, key statistics, operating strengths and weaknesses, analyses of external drivers, key success factors, the competitive landscape and major players, and industry profit and cost benchmarks.

Each report will help you understand how your industry is performing or more importantly how you are performing within the industry.

If you would like to meet with an AKSBDC Advisor to go over an IBIS World market research document for your related field, visit aksbdc.org and sign up for an appointment under the counseling tab.

Sector vs. industry Costs Average Costs of all Industries in sector (2012) 100

Industry Costs (2012)

-1.1

4.0

4.9

5.7

79.3

84.5

1.4 2.5 1.2 6.7

1.4 1.5 1.0 7.0

Percentage of revenue

80

60

Profit Wages Purchases Depreciation Marketing Rent & Utilities Other

40

20

0

Page 42 Alaska Business Resource Guide 2013

SOURCE: WWW.IBISWORLD.COM

Revl Communications & Systems 650 W. 58th Ave, Ste J Anchorage, AK 99518 (907) 563-8302 www.revlinc.net Photo: REVL Inc. designs and maintains mountaintop communication sites throughout the state, like this one in Southeast Alaska.

The sites provide reliable communications to users in the respective coverage area.

Making good calls REVL Communications works well with APTAC and AKSBDC If you live in Alaska and are part of an agency or organization that relies on secure wireless voice and data communication to protect and serve, educate our children, defend our country, create energy for Alaska, or just get the job done – there’s a good chance you’ve already come into contact with REVL Communications.

For nearly 30 years, REVL has installed, maintained and upgraded secure communications systems throughout the state.

REVL customers range from federal, state and local government agencies, to oil, gas, health care and mining companies. Some recent customers include

_________________________ See REVL, Page 44

2013 Alaska Business Resource Guide Page 43

REVL Continued from page 41 ______________________ Joint Base Elmendorf-Richardson, The State of Alaska Department of Health and Human Services, Fairbanks North Star Borough, Alyeska Pipeline Service

the Alaska Veterans Conference, where returned service men and women can learn about federal contracting opportunities for their companies.

In 2012, REVL obtained a GSA Schedule 70 Contract – General Purpose Commercial Information Technology

“Profit Mastery was an eye opener that really enabled small businesses to track their fixed and variable costs that fall under the radar some times, to make sure they stay on the radar at all the time.”

– REVL Vice President Seth Burris Company and Providence Alaska Medical Center.

REVL makes strategic use of its resources to find work and perform at the highest level possible. Since 1995, REVL has sought assistance from the Alaska Procurement and Technical Assistance Center (PTAC) to market to government agencies, and obtain contracts.

“It’s very difficult for small businesses to keep track of all the different agencies’ contracting officers all the time, because they’re constantly changing, moving between positions, turning over,” REVL Vice President Seth Burris said. “PTAC offers this invaluable service of updating the status of these contracting officers, putting us in touch with the best person directly.”

In addition to seeking this direct technical assistance, REVL has also tapped into some of the other services that PTAC provides. They include access to targeted-bid opportunities through BidMatch, and attending events like Page 44 Alaska Business Resource Guide 2013

Equipment, Software and Services.

This is a major accomplishment that requires hours of dedicated effort and determination. This contract vehicle provides new avenues for marketing and sales to federal agencies. REVL is the only Alaska Service Disabled Veteran Owned Small Business (SDVOSB) on this schedule.

Burris also recently attended the Profit Mastery program offered by the Alaska Small Business Development Center (AKSBDC).

“Profit Mastery was an eye opener that really enabled small businesses to track their fixed and variable costs that fall under the radar some times, to make sure they stay on the radar at all the time,” Burris said. “After the program we were able to make several changes that streamlined our internal process, and instilled more control of all aspects of our financial situation, which saves us time and money.”

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Alaskaâ&#x20AC;&#x2122;s SBDC Regional Center Locations and Service Hubs Find the office nearest you!

SOUTH CENTRAL GREAT NORTH CENTRAL SOUTH WEST BETHEL JUNEAU KETCHIKAN

Anchorage (South Central) 430 W. 7th Avenue, Suite 110, Anchorage, AK 99501 Phone: (907) 274-7232, Fax (907) 274-9524 Toll-free outside Anchorage (800) 478-7232

Bethel (West) 1795 Chief Eddie Hoffman Highway, Bethel, AK 99559 Phone: (907) 543-0255, Fax (907) 543-0254

Fairbanks (Great North) Phone: (800) 478-7232

Wasilla (Central) 201 N. Lucille St., Suite 2A, Wasilla, AK 99654 (907) 373-7232, Fax (907) 373-7234 Toll-free outside Mat-Su Valley (877) 373-7232

Soldotna (South West) 43335 Kalifornsky Beach Rd., Suite 12, Soldotna, AK 99669 (907) 260-5629 Fax (907) 260-1695

Juneau (Northern Southeast) 3100 Channel Dr., Suite 306, Juneau, AK 99801 (907) 463-3227, Fax (907) 463-3430

Ketchikan (Southern Southeast) 1900 1st Avenue, Suite 223, Ketchikan, AK 99901 (907) 225-1388, Fax (907) 225-1386

Alaska SBDC State Office 430 W. 7th Avenue, Suite 110, Anchorage, AK 99501 Phone: (907) 274-7232, Fax (907) 272-0565 Toll-free outside Anchorage: (800) 478-7232

Page 46 Alaska Business Resource Guide 2013

The Fiscal Checklist The first step in understanding where you need to go is knowing where you currently stand. This checklist will help you take a snapshot of your business’s key components and get you started on a path to financial clarity and performance.

It will also provide an introduction to the set of tools available through the Alaska SBDC’s Profit Mastery financial management course.

Developed by Business Resource Services, a Seattle-based financial performance company, Profit Mastery helps business owners, key managers, and those who advise them understand and use financial information to drive their business success.

Take a moment to go through this checklist. Then use it to start a conversation with your business advisor about what some next steps should be. Your balance sheet and income statement will thank you.

Benefits Your business, just like your body, needs regular checkups and maintenance to stay in optimum health. The Fiscal Physical Checklist consists of 35 management issues which, when completed, will help give your business the staying power and returns you want.

Instructions Step 1: Answer each question. Evaluate yourself in seven business management areas. If the answer to any question is “true,” check the box. Be rigorous. If the statement does not apply to your business, leave the box blank.

Step 2: Summarize each section. Add up the number of true boxes at the end of each section. Determine the total number of true boxes check. Insert that total in the Total Score box on this page.

Step 3: Chart your score In the Progress Chart below, plot your score for each business management area. Starting at the bottom, fill in each column up to your total score for that particular management area. The goal is to answer true to all questions so that the entire chart is filled. If you’re not quite there, the completed Progress Chart will indicate where you need work and where you’re doing well.

Step 4: Revisit the Progress Chart You can do it! Use your business advisors to assist you. Check back regularly for maintenance and improvement.

_________________________ See Checklist, Page 48

Risk

Trans

FinM

Costs

Growth

Cash

Bank

5 4 3 2 1 Total Score (Max 35 Points)

2013 Alaska Business Resource Guide Page 47

Checklist Continued from page 47

______________________ ❏ Check box if true

Managing Risks ❏ My selection of business structure, proprietorship, partnership, C or S corporation, is the best choice for me given all liability and tax issues. ❏ I am maintaining adequate professional and business liability insurance in the event of a claim. I regularly evaluate health care and other benefit plans I provide to my employees to ensure they are the best for my business. ❏ I make all federal, city, county and tax deposits in a timely fashion. ❏ I keep good documentation of all matters relating to legal and accounting issues.

For example, if I have made loans to and from the business, I have kept the transaction “at arm’s length” and properly documented it. If my business is structured as a corporation, I have and maintain a corporate minutes book. ❏ I have a tax accountant and attorney in whose skills I feel absolutely confident and who provide me with top level advice on a regular basis. ____ Number of True (5 Maximum)

Transition Plan ❏ I have a transition team, which consists of my executor, attorney, banker, spouse, key family members, and insurance agent. ❏ I have a will and I keep it up to date.

My transition team knows where it is located.

Page 48 Alaska Business Resource Guide 2013

❏ I have consulted an attorney who specializes in estate planning to review the steps involved. ❏ I have put together at least an outline of a transition plan, including naming successors, and shared it with my transition team. ❏ I have estimated the liquid assets and/or life insurance needed to pay estate taxes in a timely manner when I die and have ensured that my resources are adequate. ____ Number of True (5 Maximum)

Financial Management ❏ I have financial statements prepared on a monthly (or at least quarterly) basis in an accurate and decisionrelevant format.

I know my key performance ratios and regularly benchmark my performance in those areas against myself and my indus try peers on an on-going basis. ❏ I keep an especially close watch on my gross and net margins. ❏ I feel comfortable talking to my banker, financial staff, and advisors on financial issues. ❏ My year-end statements are finalized by the end of the first quarter after my fiscal year ends, if not sooner. ____ Number of True (5 Maximum)

Managing Costs ❏ I know the difference between fixed and variable costs and know which are which in my company. ❏ I know my company’s cost structure: fixed cost total, variable cost percentage and contribution margin. ❏ I can fill in the answer to this question: for every dollar of fixed costs that I add, I need to add an additional $____ in sales.

❏ I know my company’s break even sales amount on a monthly and yearly basis. ❏ I understand and use break even analysis as a decision-making tool in my company. All of my employees understand what my company’s contribution margin is and how their jobs directly impact it. ____ Number of True (5 Maximum)

Managing Growth ❏ If my company is a service company, I have a balance sheet prepared on at least a yearly basis. If my company is other than a service company, I have a balance sheet prepared on at least a quarterly basis. ❏ I know the four sources of funds available to acquire new assets and I know which is best for my growth situation. ❏ I understand the difference between variable and non-variable balance sheet items and I know which are which for my company. ❏ I can fill in the answer to this question: To grow from $_______to $_______in sales I will need $________ in financing, assuming I operate at the same level of efficiency. ❏ I understand how managing my company more efficiently in such areas as inventory and accounts receivable can reduce the need for outside funding.

monitor and adjust at least quarterly. ❏ I keep an especially close watch on the issues that affect my working capital: inventory levels, accounts receivable, and sales growth. ❏ I process and send out invoices within 24 hours of completing a project. ❏ I post a weekly A/R aging report and make follow up calls on late accounts immediately. ❏ I understand the difference between cash flow and profits and take appropriate action to manage and maximize both, including knowing my cash levels and demands on a weekly basis. ____ Number of True (5 Maximum)

Banking

____ Number of True (5 Maximum)

❏ I have a banker who understands my business and is a partner in its success and growth. ❏ I provide my banker with information on my business, i.e. statements and business plan, on a regular basis. ❏ I know how to adequately plan for sufficient working capital and long term cash needs: I use short term credit such as a credit line to fund short term cash needs and I use long term loans to fund long term cash needs such as asset acquisition or expansion. ❏ I have negotiated the best rates possible on any outstanding loans. ❏ I plan for and negotiate credit before it is needed.

Managing Cash

____ Number of True (5 Maximum)

❏ I have a 12-month projected cash budget, profit plan and balance sheet prepared for my company which I regularly 2013 Alaska Business Resource Guide Page 49

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