DC Doing Business Guide 2020-2021

DOING BUSINESS GUIDE 2020 / 2021 EDITION

In Public-Private Partnership with

The Washington DC Economic Partnership would like to acknowledge our public and private sector board members whose continued financial support and guidance has made the DC Doing Business Guide: 2020 / 2021 Edition possible.

PUBLIC SECTOR PARTNERS

OFFICE OF THE CHIEF TECHNOLOGY OFFICER

PRIVATE SECTOR PARTNERS

BOARD MEMBERS EXECUTIVE COMMITTEE John Falcicchio / Co-Chair

Deputy Mayor, Office of the Deputy Mayor for Planning and Economic Development

Richard Lake / Co-Chair Managing Principal, Roadside Development

Donna Cooper / Co-Chair Elect Region President, Pepco

Omar McIntosh / Vice Chair Senior Vice President, Smoot Construction

Kenneth Brewer / Secretary

Executive Director, H Street CDC

Timothy F. Veith / Treasurer

Raj Aggarwal

Executive Managing Director, Think Local First

Anitra Androh

Partner, Nelson Mullins

Joseph Askew

Vice President, Government Relations, Verizon

Dr. Brent Glass

Interim Executive Director, National Building Museum

Emmanuel Irono

President & CEO, Motir Services

Steven Boyle

President & CEO, Anacostia Economic Development Corporation (AEDC)

Founder & CEO, BKV Group Chief Development Officer, EDENS

Jean-Luc Brami

Principal, Gelberg Signs

Anita Butani

Division Head, HRGM Corporation

Ernest Chrappah

Director, Department of Consumer & Regulatory Affairs (DCRA)

Olivia Byrne / General Counsel

Brunson Cooper

Keith J. Sellars / President

Colette Dafoe

Principal, Corenic Construction

President & CEO, Washington DC Economic Partnership

Office Managing Partner, Nixon Peabody

Sybongile Cook / DMPED Representative

Senior Vice President, TD Bank

Director of Business Development & Strategy, Office of the Deputy Mayor for Planning and Economic Development

Director, DC Office of Cable Television, Film, Music & Entertainment (OCTFME)

Jack Boarman

President, United Bank Partner, K&L Gates

Angie Gates

Timothy Duggan Josh Etter

Director, Development, Foulger Pratt

Jennifer Eugene

Manager, Engineered Sales, Washington Gas

Stan Jackson

Caroline Kenney

Managing Director for Public-Private Ventures, Urban Atlantic

Susan Lacz

Principal & CEO, Ridgewells Catering

W. Wolfgang Lewis

Senior Director of Enterprise Services for the Beltway Region, Comcast Business

Lisa Mallory

CEO, DC Building Industry Association (DCBIA)

Thomas Nida

Executive Vice President/Market Executive, City First Bank

Kristina Noell

Executive Director, Anacostia BID

Greg O'Dell

President and CEO, Events DC

Mike O'Hara

Associate, Bohler DC

Lindsey Parker

Chief Technology Officer, Office of the Chief Technology Officer

William Rich

President, Delta Associates

Tara Scanlon

Partner, Holland & Knight

Shawn Seaman

President, Hoffman & Associates

Annie Senatore

CEO and Lead Event Designer, Design Foundry

Joseph Torraca

Vice President of Business Development, RCN

Andrew Trueblood

Director, DC Office of Planning

Mitch Weintraub

Partner, Cordia Partners

Kristi Whitfield

Director, Department of Small & Local Business Development (DSLBD)

Donna Woodall

Director of Citizenship & Public Affairs, Microsoft

Karima Woods

Commissioner, DC Department of Insurance, Securities and Banking (DISB)

WASHINGTON, DC

DOING BUSINESS GUIDE

2020 / 2021 EDITION

A RESOURCE GUIDE FOR CREATING OR EXPANDING YOUR BUSINESS IN WASHINGTON, DC

Disclaimer: The information contained in this guide is for informational purposes only. The information—including all referenced external sources, links, and downloads—has been compiled from several resources and is provided in good faith to support businesses impacted by the COVID-19 pandemic. WDCEP makes no representation or warranty of any kind regarding the accuracy, reliability, availability, or comprehensiveness of the information contained in this guide. Your use of this document implies acceptance of this Terms of Use and acknowledgment of the Disclaimer below.

This document contains names of third parties and links to third-party websites or content belonging to or originating from third parties. The third-party site owners, and not WDCEP, own the intellectual

property rights to the materials in any and all linked sites. Such links are only for the convenience of the user and informational purposes only; WDCEP does not endorse the contents of the third-party sites.

WDCEP does not assume responsibility for the accuracy or reliability of any information offered by third-party websites linked in this guide. Please consult the appropriate professionals before taking any action based on information contained herein.

Use of and access to this guide or any of resources contained within this guide does not create any type of relationship between the user and WDCEP, or any of its agents. All liability with respect to any user’s reliance on this guide is hereby expressly disclaimed.

WDCEP The WASHINGTON DC ECONOMIC PARTNERSHIP (WDCEP) is a non-profit, public-private organization whose core purpose is to actively position, promote, and support economic development and business opportunities in the District of Columbia.

WDCEP’s mission is to promote the District’s economic and business opportunities through supporting business retention and attraction activities. WDCEP is the central organization in the District that connects both the public and private sectors as well as neighborhood communities to local, national, and international audiences. WDCEP’s unique position is owed to its historical knowledge of the city’s business and economic climate; accurate analytics, data, and research; and access to community partners.

WDCEP’s success aligns with its partners and the ability to facilitate dynamic relationships with

technology visionaries, artists, entrepreneurs, non-profits, and global enterprise leaders.

WDCEP stays one step ahead of the vibrant and evolving economic landscape by monitoring the pulse of the District’s evolution shaped by entrepreneurs, start-ups, investors, as well as both small and large businesses.

WDCEP Services • Business Engagement and Consultations • DC Biz Chats • Local Market Intelligence (wdcep.co/neighborhoods) • DC Real Estate Search tool (search.wdcep.com) • Site Location Assistance

Learn more at wdcep.com or engage online @WDCEP.

DOING BUSINESS GUIDE The DC Doing Business Guide is intended to cover essential information needed to start, grow, or expand your business in the District.

Whether you are an entrepreneur looking for guidance on starting a business in the city, have an existing business that you are looking to relocate, or are expanding an existing business, this guide serves as a primary resource on how to operate in the District.

Content for this publication was made possible through collaboration with several District

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©2020 WASHINGTON DC ECONOMIC PARTNERSHIP

and federal agencies, including: the Office of the Deputy Mayor for Planning and Economic Development; Department of Small and Local Business Development; Department of Consumer and Regulatory Affairs; Department of Insurance, Securities and Banking; DC Department of Health; DC Alcohol Beverage Regulation Administration; DC Office of Tax and Revenue; DC Department of Employment Services; DC Office of Human Rights; U.S. Small Business Administration.

CONTENTS 01 ABOUT SMALL BUSINESSES IN DC State of Small Businesses

8 9

02 STARTING A BUSINESS IN DC

16

03 C OMPLYING WITH DC RULES AND REGULATIONS

28

Initial Startup Considerations

17

3.1 Business Registration & Licensing

29

3.2 Business Taxes

38

3.3 Labor Laws

45

3.4 Business Insurance

49

04 BUSINESS RESOURCES

58

4.2 Business Marketing

73

4.3 Finding Talent

78

4.4 Business Support Organizations

82

4.1 Business Financing

59

ACRONYMS ABC

Alcoholic Beverage Control

IRS

Internal Revenue Service

ABRA

Alcoholic Beverage Regulation Administration

MAVA

Mid-Atlantic Venture Association

ACA

Affordable Care Act

NAIC

National Association of Insurance Commissioners

ADA

Americans with Disabilities Act

NCCI

National Council on Compensation Insurance

B2B

Business to Business

OCP

Office of Contracting and Procurement

B2C

Business to Consumer

OHR

Office of Human Rights

BBL

Basic Business License

OJT

On-the-Job Training

CGL

Commercial General Liability

OPFL

Office of Paid Family Leave

C of O

Certificate of Occupancy

OSH

Office of Occupational Safety and Health

DC BizCAP

District of Columbia Business Capital Program

OTR

Office of Tax and Revenue

DCMR

DC Municipal Regulations

OWC

Office of Workers’ Compensation

DCRA

Department of Consumer and Regulatory Affairs

PACE

Property Assessed Clean Energy

DCSEU

District of Columbia Sustainable Energy Utility

QHTC

Qualified High Technology Companies

DDOT

District Department of Transportation

R/R&D

Federal Research/Research and Development

DISB

Department of Insurance, Securities, and Banking

SBA

U.S. Small Business Administration

DOEE

Department of Energy and Environment

SBIR

Small Business Innovation Research

DOES

Department of Employment Services

SBRC

Small Business Resource Center

DSI

Division of State Initiatives

SHOP

Small Business Health Insurance Options Program

DSLBD

Department of Small and Local Business Development

STTR

Small Business Technology Transfer

EIN

Employer Identification Number

TCS

Office of Talent and Client Services

EPA

Equal Pay Act

TIN

Tax Identification Number

HOP

Home Occupation Permit

WDCEP

Washington DC Economic Partnership

HRLA

Health Regulation and Licensing Administration

WOTC

Work Opportunity Tax Credit

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©2020 WASHINGTON DC ECONOMIC PARTNERSHIP

CHOOSE WASHINGTON, DC? THE DISTRICT OF COLUMBIA is a cosmopolitan capital city that offers unparalleled opportunities for entrepreneurs and businesses of all sizes. Even as COVID-19 has impacted economies across the globe, the District continues to move forward and make investments supporting its local business community, affordable housing programs, and workforce development initiatives.

Choosing to start, grow, or expand your business in the District provides an array of advantages, as the city's economy has proven strength and resiliency in the face of global uncertainty. A diverse and inclusive workforce of highly educated professionals and innovators continues to support industries such as professional services, non-profits, hospitality, and retail. The nation’s capital has the tools, infrastructure, community, workforce, accessibility, and climate necessary for your business to flourish.

5

TOP

3 1

MOST RESILIENT CITIES IN THE U.S.

OVER THE NEXT 10 YEARS

(Savills, 2019)

BEST METRO FOR MINORITY ENTREPRENEURS (LendingTree, 2019)

BEST PLACE FOR WORKING WOMEN

(MagnifyMoney, 2020)

DC DOING BUSINESS GUIDE 2020/2021

5

There is no place like Washington, DC to do business. Year after year, the soon to be 51st State has earned a top spot on prominent industry and business lists, including being named one of the strongest economies in the U.S.; one of the best cities for young professionals, tech start-ups and women entrepreneurs, and the most educated city in America. My ongoing commitment to grow our economy, and the resilience and passion of our businesses, has allowed us to consistently be recognized as an attractive place to do business.

With deft guidance from our Office of the Deputy Mayor for Planning and Economic Development (DMPED), and with the support of the Washington DC Economic Partnership (WDCEP), my Administration remains committed to empowering and supporting our local and small businesses through unique programs and opportunities, and today in particular, through unprecedented challenges.

What also sets our business community apart from others is the great diversity and character of our small and local businesses and the neighborhoods they serve. From historic restaurants and flower shops, to software media companies and graphic design shops, we have a wide variety of businesses that not only provide employment opportunities for residents, but embody the culture and atmosphere of Washington, DC. During the spring of 2020, as we faced the COVID-19 global pandemic, our businesses community made tremendous sacrifices and pivoted to provide goods and services for frontline workers and other essential employees. Through that very challenging time, we realized how strong and unique our business community truly is—and in the face of that adversity, they took the challenge as an opportunity to innovate and rethink traditional ways of doing business. Even now, their resiliency and commitment continue to fuel our recovery efforts as we press on to rebuild.

Our small and local businesses are the backbone of our economy, and my Administration is fully committed to supporting them. We will continue to provide tools, like this guide, to create an environment where entrepreneurs of all backgrounds have a fair shot at starting, growing and sustaining their business. And we will continue to ensure equal opportunity for all Washingtonians to thrive and prosper. Let’s keep pushing!

Sincerely,

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Muriel Bowser, Mayor, District of Columbia ©2020 WASHINGTON DC ECONOMIC PARTNERSHIP

Over the past 20 years, the Washington DC Economic Partnership (WDCEP) has been a resource for businesses and residents in all eight Wards in the District of Columbia. WDCEP stands resolute in our mission to support business creation, attraction, and retention efforts in collaboration with city leaders, including Mayor Bowser, the Office of the Deputy Mayor for Planning and Economic Development (DMPED), and local executives to strengthen our economy.

As we work together to create a more resilient future, WDCEP is uniquely positioned to help businesses of all sizes navigate opportunities to start, grow, and expand. Whether it’s assisting entrepreneurs in finding homes for their start-ups, providing expert insight to local businesses, or unique programming initiatives, we continued to be a trusted resource.

We recognize the unprecedented impact COVID-19 has brought on our community and WDCEP continues to adapt our services to provide critical information and resources. We are particularly proud of our signature, award-winning publications, including the DC Doing Business Guide, Development Report, and Neighborhood Profiles that provide the necessary tools and key insights to our local community.

Economic development creates a foundation for businesses, entrepreneurs, and residents to make an impact on the future of the District. As we look to a new normal, I want to take a moment to underscore our stakeholders are united in helping our local and small business community recover, adapt, and grow. WDCEP will always support the city’s efforts to create a more diverse economy with our public and private sector partners, from building an inclusive talent pipeline to amplifying the voice of our business community. We are your resource every step of the way.

Each of you plays a pivotal role in the vitality of the District, and collectively, we share in the accomplishments and overcome challenges together. WDCEP is committed to providing the business community guidance, research, and programs that drive economic growth and job creation while promoting the District as a leading global city.

— Keith J. Sellars, President & CEO Washington DC Economic Partnership

DC DOING BUSINESS GUIDE 2020/2021

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ABOUT SMALL BUSINESSES IN DC Overview of the District’s Business Establishments

STATE OF SMALL BUSINESSES The District of Columbia is home to nearly 85,000 private-sector business establishments, including 23,585 establishments with employees and 61,347 non-employer businesses (i.e. self-employed).1 Private-sector business establishments with employees ranging from two-person start-ups to Fortune 500 companies represent a total workforce of more than 527,000.2 Nearly 50 percent of these establishments employ less than five employees, while 92 percent employ less than 50. This employment distribution is also common among establishments in the District's key economic sectors (see pages 13 & 15).

The Professional Services sector is the District’s largest private-sector employer, which represents a workforce of more than 100,000, consists of 5,830 establishments, and generates $37.2 billion in annual revenue.

BUSINESS ESTABLISHMENTS BY SIZE 3.4%

0.4%

15%

23,585

total District employer establishments

13%

49%

18%

< 5 EMPLOYEES

5–9

10–19

20–99

100–499

500+

Source: U.S. Census (2017 County Business Patterns) 1. U.S. Census (2017 County Business Patterns & 2017 Non-employer Statistics). A company can have multiple business establishments in DC (e.g. restaurant chain). The company and the establishment are the same for a single-establishment company.

2. U.S. Census (2017 County Business Patterns)

DC DOING BUSINESS GUIDE 2020/2021

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ABOUT SMALL BUSINESSES IN DC

10,000

THE DISTRICT'S MOST COMMON LEGAL STRUCTURE BY EMPLOYMENT SIZE 8,000

6,000

4,000

2,000

0

C-corporations*

S-corporations

< 5 employees

Non-profit

5–9

10–19

Partnerships

20–99

Individual proprietorships

100+

*Includes other corporate legal forms of organization Source: U.S. Census (2017 County Business Patterns)

C-corporations, which represent 34 percent of all establishments, are the most popular legal structure for businesses located in the District, regardless of employment size. Nationally, S-corporations are favored with 43 percent of U.S. establishments selecting this legal form or organization. For more information on legal structure considerations, please read Chapter 2: Initial Startup Considerations.

GROWTH TRENDS Between 2007 and 2017, the District’s private sector added nearly 2,600 new establishments and 72,450 jobs—a growth rate of 12 percent and 16 percent respectively. During the same time period, the U.S. saw private-sector establishments grow by two percent and seven percent for employment.

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©2020 WASHINGTON DC ECONOMIC PARTNERSHIP

The District sectors that saw the fastest establishment growth from 2007–2017 were Performing Arts, Food Services and Drinking Places, and Professional Services.

While several retail sub-sectors have experienced a significant reduction in establishments (led by apparel stores), overall retail employment growth has been positive due to larger companies entering the market.

Throughout the past five years (2012–2017), the District’s private sector added nearly 2,000 new establishments and more than 44,000 jobs. Establishment growth was primarily driven by locations with less than 10 employees and those with 20 to 99 employees, as these segments accounted for more than 91 percent of the District’s growth. Whereas, 89 percent of job growth came from establishments with 20 or more employees.

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ABOUT SMALL BUSINESSES IN DC

TOP 5 GROWING & CONTRACTING SECTORS BY ESTABLISHMENT GROWTH (2007–2017) 80% 70%

GROWING

CONTRACTING

Administrative and Support Services

Clothing and Clothing Accessories Stores

60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40%

Performing Arts, Spectator Sports, and Related Industries

Food Services and Drinking Places

Professional, Scientific, and Technical Services

Real Estate

Establishment Growth

Motion Picture and Sound Recording Industries

Miscellaneous Store Retailers

Repair and Maintenance

Furniture and Home Furnishings Stores

Employment Growth

Note: Minimum of 100 establishments for growing sectors in 2017 and contracting sectors in 2007.

Source: U.S. Census, Statistics of U.S. Businesses (2017)

EMPLOYMENT & ESTABLISHMENT GROWTH SHARE BY EMPLOYMENT SIZE (2012–2017) EMPLOYMENT

ESTABLISHMENTS

0%

20% < 5 employees

40% 5 to 9

10 to 19

60% 20 to 99

80% 100 to 499

100% > 500 employees

Source: U.S. Census, Statistics of U.S. Businesses (2017)

DC DOING BUSINESS GUIDE 2020/2021

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ABOUT SMALL BUSINESSES IN DC

While the full impact of COVID-19 and the resulting economic recession is still being analyzed at the time of publication, the industries that rely heavily on physical interaction have been the hardest hit. As of June 2020, the District’s retail, hospitality (including restaurants), and real estate industries have seen the most significant year-overyear reduction in employment. The business community's reaction to the current economic climate in the District largely mirrors national trends except for the professional services industry which has seen an employment gain of 2.2 percent. In contrast, this sector has experienced a 2.6 percent reduction in the workforce nationally.

COVID-19 will have a significant effect on future growth trends, but the District is better positioned to address the resulting economic impact than most other localities, as the federal government’s presence provides a stable economic and employment base. For example, during the Great Recession (2007–2009), the U.S. saw a decrease in both establishments (3.5 percent) and employment (5.1 percent), whereas the District experienced an increase in establishments (one percent) and employment (2.6 percent).3

DISTRICT EMPLOYMENT YEAR-OVER-YEAR GROWTH (SELECT INDUSTRIES) 10.0%

0.0%

-10.0%

-20.0%

-30.0%

-40.0%

-50.0% Retail Trade

Information

Finance & Insurance

Real Estate and Rental & Leasing

June 2018

Source: U.S. Bureau of Labor Statistics (seasonally adjusted)

3 U.S. Census, Statistics of U.S. Businesses (2017)

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©2020 WASHINGTON DC ECONOMIC PARTNERSHIP

Professional, Scientific & Technical Services

June 2019

Health Care & Social Assistance

June 2020

Leisure & Hospitality

Total Private Sector

TOTAL ESTABLISHMENTS

TOTAL EMPLOYMENT

TOTAL SALES (BILLIONS)

FOOD SERVICES & DRINKING PLACES

2,604 59,596 28%

HOSPITALITY*

527

4.2

$

16%

4.3

$ 11%

⊲ $1.9 B Sales

Accomodations ⊲ 136 Establishments ⊲ 9,756 Employees ⊲ $2.6 B Sales

11%

1,271 26,010

24%

1%

⊲ 7,358 Employees ⊲ $2.4 B Sales 18%

PROFESSIONAL SERVICES

37.2

$ 57%

10%

Advertising, Public Relations & Related Services ⊲ 638 Establishments

n /a

54%

ESTABLISHMENTS BY EMPLOYMENT SIZE:

⊲ 28,957 Employees

33% 3%

MEDIA & COMMUNICATIONS

5,830 101,146

Full-service restaurants ⊲ 907 Establishments

21%

24,918 42%

TOP SUBSECTOR

16%

12%

12% 3%

Legal Services ⊲ 1,292 Establishments ⊲ 29,956 Employees ⊲ $16.9 B Sales 12%

9%

6%

1%

■ 1–4 employees ■ 5–9 ■ 10–19 ■ 20–99 ■ 100–499 ■ 500+

*Hospitality data is for Accommodations and Arts, Entertainment, and Recreation industries only

DC DOING BUSINESS GUIDE 2020/2021

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ABOUT SMALL BUSINESSES IN DC

SELF-EMPLOYED BUSINESSES

2017. The leading businesses within this sector include Consulting Services, Other Services (e.g. veterinaries, marketing research, photographers), and Legal Services.

As mentioned at the beginning of this chapter, the District is home to more than 61,000 businesses that do not have employees (i.e. are self-employed) and may operate out of their home or do not have a physical location. Collectively these businesses account for more than $3 billion in annual sales.

BUSINESS STATS 90% of non-employer businesses in the District are formed as Individual (sole) proprietorships.

The most common profession is in the Professional, Scientific, and Technical Services industry which made up 27 percent of all self-employed establishments in

TOP 5 NON-EMPLOYER ESTABLISHMENTS BY INDUSTRY Arts, Entertainment, and Recreation

Real Estate and Rental & Leasing

Other Services**

Transportation & Warehousing* Professional, Scientific, & Technical Services

0%

5%

10%

15%

20%

*Taxi and Limosine Service account for 70% of these establishments. **Does not include Public Administration. Personal and Laundry Services account for 85% of "Other services."

Source: U.S. Census (2017 Nonemployer Statistics)

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©2020 WASHINGTON DC ECONOMIC PARTNERSHIP

25%

30%

TOTAL ESTABLISHMENTS

TOTAL EMPLOYMENT

TOTAL SALES (BILLIONS)

TOP SUBSECTOR

REAL ESTATE & CONSTRUCTION

1,788 22,304

Lessors of Real Estate ⊲ 484 Establishments

n /a

⊲ 2,978 Employees ⊲ $2.3 B Sales

58%

20%

RETAIL

1,783 22,304

5.5

⊲ 6,905 Employees ⊲ $1.6 B Sales 21%

TECHNOLOGY

1,475 22,684

5.2

$

56%

ESTABLISHMENTS BY EMPLOYMENT SIZE:

10% 2%

Food & Beverage Stores ⊲ 561 Establishments

$ 53%

11%

15%

13%

11% 2%

Computer Systems Design & Related Services ⊲ 1,215 Establishments ⊲ 17,244 Employees ⊲ $3.9 B Sales 13%

13% 3%

■ 1–4 employees ■ 5–9 ■ 10–19 ■ 20–99 ■ 100–499 ■ 500+

SOURCE: U.S. Census Bureau (2017 County Business Patterns, 2017 Nonemployer Statistics, and 2017 Economic Census)

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STARTING A BUSINESS IN DC

INITIAL STARTUP CONSIDERATIONS Business Planning, Business Locations, Ownership Structure, Financing, and Marketing Starting your own business can be a rewarding process.

However, the same process can present major challenges— consider all that you must plan, the major decisions that you must make, and the valuable time you must dedicate towards making your business a success. This chapter provides some basic guidance for starting your business in or relocating it to the District of Columbia.

BASIC GUIDELINES: BUSINESS PLANNING: What problem(s) is your business trying to solve? What is your reason for existing? How will you measure your success? What will you be selling? Who will be your customers? Who will be your competition? How will your business be profitable? How will you finance your business? How will you market your business?

SELECTING A LOCATION: Where would your customers be located? Where will you operate your business? Would you need a physical space? How much space would you need?

What are the zoning requirements for your use?

MAKING YOUR BUSINESS LEGAL: What business structure will your company have?

What are the necessary licensing or registration requirements? What tax forms will you need?

FINANCING YOUR BUSINESS: How will you finance your business? Which sources of financing make the most sense for you and your business?

Would you need a business loan? If so, would you qualify for a loan? If yes, what would be the source(s) of financing?

What financial incentives would be available for your business based on your industry, location, or services?

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STARTING A BUSINESS IN DC

MARKETING YOUR BUSINESS: What would be your marketing goals? Who will be your customers? What would be the best way to communicate with your customers? Which platforms will you use to communicate with your customers?

BUSINESS PLANNING Developing a robust business plan is highly recommended for building a strong business. Successfully securing funding, marketing your products and/or services, and establishing strategic partnerships all depend on a well-written business plan that is either uniquely created for your business or adapted from a proven business model. While there are many different ways to present your formal plan, there are some key components that must always be included. The chart below will help you create a sample business plan.

However, there are certain regulations that you must be aware of when considering a home-based business.

Refer to Section 3.1: Page 30 for more information.

If you need to interact with your customers in-person, you may want to open a physical location. When considering commercial locations, the neighborhood and even the street chosen could determine the success of your business.

Your business’ location could influence target market accessibility, redefine your customer base, impact your capacity to attract and retain employees, determine the types of occupancy permits you may need, and qualify you for certain government incentives programs (refer to Section 4.1: Page 68). Before you decide on finalizing your location, you should explore all possible cost-effective options such as co-locating with another business, subleasing, working out of a commercial kitchen, food hall, incubator, co-working space etc. This will help you keep your start-up cost low, while still enabling you to reach your customers. Below, you will find some important questions to consider when deciding on a location.

BUSINESS PLANNING NEXT STEPS: • Many start-ups no longer need a formal nor lengthy business plan to get started. You may only need a simple plan, depending on the type of company you would like to open and the sources of funding you are seeking out. It is important to determine the most appropriate format for you through early exploratory meetings with advisors, potential stakeholders, investors, and lenders.

- Various examples of business plans that cover a wide range of industries and formats are available online for review. For more information visit sba.gov/tools/ business-plan, bplans.com, or canvanizer.com.

• If you would like to work with an experienced counselor to develop your business plan, it is recommended that you contact one of several resource centers in the District listed below. Refer to Section 4.4: Page 82.

CO-WORKING RESOURCE MAP There are over 100 shared workplaces throughout the District that offer everything from individual offices to on-demand room access. To learn more about co-working spaces in the District, please check WDCEP's co-working map.

SITE CONSIDERATIONS

Important questions to consider when choosing a location for your business: Do you want to operate your business from home?

Can your business be operated from home?

1. What is the purpose of a physical location for your business?

SELECTING A LOCATION

2. Are you able to run your type of business from home?

Deciding on whether you need a physical location is one of the key choices you will face when starting a business.

This all depends on your business type and need. If your business is not customer-facing, you might not need a physical location. For example, you could decide to open a home-based business or start an online business.

3. How much savings do you anticipate accumulating by operating a home-based business?

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©2020 WASHINGTON DC ECONOMIC PARTNERSHIP

4. How will you effectively reach your clients or customers?

SAMPLE BUSINESS PLAN OUTLINE COMPONENT

NOTES

EXECUTIVE SUMMARY

Briefly and convincingly describe the fundamental elements of your business, including: the problem your customers have, your solution, how you will make money, who your target customers are, what your competitive advantage is, who is on your team, and your financial summary. Write this section last since it summarizes the remaining components of your business plan.

BUSINESS HISTORY, BACKGROUND, AND OBJECTIVES

Describe when, how, and why you formed the company and its development so far. List your short term (next 12 months) and long term objectives.

BUSINESS ENVIRONMENT

Describe how environmental factors such as the economy, changes in population, interest rates, changes in levels of employment, climate for small businesses in your market, etc. may affect your business.

PRODUCT AND/OR SERVICES

List and describe your present products/services. Describe any planned changes or additions to your products/services within the next year.

PRESENT MARKET

Who needs to buy your product or services? Describe the target market, including geographic location, relevant demographics, and growth potential.

COMPETITION

Who are your primary competitors in your market(s) and what are their strengths and weaknesses? What are your company’s competitive advantages and disadvantages?

MARKETING PLAN

Describe the marketing techniques, strategies, and tools you will use in the future to promote your business.

BUSINESS RESOURCES

List the major operating equipment that your company owns or leases. Identify other outside resources used/or needed to fulfill customer requirements. Describe the skilled labor and employee training necessary to meet your company needs.

MANAGEMENT AND ORGANIZATION

Who are you? Who are the owners of your business? Describe your management team, its strengths and weaknesses, and professional development opportunities.

FINANCIAL PLAN/DATA

Explain sales and profit trends. Outline your strategy and timing for obtaining additional capital for expansion and/or to meet current needs. Detail your credits, debts, liabilities, warranties, claims, etc.

REMEMBER There are many formats and elements you should consider when drafting a business plan. You can access over 500 plan templates at bplans.com.

Be concise, clear, and convincing. Create a longer version of your business plan for your own reference, if needed.

Use charts, graphs, and diagrams when appropriate.

Always send in PDF. Microsoft Word:

Save As ➔ Save As Type ➔ PDF

Google Docs:

File ➔ Download ➔ PDF

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STARTING A BUSINESS IN DC

How accessible is your proposed location?

1. Do your anticipated clients or customers live in the area?

2. Will your location be accessible to all your potential clients, especially when considering a span of ages and abilities?

3. How convenient is the location for both your customers and employees? Is there parking or transit options (such as Metrorail, Metrobus, or bikeshare stations) nearby? Is there a significant amount of foot traffic in the area?

Does the site meet your requirements?

ZONING REGULATIONS As of September 6, 2016, DC has new zoning regulations to align with the District’s goals for achieving a healthy, vibrant, more diverse, and more environmentally sustainable city. Visit maps.dcoz.dc.gov for more information.

Are the pricing and leasing terms right for you?

1. How much of your revenue is required to cover your lease?

1. Is the space zoned for your type of business (i.e. industrial, residential, commercial, or mixed-use)?

2. What amenities and site maintenance are included (and not included) in your lease?

2. Does your business need to operate on multiple floors?

3. Will you need to build to suit? Will the landlord outfit the space or cover the cost for tenant improvements?

3. Will you require loading bays? Do you need elevators?

4. Is the site “move-in” ready for your business, or will it require renovations or any major capital improvements?

5. What other licenses and permits do you need to make this location operational?

4. Are you able to commit to a long-term lease? Would a flexible office space option (e.g. co-working) be more suitable for you and your company?

5. Per the lease, what are you responsible for maintenance (e.g. fixing a broken HVAC unit)?

SITE LOCATION NEXT STEPS • If you are still unsure as to whether you need a physical location or not, contact one of the business support organizations that can advise you on your strategy. Refer to Section 4.4: Page 82 for their contact information.

• If you are certain you need a physical location, but unsure of which neighborhood, download or pick up WDCEP's Neighborhood Profiles and Development Report publications to gain insight as to where you might want to locate or expand your business in the District at wdcep.com/resources or 1495 F Street NW. • To find for available site(s) for your business visit WDCEP's DC Real Estate Search tool at search.wdcep.com.

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MAKING YOUR BUSINESS LEGAL Before starting your business, you should understand the different rules and regulations that make your business legal. Your company must be registered in order to legally establish it. The chart below identifies the different types of ownership structures and the various District agencies that you will need to engage with to ensure your business is clear on the legal front.

A

CORPORATE REGISTRATION

See Section 3.1: Business Registration and Licensing

• In order to operate legally in the District, all businesses must be registered with the Department of Consumer and Regulatory Affairs (DCRA).

• Identify the most appropriate ownership structure for your business. See the chart on the following pages for ownership structure comparison information.

• Visit the DCRA office at 1100 4th Street SW, or apply online at business.dc.gov.

B

REGISTRATION WITH THE DC OFFICE OF TAX AND REVENUE See Section 3.2:Business Taxes

• For-profit businesses must complete form FR 500 (Notice of Business Tax Registration).

• Not-for-profit companies must complete forms FR 500 (Notice of Business Tax Registration) and FR 164 (Notice of Business Tax Registration).

• Visit otr.cfo.dc.gov for more information.

C

REGISTRATION WITH THE ZONING ADMINISTRATOR

See Section 3.1: Business Registration and Licensing

• If operating your business out of a physical location within the District that is not your home, you must ensure that the address is zoned for your specific type of business. Complete the Certificate of Occupancy if operating out of an office location in the District.

• If operating a home-based business, complete the Home Occupation Permit.

D

CLEAN HANDS CERTIFICATION

See Section 3.1: Business Registration and Licensing

• Complete this affidavit stating that you do not owe more than $100 to the DC government.

• If you owe more than $100 to the DC government, you will need to resolve the outstanding debt before you can proceed.

• Visit otr.cfo.dc.gov/page/certificate-clean-hands for more information.

E

BASIC BUSINESS LICENSE APPLICATION (BBL)

See Section 3.1: Business Registration and Licensing

• Most retail and office operations will require a Basic Business License, but DCRA also issues specialized license categories for food establishments, industry, and specific services.

• Visit business.dc.gov for more information about the 165+ types of business licenses to determine which one(s) may be necessary based on your business activities.

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OWNERSHIP STRUCTURES The ownership structure will not only define who owns the business, but will also determine who controls it, who assumes liability, how profits are divided, and how your business will be taxed.

C (General) Corporation A business formed by law as a separate legal entity from its owners (stockholders and shareholders) Advantages

There are many ways to set up a business, and each business is subject to a unique tax situation. You should consult with a qualified tax professional and a lawyer to determine the appropriate structure for your business. Visit business.dc.gov for more information.

General Partnership A business owned by two or more persons who have agreed—verbally or in a formal written statement—to operate a business

• Has a lifespan independent from its owners (stockholders) • Fringe benefits costs are tax-deductible • Personal assets are protected from business liability • Ownership can be transferred through the sale of stock • Easy to raise operating capital through the sale of stock • Ownership can change without affecting daily management

Advantages

Disadvantages

• May be more expensive to start • Partners have unlimited liability for business expenses • Each partner is bound by the actions of the other partner • Decision-making authority is divided • Loss of one partner may dissolve the business • Partnership may be difficult to end

• Incorporating involves considerable start-up expenses • Subject to more District and federal legislation • Corporate earnings subject to double taxation • Many legal formalities exist when filing corporate status • Activities are limited

S Corporation A business similar to a General Corporation, with the exception of specific IRS requirements Advantages

• Already exists as a corporation • Corporate earnings avoid double-taxation Disadvantages

• Difficult to qualify for IRS requirements

Limited Liability Partnership (LLP) A business in which partners are given the same limited liability protection as professional corporations Advantages

• Tax advantage of flow-through tax treatment for LLP partners • Simple for an existing partnership to become an LLP Disadvantages

• A sole owner cannot set up an LLP as a partnership; an LLP must have at least two partners to exist

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• Easy to establish • Partners share workload and responsibilities • Financing is easier to obtain than for a sole proprietorship • The partners share all profits and reap all benefits of ownership Disadvantages

Limited Partnership A business similar to a General Partnership, however, one invests assets into the business at their own risk and is limited to the amount of capital invested.

The investor is not involved in management and does not share in the liability for debts or losses Advantages

• Relatively easy to establish • Partners share in start-up expenses • Financing is easier to obtain than for a sole proprietorship • Partners share all profits and reap all benefits of ownership • Partners’ assets are not at risk from creditors Disadvantages

• More expensive to set up initially due to the requirement for a written agreement • Operating (general) partner has unlimited liability for expenses • Loss of one partner may dissolve the business • Partnership may be difficult to end

OWNERSHIP STRUCTURES (CONTINUED) Sole Proprietorship A business that is owned by a single individual Advantages

• Easiest and least expensive to set up • Full control over all business decisions • Minimal legal restrictions or requirements • Owns all profits and reaps all benefits • Not required to pay unemployment taxes Disadvantages

• Personally liable for all business transactions • May have difficulty obtaining long-term financing • No unemployment benefits if the business fails • Limited tax savings

Limited Liability Company (LLC) A hybrid business that draws advantageous characteristics from both corporations and partnerships Advantages

• Profits and losses pass through the company to its owners for tax purposes • Personal assets are protected from business liability • No limitation on the number or nature of owners • Easier to operate than a corporation • Not subject to corporate formalities • Owners may participate in management of the business Disadvantages

• Legal assistance is needed to properly set up and structure • Professionals—such as lawyers, accountants, and doctors—are prohibited from registering as an LLC

Non-profit An organization that has no owners, gives no income (except salaries/expenses) to members, directors or officers, and must have a Board of Directors Advantages

• Tax exemption • Business operation flexibility

Benefit Corporation (B Corps) A type of for-profit company that operates as a General Corporation, but adheres to third-party social and environmental benefit standards Advantages:

• Implementation of best environmental and social policies to your business • Indicates real promotion of real social change to your customers • Conduit between investors and businesses • Free Global Impact investment rating • Flexibility in fundraising and profit structure Disadvantages:

• Recently introduced so more assistance is needed for set-up compared to other structure

Cooperative Association A cooperative is a business or organization owned by and operated for the benefit of those using its services. Profits and earnings generated by the cooperative are distributed among the members, also known as user-owners.

Advantages:

• Less taxation • Funding opportunities • Reduce costs and improve products and services • Perpetual existence • Democratic organization Disadvantages:

• Obtaining capital through investors • Lack of membership and participation

QUESTIONS? Contact the DC Bar Pro Bono Center for small business legal assistance.

DC Bar Pro Bono Center 901 4th Street NW, Washington, DC 20001 dcbar.org · (202)737-4700

Disadvantages

• Merger limitations

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STARTING A BUSINESS IN DC

MAKING YOUR BUSINESS LEGAL NEXT STEPS

d. Obtaining a loan from an alternative community lender or a family member

If you need guidance on understanding different types of ownership structure, or have questions about taxes, you should contact a tax accountant and/or a trusted attorney.

e. Crowdfunding

FINANCING YOUR BUSINESS Financing is an important part of starting a new business.

You must determine your financial needs, understand your estimated costs, and explore viable financing options for your business to remain open. Below, you will find some helpful tips to begin the financial planning process.

UNDERSTAND AND ORGANIZE YOUR FINANCIAL NEEDS • Create a financial plan that outlines the financing needs of your business, including operational costs. Complete a comprehensive review of your business' financial position and goals. Collect information about your assets and liabilities, as well as your currently available resources.

• Review your business plan to ensure that your projections support your goals realistically reflect any constraints. Show how you will exponentially grow your company and minimize risks, while also demonstrating how you plan to pay your investors back with a profit. For more information, visit sba.gov/business-guide/ manage-your-business/manage-your-finances.

f. Applying for financial incentives provided by the DC government g. For more information, refer to Section 4.1: Page 59

DETERMINE YOUR CURRENT RESOURCES

Take inventory of the various resources that you may already have available, including personal savings, credit cards, loans from family members and friends, customers and strategic partners, retirement accounts, and trade agreements with vendors or suppliers. Before deciding to use a resource, it is important to understand that your personal finances are different from your business finances. Distinguishing between the two and treating them separately is key to ensuring that you aren’t personally liable for any business-related risks. For more information, contact your local bank representative.

OBTAIN YOUR CREDIT REPORT

You will need to obtain a copy of your credit report to ensure its accuracy and show potential investors that you are serious about paying back their investments, regardless of whether you are going to rely on your current resources or obtain commercial financing. Refer to Section 4.1: Page 59.

FINANCING NEXT STEPS

EXPLORE DIFFERENT FINANCING OPTIONS • Identify which funding options are the most appropriate for your business: a. Obtaining a traditional bank loan b. Working with a lender to get a loan guarantee from the U.S. Small Business Administration c. Securing funds from an angel investor, venture capital firm, or small business investment company

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If you are unsure of how to proceed, reach out to a small business coach who can help you decide what are the best options for your business. It’s important to note that while a business coach can help guide you in the right direction, it’s ultimately up to you to make decisions for your business. For organizations that can help you, refer to Section 4.4: Page 82.

NEIGHBORHOOD PROFILES WDCEP’S NEIGHBORHOOD PROFILES offers data and insight on DC’s 50+ neighborhoods and major commercial corridors, ranging from detailed demographics, area highlights, transportation data, walk scores, maps, and more. If you are thinking about starting a business or relocating your business the neighborhood profile can help you

MARKETING YOUR BUSINESS A critical, yet often overlooked part of building a successful business is marketing. Marketing is often the vehicle by which a business owner can showcase why their products or services are unique to customers. A marketing plan for your business enables you to understand your target market, their pain points, your competitive advantage in the market, and the different avenues by which you can reach your potential customers. Below are some tips to help you create a marketing plan.

CONDUCT MARKET RESEARCH

It is important to understand who your ideal clients are and their pain points that your products or services address. Be ready to answer the following questions: • Who makes up your target audience?

• How would you describe their demographics, traits, and spending habits?

• Where can you find them?

• What do they value? Why would they consider buying your product or service?

identify the neighborhood based on your customer demographic and spending habit.

To see what neighborhood is ideal for your business visit: wdcep.com/resources.

You are also encouraged reach out to our staff, whom can provide you with customized space options based on your needs. Email us at realestate@wdcep.com

IDENTIFY YOUR COMPETITORS

The best way to understand your competitive advantage is to identify your competitors and study what they are selling. Here are some questions you should consider: • Who are your major competitors? What products or services are they selling?

• What is working for them? What are customers saying about them?

• What are your strengths, weakness, opportunities, and threats as compared to your competitors?

CREATE AN UNIQUE VALUE PROPOSITION

Your unique value proposition helps your customers differentiate between your product or service compared to that of your competitor. It is crucial that your value proposition honestly address why customers should choose you over your competitor.

Here are some questions you should be able to answer when defining your value proposition: • What sets you apart from your competitors? Why would customers switch to your product or service?

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BUSINESS STORIES As a business owner with different types of establishments operating throughout six of the District’s wards, Greg Casten is no stranger to the site selection process. After opening the Ivy City Smokehouse’s first restaurant in 2015, Casten worked with the Washington DC Economic Partnership (WDCEP) to locate the site of his next project associated with the Smokehouse, which will open in the historic Strand Theatre in Deanwood.

“When it came to actually finding a location for our next Ivy City Smokehouse concept, Derek Ford of WDCEP was the person who turned me on to the site we ended up choosing. Over the years, Derek and I have been back and forth about various projects and opportunities throughout the District. In early 2018, he called me with a location in mind and asked if it would be something that I was interested in—from there, I kept tabs on it and eventually chased down the deal. The site is currently under construction and we look forward to opening the combined restaurant and music venue in the spring of 2021.”

GREG CASTEN Founder & Owner, The Smokehouse at The Strand Facebook: Ivy City Smokehouse Instagram: @IvyCitySmokehouse Twitter: @ICSHDC

• What is unique about your product or service?

What value is your customer receiving?

PROMOTIONAL PLAN AND BUDGET

Your promotional plan should use different avenues to reach your customers. It should include a combination of traditional marketing and social media strategies that enable your business to maximize reach and improve the visibility of your business to your target audience.

It should also outline the budget that is necessary to implement the plan. Here are some questions to consider when creating a promotional plan and budget: • What marketing channels would effectively communicate your unique story and reach your target audience? Some ideas include print (newspapers, magazines, brochures, catalogs, direct mail), broadcast (TV, radio), social media (Facebook, Twitter, Instagram), online advertising (website placement, Google ads), etc.

• What do you need for your promotional plan to be successful (e.g. collateral, graphic design, etc.)?

• What is the overall cost of your marketing strategy?

• How are you going to measure success of your promotional plan?

MARKETING NEXT STEPS If you are unsure of how to proceed, reach out to an experienced small business coach who can help you create a marketing plan for your business. Refer to Section 4.2: page 73.

Contributors: The Department of Small & Local Business Development • The U.S. Small Business Administration • The Department of Consumer and Regulatory Affairs • DC Small Business Development Network

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DOES YOUR IDEA

NEED SPACE?

When you need to scale up your business with a storefront or office space, WDCEP can assist with: ONE-ON-ONE SUPPORT FOR BUSINESSES OF ALL SIZES • • • •

Site location assistance DC incentive information Neighborhood retail/restaurant site tours Broker introductions

DATA & TOOLS • Neighborhood Profiles • Development Report • Current retail and development online search tools • Quarterly economic sector maps

wdcep.com | (202) 661-8670 | dcbiz@wdcep.com 1495 F Street, NW | Washington, DC 20004

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3.1

BUSINESS REGISTRATION AND LICENSING

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3.2

BUSINESS TAXES

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3.3

LABOR LAWS

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3.4

BUSINESS INSURANCE

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3.1 BUSINESS REGISTRATION & LICENSING Step-by-Step Explanation of the Licensing Process Obtaining both a business license and registration are essential to starting your business. All businesses operating in the District of Columbia are required to be licensed and/or registered by the Department of Consumer and Regulatory Affairs (DCRA). This chapter will help you navigate the licensing and permitting process and provide insights on the resources available to you through DCRA.

SKIP THE TRIP Businesses can apply for, track, and renew their DCRA Basic Business Licenses completely online with document uploads.

Skip the trip today by using DCRA’s portal at business.dc.gov.

THE DEPARTMENT OF CONSUMER AND REGULATORY AFFAIRS (DCRA) DCRA supports a thriving community of residents, businesses, and visitors through the diligent protection of health and safety and equitable administration of regulations and compliances in the District. All businesses operating in the District of Columbia are required to be licensed and/or registered by DCRA. Additionally, DCRA issues construction permits for commercial and residential properties in the District. The Business License Center serves walk-in and online customers who wish to file corporate documents and apply for various licenses. The Permit Center is responsible for the intake and issuance of all construction and trade permits in the District. Both centers provide online and face-to-face technical assistance for both residents and businesses. In addition, DCRA operates the Small Business Resource Center that provides training, consulting, and technical assistance to small businesses and entrepreneurs.

Visit dcra.dc.gov to view the services that DCRA provides, including: • Registration forms and documents • Answers to frequently asked questions • Business name availability tool • Registered organization search • Corporate online formation services, report filings, name reservation and trade name filings, status certificates, and certified copy ordering, as well as dissolution, withdrawal, and agent changes; online site for corporate filing is corponline.dcra.dc.gov.

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SMALL BUSINESS RESOURCE CENTER (SBRC) DCRA’s Small Business Resource Center provides small businesses and entrepreneurs with training, consulting, and technical assistance. Service offerings include several free regulatory process advisory sessions and educational workshops. Additionally, forums where subject matter experts from a variety of DCRA’s divisions impart information on corporations, business licensing, zoning (occupancy and home occupancy permits), and permitting special events as well as vending.

The SBRC also conducts two annual forums, Build It In DC and Food for Thought, which are designed to inspire entrepreneurship and encourage growth among current and potential District-based businesses.

To make an appointment, visit dcrasbrc.ecenterdirect.com.

THE BUSINESS LICENSING PROCESS STEP-BY-STEP The following steps apply to all business license applicants: 1. Business Registration and Trade Name 2. Employer Identification Number (EIN) 3. DC Business Tax Identification Number 4. Certificate of Registration 5. Clean Hands Certificate 6. Certificate of Occupancy (CRA-5) 7. Basic Business License

STEP 1: BUSINESS REGISTRATION If you will be operating as a sole proprietor, general partnership, unincorporated non-profit association, or other special entity type (e.g. unincorporated condo association), registration with the Corporations Division is not required and you can skip to Step 2. Refer to Section 2.0: Page 22 for more information on business entity.

3

If you plan to operate in the District as a non-profit or for-profit corporation, limited liability company, limited partnership, limited liability partnership, general cooperative association, limited cooperative association, or statutory trust, then you must register with the Corporations Division of DCRA that acts as Office of Corporate Registrar for the District.

To register as a domestic company, you must file for articles of incorporation (for-profit or non-profit corporations and cooperative associations), articles of organization (for limited liability companies or business trusts), or a statement of qualification for partnership (limited or limited liability partnership).

To register as a foreign company (if your business is already registered outside the District of Columbia), you must file for a certificate of registration for all filing entities, including for-profit and non-profit corporations, limited liability companies, general and limited cooperative associations, statutory trusts, limited partnerships, and limited liability partnerships. Corporate registration can be completed online through the CorpOnline site corponline.dcra.dc.gov.

BUSINESS TRADE NAME [OPTIONAL]

The District of Columbia enacted legislation establishing a registration program for trade names.

This law benefits the business community by: • Allowing businesses to use fictitious names (created words and names) to conduct business, including transacting business with vendors and financial institutions • Providing an official record of all owners associated with a fictitious name • Allowing businesses with fictitious names to take legal action under that name You can register your trade name online at the CorpOnline site at corponline.dcra.dc.gov as an individual or organization, by completing Trade Name Registration Form TN-1 for registered entities or non-entities. Additional information about trade name registration is also available by accessing DCRA’s website dcra.dc.gov/node/1417686.

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STEP 2: EMPLOYER IDENTIFICATION NUMBER (EIN) An EIN, also known as Tax Identification Number (TIN), is a nine-digit number assigned by the Internal Revenue Service (IRS). The IRS uses the number to identify business taxpayers who are required to file various tax returns. EINs are used by employers, sole proprietors, partnerships, corporations, non-profits, trusts, estates of decedents, government agencies, certain individuals, and other business entities.

Generally, you will need an EIN if you answer yes to any of the following questions: • Do you have employees?

• Do you operate your business as a corporation, LLC, or partnership?

• Do you file any of these tax returns: employment; excise; or alcohol, tobacco, and firearms?

• Do you withhold taxes on income, other than wages, paid to a non-resident alien?

• Do you have a Keogh plan (a tax-deferred pension account)?

• Are you involved with any of the following: trusts (except certain grantor-owned revocable trusts), individual retirement accounts, exempt organization business income tax returns, estates, real estate mortgage investment conduits, non-profit organizations, cooperatives, or plan administrators?

EIN REQUIREMENTS

For more specific information about whether you are required to obtain an EIN, refer to IRS Publication 1635.

You can obtain a copy of the publication online at irs.gov.

The quickest and easiest way to apply for your EIN is online at irs.gov. You may also fill out a copy of IRS Form SS-4 (Application for Employer Identification Number) and apply by phone, fax, or mail. This form is available at IRS and Social Security Administration offices, or you can request one by calling (800) 829-4933.

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STEP 3: DC BUSINESS TAX IDENTIFICATION NUMBER The FR-500 is a DC Combined Business Tax Registration document used to provide information on ownership, location, and type of business. This information is needed to determine an employing unit’s liability to pay unemployment taxes.

Once you complete the document and submit it to the Office of Tax and Revenue, you will be provided with a notice of business tax registration indicating your tax obligations and filing frequency. It will also be the basis for your unemployment tax registration with the Department of Employment Services. Tax forms can be accessed online at otr.cfo.dc.gov. For more information, call the Office of Tax and Revenue at (202) 727-4829.

Employers with one or more employees performing services within the District of Columbia must complete Part VI of the Combined Registration Application (FR500). If the form is completed on the Office of Tax and Revenue’s website, Part VI will automatically be forwarded to the Department of Employment Services (DOES).

You will be contacted by DOES and provided with a determination of tax liability if necessary. If FR-500 is not completed online, Part VI should be submitted to:

DC Department of Employment Services Office of Unemployment Compensation, Tax Division 4058 Minnesota Avenue NE, Washington, DC 20019 (202) 724-7000 · does.dc.gov

The withholding and submission of employer withholding tax is optional for household employees. If you choose to withhold, you should complete the Combined Registration Application (FR-500), as mentioned above.

STEP 4: CERTIFICATION OF REGISTRATION You will receive a Certificate of Registration from the Office of Tax and Revenue once you file your FR-500.

To learn more about the tax registration form visit: otr.cfo.dc.gov/page/new-business-registration.

FREQUENTLY ASKED QUESTIONS ABOUT BASIC BUSINESS LICENSING

HOW LONG DOES IT TAKE TO COMPLETE A BASIC BUSINESS LICENSE?

I AM A SUB-CONTRACTOR WHO IS HERE IN THE DISTRICT FOR ONE CONTRACT. DO I NEED TO GET MY OWN BASIC BUSINESS LICENSE?

If you have thought through your business needs and your business will not be operating out of a physical location within the District, then the process should take no more than two to five business days.

All contractors (e.g. sub-contractor, firms, etc.) are required to obtain a General Contractor/Construction Management or Home Improvement Contractor Basic Business License.

I HAVE CLIENTS IN THE DISTRICT, BUT I DON'T HAVE AN OFFICE THERE. DO I STILL NEED TO APPLY FOR A BASIC BUSINESS LICENSE?

I'M EMPLOYED, BUT I DO SOME FREELANCE WORK ON THE SIDE. DO I NEED A BASIC BUSINESS LICENSE?

If you are conducting business in the District, you are required to have a Basic Business License.

If you are conducting business and being compensated in the District, then you are required to obtain a Basic Business License.

IF MY BUSINESS IS ALREADY REGISTERED OUTSIDE OF THE DISTRICT, DO I STILL NEED TO REGISTER MY BUSINESS IN THE DISTRICT TO DO BUSINESS IN THE CITY?

I’M SETTING UP A MOBILE FOOD BUSINESS, BUT I’M BASED IN ANOTHER STATE. DO I NEED A VENDING LICENSE TO BE ABLE TO OPERATE IN WASHINGTON, DC?

An organization registered in another state or country that seeks to transact business in the District of Columbia must obtain authority to do business in the District by filing an application for foreign registration. This is an easy process that DCRA can help you expedite.

Yes. The vending license is one of the specialized categories of business licenses that DCRA offers for food trucks. There are specific requirements that the vessel (truck or stand) must meet as well as specific tax obligations that are unique to mobile vendors. Reach out to DCRA at dcra.dc.gov/service/vending-services-division for more information.

I AM A CONTRACTOR WHOSE BUSINESS IS BASED IN ANOTHER STATE, BUT I WANT TO DO BUSINESS IN THE DISTRICT. DO I NEED TO SET UP AN OFFICE IN THE DISTRICT?

IN ADDITION TO A BUSINESS LICENSE, MY LINE OF WORK REQUIRES A PROFESSIONAL LICENSE. HOW DO I OBTAIN THAT?

No, a business location is not required in order to do business in the District of Columbia.

DCRA’s Occupational and Professional Licensing Administration (OPLA) supports the District’s non-health occupational and professional boards, commissions, and programs. OPLA enforces regulations and offers licenses in more than 125 occupational and professional categories.

The boards, commissions, and programs are responsible for reviewing applications, administering examinations, responding to certification requests by other jurisdictions, and regulating the practices of individual professions.

DCRA’s website also allows businesses to verify the professional license status of employees and job applicants.

I'M A CONSULTANT, NOT A BUSINESS, AND I FILE MY EARNINGS ON MY PERSONAL TAX FORM BUT I WAS TOLD I STILL NEED A BASIC BUSINESS LICENSE. WHY? A Basic Business License with the endorsement General Business will be required for a consultant business here in the District. Unless you are registered as a business with the Office of Tax and Revenue and have a Business Tax ID number (also referred to as a Federal Employer Identification Number), you are not required to obtain a Basic Business License.

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STEP 5: CLEAN HANDS CERTIFICATE The Clean Hands Certificate is an affidavit stating that you do not owe more than $100 to the District government. If you owe more than $100 to the District government, you will need to resolve the outstanding debt before you can proceed.

A Clean Hands Certificate is required to be submitted with any application for a license or permit, including a Basic Business License (see Step 7). The form is included in the Basic Business License application packet.

STEP 6: CERTIFICATE OF OCCUPANCY (CRA-5) A Certificate of Occupancy (C of O) is required to show that your business is operating in a building that meets building and zoning code requirements for its intended use. However, you may not need one if you are leasing space in a building that already holds a Certificate of Occupancy for your intended business use. For instance, a law firm can operate under the umbrella of an office building's C of O as long as the firm operates in a manner that conforms to the office use. A Home occupation Permit (HO) is required when operating a business from your home. You must live in the District of Columbia and it must be your primary residence for this permit.

Certain businesses, mostly Basic Business License applicants, need to obtain a separate certificate if the property owner’s C of O does not cover their business.

Ask the owner, property manager, or agent about the C of O when entering into a lease agreement. To file for a C of O for your business, you must have a commercially zoned business location. However, if you operate your business from your house or apartment, you need a Home Occupation Permit instead. More information on C of O applications are available from the Department of Consumer and Regulatory Affairs online at dcra.dc.gov/node/1410111.

Commercial Properties will typically already have a C of O. You should be able to get a copy of the certificate from the building owner or management company, or

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you can check via DCRA’s website (dcra.dc.gov/page/ permit-records). If there is not a C of O, you will need to apply for one. If you are leasing a space for your business, you will need to get the property owner’s authorization, documented in the Authorization Form.

Home-based businesses are subject to DC Code and DC Municipal Regulations (DCMR) Title 11 Zoning Regulations; if you use your residence as your primary business location, you must file for a Home Occupation Permit. HOPs allow for limited home occupations as an accessory use to the principal residential use. See Section 203.1 of DCMR Title 11 for permitted home occupations and limitations. You may view this section and the District’s zoning regulations at dcoz.dc.gov. There are limitations, however, as you are only allowed to use the greater of either 250 square feet or 25% of the floor area of the structure, excluding the basement or any accessory structure, for your business operation. Check zoning regulations regarding all home-based businesses before applying for a HOP.

UPDATED "FAST FOOD" DESIGNATIONS Your fast-casual establishment may no longer be restricted by the District’s fast food definition or zoning restrictions. As of September 6, 2016, zoning regulations changed for fast food and fast-casual restaurants. With this change the fast food designation, which has separate zoning restrictions, will be assigned to restaurants that meet at least one of the following conditions: • Foods that are prepared by production-line techniques • Foods that are standardized foodstuffs shipped to a franchised establishment from central locations • The establishment includes trash receptacles located in the dining area for self-bussing of tables • Seating for customers • Food served on disposable tableware

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STEP 7: BASIC BUSINESS LICENSE (BBL) A Basic Business License (BBL) is a document issued from the DCRA's Business Licensing Division and is required for such business activities as the operation of restaurants, convenience/retail stores, consulting firms, home improvement businesses, and more. A BBL is required to ensure the safety of both the business and the consumer concerning certain business activities. A BBL should be secured before the start of business activity.

Below, you will find basic steps to applying for a BBL. STEP 1: Corporate Registration STEP 2: R egistration with Internal Revenue Service and DC Office of Tax and Revenue STEP 3: R egistration with Office of the Zoning Administrator STEP 4: BBL Application For additional information please visit our website at mybusiness.dc.gov.

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ALCOHOLIC BEVERAGE CONTROL LICENSING

The Alcoholic Beverage Regulation Administration (ABRA) is the independent DC government agency charged with regulating the production, sale, and distribution of alcoholic beverages in DC. The Alcoholic Beverage Control (ABC) Board, which oversees ABRA, meets most Wednesdays to consider license applications and adjudicate, administer, and enforce alcoholic beverage laws and regulations.

Prospective licensees are encouraged to speak to an ABRA licensing specialist in advance of submitting an application to determine the appropriate license type and class for the proposed operations, and verify that a license is not prohibited for your desired location by an existing moratorium or other provision of DC law.

All applications are subject to a 45-day public comment period and are subject to the review and approval by the ABC Board.

If approved, most licenses are valid for up to three years. License fees may be paid for the entire licensure period or annually.

Applications and customized resources for specific business types such as manufacturers, wholesalers, on-premises retailers, and caterers are available at abra.dc.gov.

Licensing questions can be directed to abra@dc.gov and (202) 442-4423.

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HEALTH REGULATION AND LICENSING ADMINISTRATION (HRLA) DEPARTMENT OF HEALTH Prospective businesses that have an impact on the health and wellness of District of Columbia residents and businesses, are required to follow the regulations of the Health Regulation and Licensing Administration (HRLA).

The HRLA administers the executive functions of all health professional regulatory boards and licenses for roughly 70,000 health professionals in the District. HRLA investigates consumer incidents or complaints against health professionals and recommends enforcement to bring licensees into compliance when necessary. It also develops rules and regulations for health professional practice.

In addition, HRLA has oversight and management of all healthcare facilities through the Office of Food, Drug, Radiation and Community Hygiene, which includes the Food Protection and Consumer Hygiene Division, Pharmaceutical Control Division, Medical Marijuana Program, Office of Animal Disease Prevention, and the Rodent and Vector Control Division. The HRLA also conducts investigations on behalf of DOH and Boards and assists the health facilities.

(202) 724-4900 · doh@dc.gov · dchealth.dc.gov

PERMITS BUILDING PERMITS You are required by law to obtain a permit in the District if you are going to be constructing, demolishing, renovating, or altering your building, home, or business. Even if you are not doing work but are changing the use of a building or space, you will need to obtain a building permit.

You must start the permit process by completing the appropriate permit application online at dcra.dc.gov.

Please note that other agencies (i.e. DC Health, the District Department of Transportation, and DC Water) are tied into the permitting process and have their own approval requirements. If you need further assistance or need multiple permits, contact DCRA’s Permit Customer Service Line at (202) 442-4400.

You will need a permit for: • • • • •

New construction and foundations Additions, alterations, or repair of existing buildings Razes (demolition) and interior or partial demolition Erection of a sign or awning Layout of interior space for tenants in new or existing commercial buildings • Change of use or load increase Search “DCMR Title 12 Chapter 1” online for the entire list of required permits.

BUILDING PLATS (ISSUED BY DCRA)

Building Plats—an official drawn map showing the location of all property lines—are required as the basis for all additions and new buildings. An original plat can be obtained for a fee from the District Office of the Surveyor.

You are encouraged to place your order a minimum of seven days in advance, although an expedited plat service is available. Plats show lot lines and do not show

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improvements, which must be added by the applicant.

Plats are required for the following types of work: • • • •

New buildings or additions Retaining walls or fences Sheds or garages Awnings

Site plans are required for: • New buildings, additions, interior, or exterior alterations • Retaining walls, sheds, or garages • Excavation for foundations

TRADE PERMITS (ISSUED BY DCRA)

Licensed contractors are required to complete an application for Trade Permits in order to install or replace electrical, gas, mechanical and plumbing systems. Some examples include: • • • •

HVAC systems plumbing installation and fixtures Electrical wiring, service, and fixtures Plumbing Fire alarm and sprinkler systems

Floor plans, elevations, cross-sections, and detailed drawings are required in various combinations for all proposed construction, except razes. You will need a building permit before subcontractors apply for trade permits. Permits for simple projects can be issued over the counter in half an hour as a walk-through, while more complex projects may require 14 to 30 days for completion of reviews. You can learn more about the permit process at dcra.dc.gov/page/permit-process.

In addition to trade permits, DCRA also conducts code compliance and inspections to ensure the health and safety of residents, businesses, and visitors.

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BUSINESS STORIES Tim Ma is no stranger to the ins and outs of opening and running restaurants in the District.

Working closely with the District’s licensing and registration office, he first opened Kyirisan in 2016, followed by American Son (located in the Eaton Hotel) in 2019. He is also the Culinary Director of Laoban Dumplings in Union Market.

“Having opened businesses the District, I’ve worked closely with the Department of Consumer and Regulatory Affairs (DCRA) many times. There is certainly a wealth of information available online and the agency’s website outlines the various licenses and permits needed. My experiences navigating these processes with DCRA’s assistance have overall been positive. For the times that I’ve faced more nuanced permitting needs, I’ve worked with third-party expeditors to make navigating the process even easier.

Opening a restaurant is a large task, so I was glad that the permitting and licensing went relatively seamless each time. This allowed me to focus on the operations of each business, rather than being completely consumed by navigating regulations.

While I have in the past faced confusion on certain minor things regarding renewals, I was able to easily correct them without interrupting business.”

TIM MA Chef & Founder Instagram: @cheftimma

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CODE COMPLIANCE

Reviews of drawings and submittal documents are performed

by Technical Plan Review Staff to ensure compliance with the following, where applicable, prior to permit issuance: • • • • • • • • • • • •

Structural/non-structural Plumbing/mechanical Accessibility Electrical Fire Green building Zoning Department of Energy and Environment (DOEE)— stormwater management, soil erosion and sediment control, and floodplain management District Department of Transportation—public space Historic Preservation Review Board—historic review DC Water Other—Washington Metropolitan Area Transit Authority, Commission of Fine Arts, National Capital Planning Commission, and Secret Service

INSPECTIONS

Once permits are issued and construction commences, DCRA or an approved third-party inspector conducting inspections must verify that work complies with applicable codes, regulations, and referenced standards and conforms to approved construction documents. Final inspection approval is needed to obtain a certificate of occupancy.

To schedule a plumbing, electrical, fire, construction, elevator, or boiler inspection, call the Building Inspections Scheduling unit at (202) 442-4400. You can schedule construction inspections 24/7 from any phone.

Permit Customer Service dcra@dc.gov · (202) 442-4400 · live chat: dcra.dc.gov

with outdoor sidewalk seating will need to apply for the Sidewalk Café Permit. You are required to complete an application for Public Space Permits in order to: • Construct sidewalks, alleys, flagpoles, fountains, planter boxes, retaining walls, fences, or any other improvements in public spaces • Excavate in public space to construct foundations • Occupy public space temporarily for construction equipment You can learn more at: ddot.dc.gov/page/public-space-permit-applications

WATER OR SEWER EXCAVATION PERMITS

(REVIEWED AND APPROVED BY DC WATER AND ISSUED BY DDOT)

DDOT issues excavation permits for utility related work in the public right of way. Permits are typically issued to utility companies for maintenance, upgrading, and replacement of utility infrastructure. Private contractors can also obtain excavation permits for the installation, upgrading, repair, and maintenance of utility infrastructure serving residential and commercial properties. You must complete an application for Water or Sewer Excavation Permits to: • Install water or sewer pipes • Make connections to existing water and sewer mains in the street • Excavate for water meters and meter vaults in public spaces You can learn more at: ddot.dc.gov/publication/ application-water-or-sewer-excavation-public-space

PUBLIC SPACE PERMITS

(ISSUED BY DDOT—DISTRICT DEPARTMENT OF TRANSPORTATION)

Public Space Permits are required to use or install structures on public space, which is the area between the building or property line and the curb. Restaurants

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Contributors: Department of Consumer and Regulatory Affairs • Alcoholic Beverage Regulation Administration; Department of Transportation; Department of Health

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3.2 BUSINESS TAXES

• Your legal form of business (e.g. partnership, corporation, sole proprietor)

General Business Tax Requirements, Employer Tax Requirements

• Your business addresses

There are two different classes of business taxes in the District: general business taxes and employer taxes. This chapter provides insights on both classes of business taxes. However, while reviewing this chapter, bear in mind that there are a variety of tax abatement programs for businesses in the District (see Section 4.1: Page 59).

• The former Entity Information, if previously registered with the District

BUSINESS TAXES The Office of Tax and Revenue (OTR) administers both general business taxes and employer taxes in the District.

OFFICE OF TAX AND REVENUE (OTR) The Office of Tax and Revenue (OTR) is a part of the Office of the Chief Financial Officer for the District of Columbia.

OTR's mission is to collect the proper amount of tax due to the District of Columbia through its Collection Division and correctly account for all revenues, while also minimizing the burden on taxpayers and the cost to the government.

• The names, titles, home addresses, and Social Security numbers of the proprietor, partners, or principal officers (note that this is mandatory)

• The addresses for all locations where you will collect sales tax in the District Do you need to register your business and apply for a business license in the District? Visit DCRA's website to get more information about the corporate registration and business licensing requirements.

BALLPARK FEE

The Ballpark Fee was introduced in 2005 with Major League Baseball’s return to the District. OTR requires that all businesses that have derived at least $5 million in annual District gross receipts and are either subject to filing franchise tax returns (whether corporate or unincorporated) or employers required to make unemployment insurance contributions file and pay a Ballpark Fee Return electronically. In order to file and pay electronically, a fee payer must: • Have a valid Federal Tax Identification Number (EIN)

GENERAL BUSINESS TAXES General business taxes include the corporate franchise tax, unincorporated business franchise tax, sales tax and use tax, personal property tax, gross receipts tax, taxes on special events, withholding, and the Ballpark Fee.

NEW BUSINESS REGISTRATION

To register a new business in the District, you will need the following information to complete the tax registration form (FR-500) on the District's online tax portal, MyTax.DC.gov: • Your Federal Employer Identification Number and/or Social Security Number

• Have filed a completely executed FR-500 (Combined Business Tax Registration Form) Please refer to the Ballpark Fee Schedule below to see which bracket applies to your business.

BALLPARK FEE SCHEDULE Annual Gross Revenues

Fee

$0–$4.99M Exempt $5–8M

$5,500

$8–12M

$10,800

$12–16M

$14,000

$16M+

$16,500

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TAXES ON SPECIAL EVENTS

Vendors participating in special events are liable for sales tax on items sold during the event. A “special event” is an uncommon, unique, noteworthy, or extra occurrence of a specific activity open to the general public and designed, advertised, or promoted for an identified purpose. The event is to be conducted or held on a designated day or series of days, whether held outdoors, indoors, or both, in a public or private facility at which at least 50 vendors will be present.

VENDOR OBLIGATIONS Vendors participating in special events are liable for sales tax on items sold during the event.

PROMOTER OBLIGATIONS

The promoter must submit an FR-500B registration form thru MyTax.DC.Gov. The form details the information required about the promoter, the type of event, and the listing of vendors scheduled to be at the event.

EMPLOYER WITHHOLDING FORMS

All employers with businesses located in the District are required to deduct and withhold District income tax from employee wages and pay the District the exact amount of withholding. To determine the amount of withholding, refer to the withholding table at otr.cfo.dc.gov/page/ income-tax-withholding-instructions-and-tables.

CORPORATE FRANCHISE TAX

If you engage in or carry on a trade or business in the District, or you receive income from sources within the District as a corporation, you are required to file the Corporate Franchise tax return (Form D-20) with the OTR. You must file the form on or before by the 15th day of the fourth month each year; except in the case of returns made on the basis of a fiscal year, which shall be filed on or before the 15th day of the fourth month following the close of the corporation’s taxable year. The minimum tax payable under the District corporate franchise tax is $250 if District gross receipts total $1 million or less, and the minimum tax payable is $1000 if District gross receipts total more than $1 million.

The promoter must submit a list of vendors and exhibitors to the OTR 30 days before the event and resubmit a final list 10 day after the event. This list must detail vendor and exhibitor names, EIN and SSN numbers, addresses, representatives, and telephone numbers. Promoters are also responsible for informing vendors of the District sales tax obligations and filing deadlines. Other obligations for vendors are supplied after the preliminary list is submitted. Vendors, however, are still responsible for filing sales tax returns with the District. The promoter must provide the OTR with access to the special event premises and activities to monitor vendor and exhibitor sales.

UNINCORPORATED BUSINESS FRANCHISE TAX

A promoter who fails to submit the preliminary vendor and exhibitor list must pay a penalty in the amount of $1,000 plus $50 for each day the list is late, with a maximum penalty of $2,500. A promoter who fails to submit the final vendor and exhibitor list must pay a penalty in the amount of $1,000 plus $50 for each day the list is late, with a maximum penalty of $10,000.

PARTNERSHIP RETURN OF INCOME AUDIT

For further questions regarding special events, contact OTR at (202) 727-4829.

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Filing the Unincorporated Business Franchise Tax Form D-30 is mandatory for any unincorporated business (e.g. sole proprietorship, partnership, joint venture, etc.) engaged in or carrying on a trade or business in the District that meets the following conditions: The business derives rental income or receives other income from sources within the District, and District gross receipts exceed $12,000 per year. The minimum tax payable under the District unincorporated business franchise tax is $250 if District gross receipts total between $12,000 and $1 million.

All partnerships engaged in any trade or business in the District or which received income from sources in the District must file a Form D-65 except for partnerships that are required to file an unincorporated business franchise tax return (DC Form D-30), corporate franchise tax return (DC Form D-20), an LLC, or a publicly traded partnership that filed a federal corporation return.

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SALES TAX AND USE TAX

If you engage in business activities in the District, you must collect sales and use tax from the purchaser for the following business activities: Current Tax Rate(s) As of May 2020, below is the rate structure for sales and use tax that is in effect: • 6.0% - General rate for tangible personal property and selected services • 6.0% - Tickets to legitimate theaters and entertainment venues • 8.0% - Sales and use tax on soft drinks. A "soft drink" is defined as a beverage with a natural or artificial sweetener that contains less than 100% juice; or a beverage that is less than 50% milk, soy or other milk substitutes; or coffee, coffee substitutes, cocoa, or tea • 10% - Restaurant meals, liquor and soft drinks for consumption on the premises, and rental vehicles • 10% - Food or drink served or prepared for immediate consumption, sold in, or by restaurants, lunch counters, cafeterias, or hotels • 10.25% - Alcoholic beverages sold for off-the-premises consumption • 10.25% - Rental or leasing of rental vehicles and utility trailers • 10.25% - Tickets to baseball games or baseball-related events at Nationals Park and for baseball-related tangible personal property sold at Nationals Park • 10.25% - Tickets to events at the Capital One Arena or for event-related tangible personal property sold at Capital One Arena • 10.25% - Rental or leasing of rental vehicles and utility trailers

You must also file the Form FR-800M, the sales, and use tax return by the 20th day of each month following the reporting period; the FR-800Q (quarterly sales tax return) by the 20th day of the month following the reporting quarter; and the FR-800A (annual sales tax return) on the 20th of October. The annual sales tax year covers the period from October 1 through September 30 of the following year. All sales tax is on a quarterly basis, October 1 through September 30 of each year.

VENDOR OBLIGATIONS Vendors participating in special events are liable for sales tax on items sold during the event.

PERSONAL PROPERTY TAX For any tangible personal property (e.g. furniture, computers, fixtures, books, etc.) that is used or available for business purposes, you are required to file Form FP-31 and pay personal property tax on or before July 31 each year. This includes property kept in storage or held for rent, which is leased to third parties, including governmental agencies or non-profit entities under operating lease. Form FP-31 must be based upon the current value of all tangible personal property owned as of July 1. The statute allows filers to exclude $225,000 of personal property value. The tax rate is $3.40 per each $100 of value of tangible personal property.

GROSS RECEIPTS TAX

Gross Receipts Tax is a tax imposed upon the gross revenue received by the below industries for services and/or deliveries to a District of Columbia address (commercial and non-commercial). You are subject to the gross receipts tax if your business falls under one of the following categories: • Utilities (FR-27U)

• 14.95% - Hotels (transient accommodations)

• Telecommunications companies providing long distance service, cable television, satellite relay or distribution of video or radio transmission to subscribers and paying customers (FR-27T)

• 18% - Parking motor vehicles in commercial lots

• Heating oil delivery companies (FR-27H)

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• Commercial mobile service providers and non-public utility sellers of natural or artificial gas (FR-27M)

MOTOR FUEL TAX (FR-400M)

All Gross Receipts are to be filed and paid via the web portal, MyTax.DC.gov.

Generally, each importer engaged in selling or other disposition or use of motor vehicle fuel in the District must file a monthly Motor Fuel Tax Return (Form FR-400M).

Persons who bring fuel for use, such as in excavating equipment on a construction site in the Distrit, must also file the FR-400M if that fuel is brought from outside the District and is not delivered by a District licensed importer. You must file a return even if you have no tax liability for the month being reported, via MyTax.DC.gov.

EXCISE TAXES

UNEMPLOYMENT TAXES

• Cable Television, Satellite Relay or Distribution of Video or Radio Transmissions (FR-27C) • Natural Gas Utilities (FR-27NU)

ALCOHOLIC BEVERAGE TAX

Alcoholic beverages manufactured by a holder of a manufacturer’s license and beverages brought into the District by the holder of wholesaler’s license are subject to the following tax rates: • Beer: $2.79 per barrel • Champagne/sparkling wine: $0.45 per gallon • Distilled spirits: $1.50 per gallon • Light wine (alcohol content 14% or less): $0.30 per gallon • Heavy wine (alcohol content above 14%): $0.40 per gallon The tax return must be filed and paid on OTR’s online portal, MyTax.DC.gov.

TOBACCO TAX

The sale or possession of cigarettes in the District are subject to a tax of $4.98 per pack of 20 cigarettes (effective October 1, 2019). Cigarettes sold to the military and to the federal government are exempt from this excise tax.

Tobacco Products Excise (FR1000Q) Tax is imposed on the sale or possession of ‘little cigars’ at $0.249 per little cigar and tax is imposed on the sales of vapor products and other tobacco products at a rate of 91%.

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If you are an employer in the District of Columbia with at least one full-time or part-time employee, you are required to register Part VI of the Combined Business Tax Registration Form for unemployment taxes. Each employer determined liable for taxes is assigned an account number. This number identifies the employer’s individual account, which is a record of taxes paid by the employer and charges made against the employer by former employees. Liable employers must file quarterly tax and wage reports with the Department of Employment Services Tax Division on or before the last day of April, July, October, and January of each year.

Reporting forms imprinted with your information will be mailed to you roughly five weeks before each due date.

Employers who employ only household employees may elect to file tax and wage reports annually rather than quarterly. Learn more at does.dc.gov, or call (202) 724-7000.

The amount of tax due is based on a specified tax rate of taxable wages for the quarter. As the employer, you are solely responsible for the taxes—no part of the tax should be deducted from the employee’s wages. Taxes are based on gross wages before any amount is withheld for any purpose. Gross wages include salaries, commissions, bonuses, and the cash value of any remuneration payable to the employee in a medium other than cash (e.g. lodging, meals, etc.). Taxes are payable for the first $9,000 paid to each employee during a calendar year. A newly liable employer pays taxes at the rate of 2.7% or an average rate paid by all employers during the preceding year, whichever is higher. Non-profit organizations covered under the Unemployment Compensation law may elect to reimburse DOES for benefits paid to their former employees, rather than pay quarterly contributions at a predetermined rate.

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EMPLOYER TAXES Employer taxes apply to organizations according to their ownership structure. When choosing your business ownership structure, pay close attention to the tax implications of the designation that you choose. As your business grows, it is normal to change your entity structure

to accommodate changes in ownership, revenue, and investment or to minimize financial risk and tax liability.

Refer to page 22 for more information on Business Ownership Structure. While it is best to assess your options with a tax advisor, review the considerations below:

BUSINESS OWNERSHIP STRUCTURE

TAX CONSIDERATIONS

Sole Proprietorship

• Profits are personally taxed to owner • Sole proprietors need to pay self-employment tax on their profits • Offers few tax benefits

General Partnership

• Profits are personally taxed to partners based on percentage of ownership • Can claim on personal taxes

Limited Liability Company (LLC)

• Corporation is taxed on earnings; owners only taxed on income taken out of business • While the federal government does not tax income on an LLC, some states do. Check with your state’s income tax agency. For more information, visit irs.gov/businesses.

• Additional tax benefits

C Corporation

• C Corporation owners must file personal and business tax returns separately • Corporate earnings are subject to “double taxation” when corporations are taxed and shareholders receive dividends • May be beneficial if you plan on investing the profits of your business back into the company

Limited Partnership

• Profits are personally taxed to partners based on percentage of ownership • Can claim on personal taxes

Limited Liability Partnership

• Profits and losses can be passed to individual tax returns • Special tax consequences

Non-profit

• May seek to be exempt from taxation, which requires the approval of the IRS under specific guidelines • Time consuming and costly process to apply for and maintain tax-exempt status

S Corporation

• S Corporation does not pay income taxes on any profits • Difficult to qualify for IRS requirements • Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates

Benefit Corporation

• Taxed as a C- or S-Corporation, depending on your ownership structure • Benefit corporations are for-profit entities and do not offer philanthropists the same tax advantages as donating to a non-profit organization

Cooperative Association

• Exempt from taxation on all income that is distributed to worker-members

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BUSINESS STORIES Opened in 2012, CFO Services Group is a District-based managerial accounting firm. They offer a flexible, scalable, and comprehensive range of organizational management services adjacent to traditional accounting for small businesses and non-profits.

“Our end-goal is to equip organizations with a toolbox of financial processes and language that set them up for not only success, but also growth.

We work to guide our clients toward a sense of independence in navigating their financials or give them the extra support needed such that they can focus on other areas of opportunity.

With experience across the private and nonprofit sectors, we’ve helped organizations build financial literacy and gain a solid handle on their budgeting and bookkeeping. Each case is different, and we tailor our services to the needs of the organization. Some organizations request fully outsourced ‘Chief Financial Officer’ type services, while others simply need assistance grappling with QuickBooks and all its features.

For example, we recently began supporting a multimillion-dollar non-profit based in the District after their CFO parted ways with the organization.

We worked closely with the team to develop an incredibly detailed 16-month budget that accounted for their programming costs and revenue sources.

The organization’s leadership was shocked that they could now confidently articulate a comprehensive overview of their financial flows and projections to their board that directly tied to the organization’s vision and future path. It’s stories like this that make us genuinely proud of our work.”

MORGAN JAMESON Director of Sales & Marketing, CFO Services Group Twitter: @CFOServicesGroup Facebook: @cfoservicesgroup LinkedIn: CFO Services Group

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FOR NON-PROFIT ORGANIZATIONS

If you are exempt from federal unemployment taxes, you have two options to finance unemployment insurance coverage: Payment of contributions at the rate assigned by the DC Department of Employment Services. The rate is applied to the taxable wages earned by each employee during a calendar year. Contributions are paid on a quarterly calendar basis.

–or– Reimbursement of the trust fund. At the end of each calendar quarter, the employer is billed for unemployment benefits paid to its former employees during the quarter.

TAXES For more information on the District’s compensation law pertaining to taxes, contact the Office of Unemployment Compensation, Tax Division at (202) 698-7550.

DC PAID FAMILY LEAVE ACT

The DC Office of Paid Family Leave (OPFL) at theDC Department of Employment Services (DOES) is working with employers and residents to support the implementation of Paid Family Leave and to ensure our communities are a meaningful part of the process.

Private sector employers in the District are required to pay a 0.62% tax to fund the paid-leave benefit. The Paid Family Leave tax is 100% employer-funded and may not be deducted from a worker's paycheck. On July 1, 2020, the District began administering the paid leave benefits to eligible workers.

You (eligible workers) are eligible for Paid Family Leave benefits if you: Spend more than 50% of your time working in the District. Eligible workers must spend most of their time working in the District—including teleworking or telecommuting—for a covered employer and must have completed that work during the year prior to needing leave.

Are self-employed and have opted into the Paid Family Leave program. Individuals who have earned self-employment income for work performed more than 50% of the time in the District during the year prior to needing leave are eligible for the benefit.

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Are employed when you apply for the benefit. Your wages must have been reported by your covered employer for you to be eligible for the benefit. If you are receiving unemployment compensation benefits, you are not eligible for Paid Family Leave.

Meet specifications as a temporary or seasonal worker.

These specifications depend on when your employer reports wages and when you need the benefit.

For more information, visit the Paid Family Leave microsite at dcpaidfamilyleave.dc.gov.

DELINQUENT ON TAXES COLLECTIONS As a new business owner, it is critical that you understand and comply with all tax requirements based on your business type and operations. OTR encourages businesses and individuals that are not in compliance with District tax laws to bring their accounts into compliance through the Voluntary Disclosure Program. Participation in the Voluntary Disclosure Program can be anonymous or under the taxpayer’s identity. OTR will waive civil penalties if the tax and interest is paid in full.

SMALL RETAILER PROPERTY TAX RELIEF For taxable year beginning after December 31, 2017, a qualified corporation or qualified unincorporated business may claim a refundable credit against corporation franchise tax or unincorporated business franchise tax. For businesses that lease a qualified retail rental location, the credit is equal to 10% of the total rent paid for the qualified retail location during taxable year not to exceed $5,000. For businesses that own a qualified retail owned location, the credit is equal to the total Class 2 real property taxes paid for qualified retail owned location during the taxable year not to exceed $5,000. The federal gross receipts of the qualified business cannot exceed $2.5 million per year.

To claim the credit, businesses must file either a Form D-20 or D-30 and complete Schedule SR. For details and eligibility requirements refer to District official code section 47-1807.14 or 47-1808.14. For more info, visit otr.cfo.dc.gov/page/ small-retailer-property-tax-relief-credit-frequently-askedquestions-faqs.

3.3 LABOR LAWS Resources for Local and Federal Labor Laws and Employment Regulation

UNDERSTANDING EMPLOYMENT AND LABOR LAWS The District has specific laws concerning the hiring, firing, and treatment of employees. This section examines the most prevalent laws and standards that you must be aware of, though it is not all encompassing. Specifically, the following will be examined in more detail: 1.

2.

3.

4.

Labor standards and worker’s protection Federal human rights laws Local human right laws Information required to display visibly

While DOES administers and enforces many of these employment and labor laws in the District, the organizations listed in the resources section can also help you understand these laws.

LABOR STANDARDS/WORKER’S PROTECTION Labor laws in the District help to foster a mutually beneficial relationship between employers and employees by codifying employees' rights, employers' obligations and responsibilities, and a standard of conduct in the workplace.

The following list provides the most relevant examples of these standards, for more information go to does.dc.gov.

WAGE HOUR LAWS

Wage and hour compliance involves administering the wage laws of the District. The Office of Wage-Hour conducts compliance audits and may recover back wages for employees who have not been paid pursuant to the District’s wage laws, either administratively or through court action. The Wage Theft Prevention Amendment Act of 2014 enhances applicable remedies, fines, and administrative penalties when an employer fails to do any of the following: pay earned wages, provide for suspension

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of business licenses of employers that are delinquent in paying wage judgments or agreements, clarify administrative procedures and legal standards for adjudicating wage disputes, require the employer to provide written notice to each employee of the terms of their employment, and maintain appropriate employment records. As an employer, you need to be aware of the following wage standards: • All employers are required to pay their employees the minimum wage rate, unless they are required to pay the living wage. The minimum wage permitted by law in the District is $15.00 per hour as of July 1, 2020. The base minimum wage for tipped employees is $4.45, but if an employee’s hourly tip earnings added to the service rate does not equal or exceed the minimum wage then employer must pay the difference. For example, if your employee received an average of $10 an hour in tips, you would be required to pay them $5 an hour.

• The Living Wage Act of 2006: The living wage is only applicable for businesses that receive government contracts or assistance of $100,000 or more, or for subcontractors of $15,000 contracts or more. These employers are required to pay their affiliated employees no less than the living wage authorized by law. The living wage in the District is $15, but it is reviewed annually by DOES.

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WORKERS’ COMPENSATION PROGRAM

The Workers’ Compensation program requires that you provide your employees who become injured or disabled on the job with fixed monetary awards.

OCCUPATIONAL SAFETY AND HEALTH

You are required to establish and maintain a safe and healthy work environment for your employees.

The Office of Occupational Safety and Health (OSH) provides onsite consultation services to private-sector employers in the District to ensure the safest and healthiest work environment possible for employees.

FOREIGN WORKER (LABOR) CERTIFICATION

Certain foreign workers may obtain a visa to enter the U.S. and engage in permanent employment. However, hiring foreign workers for employment in the U.S. requires approval from several government agencies.

Note that the foreign labor certification process is the responsibility of the employer, not the employee.

CHILD LABOR LAWS

The District imposes restrictions on employers who hire minors. These restrictions vary based on the age of the minor, type of employment, and period of employment.

Generally, no minor under 18 can be employed for more than eight hours in any one day, six consecutive days in any one week, or 48 hours in any one week.

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LEAVE ACTS

In applicable situations, you are required by law to grant your employees time off from work for various reasons. The following are the most common examples in the District: • DC Paid Family Leave Act: Provides the following government-administered paid leave to District employees: Up to eight weeks per year to bond with a new child, up to six weeks per year to care for a family member with a serious health condition, and up to two weeks per year to care for the employee's own serious health condition.

• The DC Family and Medical Leave Act: Requires employers with 20 or more employees in the District to provide eligible employees with 16 weeks of unpaid family leave and 16 weeks of unpaid medical leave during a 24-month period.

• The DC Parental Leave Act: Allows employees who are parents or guardians to take 24 hours of leave (paid or unpaid) during a 12-month period to attend school-related activities.

FEDERAL HUMAN RIGHTS LAWS The federal government has strict laws that forbid employment discrimination based on race, sex, color, religion, national origin, age, pregnancy, or physical disability. The following is a non-exhaustive list of federal human rights laws that could apply to your business: • Title VII of the Civil Rights Act of 1964: Prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, and religion.

• The Equal Pay Act (EPA): Requires that that women doing the same job as men be paid the same salary.

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BUSINESS STORIES

Established from the merger of two animal welfare organizations in 2016 the Humane Rescue Alliance is based in the District and provides animal welfare services across the region. In coordination with the District’s Department of Employment Services (DOES), Humane Rescue Alliance successfully implemented the DC Paid Family Leave Program (in effect as of July 1, 2020) for their employees.

“Overall our experience with DOES has been great—the agency was really on top of getting all the DC Paid Family Leave Program information out to employers. They held several town hall meetings (of which we attended two), in addition to several virtual webinars.

In January 2020, we requested that DOES come present to our staff onsite, which they did at both of our locations in the District. Coordinating was simple and quick—they have a phenomenal team working to implement and educate employers about the program. They explained to our staff how the program works, who is eligible for the benefits, and how to apply for it. DOES was very responsive to any questions that our staff had throughout the process. Thus far, we’ve only had one employee take advantage of the program and they found the process easy and straightforward to navigate.”

HUMANE RESCUE ALLIANCE Facebook: HumaneRescueAlliance

Instagram: @humanerescue Twitter: @HumaneRescue

• The Americans with Disabilities Act (ADA): Prohibits the exclusion of people with disabilities from participating in everyday activities.

• Age Discrimination in Employment Act: Forbids age discrimination.

• Pregnancy Discrimination Act: Forbids discrimination based on pregnancy when it comes to any aspect of employment.

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• Sexual Harassment laws: Forbids the harassment of a person (an applicant or employee) because of that person’s sex. Harassment can include “sexual harassment” or unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.

LOCAL HUMAN RIGHTS LAWS The DC Human Rights Act of 1977, as amended, expands upon federal protections for individuals and applies to all District businesses. There are 21 traits protected from employment discrimination in the District, which include some of the following: • • • • • • • • • •

Race Color Religion National origin Sex Age Marital status Personal appearance Sexual orientation Gender identity or expression

Along with enforcing the DC Human Rights Act of 1977, the District’s Office of Human Rights (OHR) also enforces federal and local human rights laws, including the following non-exhaustive list of employment laws: • The Fair Criminal Record Screening Amendment Act of 2014: Prohibits most employers in the District from asking about criminal backgrounds on job applications or during the interview process.

Covered employers may conduct a criminal background check only after making a conditional job offer to the applicant and may only withdraw the offer for a legitimate business reason.

• The Protecting Pregnant Workers Fairness Act of 2014: Requires District employers to provide reasonable workplace accommodations for employees whose ability to perform job duties is limited because of pregnancy, childbirth, breastfeeding, or a related medical condition.

• The Unemployed Anti-Discrimination Act of 2012: Prohibits employers, employment agencies, or entities acting on an employer’s behalf from discriminating against individual applicants because they are unemployed.

• The Fair Credit in Employment Amendment Act of 2016: Prohibits employers from taking discriminatory action against a current or prospective employee based on their credit information.

If you need assistance understanding these protections, you can reach out to several District agencies such as the Office of Disability Rights. To learn more about these protections, go to ohr.dc.gov.

INCLUSIVITY ASSISTANCE The following District government offices can assist you in making your business more inclusive for your employees: • Mayor’s Office of Lesbian, Gay, Bisexual, Transgender and Questioning Affairs • Age-Friendly DC • Office of Disability Rights

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INFORMATION REQUIRED TO DISPLAY VISIBLY As an employer in the District, you are required by law to display specific employment-related posters in locations accessible to your employees. A listing of these posters, and the appropriate District government offices where they may be obtained, is provided below:

DC Minimum wage

Office of Wage-Hour · (202) 671-1880

does.dc.gov

Unemployment Compensation

Office of Unemployment Compensation · (202) 724-7000

Workers’ Compensation (Private Sector) Office of Workers’ Compensation · (202) 671-1000

Occupational Safety and Health (Private Sector)

Office of Occupational Safety and Health · (202) 671-1800

DC Family Medical Leave Act

OHR.dc.gov

DC Office of Human Rights · (202) 727-4559

Equal Employment Opportunity DC Office of Human Rights · (202) 727-4559

Protecting Pregnant Workers Fairness Act DC Office of Human Rights · (202) 727-4559

DC Parental Leave Act dcps.dc.GOV

DC Office of Human Rights · (202) 727-4559

3.4 BUSINESS INSURANCE Workers’ Compensation Insurance, Business Property and Liability, Bonding, DC Captive Insurance Dealing with potential exposure to loss constitutes a significant portion of business planning. Commercial insurance facilitates the transfer of potential business-related risks to an insurance company for a price or premium. It is important to have business insurance so that the assets of your company are protected in the case of a mishap. It protects not only your company, but also your customers and employees. There are different types of insurances, some of which are required for all businesses in most states, while others are recommended based on your business’ sector.

This chapter provides helpful guidelines on the different types of insurances that can help you protect your business.

DEPARTMENT OF INSURANCE, SECURITIES, AND BANKING (DISB) DISB regulates the financial services industries in the District by administering insurance, security and banking laws, and regulations. This District government agency oversees financial service providers that include insurance companies and producers, broker-dealers, mortgage lenders, check cashers, and District-chartered banks. DISB ensures a business climate that encourages fair and open competition, while supporting financial services firms conducting business in the District.

NAIC Child Labor Law

U.S. Department of Labor · (866) 487-9243

One of the insurance resources DISB recommends is the National Association of Insurance Commissioners (NAIC). The NAIC, of which DISB is a member, equips small businesses with information about business risks and insurance options in both English and Spanish. Visit content.naic.org/consumer/ small-business.htm for more information.

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TYPES OF BUSINESS INSURANCE WORKERS’ COMPENSATION INSURANCE Workers’ compensation insurance provides medical and wage benefits to employees who are injured or become ill at work. Though it is mandated by each state, the wage and medical benefit vary by state. A typical workers’ compensation policy has two main components:

PROCESSING CLAIMS

The District’s Office of Workers’ Compensation (OWC) within the District’s Department of Employment Services processes claims and monitors the payment of benefits to injured private-sector employees in the District.

The program mediates disputes, monitors employer compliance, and administers the Special Fund, which provides benefits in the cases of uninsured employers or in situations where an injury combines with a preexisting disability and causes a greater disability.

Part one covers the employer's statutory liabilities under workers’ compensation laws, such as the employee’s medical expenses, rehabilitation costs, death benefits, and lost wages. Part one is compulsory in the District. Every employer subject to the District of Columbia workers’ compensation law is liable for covered claims made by employees who experience a work-related injury, illness, or death sustained either on business premises or due to business operations. With few exceptions, companies in the District are required to carry workers’ compensation insurance for their employees. If a business does not have workers’ compensation and one of its employees is injured on the job, the business may be liable for expenses incurred for that individual. Also, the business may face fines and penalties for noncompliance. Usually, a workers’ compensation policy will not provide coverage for onthe-job accidents caused while committing an illegal act, while intoxicated, while using illegal drugs, by a worker whom starts a fight, by an accident that is self-inflicted, or when an employee’s conduct violates company policy.

OWC, in partnership with DISB and the National Council on Compensation Insurance (NCCI), has also implemented the Safe Workplace Program. This program allows employers to receive a 5% reduction in workers’ compensation premiums, if they meet the criteria and requirements for establishing a safe workplace.

Part two encompasses employer’s liability insurance, which covers liability arising from employees' workrelated injuries that do not fall under the workers’ compensation statutes. Part two protects employers from workplace injury claims attributed to the employer’s negligence or fault and brought by an employee who is injured due to a work-related incident. Coverage afforded under this part can help pay for attorney fees, court costs, settlements, or judgements. Like many policies, employer’s liability coverage has exclusions designed to help define the scope of coverage. For example, employer’s liability does not apply to: liability assumed under a contract; punitive or exemplary damages because the employee was in violation of the law; damages arising out of the discharge of, coercion of, or discrimination against any employee in violation of the law; bodily injury intentionally caused or aggravated by the insured.

Providing health insurance for employees is one of the greatest challenges many businesses face today. As many business owners know, health insurance is a very powerful benefit to leverage in recruiting and retaining workers. Cost and availability of health insurance are crucial issues to master as a business owner.

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LIMITING WORK INJURIES The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) offers specific information by industry type and other helpful resources to small businesses on how to comply with safety requirements that can limit work injuries. To learn more, visit the OSHA website at osha.gov/dcsp/smallbusiness.

GROUP HEALTH INSURANCE

Signed into law by President Barack Obama in 2010, the Patient Protection and Affordable Care Act (ACA) is responsible for the most comprehensive reforms of the United States’ health care system since the 1960’s passage of laws that created Medicare and Medicaid.

The ACA established state health insurance exchanges, or marketplaces, where individuals, families, and small businesses can purchase guaranteed-issue qualified health insurance plans with affordable premiums.

COMPLYING WITH DC RULES AND REGULATIONS

While the ACA changed little for large employer group health insurance and self-funded groups, much has changed for smaller employers. The Small Business Health Insurance Options Program (SHOP) available through DC Health Link (the District’s health exchange marketplace) is intended to pool all eligible small businesses (employers with fewer than 50 full-time employees) in the District into one group. This spreads risk across a vast number of participants, while yielding costs that are similar to those otherwise available to large employers and government entities. Furthermore, the DC Health Link system provides automatic price and plan comparisons. Based on information provided in the marketplace of interest, one of more than 800 licensed brokers will serve as a personal adviser, looking out for a company’s best interests.

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• Short-term Disability covers a portion of the policyholder’s salary for a short period of time, typically three to six months following a disability. The specific period and percentage of replaced income varies with different policies.

• Long-term Disability insurance benefits typically begin after the policyholder is disabled and unable to work for at least six months. Benefits can extend for a specified number of years or until the insured retires or reaches age 65, depending on the policy.

COMMERCIAL PROPERTY INSURANCE

GROUP DISABILITY INSURANCE

Commercial property insurance protects business owners from losses due to theft or damage to physical space or equipment. For insurance purposes, a business property includes the physical building in which the business resides and its other assets, including machinery, computers and other data processing equipment, signs, fences, or intangible items (such as trademarks and copyrights and inventory). The insurance also can provide protection for employees’ personal property.

A business owner may want to consider offering disability insurance to employees in the case that they become disabled and unable to work.

There are two types of disability insurance:

One of three levels of coverage can be selected to become part of a commercial property policy. Each level provides more coverage. These different levels of coverage are more commonly known as Causes of Loss forms.

In addition, small business owners who purchase coverage for their employees on the exchange are eligible for a tax credit up of to 50% of the cost of providing health insurance for their employees and up to 35% for tax-exempt employers.

For more information, visit: disb.dc.gov and dchealthlink.com.

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1. Basic Form includes losses resulting from a fire, lightning, windstorm, riot or civil commotion, hail and explosion, plus the cost of removing property to protect it from further damage 2. Broad Form includes basic plus extended coverage for other types of perils, such as a roof collapse (e.g. one caused by snow or ice), falling objects, sprinkler leakage, breakage of glass, etc.

3. Special Form includes basic and broad form coverage and covers all direct physical losses except conditions specifically excluded in the policy With commercial property insurance, business owners can buy either actual cash value or replacement cost insurance. Actual cash value insurance reimburses owners for the value of lost, damaged, or stolen goods after depreciation. Replacement cost insurance reimburses the owner for the amount it would take to replace, rebuild, or repair damages with materials of similar kind and quality, without deducting for depreciation.

BUSINESS INTERRUPTION / CONTINUATION INSURANCE Business interruption/continuation insurance covers lost earnings due to circumstances identified in the policy that shut down or decrease business operations for an extended period. Business interruption/continuation insurance covers expenses associated with running a business. This coverage can be added to a property insurance policy or purchased through a package of insurance product.

CONTINUATION OF OPERATIONS

All businesses should consider developing or updating a continuity of operations plan. A strong continuity of operations plan will help businesses prepare, reorganize, and recover from a catastrophic or unexpected event adeptly. The plan provides direction and establishes policies to ensure that critical functions continue, while staff, resources, and materials are managed effectively during the emergency or unexpected event.

What should a “Continuity of Operations” plan look like?

This will vary depending on the type of business. In general, a continuity of operations plan should address the following:

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1. Identify essential business functions—These are the critical activities performed by the business.

2. Recognize chain of command—This list covers the people involved in the succession of control and all decision makers.

3. Research alternate operating facilities or locations—Identify offsite locations to include a warehouse, mobile office, home or telecommuting site, or a command center in which business and operations can be conducted.

4. Designate communication system—This includes your mode or system of contacting or communicating with employees, the community, or other important stakeholders.

5. Coordinate for specific tasks or situations—Identify and assign specific employees who will carry out specific tasks or work under a specific situation or circumstance. They may oversee responding to calls, contacting people, or coordinating specific activities.

6. Set distress zone(s)—Identify areas for disaster supply kits, first aid kits, personal protective equipment or survival gear, and comfort centers or rooms.

7. Confirm stock rooms—Identify an area or location where materials, supplies, and equipment are contained and later disseminated to allow the business to operate under different conditions.

8. Develop an emergency fund—Develop an emergency/reserve financial fund that would allow the business to operate for at least three to six months if monetary access is limited or unavailable.

9. Identify critical resource channels— Identify and manage crucial company resource links, contacts, and suppliers.

10. Create vital record protection program—Create a program that identifies, preserves, and makes retrievable or reproducible critical business records during an emergency. Critical records to include are an emergency preparedness plan, a copy of vital records inventory, insurance policies, personnel records, financial information, and orders of succession.

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How fast a business recovers greatly depends on the severity and nature of the event. Having the right insurance policy can help with recovery. It is recommended to review your commercial policy at least annually and after any emergency, to determine if any coverage needs to be supplemented with business interruption, loss of income, extra expense, loss of use and occupancy, or another coverage that may be beneficial to recovery and mitigate losses. While insurance coverage can certainly help in times of emergency, there are certain events where coverage may be excluded or unavailable. It is recommended to check with an agent for more comprehensive information on insurance coverage.

LIABILITY INSURANCE Liability insurance covers a business owner if someone suffers from an injury while visiting the premises of the business or if a customer is hurt by a product the business sells. This insurance prevents the business from being held responsible for the injury.

Liability insurance, also called commercial general liability (CGL) insurance, covers four types of events in which a business could be held financially responsible: bodily injury; damage to others’ property; personal injury (including slander and libel); and false or misleading advertising. Three types of legal damages for which people may sue are typically covered by a CGL policy: • Compensatory damages, which include financial losses suffered by the injured party that also include future losses the party may suffer as a result of an injury they claim in a lawsuit • General damages, which include non-monetary losses suffered by the injured party, such as pain and suffering or mental anguish • Punitive or exemplary damages, which include additional penalties and charges awarded to an injured party that go beyond what is necessary to compensate the individual for losses, and that are intended to punish the wrongdoer for negligence Standard Liability Insurance does not protect a business against: • Claims from sexual harassment, wrongful termination of employees, failure to employ or promote, or discrimination lawsuits

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• Claims related to operating an automobile or truck • Pollution caused by the company

• Wrongful practices by professional service providers (e.g., healthcare providers, lawyers, and consultants) Small businesses that have these types of exposure may need to secure specialized policies, such as employment practices liability, commercial auto liability, medical professional liability, and pollution liability.

OTHER TYPES OF LIABILITY INSURANCE • An Umbrella Liability Policy is a type of excess liability coverage that provides more comprehensive protection not available in the underlying policy.

Umbrella policy coverage limits are typically within the $1 million to $5 million range and are appropriate for business owners who have large assets or may be especially vulnerable to lawsuits.

• Crime Insurance protects businesses from theft and malicious damage, such as employee embezzlement.

• Cyber Security Insurance, or internet business insurance, covers web-based businesses for damages caused by computer hackers and viruses. You should check to make sure your insurance covers ransomware.

• Professional Liability protects against lawsuits that may claim the business has been negligent or made an error or omission while performing services. Policies that fall under professional liability can include errors and omissions (protecting business professionals against mistakes or oversights) as well as directors and officers (protecting an organization, usually a corporation, from errors made by the people in charge).

• An Excess Liability Policy provides additional or higher limits of coverage to only those covered items or subjects identified in the underlying policy.

COMMERCIAL AUTO INSURANCE All motorized vehicles must be covered by auto insurance, regardless of whether they are used for personal or business purposes. Automobile liability insurance covers medical expenses for injured persons and damages to the property of other individuals caused by a motor vehicle accident

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due to the insured’s negligence. Automobile liability insurance is mandatory in the District. All commercial enterprises that maintain one or more vehicles must meet the financial responsibility laws by posting bond (through self-insurance), or by providing a certificate of liability or an insurance policy issued by an insurer.

While the types of coverage provided by personal and commercial auto insurance policies are similar, there are important distinctions. Typically, commercial auto insurance policies have higher liability limits; for example, this type of policy may have a liability limit of $1 million.

They may also have provisions that cover rented and other non-owned vehicles, including employees’ cars driven for business purposes. Several factors related to ownership and use of vehicles determine whether a personal or commercial policy is appropriate. These include: • Who owns or leases the vehicle: an individual or the business as an entity?

• Who drives the vehicle: the owner or the employees?

• How is the vehicle principally used: for transporting people, delivering packages, or carrying hazardous materials?

Business owners may also want to consider the purchase of collision and comprehensive coverage to guard against damage to the vehicle.

FLOOD INSURANCE Flooding can occur due to poor drainage systems, rapid accumulation of rainfall, large snowmelt, or broken water mains. Properties on a hillside or in a sloping area can be damaged by mudflow. Flood insurance is required by law for buildings in high-risk flood areas as a condition of receiving a mortgage or deeds of trust from a federally regulated or insured lender. For more information on flood insurance coverage, visit floodsmart.gov or contact DISB for a list of licensed insurance agents.

GROUP LIFE INSURANCE Some business owners offer group life insurance to employees. Group life insurance can be part of an employee benefit plan or a voluntary offering.

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For policies paid for by a business owner, the benefit can often be equivalent to a full year’s salary, an amount that may not be sufficient for some people. These types of policies can be viewed as an added benefit or supplement to other life insurance coverage that an employee may have. If an employee wants additional coverage on top of what an employer is willing to purchase, amounting to double or triple the employee’s salary, the employee may have to pay for it.

Purchasing additional coverage outside of what is offered through the group policy may require that the employee undergo a medical exam to determine the level of insurability based on health. However, a voluntary life insurance policy can provide significantly more coverage, depending on the amount of money an employee wants to spend on that type of policy.

Group life insurance policies tend to be less expensive than those purchased individually. Most group life insurance is sold on a term basis. Term life insurance pays a death benefit if the policyholder passes away within a specified period.

To figure out a group rate, the insurance company will usually consider the following factors about a business: • The number of employees within the group • Average age of employees • Ratio of females to males (based on the statistic that women tend to live longer than men) • Number of smokers • Risk factors associated with the business Based on the business risk, for example, a marketing firm would probably have a lower group rate than a roofing company for equivalent coverage. Generally, group life insurance policies are a guaranteed issue, meaning that employees do not need to undergo a medical examination to be eligible. An employee who has a serious medical condition may still be a part of the group if he or she is an active worker. However, employees out on disability leave are not eligible for group life insurance until they return to work, unless they went on leave after the policy had been issued.

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KEY PERSON LIFE INSURANCE

HOME-BASED BUSINESS INSURANCE

Within a small company, there are typically key people who are critical to the success of the business. These individuals may be limited to the business’ founders or partners or defined more broadly to include other critical employees responsible for running aspects of the business (e.g. the senior marketing or sales manager, chief engineer or software developer, etc.). The death of any of these key people would likely cause a serious impact on the business’ bottom line. Therefore, many small firms choose to purchase key person life insurance policies on these employees.

As the policy owner, the company is the beneficiary and receives the proceeds upon the death of the insured key employee. The payout can help the company by providing:

Home-based businesses (those exclusively run from a home and no other location) compose roughly half of all U.S. businesses and generate a huge amount of economic activity, according to the U.S. Small Business Administration. While some home-based businesses grow into full-fledged companies that employ substantial numbers of people, most remain quite small:

• Funds to weather the loss and continue operations until a replacement can be hired and trained to carry out the functions of the deceased • The funding to buy out the key person’s heirs if ownership rights of the business are involved In some cases, a small business seeking a loan from a bank or trying to raise capital from outside investors may be required by the lender or investor to carry key person life insurance for its partners. The bank may even require that the small business provide a collateral assignment agreement that would give the bank first rights to the policy proceeds to cover outstanding loans if one of the partners dies.

TYPES OF KEY PERSON POLICIES

Like individual life insurance policies, key person life insurance policies may be purchased as term life or permanent life policies.

• 90% are sole proprietorships, • 7.2% have between two and four employees, • Just over 1% have five to 19 employees, and • About 0.2% have 20 or more employees.

Regardless of size or type, home-based businesses should be properly insured to protect their assets and owners against certain risks. Home-based businesses are often underinsured, a fact that the owner discovers after an incident occurs.

TYPES OF HOME-BASED BUSINESS INSURANCE

If your business is a home-based business or if you are thinking about starting one, it is recommended to learn about the range of insurance products available. While your business may not require all types of insurance listed, it is important to understand the potential risks and insurance options.

Home-based business owners should consider the following types of insurance for their business: • Workers’ compensation insurance

• Term Life Insurance covers the insured for a term of one or more years. It pays a death benefit only if the insured dies within that term. Term insurance generally offers the best value for the premium dollar. However, it does not build up cash value, it may not be renewable at the end of the term, or may cost considerably more to continue.

• Property and liability insurance

• Permanent Life Insurance, which is also called whole life, universal life, or variable life insurance, typically includes a death benefit and cash value. Premiums for permanent life insurance tend to be higher than for term life insurance because of the cash value element.

• Life insurance

• Commercial auto insurance • Flood coverage • Disability insurance

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BUSINESS STORIES Established in 2008, Solar Solution has grown to be one of the largest residential solar photovoltaic development and installation companies operating and located in the District. Local financial support programs offered by the District government gave Solar Solution the opportunity to expand their capacity as a business, and ultimately impact the District’s renewable energy profile.

“A big part of our growth journey and current success can be attributed to the Department of Insurance, Securities and Banking (DISB)’s District of Columbia Business Capital Program (DC BizCAP).

DC BizCAP helped us get approval for our first loan in 2013 from Industrial Bank, a participant lender of the program. DISB backed a $2 million loan that certainly changed the course of growth for us as a company. Since then, we’ve been able to take out larger loans and expand our operations throughout the city. We’re proud to have installed over 60% of the District’s residential solar PV systems and work closely with both District residents and businesses to switch to solar at no upfront cost!”

JD ELKURD CEO, Solar Solution Facebook: @SolarSolutionDC Yelp: Solar Solution

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CAPTIVE INSURANCE Captive insurance is a type of insurance that allows businesses to self-insure their risks rather than buy coverage from commercial insurers.

A captive insurance company, or a captive, is an insurance company owned by a single business or a group of businesses that only insures the commercial risks of its owner or owners. A captive can be useful when insurance coverage is not offered by commercial insurers or when it is too expensive. A captive is not permitted to sell insurance to the general public nor issue personal lines of insurance.

Captives allow businesses to take financial control and manage risks by underwriting their own insurance instead of paying premiums to third-party insurers. The potential advantages of such self-insurance include lower costs, protection tailored to the organization’s needs, more control over risks, and tighter control over financial resources.

Captive insurance companies are chartered in the District by the DISB’s Risk Finance Bureau. For more information, call DISB at 202-727-8000 or visit disb.dc.gov.

BONDING An insurance bond offers assurance that one party will be responsible for the faithful performance of another party.

It differs from insurance in that there are three parties involved in a surety program, while only two parties are involved in a typical contract of insurance. Surety programs usually involve the obligee (the obliging party) which can be a contractor, state, local, or federal government, or individual(s) requesting services, the obligor (the performer or principal), and the surety (company). Five general

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requirements would be compliance with an ordinance, rule, special term, obligation, or regulation. Most capital work projects put out to bid require the successful bidder to lodge bonds after being awarded the contract. Business owners should contact their insurance or surety companies to find out what they offer. Visit businessinsurance.com for general business insurance information.

types of contract bonds are available for small businesses offering products/materials or services to others: • A Bid Bond, or tender bond, is a type of surety bond issued by surety or insurance companies specializing in this type of product. The bond is taken out by an entity during the bidding process for a project. The bond guarantees that the successful bidder will enter contract once the bid is accepted and will furnish a performance bond.

It is important to note that other types of surety bonds, in addition to those falling under contract bonds, may be required when doing business with a regulatory authority or engaging in certain business activities.

Two of the more notable surety bonds are federal surety bonds that guarantee compliance with federal laws or regulations and license, and permit bonds.

• A Performance Bond guarantees that the entity will perform and complete the work in accordance with the contract and related documents and that such work, when completed, will be free of liens.

• A Payment Bond, also known as a labor and material bonds, ensures that subcontractors and material suppliers are paid.

Federal surety bonds primarily guarantee compliance with federal laws or regulations. This type of bond may be required if a business is involved in the importing or exporting of goods to other states or countries, ultimately guaranteeing payment of duties or taxes. License and permit bonds are often required by licensing authorities as a prerequisite to engaging in certain business activities.

• A Maintenance Bond guarantees that the work is free from defects in both workmanship and materials for a designated period.

• An Ancillary Bond guarantees that non-material, incidental, or essential performance requirements of a contract will be satisfied. An example of performance

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Whether you are looking to start a business or expand your existing business, WDCEP has multiple programs to help you grow. Our free site location assistance, local market intelligence, and development forecasts provide valuable insight into DC’s trends and opportunities.

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4.1

BUSINESS FINANCING

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4.2

BUSINESS MARKETING

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4.3

FINDING TALENT

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4.4

BUSINESS SUPPORT ORGANIZATION

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4.1 BUSINESS FINANCING Getting Ready for Financing and Sources of Financing—Loans, Equity, Crowdfunding, Grants, Other Financing is often considered the most challenging aspect of starting a business. Each business is unique and has different financial needs. Your business model, personal financial situation, and overall vision for the business will determine how much funding is needed to start and operate your business. Once you have determined the amount of funding necessary, you can begin exploring different options. This chapter will help you understand questions you need to consider in terms of financing and provide guidance on the different sources of funding including debt, equity, or grants available.

GETTING READY FOR FINANCING INITIAL CONSIDERATIONS In order to determine how much financing is needed and available to your business, you will need to assess current resources, complete relevant financial documents, and obtain a credit report.

RESOURCES EVALUATION It is important to evaluate your current resources before turning to external financing. You should take inventory of the financial resources that you may already have available—this could include personal savings, personal assets available as potential loan collateral, loans and investments from family members and friends, trade agreements with vendors or suppliers, contracts with potential customers, retirement accounts, credit cards, home equity lines of credit, and ongoing sources of income.

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BUSINESS FINANCIALS You will need to thoroughly understand and be ready to demonstrate your business’ financial projections. You will likely be required to answer key financial questions in order to secure funding for your business, such as: • What level of funding will you need to start, operate, and grow your business?

• How will you spend the funding? What aspects of the business will the funding support?

• What do your business budget and cash flow projections look like?

In addition, you will also need to demonstrate understanding of key financial statements such as income statements, cash flow projections, and balance sheets. Once your financial documents are in order, you should review them to ensure that the communicated expectations and projections achieve the following: • Support business goals that are realistic • Show how your company will grow and achieve profitability • Identify how financial risks will be minimized • Demonstrate a clear plan to repay investors or lenders

CREDIT REPORT Regardless of whether you will use your own resources or obtain external financing, it’s important to obtain a credit report for the following reasons: • Verify the accuracy of your personal credit history • Determine if loans (personal and/or commercial) are a viable option • Identify any outstanding issues concerning previous debt that need to be resolved prior to contacting investors

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The Fair and Accurate Credit Transaction Act allows you to obtain one free copy of a credit report through one of the following businesses every 12 months: equifaX (800) 685-1111 · equifax.com/business eXperian (888) 397-3742 · experian.com/small-business transunion (800) 888-4213 · transunion.com/business

For more information visit annualcreditreport.com.

feel comfortable with the lender, loan terms, interest rates, and your ability to repay loans before committing to the loan. It is advisable to compare loan proposals from more than one lender before deciding on a loan.

SHORT-TERM LOANS Short-term loans generally must be repaid within a year and are typically used to finance seasonal build-up of inventory, accounts receivable, staffing, and other working capital needs.

LINE OF CREDIT

BUILD AND IMPROVE YOUR CREDIT If your credit score is not as high as you would like, or you do not currently have much credit, you may contact a community-based organization to receive one-on-one credit counseling and apply for small loans to help build credit.

Refer to Section 4.4: Page 82 for the list of organizations that can help you.

SOURCES OF FINANCING The District has many banking, financial, and community resources that can help you start and/or expand your business. Before applying for financing, it is important to understand the different sources of financing available to your business. Typically, financing is divided in five different categories: 1.

2.

3.

4.

5.

Debt/Loans Equity Crowdfunding Grants and Incentives Other

DEBT/LOANS Debt financing involves borrowing a fixed amount from a lender, which is paid back over time with interest.

Debt financing is often referred to as a loan.

TYPES OF LOANS

While there are broadly two types of loans—short-term and long-term—there are many types of loan combinations.

By understanding the different types of loans on the market and what each is designed to do, you can select the best option for your business. Make sure that you

A line of credit is a specific amount of money that has been approved and set aside for business owners to draw upon as needed. Interest is charged only on the amount of the line that is used. However, lenders may charge a commitment fee of 0.5–1% of the total line for reserving these funds.

TIME LOANS

There are no installment payments with time loans. Instead, the entire amount of the loan plus interest is paid back at loan maturity.

TERM LOANS

Term loans are offered on a short-term basis to businesses that don’t qualify for a line of credit.

They generally run less than a year, though it can also refer to a loan of up to 18 months or so.

LONG-TERM LOANS Long-term loans generally have repayment terms that exceed one year and are often used to finance permanent assets such as a core level of inventory, business expansion, machinery and equipment, or facilities.

TERM LOANS

Term loans can also be offered on a long-term basis. Usually, these loans are repaid as equal installments of principal plus interest on the outstanding amount of the loan. Payments can be due monthly, quarterly, or semi-annually in equal amounts that include principal and interest. Payments can also include a fixed amount of principal, with interest payments that decline with the outstanding loan balance.

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REVOLVING LINE OF CREDIT

PERSONAL LOANS

A revolving line of credit differs from other lines of credit because it does not require an annual payoff but may require an annual renewal. Reviewed and renewed on an annual basis, revolving lines are similar to credit cards with pre-set spending limits. The amount of funds available decreases by the amount of money withdrawn and increases as the funds are repaid in monthly installments of interest plus principal.

Owners of a start-up or new business can take out long-term personal loans from a lender. Because there is no existing track record to evaluate, a lender may base the loan on personal assets, relevant borrower experience, or their personal credit history.

ACCOUNTS RECEIVABLE LINES OF CREDIT

Microloans (from $500–$50,000) are also a good source of financing. Nontraditional lenders, often with less stringent financial guidelines than banks, may offer microloans. They can be used for working capital, machinery, inventory, or leasehold improvements.

Accounts receivable are legally enforceable claims for payment held by a business for goods supplied and/or services rendered that customers/clients have ordered but have not paid. An accounts receivable loan is based on the payment history of your customers. This type of loan is often used for government contracts and subcontracts. Lenders will either render separate loans or set aside funds for your use in an amount usually equal to 75–100% of all accounts receivable invoices that are less than 90 days old (depending on the customer).

Typically, a government contract is more reliable than a private sector one, so the amount and term of the loan changes accordingly. Available money is drawn as needed and paid as customers make payments.

Interest is charged only on the outstanding portion of the loan, with principal due at maturity.

COMMERCIAL AND INDUSTRIAL MORTGAGES

These are used to finance the purchase, renovation, and construction of commercial property that are either owner-occupied or held for investment. Depending on the property, most lenders will finance up to 75% of the property’s appraised value or construction cost in the form of a mortgage. However, commercial mortgage loans are generally offered for 10 years or less. The monthly installment payments may be reduced by basing the payments on an amortization period that is longer than the life of the loan. With this loan structure, the outstanding principal and interest is paid off with a lump sum “balloon payment” when the loan is due.

MICROLOANS

TAX-EXEMPT BONDS

Revenue bond financing is an attractive source of funding for businesses and non-profit organizations that are located and operate within the District. A qualified private business can borrow up to $15 million of tax-exempt bonds to invest in buildings, equipment, and furnishings used for the qualified business. Since interest on revenue bonds is tax-exempt to the bondholders, the interest rate paid by the borrower is lower than for market interest rates.

APPLYING FOR A LOAN

A business loan application for an existing business will vary based on the lender, but generally includes the following information: • A description of the business, including products and/or services as well as market and competitive advantages • A biography with a summary of qualifications (many applicants simply provide resumes of key managers) • A budget detailing how the funds will be used • A statement of equity injection—the business owner’s personal contribution (if possible, this should be 20% of the total budget; the remainder is the amount of the requested loan) • Business financial statements and tax returns for the last three years (if applicable)

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BUSINESS RESOURCES

• Monthly cash flow projections for at least the next 12 months • Personal financial statements and three years of tax returns for each owner of the business • A description of the collateral being offered, in addition to business assets that often include personal assets such as marketable securities or real estate The lender will evaluate all this information prior to deciding on your loan application. In addition, lenders will also weigh the five characteristics of your credit to determine your credit worthiness. In some cases, applications are not quite strong enough to stand on their own. This is often true with start-up businesses, cases in which the collateral is insufficient, or if the equity injection is too small. In these instances, the lender will sometimes agree to make the loan only with the guarantee of the U.S. Small Business Administration (SBA). The lender will guide the business owner through the process and additional paperwork involved in obtaining the SBA guarantee. For more information, including a free online tool that connects small business owners with participating SBA-approved lenders, visit sba.gov/lendermatch.

THE FIVE C'S OF CREDIT • CAPITAL: the amount of a business owner’s funds that are invested in the business.

• CAPACITY: the owner’s ability to produce the cash flow to repay the loan.

• COLLATERAL: the assets, such as real estate, equipment, or inventory that can be liquidated to repay the loan if cash flow is inadequate.

• CONDITIONS: external conditions that can impact the business, either as opportunities or challenges.

• CHARACTER: the general impression of trustworthiness the owner makes on the prospective lender or investor, evidence of the owner’s willingness to repay the loan (this is where a good credit history is crucial).

DC BizCAP

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The District of Columbia Business Capital Program (DC BizCAP) at DISB provides capital to small businesses and entrepreneurs in the District. Two DC BizCAP programs provide alternatives to traditional commercial financing to facilitate private lending and investments in District small businesses.

DC BIZCAP – COLLATERAL SUPPORT PROGRAM Provides funds for deposit with a participating lender to cover the borrower’s collateral shortfall.

DC BIZCAP – LOAN PARTICIPATION PROGRAM Helps a lender make loans to small businesses by enhancing the lender’s ability to improve liquidity and reduce credit risk.

DC BIZCAP – INNOVATION FINANCE PROGRAM Provides capital for investment in District of Columbia start-ups and emerging companies that seek financing alternatives to traditional commercial financing.

Program funds can be used for start-up and business recovery costs; working capital; business procurement; franchise fees; equipment; inventory; purchase, construction, renovation or tenant improvement of commercial real estate; and tangible and intangible property (except goodwill). To apply for program funds, visit one of the participating lenders listed at disb.dc.gov/node/391732.

For more information, visit disb.dc.gov/service/small-business-resources.

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U.S. SMALL BUSINESS ADMINISTRATION (SBA) The SBA offers a variety of loan programs that many small businesses use for very specific purposes. While the SBA does not make direct loans to small businesses, it does set the loan guidelines. Loans are then made by SBA partners (e.g. lenders, community development organizations, and microlending institutions).

The SBA provides guarantees that support eligible business loans, thus eliminating some degree of the risk posed to lending partners. Consequently, when a business applies for an SBA loan, it is applying for a commercial loan that is structured according to SBA requirements with an SBA guaranty.

Several reasons why an SBA guaranty may be necessary to include: • Lack of collateral • Lower than normal down payment or equity • Longer term/lower payments required to meet debt coverage requirements

Application procedures for SBA loans vary depending on the type of loan and the lender, so it is important to confirm which format is required with the local lender. Some of the most common SBA programs include: • 7(A) • SBA Express • Advantage Loan • Small Loan Advantage • Community Advantage • Veteran Advantage • Microloans • CDC/504 loan • Disaster loan • SBIC • Surety Bonds For more information on the loans, go to: sba.gov/funding-programs.

• Riskier industries (e.g. entertainment, high tech, service, retail) • Uneven historical revenues or profits • Tighter than normal debt coverage • Change of ownership or management • Reliance on projections • Lending limits The SBA does not extend financial assistance to businesses when the financial strength of the individual owners or the company itself is sufficient to provide all or majority of the financing.

Both business and personal financial resources are reviewed as part of the eligibility criteria. If these resources are found to be adequate, the business will be required to use those resources in lieu of part or all the requested loan proceeds.

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EQUITY Equity financing involves a sale of a percentage of the business to an investor in exchange for capital. The investor can be anyone, ranging from family members to an external partner (either a person or corporation), that has the capital needed to invest in your business.

Capital can be raised through two different sources:

ANGEL INVESTORS

Angel investors are typically wealthy individuals or accomplished entrepreneurs who have the financial means to invest in your business. They are generally looking to partner by providing their capital in exchange for equity in your company. In addition to capital, they might offer business advice and guidance on how to grow your business. Before accepting capital from an angel investor, talk to your lawyer about the terms, conditions, and impacts it will have on your business.

VENTURE CAPITAL INVESTMENT

Venture Capital investments are usually made by private firms in exchange for equity. Typically, these firms invest in businesses that have high-growth potential and an ability to disrupt the market. These firms invest in phases, which are typically called rounds. Each round carries a designated letter; the first round is called Series A, the second round is called Series B, and so on. Venture Capital firms usually require some management control and repayment in exchange for their financial investment.

An advantage to using private investors is that they bring experience and their network of contacts to a business.

To obtain a listing of area venture capital firms or other private equity investors, visit the Mid-Atlantic Venture Association (MAVA) online and choose Member Profiles, which allows a search for funders by industry and location. MAVA is a membership organization of investors, entrepreneurs, advisors, and other company-builders.

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APPLYING FOR EQUITY FINANCING: FIND AN INVESTOR

Look for individual investors, often called angel investors, or venture capital firms. Be sure to do enough background research to know if the investor is reputable and has experience working with start-up companies.

SHARE YOUR BUSINESS PLAN

The investor will review your business plan to make sure it meets their investing criteria. Most investment funds concentrate on an industry, geographic area, or particular stage of business development.

GO THROUGH DUE DILIGENCE

The investors will survey your company’s management team, market, products and services, corporate governance documents, and financial statements.

WORK OUT THE TERMS

If they want to invest, the next step is to agree on a term sheet that describes the terms and conditions for the fund to make an investment.

INVESTMENTS

Once you agree on a term sheet, you can acquire the investment! Thereafter, the venture fund becomes actively involved in the growth of your company. Venture funds typically come in rounds. As the company meets milestones, further rounds of financing are made available with adjustments in price as the company executes its plan.

BUSINESS RESOURCES

CROWDFUNDING Crowdsourced funding for projects has become a popular way to raise capital. Crowdfunding allows multiple people to network and pool their money and resources together to support a business, project, or campaign. This is typically done through specific crowdfunding website.

Unlike angel investments, in which specific investors take stakes in a small business, crowdfunding enables a small business to attract multiple people who then receive benefits for contributing towards an online funding target.

These benefits are usually goods and/or services, rather than equity in the business. Crowdfunding is a popular mechanism because it doesn’t require giving investors a portion of control over your company. If your company fails, you won’t have any obligation to repay crowd funders. To learn more about whether crowdfunding is right for your business, visit crowdfunding.about.com.

Some of the popular crowdfunding platforms include: • • • • • • • •

Kickstarter - kickstarter.com Indiegogo - indiegogo.com IFundWomen - ifundwomen.com GoFundMe - gofundme.com Fundable - fundable.com Kiva - kiva.org GiveButter - givebutter.com Honeycomb Credit - honeycombcredit.com

INVESTMENT CROWDFUNDING (THE DISTRICT ONLY) Crowdfunding allows District-based businesses an exemption from the District’s securities registration requirements to encourage capital formation and simplify investing in Districtbased businesses (including start-ups and small businesses).

To qualify for the exemption, the business must be organized under District law and have its principal place of business in the District, and the securities in the offering must be offered only to District residents.

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CROWDFUNDED MICROLOANS—KIVA KIVA LOANS—Established in 2005 as the world's first personal micro-lending website, Kiva enables everyday people to pool small lending contributions to provide financial access to entrepreneurs across the globe. KIVA provides zero interest loans from $1,000 to $15,000 on loan terms of 12 to 36 months. Borrowers apply through the KIVA website, where they create an online profile about their business. If accepted, the borrower enters a private fundraising period, where they are required to recruit anywhere from five to 30 lenders depending on loan size. Once they hit their private donor quota, they are added to the public KIVA website with access to over 1.7 million lenders. A borrower has 45 days to become fully funded and fully funded loans are disbursed through PayPal. More information is available at kiva.org LISC-KIVA PARTNERSHIP MATCH—In addition, local non-profit organization, LISC DC provides a loan match to qualified small businesses pursuing a KIVA loan. For example, if a business is pursuing a $10,000 loan, the borrower would only need to raise $5,000 with LISC providing the remaining $5,000. LISC match is reserved for businesses that fit LISC’s mission criteria (e.g. person of color or women led business; businesses that have community benefit; businesses located in Wards 7 and 8). Learn more at lisc.org/dc.

For more information visit disb.dc.gov/smallbusinfo.

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GRANTS AND INCENTIVES Grants are funds that come from either the government (local or federal) or an organization to help businesses build and grow. Unlike loans, you don’t have to pay back a grant, nor do you have to put up collateral to receive a grant. However, grants usually carry stipulations on how they can be spent. Failure to abide by the terms and conditions may have legal implications. In most cases, you would have to return the grant funds if the money was spent on something other than the items specified in the grant agreement. It’s imperative to understand the terms and conditions of the grant before you apply.

Incentives are benefits that are provided by either the local or federal government to help businesses start and grow.

Incentives are often provided in the form of tax credits to lessen the financial burden of operating a business.

The Government of the District of Columbia offers a variety of grants and incentives for entrepreneurs that are looking to start, grow, or expand their business in the District. Depending on your business type or sector and location of business, you may be eligible for certain grants and incentives offered by the city. Below, you will find examples of financial resources and technical assistance offered by the District government and its partners. For full list of available resources, please visit incentives.dc.gov.

ALL BUSINESS SECTORS District BUSINESS INCENTIVES Incentives and resources to grow your business in the District of Columbia

Incentives.dc.gov is a comprehensive, searchable database of incentives and other funding-related programs provided by the District’s government agencies.

Benefits: Use the wizard to determine which incentives are the best fit for your organization based on your location, business structure, and industry. Enter your business address on the map tool to see if your location qualifies for any location-based incentives.

Eligibility: Businesses, non-profits, and property owners.

Website: incentives.dc.gov

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DC BUSINESS TOOLKIT

Grants, other funding, and application preparation technical assistance for District businesses

DCBusinessToolkit.com portal centralizes information about current grants as well as other funding and technical assistance resources available citywide and nationally from over 150 agencies and service providers.

Benefits: Use the Find Grants Roadmap wizard or the Search for Assistance Resources search tool to locate grants and other funding for your specific stage, type, ownership structure, and location (listing updated weekly). Find technical assistance to help apply for grants. Create account to receive email updates.

Eligibility: District-based businesses, District residents exploring entrepreneurship.

Website: DCBusinessToolkit.com

DC MAIN STREETS Businesses located in any of the 24 designated DC Main Street commercial districts benefit from technical, financial, and marketing assistance, as well additional amenities such as Clean Team public space services.

Annually, the Department of Small and Local Business Development (DSLBD) awards each DC Main Street program a grant, which in turn each individual Main Street program may use in part to award subgrants to businesses operating in their respective commercial district.

Benefits: Competitive grants for qualifying businesses in different main streets corridor.

Eligibility: Businesses, non-profits, and property owners.

Website: dslbd.dc.gov/service/DCMS.

BUSINESS RESOURCES

RETAIL + RESTAURANTS GREAT STREETs SMALL BUSINESS GRANT

Great Streets is the District’s commercial revitalization initiative designed to support existing small businesses, attract new businesses, increase the District’s tax base, create new job opportunities for District residents, and transform emerging corridors into thriving neighborhood centers. Since 2006, the Great Streets program has supported hundreds of small businesses across 13 corridors throughout the District.

The Great Streets Small Business Grant is the hallmark grant opportunity of the Great Streets program.

Businesses can use the grant funds, for example, to renovate their storefronts to attract new customers and ultimately increase profitability. The program has awarded more than $10 million in grants since 2017.

Benefits: Competitive grants up to $50,000 for qualified small business owners who wish to improve their place of business.

Eligibility: Grants are offered to eligible new and existing small businesses located along Great Street corridors. Some examples of eligible applicants include restaurants, bakeries, retail stores, pharmacies, and arts/humanities non-profits.

Website: greatstreets.dc.gov

NEIGHBORHOOD PROSPERITY FUND

In order to create new job opportunities for District residents, the Neighborhood Prosperity Fund provides gap funding for the commercial components of mixed use, office space, or retail development projects in targeted areas with more than 10% unemployment.

Benefits: The grant provides a minimum of $250,000 in necessary gap funding for nonresidential components of development projects.

Eligibility: Mixed-use or commercial projects located in census tracts where the unemployment rate is 10% or higher. 50% of tenants in project must be secured.

Website: dmped.dc.gov/page/neighborhood-prosperity-fund-npf

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BUSINESS STORIES MahoganyBooks is a family owned and run bookstore that specializes in books written for, by, or about the African Diaspora. Operating online since 2007, MahoganyBooks opened their first brick-and-mortar location in 2017 with the assistance of the Great Streets Small Business Grant Program offered by the Deputy Mayor’s Office for Planning and Economic Development.

“Though we started off selling books online, our vision was always to open a physical location. The goal was for our customers to feel comfortable while pursuing our stock and spending time in the store. We wanted to build a space that not only served as a bookstore, but also as a space for the community to gather, discuss, and debate.

When looking at potential locations for our storefront in 2017, we learned about the Greet Streets Grant program from the neighboring business. They had been awarded a grant and encouraged us to research that opportunity. While we were looking to open a physical location, we also attended information sessions that DMPED offered on the program to figure out the qualifications and steps necessary to apply.

The Great Streets Grant essentially allowed us to level-up. It gave us the extra financial cushion to invest in the interior design, fixtures, and amenities that we envisioned our storefront to have. We both have strong ties to Southeast (and Anacostia specifically), so we’re proud to be a part of the community by bringing African Diaspora-focused literature and offering a space to reflect or engage.”

RAMUNDA AND DERRICK YOUNG Owners, MahoganyBooks

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SUPERMARKET TAX EXEMPTION

The Supermarket Tax Exemption Act of 2000 waives certain taxes and fees to encourage supermarkets to locate in neighborhoods that lack access to groceries and fresh food.

Benefits: Qualified supermarkets may be eligible to receive the following benefits for up to 10 years after development or renovation: real property tax exemption, business license fee exemption, personal property tax exemption, and/or sales and use tax exemption on building materials necessary for construction.

Eligibility: Businesses must be registered grocery stores located within an eligible area and offer a full line of meat, seafood, fruits, vegetables, dairy products, dry groceries, household products, and sundries. There is no size requirement. To see if your business is in an eligible area, enter your business address on the map at incentives.dc.gov.

Website: dmped.dc.gov/page/supermarket-tax-incentives

CREATIVE AND OPEN SPACE MODERNIZATION TAX REBATE

The Creative and Open Space Modernization Tax Rebate fosters the development of technology-focused businesses in the District, with the potential for up to $5 million for qualified tenant improvements.

Benefits: QHTCs in the District can qualify for tax rebates of up to $1,000,000 annually for a maximum of five years (pending funding availability). Tax rebates will assist companies with improving their place of business or for the purchase and installation of heavy equipment that will be used onsite at the business location.

Eligibility: QHTCs that have a signed lease (or sublease) of at least 50,000 square feet of office space in the District after July 1, 2015, maintain site control of this office space for at least 12 years after the date of grant application, and provide a public benefit that will have a material, positive impact on the District.

Website: dmped.dc.gov

TECH QUALIFIED HIGH TECHNOLOGY COMPANIES

Qualified High Technology Companies (QHTC) can claim tax benefits to support their growth in the District.

Benefits: Reduced capital gains tax rate, new hire wage tax credits (up to $6,000 per employee) and retraining credits (up to $10,000 per qualified employee).

Eligibility: A QHTC is a company that leases or owns an office in the District, has 10 or more qualified employees, and derives at least 51% of its gross revenues earned in the District from qualifying high technology activities. Examples include website design, software development, and data processing.

Website: dmped.dc.gov/qhtc

INNOVATION AND RESEARCH SMALL BUSINESS INNOVATION RESEARCH

The Small Business Innovation Research (SBIR) program is a highly competitive program that encourages domestic small businesses to engage in federal research/research and development (R/R&D) that has the potential for commercialization. Through a competitive awardsbased program, SBIR enables small businesses to explore their tech potential and provides incentives to profit from its commercialization. By including qualified small businesses in the nation's R&D arena, entrepreneurial spirit and high-tech innovation are stimulated as they meet specific research and development needs. SBIR is a federal program coordinated through the SBA. DC PTAC at DSLBD can provide support to SBIR applicants.

Benefits: Phase I awards normally do not exceed $150,000.

SBIR Phase II awards normally do not exceed $1,000,000.

Eligibility: For-profit organizations based in the District.

Website: sbir.gov

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SMALL BUSINESS TECHNOLOGY TRANSFER

The Small Business Technology Transfer (STTR) program merges the entrepreneurial talent of a small high-tech business with the innovation of leading institutions and universities. STTR is a federal program coordinated through the SBA. DC PTAC at DSLBD can provide support to STTR applicants.

Benefits: The STTR program is phased similarly to the SBIR program, with awards limited to $100,000 for one year in phase I and limited to $750,000 for two years in phase II. Eligibility: For-profit organizations based in the District.

Website: sbir.gov/about/about-sttr

INTERNATIONAL EXPORTDC

ExportDC allows DC’s small businesses to capitalize on the District’s wealth of international knowledge and resources in order to enhance their international exposure and accessibility to global trade opportunities.

ExportDC is comprised of two full-time staff members who provide both prospective and established DC exporters with international expertise and business development skills. Since its inception, ExportDC has successfully established its program, setting the operating principles and protocols associated with managing both federal and locally-funded business support grants, attracting a professional-client base, and delivering on commitments to introduce small businesses in the District to international sales opportunities, developed internally or in cooperation with our local and national resource partners.

Benefits: Business matchmaking with potential international partners, opportunities to participate in international trade missions, post-mission business development planning, as well as personalized counseling, free workshops, specialized trainings, networking events, and limited financial assistance.

NON-PROFIT ORGANIZATIONS FUNDING ALERT

The Funding Alert is a weekly electronic bulletin produced by the Office of Partnerships and Grant Services that highlights competitive grant opportunities and related resource announcements for eligible community, faith-based, and 501 (c)(3) non-profit organizations, as well as local government agencies. The grant funding announcements generally come from District, federal, and foundation grant making entities. The Funding Alert provides information about the Grant Information Resource Center and District Grants Clearinghouse. The bulletin also has a link to the District Office of Contracting and Procurement (OCP)’s solicitation opportunities.

To start your own online subscription to Office of Partnerships and Grant Services’ Funding Alert, simply sign up at DCDOCS.

GREEN AND ENERGY EFFICIENCY PROPERTY ASSESSED CLEAN ENERGY

The Property Assessed Clean Energy (PACE) Program provides an affordable, long-term financing solution to help District property owners implement energy efficiency improvements that reduce utility bills and operating expenses.

Benefits: Qualified property owners can receive project financing that is repaid through a special assessment on their property taxes. Since the assessment is attached to the property, the term of the repayment can be much longer than conventional financing (up to 20 years) and the PACE assessment can stay with the property when it is sold.

Eligibility: Property owners in the District.

Website: dcpace.com

Eligibility: The team helps you to determine if your business is ready for export.

Website: dmped.dc.gov/page/exportdc

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SUSTAINABLE ENERGY UTILITY

SUMMER YOUTH EMPLOYMENT PROGRAM

Benefits: DSCEU provides financial incentives, technical assistance, and information to help District businesses save on their energy costs. For example, businesses can receive up to $50,000 in rebates per year to make upgrades on energy-efficiency.

Benefits: Employers can hire a young person for the summer at no cost to them. DOES will pay stipends/wages directly to the youth workers assigned to their worksite.

The District of Columbia Sustainable Energy Utility (DCSEU) helps District businesses save energy and money through energy efficiency and renewable energy implementation programs.

Eligibility: For-profit and non-profit organizations located in the District.

Website: dcseu.com There are many other energy efficiency rebates and savings available to businesses located in the District of Columbia. These programs include the Green Roof Rebate, Riversmart Rewards, and the Stormwater Retention Credit (SRC) Trading Program.

Please visit doee.dc.gov to check eligibility and savings potential.

WORKFORCE DEVELOPMENT ON THE JOB TRAINING

On the Job Training is a workforce development program that provides employers an opportunity to hire and train individuals who meet their specific workforce needs, while also giving trainees the opportunity to learn as they earn.

Benefits: Reimbursement of 50 to 75% of an eligible trainee's wages for up to 1040 hours. DOES can help to reduce recruitment time by sourcing candidates, but employer-sourced candidates are also permitted.

Eligibility: Large companies (100 or more employees) are eligible for 50% reimbursement.

Small to mid-size companies (less than 100 employees) are eligible for 75% reimbursement.

Website: does.dc.gov/page/job-training

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The Mayor Marion S. Barry Summer Youth Employment Program provides District youth ages 14 to 24 with enriching and constructive summer work experiences through subsidized placements in the private and government sectors.

Eligibility: Participating employers must demonstrate that they have the fiscal and operational capacity to administer the proposed program.

Website: does.dc.gov/service/mayor-marion-s-barry -summer-youth-employment-program

WORK OPPORTUNITY TAX CREDIT

The Work Opportunity Tax Credit (WOTC) is a federally funded incentive that reduces the federal tax liability of employers hiring new employees from eligible target groups who have consistently faced significant barriers to employment.

Benefits: Credit amounts are based upon a percentage of wages paid to and hours worked by properly certified employees.

Eligibility: For-profit employers, and in some instances non-profit employers.

Website: does.dc.gov/page/work-opportunity-tax-credit

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PERSONAL NETWORK Outside of the traditional sources of financing, if you ask business owners how they initially financed their businesses, you will find that most met their company’s needs through a variety of means. These include:

PERSONAL SAVINGS This includes all of your personal accounts, including traditional savings, certificates of deposit, and money market accounts.

PERSONAL ASSETS Selling some of your existing assets is an oftenoverlooked way to raise capital. This could include selling a car, boat, time-share, property, or accounts receivables (if you are a business).

FRIENDS & FAMILY Loans and investments from family and friends are a common form of financing for start-ups and small businesses to boost performance or enhance balance sheets prior to obtaining more formal secondary money.

TRADE ACCOUNTS Credit extensions from trade accounts are another source of business capital. Suppliers may choose to allow invoices to go unpaid for 30 to 60 days, or may draft a formal agreement issuing credit for a specified period of time.

RETIREMENT ACCOUNTS You may have a retirement account from which you could borrow. In general, this is a highly discouraged method of financing because of the tax implications.

4.2 BUSINESS MARKETING In this section, you will learn about the basics of marketing and how to craft a marketing plan for your business. Building a strong marketing plan helps you have a set course when navigating uncharted waters and pays off in the long term by growing your customer base and strengthening your brand equity.

OVERVIEW WHAT IS MARKETING? Marketing is an essential part of not only running, but also growing a successful business. It’s a mechanism that employs different tools and strategies to influence a potential customer to take action as it relates to your business. While it requires diligence and creativity, investing in a strong marketing plan can give you an edge over your competitors and help you broaden your customer base.

Before you start to think about the marketing plan for your business, it’s important to determine whether your business falls under the B2B (business to business) or B2C (business to consumer) realm. Typically, a B2B customer is focused on a particular purchase and interacts with a sales representative whose goal is to sell the product and/or service to the business. A B2C business typically sells their product and/or service directly to customers. Knowing this helps you determine how you should approach your marketing plan.

PERSONAL CREDIT CARDS Many business owners use personal credit cards to fund start-up expenses. However, it is not advised to mix personal and business finances.

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BUILDING A MARKETING PLAN ELEMENTS OF A MARKETING PLAN The following key elements are crucial components to prioritize when creating your own marketing plan. Make your plan as detailed and granular as necessary to stay on track with your goals.

BUSINESS SUMMARY

A marketing plan generally starts with a business summary which includes your mission statement and briefly identifies your business’ strengths, weaknesses, opportunities, and threats.

BUSINESS INITIATIVES

The business initiatives section is where you will outline your marketing goals, objectives, and key results. Think of goals as the destination, and objectives as the journey, while the key results measure the quality or success of the path taken. This section should answer the following questions: 1. What do you want to accomplish through marketing?

2. What does success look like and in what timeframe?

Defining the goals you want to accomplish through your marketing efforts helps you create a successful marketing plan. Clarifying the objectives will help you outline how to achieve those goals and how also to measure success. Consider defining your goals using the SMART acronym, which stands for:

In thinking about objectives, consider using the OKR framework which stands for Objective and Key Results.

Objectives prompt the question, “where do you want to go?” Key results ask the question, “how do you know you’ve gotten there?” Picking several key results per quarter that measure the success of your objectives gives insight as to whether you should continue investing your marketing efforts in a particular direction or if there’s a need to pivot.

TARGET MARKET Understanding your target market through market research is imperative to building, running, and marketing your business. This section contextualizes the market you are entering, while summarizing all of the market research you conducted on your customers and competitors. Below are some useful frameworks to conduct market research.

UNDERSTANDING YOUR CUSTOMER

Targeted market research on your customers will help you understand what type of person is likely to purchase your product or services. Outlining their traits helps you better understand how to strategically convert potential customers into loyal customers through your marketing efforts. Some guiding questions to consider when defining your target market include: 1. Who are my customers?

2. What are their demographics (gender, age, income, education), psychographics (opinions, beliefs, values, attitudes, interests), behaviors?

• Specific

3. What needs do they have and how are those needs being addressed?

• Measurable

4. What obstacles or barriers do they need to overcome?

• Attainable

5. What motivates them?

• Relevant • Time-bound

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UNDERSTANDING YOUR BUSINESS COMPETITION

To understand what makes your business stand out in the marketing landscape, you need to understand who your competitors are. A competitor is any other business that claims to provide the same or similar products or services as you. Comparing what you offer as a brand to what your competitor offers helps you set competitive prices and attract customers looking for the best option. Consider the following questions to help guide you in monitoring your competition: 1. Who are my direct competitors? (Note: direct competitors offer a product/service that can be interchanged with yours in the eyes of the customer) 2. Who are my indirect competitors? (Note: indirect competitors offer a different product/service than yours but still serve your customer base) 3. What market segment are they chasing?

4. What is their messaging?

5. What are their strengths and weaknesses?

6. How have they framed their value proposition (i.e. uniqueness of product and/or service)?

POSITIONING YOUR BUSINESS By positioning your business through effective and strategic messaging, your consumer is more likely to interact with your product or services. This messaging should be present at every single touchpoint a potential customer interacts with to simply and consistently communicate your value. The most effective messaging usually centers around a strong narrative, as storytelling is often a major motivator for people. Also consider the emotional appeal of your messaging as people often make decisions based off of emotion, and subsequently justify with facts. Be clear and simple in your messaging to put potential customers at ease, while using your unique flavor or tone throughout all of your communication. Your messaging should address the following questions for your business:

• What is it that you do?

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• What is the problem that you’re solving?

• How are you different from your competitors?

• Why should customers buy from you? How will your product/service benefit the customer?

DEVELOP YOUR VALUE PROPOSITION

A value proposition is a succinct, well-crafted statement on how your business is different from your competitor.

This answers the question of what in particular makes your business attractive and unique to investors and customers.

Your value proposition is what you should position your business’ marketing strategy around and serves as a great tagline as to why people should choose your business.

PRICING

An essential component of running a successful business is making sure that your customers believe that they are paying a proper amount for the value they are receiving from your product and/or service. Setting the right price helps you enhance your competitiveness, gain market shares to maximize your total revenue, and ultimately enables your business to succeed. You should evaluate various factors including your competitors pricing, target customers spending habits, etc. before deciding on the appropriate pricing. Some helpful questions to consider in creating the pricing for your business include: 1. What is a reasonable margin to make a profit and cover the cost of production, cost of staff (i.e. salary), real estate or rent, distribution, and marketing?

2. What can your customers pay? And what are your competitors selling it for?

3. How important is your profit margin? Are you willing to sacrifice profit margins in return for a greater market share?

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BUSINESS STORIES Byte Back, Inc. is a Washington, DC based nonprofit that creates pathways to living-wage careers for District (and Baltimore) residents through inclusive tech training and educational programs.

Open since 1997, Byte Back’s impact has grown substantially through its partnerships and outreach.

“Given our long-standing history and work in the District, the majority of our past recruitment was through word-of-mouth. Prospective students would often hear of our programs and services through one of our partner organizations or from Byte Back alumni. Shifting our programming to a virtual platform has also meant adapting our marketing strategy. We now rely more heavily on digital channels, including social media advertising, to connect with a wider audience of prospective students in need of free career tech training.”

YVETTE SCORSE Communications Director, Byte Back, Inc. Facebook: @ByteBackDC Instagram: @ByteBackDC Twitter: @ByteBackDC

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MARKETING CHANNELS Marketing channels are the avenues in which your message is distributed. Think about where your target customer turns to for information, recommendations, and insight. This will determine the avenues to use in order to communicate information about your brand and the frequency of your messaging. For example, some platforms are more appropriate for daily customer interaction, whereas others are better positioned for weekly touchpoints.

In determining which channels to use, evaluate the effort required to build out a campaign on a channel versus the value garnered. Estimate the impact, confidence in expected impact, and ease associated with building out each specific campaign to contextualize which route is the best to meet your marketing objectives.

Using all possible channels available doesn’t necessarily mean better results. It’s advised that you choose to market through a few channels that make sense given your target customer and what you want to accomplish with your marketing strategy. When starting a new business, it’s worthwhile to consider personalized marketing at first. This could help you build out a loyal customer base before casting a wider net.

Contemporary marketing channels include print and digital advertising, email, search engine optimization, pay per click, and paid placements. Social media channels are a popular and easy way to build brand equity and quickly reach your customers. The following sections outline the most common social media channels available for marketing your business, as well as considerations to be aware of when maintaining a profile.

BUSINESS RESOURCES

FACEBOOK

One of the most popular social media platforms, Facebook gives businesses the ability to reach very targeted consumer groups. Facebook business pages are often perceived as a go-to source of information and allow for direct sales. This platform is particularly popular for event promotion and sales. However, paid advertising is necessary to reach a substantial audience.

When using platforms like Facebook, which allow direct communication to your business, it's critical to devote the proper resources (e.g. automation, staff ) to ensure a timely response. A high response rate can result in a better customer perception of your business’ reliability.

TWITTER

Twitter is a great platform to demonstrate brand personality through social commentary, breaking news, and humor through written and graphic content.

Paid advertising can reach a broad to hyper-local audiences.

Advertising a service is generally more common than product advertising on Twitter. Note that the platform cadence is quite fast-paced and engagement with other content (current or potential customers) is expected. Twitter is considered the most high-maintenance social media platform.

INSTAGRAM

Instagram is a highly visual and image-driven platform which gives customers a feel for your brand aesthetic and personality. It’s an excellent platform for targeted product marketing as consumers can complete purchases on the app through direct sale features. Businesses can also build brand equity (i.e. the perceived worth, or social value, of a brand in of itself ) through the promotion of in-person events or by hosting virtual live-streams.

The algorithm tends to favor and lift profiles that are continually using the platform—therefore it’s considered quite high maintenance but provides useful features like cross-platform integration with Facebook and Twitter.

LINKEDIN

LinkedIn is particularly useful for B2B marketing—it is a great way to build a professional network and connect with professionals to either pitch to or collaborate with depending on your business goals. Note that paid advertising features are not necessarily as popular amongst platform users, while writing branded content that shares advice or guidance based on the type of service your business provides yields better engagement and conversion results.

YOUTUBE

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YouTube is a prevalent video-sharing platform.

Businesses can market on the platform through targeted video advertising, product placement opportunities, as well as product reviews or demonstration videos.

Targeted advertising audiences can be as large or niche as you’d like. Note that video content creation is timeintensive, but ultimately an effective marketing tool to consider. Video content should be high quality, as poorly made videos reflect negatively on the brand.

PINTEREST

Pinterest is another image-driven platform that allows for direct sales. The creation of mood boards effectively communicates brand identity. However, the platform caters to a niche audience. It’s worth considering depending on your product and/or service.

SNAPCHAT

Snapchat is a multimedia messaging platform that is particularly great for businesses that need to reach younger generations for their target audience.

It’s a useful platform for event coverage, product reviews, and certain product demonstrations. The cadence is quite fast paced, making it a high maintenance platform.

BUDGET Your budget outlines how much money you have explicitly dedicated to marketing initiatives. Itemizing your marketing budget helps you keep track of where to shift or increase spending based on what’s working and what isn’t.

ACTION PLAN

Once you have identified your goals and objectives, outlined your target market and competitors, determined your pricing structure, chosen your marketing channels, and created your budget, it is then time to think about how you will implement a marketing campaign. This includes identifying the next steps of action items, establishing time frames to achieve your goals, and identifying the necessary roles and responsibilities to roll out your marketing plan.

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4.3 FINDING TALENT Resources for Finding Talent Leaders and hiring professionals are continuously dealing with the challenges of recruiting, vetting, and hiring both employees and contractors. They review various traits such as skill level, qualifications, background, and experience in order to find talent that represents their values and culture, while maximizing the effectiveness of their business. While finding qualified talent for your business can be a challenge, many hiring professionals rely on various online and offline recruiting channels such as LinkedIn, Indeed, Idealist, staffing agencies, recruiting services, or government agencies.

The District government is a partner that you can use to assist with your employee recruitment efforts. Through the Department of Employment Services (DOES), the District offers various programs and services that assist in the talent sourcing and recruiting process to attract the best candidates for your business.

DC DEPARTMENT OF EMPLOYMENT SERVICES DOES’ mission is to connect District residents, job seekers, and employers to opportunities and resources that empower fair, safe, and effective working communities.

DOES has created a host of programs that help small businesses attract qualified talent. The programs and services below are some of the ways in which DOES can help you identify the right resources for your business, such as identifying qualified candidates and providing financial incentives to hire District residents.

TALENT AND CLIENT SERVICES The Office of Talent and Client Services (TCS) aligns its business engagement strategy with the DOES workforce development mission by connecting job-ready District residents to District employers. TCS provides a variety of concierge services to District employers at no additional cost. These services include assisting businesses with registering in DC Networks for recruitment purposes, as well as co-hosting job applicant pre-screening and hiring events at local American Job Centers. TCS also leverages DOES programs such as On-the-Job Training, the Senior Community Service Employment Program, Project

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Empowerment, and the District of Columbia Infrastructure Academy to grow a talent management pathway, matching skilled job seekers with employer workforce needs.

DC AMERICAN JOB CENTERS— INTEGRATED CAREER DELIVERY SYSTEM American Job Centers comprise of a nationwide network that offers job seekers, students, businesses, and career professionals access to an array of employment-related services and tools in one convenient location.

DCNetworks.org is the online equivalent of the American Job Centers system. The website is a comprehensive and integrated system that provides job seekers, training providers, employers, and unemployment insurance applicants with 24-hour access to the agency’s employment-related program services and resources. It also provides access to local, regional, and national labor market information.

JOB OPENINGS & RESUMES

The American Job Centers and DCNetworks.org allow employers to post job openings and review the resumes of registered applicants. The District offers a unique benefit to employers by offering to pre-screen potential applicants for their workforce needs.

WORK OPPORTUNITY TAX CREDIT (SEE SECTION 4.1: PAGE 72)

The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers for hiring individuals from certain groups who have historically faced barriers to employment. As of August 2020, the WOTC is authorized until December 31, 2020 and may or may not be renewed as a result of future legislative action.

EMPLOYER BENEFITS: • The credit is limited to the amount of the business income tax liability or social security tax owed • A taxable business may apply the credit against its business income tax liability, and the normal carry-back and carry-forward rules apply

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• For qualified tax-exempt organizations, the credit is limited to the amount of employer social security tax owed on wages paid to all employees for the period the credit is claimed See the instructions for Form 3800, General Business Credit, for more details. For more information on how to file for the Work Opportunity Tax Credit, contact Talent and Client Services at talent@dc.gov.

DIVISON OF STATE INITIATIVES’ PROGRAMS: PROJECT EMPOWERMENT AND D.C. CAREER CONNECTIONS Programs under the Division of State Initiatives (DSI) umbrella offer specialized employment services to residents preparing to enter the workforce. Through structured training, subsidized work experience, credential attainment, and coaching services, job seekers are prepared to apply for full and/or part-time positions at businesses located throughout the District's metropolitan region. With a team of dedicated job development and coaching professionals, DSI supports employers by identifying qualified job candidates, subsidizing wages (for the initial period of employment), participating in direct hiring events, hosting employer engagement sessions, as well as providing on the job coaching, and retention services to ensure that workers have the tools necessary to succeed on the job.

EMPLOYER BENEFITS: • Professional job matching services • Pre-employment drug screenings (expedites the onboarding process) • Short term wage subsidies (up to six months)

• Transportation assistance • Uniform purchases • On the job/retention coaching

ON-THE-JOB TRAINING PROGRAM On-the-Job Training (OJT) is a workforce development strategy where employers of all capacities have an opportunity to train, mentor, and hire candidates as they become fully proficient in a skill set or job function. Prescreened and job-ready candidates are matched with employers that are willing to provide skills-based, onthe-job training. DOES provides wage reimbursement with up to 75% of the candidate’s salary for one to six months for qualifying District residents and employers.

OJT employers maintain complete control over hiring decisions and are assigned a DOES liaison to initiate recruitment efforts and provide support throughout the length of the OJT process. Clearly written agreements detail the individual training outline, objectives, duration of agreement, and reimbursement rate.

Wage reimbursements will be administered to employers within 30 days (upon receipt of a correct invoice with supporting documentation). Desired occupations are those that will develop a marketable skillset during the term of the OJT, preferably within high-demand sectors, including: • • • • • • • •

Administration Management Executive Assistants Business Specialists Account Executive Legal Assistant Healthcare Specialists Information Technology

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• • • • •

Law Enforcement Support Services Hospitality HVAC Transportation Services

VETERANS’ EMPLOYMENT PROGRAM DOES proudly serves veterans and other eligible persons by providing resources and expertise that assist and prepare them for employment opportunities, while protecting their employment rights. A range of federally funded services mandated by the VOW to Hire Heroes Act and the Jobs for Veterans State Grant authorize each state to hire veteran-specific staff. The Disabled Veterans’ Outreach Program Specialist and the local Veteran’s Employment Representative provide a variety of employmentrelated services to veterans and eligible persons.

VETERANS WITH SERVICE-RELATED DISABILITIES

PARTICIPATION ELIGIBILITY CRITERIA

Apprenticeship sponsors must be approved by a state or federal apprenticeship registration agency for certification. Apprenticeship sponsors may grant applicants credit toward apprenticeship training for previous work or training in the occupation or trade.

An apprentice is a worker who is at least 16 years old (except where a higher minimum age standard is fixed by law) and is employed to learn a trainable occupation. In the District, the general qualifications for apprenticeships vary by craft. The general qualifications for apprenticeship selections are typically: • Drug-free • Physical ability to do the work of the specified trade/occupation • A high school diploma or GED • Access to reliable transportation, particularly for construction trades • A high school transcript may be required

The law neither prohibits nor requires affirmative action on behalf of individuals with disabilities. An employer may hire a qualified individual with a disability (including a veteran with a service-related disability) over a qualified applicant without a disability.

There are more than 800 apprenticeship trades recognized nationally. If you would like to partner on this initiative, you can learn more from the Office of Apprenticeship Information and Training at does.dc.gov/service/apprenticeships.

RECRUITMENT PROCESS FOR VETERANS WITH SERVICE-RELATED DISABILITIES

FIRST SOURCE

Employers may post advertisements and vacancy announcements in the DOES Job Bank. They may also send vacancy announcements and request referrals from the DC American Job Centers, found at does.dc.gov/service/american-job-center.

APPRENTICESHIP PROGRAM The Apprenticeship program offers a combination of on-thejob training opportunities and classroom instruction that teaches workers both the practical and theoretical aspects of certain highly skilled occupations, such as construction, electrical, plumbing/HVAC, or carpentry trades. Applicants must meet the sponsor’s eligibility requirements and demonstrate aptitude to master the basics of the occupation.

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For over 30 years, First Source Compliance has been a driving force behind the District’s strategy to reduce unemployment by ensuring that District residents receive priority consideration for new jobs created by local government-funded projects. After coming up under the leadership of Director Morris-Hughes and Mayor Bowser, the office has taken significant steps to change the program’s direction of implementation.

First Source Overview

There are separate hiring requirements within the First Source Law depending on the amount awarded on a government-assisted project or contract. The First Source Law is enforced for any contracts, grants, loans, tax abatements, land transfers for

BUSINESS RESOURCES

redevelopment or tax increment financing, land dispositions or any combination of $300,000 or more.

Requirement under First Source Law include: 1. 51% of new hires for jobs created on governmentassisted projects or contracts between $300,000 and $5,000,000 must be District residents 2. There are required minimum hours worked percentages for District residents on construction projects receiving government assistance of $5,000,000. The hours worked percentages for District residents on those projects are: ⊲ 20% of journey worker hours ⊲ 60% of apprentice hours ⊲ 51% of skilled laborer hours ⊲ 70% of common laborer hours 3. 51% of new hires must be District residents and the hours worked percentages by District residents are: ⊲ 20% of journey worker hours ⊲ 60% of apprentice hours ⊲ 51% of skilled laborer hours ⊲ 70% of common laborer hours

OTHER RESOURCES ONLINE JOB BOARDS Online job boards consolidate job postings from various sectors and industries, enabling job seekers to apply to open jobs. Online job boards can be a helpful tool for reaching a large audience in your business’ search for qualified candidates. Some examples of online job boards include: 1.

2.

3.

4.

5.

6.

7.

Indeed Glassdoor Google for Jobs Craigslist Monster CareerBuilder LinkedIn

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BUSINESS STORIES

Pepco is an Exelon-owned electricity provider to the District and surrounding Maryland communities, which has been in operation for over a century.

They have worked closely with the District government to develop training programs, build sustainable career opportunities, and hire locally.

“Pepco and Exelon jointly contributed $5.2 million in support of the District of Columbia Infrastructure Academy (DCIA), which first opened its doors in 2018. The DCIA focuses on occupational skills training and work-based learning initiatives related to the infrastructure industry including the utility, energy efficiency, transportation, and logistics sectors. District residents can access career counseling and planning, resumé assistance, direct job placement, and information about both local and regional infrastructure jobs or apprenticeships through this program.

Pepco HR Workforce Development (WFD) and the Department of Employment Services (DOES) partner on coordinating each cohort. The class schedule takes into consideration projected hiring numbers in coordination with our contractor partners as well as the internal and external training support needed for each cohort. Half of the members of the first graduating class received job offers from Pepco, while the remaining graduates received offers from Pepco contractors of choice.

Of the second graduating 2020 Class, six are now employed with Pepco with the remaining nine receiving offers from Pepco partners.

The DCIA not only provides sustainable career opportunities for program graduates and future students, but also proudly shapes the future of our community at large.”

DONNA COOPER President, Pepco Region Facebook: @PepcoConnect Twitter: @PepcoConnect

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VIRTUAL JOB FAIRS Virtual job fairs take place at a specific time and place online. They may target a specific geographic location, skill set, or industry and often include chat rooms and web conferencing features to help job seekers and employers connect. Candidates typically upload their resume prior to attending and can either be matched with employers based on their experience or choose which virtual booths to visit. Examples of virtual job fairs include: 1. Online-job-fairs.com 2. Veteranrecruiting.com 3. Jobfairsin.com

JOB FAIRS Job fairs act as a pre-screening tool for companies looking to recruit. Job fairs can range from a general audience to a more targeted focus on specific industries or skill sets. Many colleges, universities, and trade organizations use job fairs to introduce their students or members to employers in the region.

STAFFING AGENCIES Staffing agencies are a great way to recruit talent if your business doesn’t have an in-house recruiter. Recruitment agencies can help you quickly find and shortlist highquality candidates. Working with a staffing agency to hire a candidate on a temporary basis usually enables you to review the candidate’s performance prior to hiring them on a permanent basis. Assess your business’ hiring needs prior to engaging with a staffing agency. Some of the staffing agencies that serve the District include: 1.

2.

3.

4.

5.

6.

7.

The Choice Workbridge Associates Help Unlimited Temps Palmer Staffing Services Mb Staffing Services The Ford Agency Robert Half

Contributors: DC Department of Employment Services

4.4 BUSINESS SUPPORT ORGANIZATIONS WASHINGTON DC ECONOMIC PARTNERSHIP

It is the mission of the Washington DC Economic Partnership (WDCEP), a 501(c)3 organization, to promote business opportunities throughout the District of Columbia and to contribute to business retention and attraction activities. WDCEP supports businesses and entrepreneurs looking to open, expand, or invest in DC through our programs and services focusing on business development, education of the real estate market, and business opportunities.

1495 F Street NW, Washington, DC 20004 202-661-8670 · business@wdcep.com · wdcep.com · @wdcep

BUSINESS TECHNICAL ASSISTANCE AND SUPPORT CENTERS ANACOSTIA ECONOMIC DEVELOPMENT CORPORATION Anacostia Economic Development Corporation Business Center provides free management, technical assistance, and affordable training in all phases of business development to District residents and small businesses.

1800 Martin Luther King Jr. Ave. SE, Suite 100, Washington DC 20020 202-889-5090 · anacostiacdc.com

ARCH

ARCH is a small, non-profit neighborhood-based organization with its entire focus on the economic regeneration of Washington DC's Historic Community of Anacostia, through using arts culture and creative economy.

1227 Good Hope Rd SE, Washington, DC 20020 arts@archdc.org · archdevelopment.org

BETTER BUSINESS BUREAU

The Better Business Bureau (BBB) helps people find businesses and charities that they can trust. The BBB serving Metro Washington DC, Metro Philadelphia & Eastern Pennsylvania was chartered as a not-for-profit corporation in 1920 and is one of the oldest BBBs in the United States.

1411 K Street NW, Suite 1000, Washington, DC 20005 202-393-8000 · info@mybbb.org · bbb.org/us/Washington

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CAPITAL IMPACT PARTNERS

Capital Impact Partners helps people build communities of opportunity that break barriers to success through focused capital. They deliver strategic financing, social innovation programs, and capacity building that creates social change and delivers financial impact nationwide.

Capital Impact partners also funds worker cooperatives.

1400 Crystal Drive, Suite 500, Arlington, VA 22202 703-647-2300 · capitalimpact.org

small business lending solutions include term loans and lines of credit for launching or expanding businesses.

1342 Florida Ave. NW, Washington, DC 20009 202-745-4490 · info@cfenterprises.org · cfenterprises.org

COALITION FOR NON-PROFIT HOUSING AND ECONOMIC DEVELOPMENT

The Capitol Hill Association of Merchants and Professionals (CHAMPS) is a dynamic organization of Washington, D.C. business and community leaders dedicated to a strong economic environment for the Capitol Hill neighborhood. CHAMPS advocates, connects, and promotes Capitol Hill businesses.

The Coalition for Non-Profit Housing and Economic Development (CNHED) fosters just and equitable community development solutions that address the needs and aspirations of low to moderate-income District residents by convening, advocating, and educating diverse stakeholders. CNHED’s organizational members include non-profit and for-profit affordable housing developers, housing counseling and service agencies, community economic development organizations, workforce and business development entities, lenders, intermediaries, and government agencies.

PO BOX 15486, Washington, DC, 20003 202-547-7788 · champs@capitolhill.org · capitolhill.org

727 15th Street NW, Suite 600, Washington, DC 20005 202-745-0902 · info@cnhed.org · cnhed.org

City First Enterprises

DC BAR PRO BONO

CAPITOL HILL ASSOCIATION OF MERCHANTS AND PROFESSIONALS

City First Enterprises (CFE) is a mission-driven institution working at the intersection of financial innovation and impact investment. To help mitigate economic and racial inequity, CFE capital is put to use by supporting affordable housing, small businesses, increasing access to community facilities for the arts, health, education, and other social services, and to support sustainable living through green energy. CFE’s

The DC Bar Pro Bono Center is an independent, nonprofit organization supported entirely by voluntary contributions. The Pro Bono Center recruits, trains, and mobilizes volunteer attorneys to take pro bono cases serving individuals living in poverty who are at risk of losing their homes, their livelihoods, and their families. The center also helps small businesses and community-based non-profits needing legal assistance.

901 4th Street NW, Washington, D.C. 20001 202-737-4700 · dcbar.org

COVID-19

Business Recovery Resources visit coronavirus.dc.gov/recovery

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DC BID COUNCIL

DC SMALL BUSINESS DEVELOPMENT CENTERS

1275 K Street NW, Suite 1000, Washington, DC 20005 202-246-0343 · dcbidcouncil.org

2600 6th Street NW, Room 128, Washington DC 20059 202-806-1550 · dcsbdc.org

DC BUILDING INDUSTRY ASSOCIATION

GREATER WASHINGTON BLACK CHAMBER OF COMMERCE

The DC BID Council is an association of Washington DC's eleven business improvement districts. A Business Improvement District (BID) is a self-taxing district established by property owners to enhance the economic vitality of a specific commercial area. BIDs provide programs that address commercial District-wide issues, e.g. cleanliness, maintenance, safety, promotion, economic development, and other collective business issues in their coverage areas.

The DC Building Industry Association can refer you to their member brokers depending on your needs.

Association members are engaged in all aspects of real estate development and include developers, general contractors, architects and engineers, lenders, attorneys, brokers, title companies, utility companies, and community development organizations.

650 F Street NW #690, Washington, DC 20004 202-966-8665 · info@dcbia.org · dcbia.org

DC CHAMBER OF COMMERCE

DC Chamber of Commerce’s vision is to create a vibrant, thriving economy that improves the quality of life for all in the District, while establishing mutually beneficial partnerships between business, government and the community.

1133 21st Street NW, Suite M200, Washington, DC 20036 202-347-7201 · Info@DCChamber.org · dcchamber.org

DC FASHION FOUNDATION

The DC Fashion Foundation is a 501(c)(3) nonprofit organization supporting the fashion business community in the District through educational programs, workforce training initiatives, as well as networking and mentoring opportunities.

202-355-3929 · info@dcfashionfoundation.org dcfashionfoundation.org

The DC Small Business Development Centers (DC SBDC) network provides District-based businesses with free, confidential one-on-one business counseling, specialized training, and other forms of technical assistance that help businesses in all phases of development. The DC SBDC network is a resource partner of the U.S. Small Business Administration (SBA) hosted at various centers and training facilities throughout the District.

The Greater Washington Black Chamber of Commerce (GWBCC) is a part of the national U.S. Black Chambers, Inc. (USBC) and combines the power of resourced, national network with local expertise and connections.

The GWBCC is committed to promoting black business growth in District by providing resources through advocacy, education and facilitation of networking opportunities. gwbcc.org

GREATER WASHINGTON BOARD OF TRADE

The Greater Washington Board of Trade works to advance polices, practices, and actions that benefit its members and improve the business environment across the region.

800 Connecticut Ave. NW, Suite 1001, Washington, DC, 20006 202-857-5900 · info@bot.org · bot.org

GREATER WASHINGTON HISPANIC CHAMBER OF COMMERCE

Founded in 1976, the Greater Washington Hispanic Chamber of Commerce (formerly the Ibero American Chamber) is a membership driven organization that supports the economic development of the District's metropolitan region by facilitating the success of Latino and other minority-owned businesses and the communities they serve through networking opportunities, advocacy, education, and access to capital.

910 17th Street NW, Suite 1150, Washington, DC 20006 202-728-0352 · gwhcc.org

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LATINO ECONOMIC DEVELOPMENT CORPORATION

The Latino Economic Development Center (LEDC) equips aspiring and established entrepreneurs with the skills and tools necessary to run and strengthen a small business.

Training and coaching sessions are also offered in Spanish.

1401 Columbia Road NW, Unit C-1, Washington, DC 20009 202-588-5102 · ledcmetro.org

LIFE ASSET

The mission of Life Asset is to help alleviate poverty in the District metropolitan area, by empowering people through affordable financial products, services, and education, thereby promoting self-help and self-respect while expanding social and economic opportunities for low income individuals. Services include microloans, financial and business training, networking opportunities, business incubator, and office/retail space.

2448 18th Street NW, Washington, DC 20009 202-709-0652 · contactus@lifeasset.org · lifeasset.org

LOCAL INITIATIVES SUPPORT CORPORATION

Local Initiatives Support Corporation (LISC) creates opportunities for people to find jobs that increase their income and assets. LISC also grows businesses and rebuilds neighborhood economies. With their resources— lending, technical assistance, and grantmaking—they help build a local ecosystem that creates more equitable economic opportunities and outcomes for District residents and small businesses. Some of their key financial products include Kiva Crowdfunded Loans, Commercial Real Estate Loans, Accelerated Business Loans, Permanent Working Capital Loans, Makerspace Loans, and Leasehold Improvement/FF&E Loans to existing businesses within LISC communities.

1825 K Street NW, Suite 1100, Washington DC, 20006. washingtondc@lisc.org. · lisc.org/dc

MINORITY BUSINESS DEVELOPMENT AGENCy

NATIONAL ASSOCIATION OF MINORITY CONTRACTORS The National Association of Minority Contractors (NAMC) is the oldest minority construction trade association in the United States. Members include more than 50 Hall of Fame members and Legacy Contractor Builders and a combined annual project capacity of over a billion dollars nationally. The association represents the interests of millions of skilled minority workers across the country.

910 17th Street NW #413, Washington, DC 20006 202-296-1600 · info@namcnational.org · namcnational.org

SB WORKS

SB Works is a small business advocate and resource non-profit focused on providing small businesses with professional technical assistance, affordable consultants, and networking opportunities. 5 Points Business Center is SB Work’s shared office center and business-focused community space that provides not only an affordable and professional workspace, but also functions as a resource center for small businesses. Hosting educational events, trainings, on-site consultants, and networking opportunities, 5 Points is a comprehensive service center for the small business owner.

2316 Rhode Island Ave NE, Washington, DC 20018 202-803-5400 · info@sbworksdc.org · sbworksdc.org

SCORE

SCORE is a 501(c)(3) non-profit organization and a resource partner of the U.S. Small Business Administration (SBA) whose mission is to foster vibrant small business communities through mentoring and education. SCORE is the nation’s largest network of volunteer, expert business mentors dedicated to helping small businesses get off the ground, grow, and achieve their goals.

1175 Herndon Parkway, Suite 900, Herndon, VA 20170 1-800-634-0245

SOCIETY OF INDUSTRIAL AND OFFICE REALTORS®

The Minority Business Development Agency (MBDA) is an agency of the U.S. Department of Commerce that promotes the growth of minority-owned businesses through the mobilization and advancement of public and private sector programs, policy, and research.

The Society of Industrial and Office Realtors® (SIOR) is a commercial and industrial real estate association, representing experienced and successful commercial real estate professionals. SIOR consists of associate members who include corporate real estate executives, commercial real estate brokers, agents, lenders, developers, and educators.

1401 Constitution Ave NW, Washington, DC 20230 301-242-5320 · mbda.gov

1201 New York Ave NW # 350, Washington, DC 20005 202-449-8200 · membership@sior.com · sior.com

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U.S. Small Business Administration

Created in 1953, the U.S. Small Business Administration (SBA) continues to help small business owners and entrepreneurs pursue the American dream. The SBA is the only cabinet-level federal agency fully dedicated to small business and provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses.

409 3rd Street SW, Floor 3, Washington, DC 20416 202-205-8800 · sba.gov

WASHINGTON AREA COMMUNITY INVESTMENT FUND

Established in 1987, the Washington Area Community Investment Fund's (WACIF) mission is to promote equity and economic opportunity in underserved neighborhoods in the Washington, DC region. Their mission is driven by three strategic pillars: inclusive entrepreneurship, community wealth building, and equitable economic development.

Their mission is fulfilled by providing access to capital products and services, and capacity building technical assistance for low- to moderate-income entrepreneurs.

2012 Rhode Island Avenue NE, Washington, DC 20018 202-529-5505 · info@wacif.org · wacif.org

WASHINGTON, DC WOMEN’S BUSINESS CENTER

The Washington, DC Women's Business Center (DCWBC) is a business development organization that serves women entrepreneurs in the Washington, DC Capitol Region. The DCWBC is managed by the National Community Reinvestment Coalition (NCRC).

The DCWBC provides training and consulting to assist in the growth of women-owned businesses through federal procurement and credit opportunities.

740 15th Street NW, 4th Floor, Washington, DC 20005 202-393-8307 · info@dcwbc.org · dcwbc.org

DC GOVERNMENT AGENCIES DEPUTY MAYOR’S OFFICE FOR PLANNING AND ECONOMIC DEVELOPMENT

The Office of the Deputy Mayor for Planning and Economic Development (DMPED) assists the Mayor in the coordination, planning, supervision, and execution of economic development efforts in the District with the goal of creating and preserving affordable housing, creating jobs, and increasing tax revenue. DMPED pursues policies and programs that create strong neighborhoods, expand and diversify the local economy, and provide residents with pathways to the middle class.

1350 Pennsylvania Avenue NW, Suite 317, Washington, DC 20004 202-727-6365 · dmped.eom@dc.gov · dmped.dc.gov

DC OFFICE OF CABLE TELEVISION, FILM, MUSIC AND ENTERTAINMENT

The mission of the Office of Cable Television, Film, Music, and Entertainment (OCTFME) is to produce and broadcast programming for the District’s public, educational, and government access cable channels and digital radio station; regulate the District’s cable television service providers; provide customer service for cable subscribers; and support a sustainable creative economy and labor market in the District.

200 I Street SE, Washington, DC 20003 202-727-6608 · film@dc.gov · entertainment.dc.gov

DC OFFICE OF DISABILITY RIGHTS

The mission of the DC Office of Disability Rights (ODR) is to ensure that the programs, services, benefits, activities, and facilities operated or funded by the District are fully accessible to and useable by people with disabilities. ODR is committed to inclusion, community-based services, and self-determination for people with disabilities.

ODR is responsible for overseeing the implementation of the City's obligations under the Americans with Disabilities Act, as well as other disability rights laws.

441 4th Street NW, Suite 729 North, Washington, DC 20001 202-724-5055 · odr@dc.gov

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DC OFFICE OF HUMAN RIGHTS

The District of Columbia Office of Human Rights (OHR) was established to eradicate discrimination, increase equal opportunity, and protect human rights for people who live in or visit the District. The agency enforces local and federal human rights laws, including the DC Human Rights Act, by providing a legal process to those who believe they have been discriminated against. OHR proactively enforces human rights in the District through Director’s Inquiries, which allow it to identify and investigate practices and policies that may be discriminatory.

DEPARTMENT OF EMPLOYMENT SERVICES

The Department of Employment Services (DOES) provides comprehensive employment services to ensure a competitive workforce, full employment, life-long learning, economic stability, and the highest quality of life for all District residents. DOES's mission is to connect District residents, job seekers, and employers to opportunities and resources that empower fair, safe, and effective working communities.

4058 Minnesota Avenue NE, Washington, DC 20019 (202) 724-7000 · does@dc.gov · does.dc.gov

441 4th Street NW, Suite 570 North, Washington, DC 20001 202-727-4559 · ohr@dc.gov · ohr.dc.gov

Office of Talent and Client Services

DC OFFICE OF PLANNINg

DC American Job Center

The DC Office of Planning (OP) performs planning for neighborhoods, corridors, districts, historic preservation, public facilities, parks and open spaces, and individual sites. In addition, OP engages in urban design, land use, and historic preservation review.

202-724-7000 · talent@dc.gov

202-724-7000 · dcnetworks.org

PROJECT EMPOWERMENT AND D.C. CAREER CONNECTION

202-698-5599 · projectempowerment@dc.gov

1100 4th Street SW, Suite E650, Washington, DC 20024 202-442-7600 · planning@dc.gov · planning.dc.gov

ON THE JOB TRAINING

DC OFFICE OF TAX AND REVENUE

OFFICE OF APPRENTICESHIP INFORMATION AND TRAINING

The Office of Tax and Revenue (OTR) is a part of the Office of the Chief Financial Officer for the District. OTR's mission, through its Collection Division, is to collect the proper amount of tax due to the District of Columbia and correctly account for all revenues, while minimizing the burden on taxpayers and cost to the government.

1101 4th Street SW, Suite 270 West, Washington, DC 20024 202-727-4829 · otr.cfo.dc.gov

DEPARTMENT OF CONSUMER AND REGULATORY AFFAIRS SMALL BUSINESS RESOURCE CENTER

The Department of Consumer and Regulatory Affairs' (DCRA) Small Business Resource Center provides small businesses and entrepreneurs with training, consulting, and technical assistance. Service offerings include a number of free regulatory process advisory sessions and educational workshops. Additionally, forums where subject matter experts from a variety of DCRA’s divisions impart information on corporations, business licensing, zoning (occupancy and home occupancy permits), permitting special events, and vending. To make an appointment, visit dcrasbrc.ecenterdirect.com.

1100 4th Street SW, Washington DC 20024 202-442-4400 · dcra@dc.gov · business.dc.gov

202-724-7000 · ojt@dc.gov

202-698 5099 · does.dc.gov

DEPARTMENT OF ENERGY AND ENVIRONMENT

The Department of Energy and Environment's (DOEE) mission is to improve the quality of life for the residents and natural inhabitants of the nation’s capital by protecting and restoring the environment, conserving natural resources, mitigating pollution, increasing access to clean and renewable energy, and educating the public on ways to secure a sustainable future.

1200 First Street NE, Washington, DC 20002 202-535-2600 · doee@dc.gov · doee.dc.gov

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT SMALL BUSINESS TECHNICAL ASSISTANCE

Department of Housing and Community Development Community-based Nonprofit Organizations (DHCD CBOs) provide technical assistance, support, and training to small and retail businesses focusing on neglected commercial corridors in low- and moderate-income areas in the District. Assistance provided includes micro-loan packaging, business planning, entrepreneurial training,

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one-on-one business technical assistance, tax preparation assistance, accounting assistance, or legal assistance.

attends veteran commemorative events that recognize the military service and sacrifice of District veterans.

1800 Martin Luther King Jr. Avenue SE, Washington, DC 20020 202-442-7200 · dhcd@dc.gov

441 4th Street NW, Suite 707 North, Washington, DC 20001 202-724-5454 · ova@dc.gov · ova.dc.gov

DEPARTMENT OF INSURANCE, SECURITIES AND BANKING

MAYOR’s OFFICE OF LESBIAN, GAY, BISEXUAL, TRANSGENDER AND QUESTIONING AFFAIRS

The Department of Insurance, Securities and Banking (DISB) regulates the financial services industries in the District by administering insurance, security and banking laws, and regulations. This District government agency oversees financial service providers that include insurance companies and producers, broker-dealers, mortgage lenders, check cashers, and District-chartered banks. DISB ensures a business climate that encourages fair and open competition, while supporting financial services firms conducting business in the District.

1050 First Street NE, 801, Washington, DC 20002 202-727-8000 · disb@dc.gov · disb.dc.gov

DEPARTMENT OF SMALL AND LOCAL BUSINESS DEVELOPMENT

The Department of Small and Local Business Development (DSLBD) supports the development, economic growth, and retention of District-based businesses, and promotes economic development throughout the District's commercial corridors.

441 4 Street NW, Suite 850 North, Washington, DC, 20001 202-727-3900 · dslbd@dc.gov · dslbd.dc.gov th

DC MAIN STREETS

DC Main Streets is a program that promotes the revitalization of business corridors in the District. There are 24 independent, non-profit neighborhood Main Street programs that revitalize communities by retaining and recruiting businesses, improving commercial properties and streetscapes, and attracting consumers.

441 4th Street NW, Suite 850 North, Washington, DC 20001 202-727-3900 · cristina.amoruso@dc.gov dslbd.dc.gov/service/DCMS

MAYOR’s OFFICE OF VETERANS AFFAIRS

The Office of Veterans Affairs was established to provide veteran benefits, assistance, information, outreach, effective advocacy, claims processing assistance, and service provider coordination to veterans and their families so that they can access their entitled resources and benefits. The office also develops, coordinates, and

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The Mayor’s Office of Lesbian, Gay, Bisexual, Transgender and Questioning Affairs (LGBTQ) is a permanent, cabinetlevel office within the Office of Community Affairs in the Executive Office of the Mayor, established by statute in 2006 to address the important concerns of the District's gay, lesbian, bisexual, and transgender residents. The Office of LGBTQ Affairs works in collaboration with an Advisory Committee, appointed by the Mayor, to define issues of concern to the LGBTQ community and find innovative ways of utilizing government resources to help address these issues by conducting outreach, building capacity, providing technical assistance, and education and training 2000 14th Street NW 206A, Washington DC 20009 202-727-9493 · lgbtg@dc.gov · lgbtq.dc.gov

MAYOR’S OFFICE ON ASIAN AND PACIFIC ISLANDER AFFAIRS

The Mayor's Office on Asian and Pacific Islander Affairs' (MOAPIA) mission is to improve the quality of life for District Asian Americans and Pacific Islanders through advocacy and engagement. MOAPIA advises the Mayor, the Council, and District agencies on the views, needs, and concerns of the AAPI community. MOAPIA provides recommendations on District programs and initiatives affecting the AAPI community and helps coordinate programs and initiatives within the government that promote the overall welfare of the AAPI community.

441 4th Street NW, Suite 721 North, Washington, DC 20001 202-727-3120 · oapia@dc.gov · apia.dc.gov

OFFICE OF THE CHIEF TECHNOLOGY OFFICER

The Office of the Chief Technology Officer (OCTO) develops, implements, and maintains the District’s technology infrastructure; develops and implements major enterprise applications; establishes and oversees technology policies and standards for the District; provides technology services and support for District agencies, and develops technology solutions to improve services to businesses, residents, and visitors in all areas of District government.

200 I Street SE, Washington, DC 20003 202-727-2277 · octo@dc.gov · octo.dc.gov ■

It is the mission of the Washington DC Economic Partnership, a 501(c)3 organization, to promote business opportunities throughout the District of Columbia and to contribute to business retention and attraction activities.

The Washington DC Economic Partnership supports businesses and entrepreneurs looking to open, expand or invest in DC through our programs and services focusing on business development, education of the real estate market, and business opportunities. To learn more about the Washington DC Economic Partnership please visit wdcep.com. © 2020 Washington DC Economic Partnership—Published September 2020

Small Businesses Find Big Opportunities

LINDY CAMPBELL Music on the Hill

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DENISE ROLARK BARNES The Washington Informer

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