Colorful main street with several small businesses

Small Businesses Give Their 2023 Predictions

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A month into 2023 and we’re already seeing some new issues to pile onto those that have crossed over from 2022. Most small business owners are already up to their necks in planning how to mitigate next week’s issues, but what about preparing for the rest of the year?. Planning ahead as a small business owner is a luxury rarely afforded. Especially in this new era of unbelievably fast globalization and interconnectedness, keeping track of current events means being a world news expert. While business leaders across the globe have already posed their thoughts on the state of the new year’s economy and job market, it is perhaps even more valuable to hear from the people living the small business reality day in and day out. Consider, then, these collected hypotheses from real small business owners and thinkers about what they (and you) ought to be aware of pushing further into 2023.

Economic Slowdown

In today’s market, one business’s slowdown is another’s ramp-up. Consider, then, the prediction and recommendations of Stacy Elmore, the Co-Founder of The Luxury Pergola, SEE Home Improvements, and LouveRoof Luxury Pergolas. Her business keenly knew that consumer spending had changed and was determined to beat the trend.

“For our business, we are seeing a rapid slowdown in the economy. We’ve had to shift our product from a “dealer focused” distribution model to a direct-to-consumer DIY product. The reason for this is that with home equity (for many) shrinking, consumer debt rising, and retirement accounts shrinking. We are noticing more people prioritizing necessities in their spending, and luxury products are the first to dip in performance.

“Locally, our installation of Louvered Pergolas is down, so by supplementing with a DIY kit, we’ve seen our sales improve. I expect revenues to drop for small businesses across the country until mid-2023. As interest rates rise, expensive products (that are financed) will continue to drop in gross revenue. Businesses have 2 options: Either raise Prices (but have lower volume) or pivot to grow revenue. Unfortunately, many businesses don’t have many, if any, places to pivot. It’s best to get creative.”

Stacy Elmore, Co-Founder of The Luxury Pergola, SEE Home Improvements, and LouveRoof Luxury Pergolas

The Future of Advertising

As a business owner, you make the decisions that affect not only your livelihood but that of your employees. Small business co-owner and small business consultant Chris Glarner has abundant experience dealing with strategic cuts both in his own business and those he consults. Glarner poses that the rules of the game are likely changing for advertising, especially for companies with smaller budgets. 

“The livelihood of business owners and their employees directly relies on the owners’ decisions, which makes each decision and outcome a personal one. For some, fear tends to rule, and the fear of poor economic conditions is causing hesitancy in moving forward with key projects and investments.

“More specifically, marketing and advertising are already being discussed as one of two key areas to make budget cuts. The top priority for budget cuts is, of course, “non-essential” expenses.

“Microsoft has sent us offers to “Spend X dollars, get 2X dollars free” to start or continue running ads. We have seen pay-per-click ads decrease in cost by 9% in November – December compared to the two months prior.

“By cutting advertising and marketing, especially in online advertising such as PPC, the cost of advertising in certain markets will likely decrease. This will drive a higher ROI and grow market share for the businesses that have the funds and are willing to continue investing in growth through 2023. These businesses will be in the best position to thrive in 2024 and beyond.”

Chris Glarner, Business Consultant

Smarter not Harder

With economic changes and restrictions, small business owners have found increasingly inventive ways to keep above water. And going into 2023, small business owners will likely have to double down on cost-saving that is more unexpected and creativity-driven. This financial awareness is the mindset of business growth specialist Ryan Niddel, who, along with his prediction, has an abundance of practical advice for business owners preparing for the new year.

“For many companies, 2023 will be a pivotal year in which we will be forced to handle the crisis of a potential global recession. I have taken the stance inside of my company, MIT45, to shore up the vulnerabilities that could create issues during a crisis season, and I would encourage other business owners to do the same.

“What we have done is to buy as deep as we’re able to in all material goods. This prepares us for the potential of increased expense not only on physical goods, but also on transportation. We have pulled back on wasteful spending. Wasteful spending is the creep that happens over a period of time of continuity billing on software services. It is not to eliminate fringe benefits for employees. We have also gone through our employee roster and instead of cutting back, we have encouraged personnel to exceed our expectations so that the yield that they produce is above a level that justifies their employment.

“These are all ways to prepare for an impending crisis in 2023. It becomes paramount that we go through the four Fs in a crisis – we get stuck in feelings, which is the second half, but we must first get clear on the facts that created the feelings. Once we acknowledge the feelings exist, we get clear on the facts that created them. Then we can pivot and look to the future and determine where we want our focus to go. Once we determine our focus, we can see what the fruit of our focus is. This is a simple exercise to manage the emotional response that happens during a crisis season.”

Ryan Niddel, CEO and Founder of Ryan Niddel Strategies

Cyber-Security and Cookies

It’s no news that digitalization will continue to reinvent the business landscape going into 2023. But what can small business owners expect to change, or in what ways will they have to change to keep in-toe with digitalization? Brian David Crane, e-commerce business expert and owner of several successful enterprises has very clear advice.

“2022 was a year of cyber hacks and scams. As phishing attacks and identity thefts rise, more and more businesses are compelled to rethink their data security protocols. Data security is the next frontier, and the growing relevance would mean more investments and focus on Cybersecurity.

“Without third-party cookies, consumers will have more control over their data as more intrusive ways of data gathering come to an end. Marketers will be limited to gathering data from direct sources like surveys, community polls, direct mail, mobile notifications, SMS answers, and sign-up forms. I also believe that businesses’ marketing spending will increase as they find novel ways to access first-party data and implement it productively. In a world without third-party cookies, the focus would be more on personalization as companies find creative ways of getting to know customers’ needs and pain points at a more granular level.”

Brian David Crane, Founder of Callersmart

A Stronger Year for All Businesses

While no two businesses will have the same 2023, the hope is that every business will have a better 2023 with the right mindset and education. Business owners who fully prepare and insulate their businesses  have the most to gain. So spend 2023 not with the doomed chant “recession, war, defeat,” but instead think locally and insularly! Control and protect the enterprises you know best, and the rest will fall into place.

TFTI Experience, Brian Andaya, Building Resilient Businesses Contest, Small Businesses, Kapitus

BRB Stories: Creating Libraries-worth of Unforgettable Memories!

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Congratulations to TFTI Experience, a Houston-based small business that takes “selfies” to a whole new level, for winning the 2nd place prize in Kapitus’ inaugural Building Resilient Businesses contest! TFTI, which stands for “Thanks for the Invitation,” will receive $50,000 to help grow their business

Picture Perfect

TFTI launched its first “selfie” exhibit at the Marq’E Entertainment Center in Houston in 2018 and became an immediate success. The business creates specially designed rooms that are ideal places for individuals, families and friends to take selfies. TFTI then took their unique business idea to showrooms in Atlanta and Dallas. 

After surviving the worst of the COVID-19 pandemic, TFTI took off by opening a 5,000 sq. ft. space in

TFTI Experience, Brian Andaya, Kapitus, Building Resilient Businesses

TFTI’s Love Room has been the setting for many romantic gestures, including marriage proposals.

the Galleria in Houston which features 15 custom-designed rooms that provide unique experiences and backdrops for  customers to take the perfect selfies. 

“They say a picture is worth a thousand words, and if that’s the case, then we’ve created libraries worth of unforgettable memories with all of our guests,” said Bryan Andaya, founder and partner at TFTI. “TFTI is the original photo experience concept and we’re ready to create more. We are family-owned and started by first-time entrepreneurs who have learned so much since our opening back in 2018. All we need is the fuel to grow. Our name TFTI stands for the popular social media acronym ‘Thanks For The Invite,’ and we definitely want to thank Kapitus for inviting us to this wonderful opportunity.”

The Upside-Down

TFTI Experience, Building Resilient Businesses, Kapitus, contest, Brian Andaya

TFTI’s Upside-Down Room is one of its most popular attractions.

No, we’re not talking about the parallel universe in Netflix’s hit show “Stranger Things,” but we are referring to one of the coolest rooms at TFTI’s space at the Galleria – the room that mimics an upside-down apartment. The ceiling consists of hardwood floors and a fully decorated Christmas tree. Wrapped boxes and basic furniture are bolted to the ceiling. Photos of guests are turned upside-down, giving the appearance that they are defying gravity. 

There’s also the cherry blossom room where guests can sit on a swing, as well as the space station room where customers can put on astronaut gear and pretend that they’re floating in a space station. These are just some of the creative rooms TFTI has created for its guests. 

“People come just for the upside-down room,” said Andaya, adding that the room will change once the holiday season is over. He added that the “Love Room” has been used for marriage proposals, and the entire space has been rented out for parties. The creativity of the business is still flourishing, despite the bumpy economy. 

Expanding the Lens

Andaya said that the company will use the $50,000 to enhance the specialized rooms by installing high-quality photo booths in them. 

“TFTI plans to use part of the winning funds to start building photo booth systems in our interactive rooms,” said Andaya. “This will allow guests to take high-quality photos and receive them via text message or email on the spot. Perfect for guests who may not have the latest phone or [hightest] quality camera.”

Part of the prize money will also be used to enhance the company’s marketing strategy, said Andaya, noting that online advertising is the company’s biggest challenge. 

“Our biggest challenge currently is the rising cost of online advertising spend. Most of our guests can be found on popular social media platforms, but with online privacy changes and rising costs, they are becoming more difficult to target,” he said. “We work to overcome this by doing continuous organic postings, reaching out to local influencers in our area for partnerships and focusing on interacting with potential customers organically by commenting and liking their posts.”

Moving Forward

Andaya and his partners plan for continued success and expansion for TFTI, which was a natural offshoot of another company Andaya launched nearly 12 years ago, Lucky Shots. The company rents out portable photo booths that can print out custom, branded photos and has been used for events for big clients such as the Houston Texans, Houston Astros, CITY CENTRE and the Houston Rodeo.

Learn the stories of all of our small business winners:

BRB Stories: After Devastating Setback, Play Pits Takes First Place in Kapitus’ BRB Contest!

BRB Stories: Relying on Faith and Passion for Business Success

Strands of Faith, Ameka Coleman, small business, Building Resilient Businesses, Kapitus

BRB Stories: Relying on Faith and Passion for Business Success

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For small business owners, it’s all about keeping the faith – not only in God, but in yourself and your ability to succeed. That’s what drives Ameka Coleman, founder and CEO of Strands of Faith and one of the 3rd place winners of Kapitus’ inaugural Building Resilient Businesses contest. Strands of Faith is one of five 3rd place winners, and Coleman received $20,000 to help maintain and grow Strands of Faith. 

Starting her own business in 2018 took a tremendous amount of faith, courage, and hard work for Coleman, who gave up a lucrative career as a clinical researcher for pharmaceutical contract research giant PPD to become a small business owner. The Christian mother of four took the plunge into entrepreneurship when she realized that her passion was hair care.

Coleman was able to fill a need by creating a line of cruelty-free, non-toxic hair care products that

Ameka Coleman, Strands of Faith, Building Resilient Businesses, Kapitus, Contestof Faith

Ameka Coleman, founder and CEO of Strands of Faith, used her personal credit card, a small amount of savings and her faith to launch the business.

contain no parabens or silicone-based materials, yet keep hair moisturized and healthy.

“I launched the business in 2018,” said Coleman. “Prior to this, I never thought that I would one day own a business. I was in a career, Clinical Research, that I loved. It was truly a scenario of passion meeting purpose. Starting in 2006, I developed a passion for loving and embracing my natural hair and I was equally passionate about making progress in the field of clinical trials. Eventually, my science background and real-life experience merged into one to make a beautiful faith walk with purpose!”

A Wing and a Prayer

Like most small business owners first starting out, Coleman had few resources. She used a small amount of savings and personal credit cards to fund the launch of Strands of Faith, and her biggest assets during that time were support from her family and her passion for making clean hair care products. Even though she took a huge gamble by starting her own business, she found the resilience to push through the COVID-19 pandemic through hard work.

“Building Strands of Faith has been a journey of faith, hope, and resilience,” said Coleman. “If you would have told me 6 years ago that I would one day start a business, I wouldn’t have believed it simply because I didn’t have the mental fortitude, faith, and self-confidence to bet on myself. However, little did I know, my journey leading up to it was the perfect segway to creating my brand. While I was on a journey to finding myself, it resulted in me falling in love with the hair that God blessed me with. I then found great joy in encouraging and motivating other women to do the same.” 

Expansion Plans

Strands of Faith has found success through some rough times, and has grown to 10 employees and dozens of product lines, as well as a successful blog on hair care. Coleman said that she plans to use the $20,000 in prize money to help expand her team and strengthen its marketing efforts to serve customers both in the US and internationally. 

“This business became bigger than me,” she said. “I was led to create products that could help further the

Strands of Faith’s Holy Grail collection of natural hair care products has helped launch it to success.

mission by providing clean products for textured hair that would make women feel confident about their hair regimen. This entire journey has been one of faith. Starting out, I didn’t have many resources, but I didn’t let that stop me. I put my best foot forward, juggled all of the roles, and trusted God to lead the way. I was working my full-time job while also being a mom to 2 kids and a wife. It was rough but the vision made me stay committed.

“Now, as a mom of 4, I strive daily to be the best example to my kids, and it gives me great joy for them to see me keep pushing along this entrepreneurial journey. Building this business has impacted my life and others in so many ways but the most impactful way has been the reminder to simply keep the faith! This grant by Kapitus is such a tremendous blessing in allowing me to expand my team and marketing efforts so that we can continue to serve women all around the world.”

Maintaining Balance

Coleman may be unusual among small business owners in that she’s achieved something that many small business owners have not: balance between her personal and business lives. Her secret is putting her family and faith first. That balance, she said, is a key part of the success of Strands of Faith.

“I did the groundwork in the beginning and worked super hard to lay a foundation, so I now have a team who has helped tremendously with taking off some of the workload. Now, these days, though the business still needs much of my time to run, my priorities have shifted, and it is all about family first! Business now comes second to my family. I intentionally did the groundwork in the beginning when my kids were younger. Now that they are older, I am super intentional about being present for them!”

Advice to New Entrepreneurs

Coleman said that the beginning days of Strands of Faith were the most difficult as they are for most small business owners, but she advised new entrepreneurs that the learning experience of launching a business is well worth it. 

“I would say that the most challenging parts, in the beginning, were wearing many titles,” she said. “I now appreciate the process of first getting the experience in each role because over time it built me up to be an efficient business owner. I have learned that entrepreneurship is not just a journey by itself but, instead, it is also a personal healing journey! There will be many times where the journey may feel lonely, but this is when it becomes super important to lean on your self-confidence and focus on the past wins to get you through and, of course, God’s given strength.”

Congratulations to All the Winners

Kapitus’ inaugural BRB contest awarded $250,000 to 7 small businesses that are the epitome of strength and resilience – two crucial ingredients needed to launch and operate a small business. The first-place prize was $100,000, the second was $50,000 and five third-place winners each received $20,000. All of the winners also will receive a complimentary, 8-hour consulting/advisory session to help their business. Kapitus also looks forward to this being an annual contest starting every spring.

Learn the stories of all of our small business winners:

BRB Stories: After Devastating Setback, Play Pits Takes First Place in Kapitus’ BRB Contest!

Play Pits, Building Resilient Businesses, Chantel PowellKapitus

BRB Stories: After Devastating Setback, Play Pits Takes First Place in Kapitus’ BRB Contest!

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Congratulations to Play Pits, an African American-owned producer of specialty deodorants made from all-natural ingredients, for being named the winner of Kapitus’ inaugural Building Resilient Businesses (BRB) contest. The Atlanta-based family business will receive $100,000 and 8 hours of complimentary educational consulting/advising sessions on its business. 

Embodiment of Resilience

Chantel Powell, Play Pits, Kapitus, Building Resilient Businesses, contest

Chantel Powell’s small business has endured the COVID-19 pandemic and a warehouse fire, making it one of the most resilient businesses out there.

For Chantel Powell, creator and CEO of Play Pits, resilience isn’t just a trait, it’s a necessity. The four-year-old company suffered through the pandemic shortly after it was created – a period in which nearly 40% of all black-owned businesses were forced to shut down. As if that weren’t enough, in September 2022, its Atlanta-based headquarters and warehouse (where all of its inventory was stored) were completely burnt to the ground in a fire – a catastrophic event that left Powell and her family reeling.

In the aftermath, however, instead of giving up, Powell and her family members are determined to rebuild the business and will use their $100,000 prize to help do so, making  Play Pits the very embodiment of everything for which BRB stands..

“It’s by the grace of God that we won the Building Resilient Businesses Contest because in the last few weeks, Play Pits has proven that we are the personification of a resilient business,” said Powell.

A Family Commitment

Play Pits. Chantel Powell, Kameron, Kapitus, Building Resilient Businesses, Contest

Chantel Powell was inspired to launch Play Pits by her son, Kameron.

After spending nearly six years as an executive assistant at Viacom International Media Networks and graduating Summa Cum Laude from Clark Atlanta University with a degree in fashion design and merchandising, Powell had picked up the skills she needed to pursue her passion for launching her own small business. All she needed was an innovative idea and a product to sell.

That idea came in 2017 when she picked up her six-year-old son, Kameron, from basketball camp. Like most active kids coming home after attending a sweaty sports camp, Kameron’s body odor hit Powell hard. 

“My exact words to him were, ‘You smell like a grown man!’” said Powell. She was determined to make him wear deodorant but didn’t want to use the typical ones that were filled with toxic chemicals. When she searched for deodorants that used natural ingredients, she found them to be boring products that she knew she would have to fight her son to get him to use them. 

Powell spent days in her kitchen using organic ingredients to make an all-natural deodorant that she felt comfortable with her son wearing. To her surprise, Kameron loved the deodorant and suggested that she make it for all his friends at camp.

“After my initial refusal, I quickly reconsidered once it hit me that Kameron had a genius business idea!” she said.

Hard Work and Self-Sufficiency

Like many seeking to achieve the American Dream, Powell put in a lot of hard work and $3,500 of her own money to start Play Pits. With no outside investments, she spent nine long months perfecting the secret formula to create the first all-natural deodorant free of aluminum, parabens, synthetic fragrances and other harsh chemicals found in most deodorant products, and one specifically designed for active kids. 

She officially launched Play Pits in March of 2018, and success came quickly for the new business. Powell saw 497% growth after just 20 months in business, with over 12,200 units sold. Play Pits soon had both out-of-state and international customers, and distributed through both Amazon and Target, as well as directly.

Powell also worked hard by engaging in one of the toughest types of marketing campaigns a business can engage in: word-of-mouth. Powell works extremely hard to market the company through social media and customer recommendations. She also doesn’t keep herself on the company payroll. “Every dime made is completely due to us bootstrapping our business, getting out there and hustling. It has been the best method for us to advance and grow Play Pits,” she said.  

“Quietly, Play Pits has become the nation’s largest 100% black-owned deodorant company,” said Powell. “This grant money is going to be invested in scaling our company by allowing us to purchase larger amounts of raw goods and materials at reduced costs, increase our marketing efforts into youth and professional sports, and to add knowledgeable professionals to help us meet customer demand by expanding our product line and increasing revenue.”  

More Than Just Survival

As Play Pits recovers and rebuilds from the devastating fire, its mission to educate parents about the

Play Pits, Chantel Powell, Building Resilient Businesses, Contest, $100,000, Kapitus

Paly Pits has endured the pandemic and a devastating fire to come back better than ever.

dangerous ingredients found in commercial deodorants and to provide a healthier, all-natural solution for their children, remains the same. The business is still seeking to grow both domestically and internationally, and to never forget where it came from. Since launching, Kameron has been named the company’s Chief Inspiration Officer and is still active in sports, while Powell continues to work hard to market and sell the company’s products. 

“As we start recovery from this tragic event, this grant money is needed now more than ever as it will play a key role in helping us to rebuild, replenish lost inventory/materials, equipment etc., while still allowing us to continue our initial expansion plans,” she said.  

Small business legislation, small business lending Kapitus Vince Calio

Small Business Legislation: Childcare, Credit Card Fees and Part-Time Benefits Proposals That Could Affect You

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Small businesses should be keeping an eye on this current session of Congress as well as the upcoming midterm elections. There are three bills still being debated in this current session of Congress that, if passed, could make it easier for small business owners to fund childcare for themselves and their employees, as well as lower credit card processing fees and give part-time workers additional benefits. 

The Credit Card Competition Act of 2022

A controversial bill to reduce credit card processing fees for small businesses could be in the works this year.

This bill, S.4674, and an identical bill in the House, H.R. 8874, are easily the most controversial pieces of small business legislation being debated. It was introduced by Sen. Richard Durbin (D-IL) in July and, if passed, would require credit card companies to offer two options for credit card processors whenever a customer makes a purchase with a small business. The goal of the legislation is to reduce the credit card processing fees that merchants, including small business owners, must pay in exchange for giving their customers the ability to pay with a credit card. 

Critics and Supporters

The typical credit card processing fees range from 1.5% of a purchase to 3.5%, raking in hundreds of billions of dollars in profits for credit card issuers. These fees are typically priced into the costs of products and services offered by small businesses. Small business advocates such as the National Federation of Independent Businesses support the bill, saying that it will reduce the credit card processing fees charged to small businesses that are already feeling the burden of inflation, rising interest rates and other economic issues. 

Banks and credit unions, however, are against the bill, saying that banks will cut cash-back rewards and other credit card perks as a way to offset the losses they will suffer if the bill gets passed. Many of them point to the controversial Durbin Amendment that was attached to the Dodd-Frank Act in 2010, which limited the interchange fees banks charged on debit cards, as a forewarning of the consequences consumers will suffer if the bill passes. That amendment, critics claim, did nothing to lower the cost of banking and led to retail banks eliminating rewards and perks offered on checking account debit cards. 

Likelihood of Passing?

Democrats in Congress are pushing for the bill to be voted upon in the current session of Congress. The Senate Committee on Banking, Housing and Urban Affairs even tried to attach the bill as an amendment to the National Defense Authorization Act (an annual defense spending bill that Congress almost always passes), but the effort was rejected. The likelihood of passage rests greatly on the results of the midterm elections, as it will most likely die if Republicans gain control of Congress. 

Part-Time Worker Bill of Rights Act of 2022

This is probably the most partisan piece of legislation being debated in Congress as it pertains to small

Kapitus small business lending part time workers

Part-time workers could be eligible for full-time benefits if Democratic legislation is passed.

businesses, as Democrats have been pushing for versions of this legislation since 2015. Renewed debate has once again begun on this bill, H.R. 6699,  and Congressional Democrats may want to push this bill out for a vote before the current, 117th session of Congress expires in January. 

The one section of the bill that most pertains to small businesses is the one stating that if a part time employee has been with a company for a year or more, that employee is entitled to the protections of the Family Medical Leave Act. This act allows employees to take up to 12 weeks of unpaid leave for medical reasons as well as the birth of a child without fear of being fired. This could have an obvious impact on small business owners who are already facing labor shortage problems. 

Another provision in the bill would affect high margin small businesses that offer retirement plans to their workers. This provision would allow part time workers who have worked at least 500 hours per year for two consecutive years for a company to participate in any retirement plan that company offers. If the bill were signed into law, it could cost small businesses that offer matches to their employees’ contributions to their 401(k) or other retirement plans, as they would have to make more matching contributions. 

Likelihood of Passing?

The eight co-sponsors of the bill, all Democrats, are pushing hard for a full vote on the floor of the House before the 117th session of Congress expires, especially if Republicans win back control of Congress. If that happens and the bill isn’t voted upon and signed into law by President Joe Biden before January, the bill will almost certainly die. 

Childcare DESERT Act

Kapitus childcare small business lending

New legislation could make it easier for small businesses to fund childcare for their employees.

This bill, S.5022, is a bi-partisan bill introduced in late September 2022 that, if passed, would allow small businesses to use a portion of the proceeds of the popular Small Business Administration 504 CDC loan to provide childcare services to employees. This would help address a serious problem that small businesses face in hiring and retaining employees. Goldman Sachs found in its most recent 10,000 Small Businesses study that 80% of small business owners cite childcare as a hiring issue, and just as high of a percentage of those surveyed said that they support the government providing childcare assistance to workers. 

Right now, qualifying small businesses can borrow up to $5 million through a SBA 504 CDC loan through Certified Development Companies to finance new equipment, build new facilities or purchase or lease additional land. The loan can also be used to improve storefronts and existing facilities, and the borrower must demonstrate that the proceeds will be used to create new jobs and help develop the community in which they operate. 

Likelihood of Passing?

This bill has a high chance of passing, as it was introduced by Sen. Chuck Grassley (R-IA) and co-sponsored by prominent Democrat Senator Gary Peters (D-MI). The bill was introduced in the Senate and will be debated by the members of the Senate Committee on Small Business and Entrepreneurship. Given that it is receiving bi-partisan support, the biggest threat to the bill being passed is time. There are only two months left in the 117th session of Congress, but if it isn’t voted upon within that time frame it could get reintroduced in the next session.

Show Your Support (or Opposition)!

There are several pieces of legislation being debated in Congress right now that you can show your support for. You can view upcoming bills and how they can affect your small business by clicking here. The site, Legiscan, also gives you access to the specific Representatives and Senators in your state and allows you to write to them to show your support or opposition to current bills circulating in Congress.

Kapitus small business halloween

This Halloween, Slay Your Biggest Fears as a Small Business Owner

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Children may be afraid of ghosts and goblins during the Halloween season, but for small business owners, things that go bump in the night are nothing compared to their real-world fears. If you’re a small business owner, you’re likely more afraid of an auditor from the IRS knocking on your door than you are of Michael Myers or Jason coming at you with a knife. 

In the spirit of Halloween, here are some of the biggest fears that small business owners face, as well as tips to overcome them. 

#1 – Fear of Catastrophe

Halloween Kapitus small business

The fear of catastrophe monster can be slain with some planning and insurance.

The COVID-19 pandemic proved disastrous for small businesses, as it forced more than 300,000 small businesses to close their doors permanently. Many small business owners that survived had to take out PPP loans and other government assistance to survive, and many are facing challenges with having to pay back rent the last two years are suffering from anxiety. 

Now, with inflation and interest rates out of control and the labor shortage persisting, small business owners are waiting in fear for the next catastrophe – be it a full-blown economic recession, a fire, a natural disaster or some other event that can drive them out of business.

Slaying the Monster – It’s important to remember that the pandemic was a historic once-in-a-century event, and while hurricane Ian did devastate parts of Central Florida, natural disasters don’t occur very often. Just in case disaster does hit, however, you want to be prepared. Some steps you can take now are: 

  • Take out small business hazard insurance. It may be an added monthly expense for your business, but it could prove to be worth it when the next crisis hits.
  • Check out SBA Disaster Mitigation Assistance. This SBA program allows businesses within declared disaster zones to apply for additional funds specifically for improving their businesses to better protect against future disasters. 
  • Take out a business line of credit (BLOC). BLOCs are offered to qualified borrowers from both traditional banks and alternative lenders, and can provide you with emergency cash to help you quickly recover when disaster hits.
  • Protect your business records. You should always have a backup of your most important business records. You can do this by storing important information on a separate hard drive or through cloud computing. 

#2 Rapid Growth

Having more customers or receiving too many demands simultaneously from clients than you can

Kapitus small business halloween

The fear of rapid growth goblin can be dealt with by some careful preparation

handle is another monster that may be hiding under the beds of small business owners. While some may say that this is a good problem to have, this fear can threaten your business if you aren’t in a position to quickly obtain additional inventory or are understaffed.

Slaying the Monster –If your business is growing at a rapid pace, the first thing you should do is take pride in knowing that you’re doing something right. After you give yourself that little pat on the back,  your first priority should be customer service. Be ready to explain politely to them that they need to have patience because you are experiencing overwhelming demand but assure them that their needs will be taken care of. 

You should also have a plan to add more hourly or full-time staff if you find yourself overwhelmed with customer demands, or consider hiring a virtual assistant. If you need more inventory fast but don’t have the cash upfront to pay for it, you may want to consider purchase order financing to help you.

#3 Employees Quitting

Kapitus small business halloween

The fear of all your employees quitting can be very spooky, so make sure you’re treating your workers well!

Small businesses in nearly every industry are feeling the brunt of the labor shortage, as workers are increasingly demanding higher salaries and better working conditions. The prospect of your best employee – or all of your employees – suddenly quitting at roughly the same time is scarier than the thought of Freddy Kreuger visiting you in your dreams, especially if you employ hourly workers that don’t get benefits.

Slaying the Monster – Every business, no matter how small, must deal with employee turnover. The scenario you want to avoid, however, is having all of your employees quitting in a short period of time. You want to create a system that doesn’t overly rely on a single employee, no matter how good that employee is. You also want to make sure that you create a company culture that your workers feel comfortable and safe in. You should also look to offer small perks, such as quarterly bonuses or limited essential coverage plans that your workers will appreciate. 

#4 Getting Audited

There are few boogeymen that are scarier to small business owners than an IRS auditor – which could

Kapitus small business halloween

Few boogeymen are scarier than IRS auditors, so make sure you get your finances in order!

mean that you inadvertently misreported finances and that you suddenly owe a fortune in back taxes. 

Slaying the Monster – As a small business owner, you shouldn’t be too worried about getting audited if you’ve kept your books in order throughout the year. Only 1.5% of small businesses in the country get audited on a yearly basis, but to prevent yourself from being among them:

  1. Make sure you keep track of your business finances. It’s especially important to carefully separate them from your personal expenses.
  2. Carefully document your business expenses throughout each quarter. Sometimes the line between a business and personal expense can be blurry, so make sure when you document a business expense you have a good reason why it should be a business expense. 
  3. Consult with an accountant on how much in taxes you should pay each quarter. You’re probably better off being conservative when reporting your business expenses and getting a refund at the end of the year. 
  4. Stay up to date on new tax laws. The see-saw battle between Republicans and Democrats over who controls Congress and the executive branch has never been more volatile. Expect the tax code to change every time the balance of power shifts to make sure you’re not missing out on new tax deductions. 

#5 Continued Inflation

Inflation is definitely a monster hiding in the closet, but it can be handled with some great customer service.

While inflation has slowed a bit in the past two quarters, it is still growing at a rapid pace thanks to continued supply chain disruptions, rising gas prices and higher wages for workers across the board. Indeed, the inflation monster has forced small business owners to raise their prices and fear losing customers as a result. 

Slaying the Monster – The prospect of having to raise the prices of your products and services is always  scary for small business owners, but here’s the good news: inflation is showing signs of slowing, and while consumers resent having to pay more for goods and services, they’re still spending, according to a recent JPMorgan study. Also, if you raise your prices carefully, you can actually beat out your larger competition, since they’re also raising their prices.

#6 Failure

This fear is probably the most prevalent among new business owners. Having to close your business due

Kapitus small business halloween

Remember – the fear of failure is often more psychological than anything.

to lack of sales does count as a tangible definition of failure, but there are other definitions of the word that haunt small business owners, making this fear much more opaque. Those fears can include the fear of not providing enough income for your family, losing control of your business, or losing confidence in your ability to run your business. An overwhelming fear of failure can take its toll on your mental health, as any unexpected problem can cause you to go into full-blown panic mode.

Slaying the Monster – Fear of failure is normal among small business owners, but having that fear to an unhealthy degree is not good. One of the most important things to remember when it comes to the fear of failure is that, more than anything, it’s psychological. Sometimes overcoming this fear is as simple as developing a positive mindset. Here are some steps you can take:

  1. Set daily goals. If you feel overwhelmed in the number of tasks you need to complete, try breaking down those tasks on a daily basis. Be realistic in what you can get done every day, and feel good about accomplishing those tasks afterward – they can serve as reminders that you’re succeeding.
  2. Adopt a philosophy of learning. Failure, in many cases, isn’t a dirty word. Some may argue that there are no such things as failures – just lessons. If you experience a setback, solve it, learn from it and move on with no regrets. 
  3. Prepare for obstacles. As a small business owner, you will face obstacles, both big and small, every day – there may be a delay in the delivery of important inventory; your credit card processing machine may break down, or an employee might unexpectedly not show up.  It’s important to prepare for these obstacles by having a backup plan.
  4. Find relaxation time. Constant stress can lead to serious mental health problems over time. Try to carve out time every day to take care of yourself. This can be in the form of meditation, exercise and spending quality time with your family.

#7 Slowing Sales

Kapitus small business halloween

The prospect of slowing sales can be terrifying, but don’t worry, there are ways to prepare for that.

Every small business owner fears a sudden slowdown in sales, especially now that we’re living in uncertain economic times. This fear is often exacerbated by the holiday period – a time when many small businesses rely on seasonal sales to survive. 

Slaying the Monster – Overcoming this fear comes down to your marketing strategy. Are you offering the proper discounts during the holiday season? Are you implementing a strategy to retain existing customers and gain new ones? Are you offering something different and better than your competitors? Focusing on marketing throughout the year should help you overcome this fear.

Happy Halloween!

This Halloween, don’t allow your fears to stand in the way of running your business successfully. If you find yourself overwhelmed by fear, it’s important to face those fears head-on by making good decisions and celebrating victories and milestones in your business.

Labor shortage, Kapitus, Vince Calio, small business. small business lending

Which Industries Are Getting Hit Hardest By The Labor Shortage in 2022

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The labor shortage remains stubbornly high for businesses across several different industries despite the high number of job openings, even as many predict that the current recession will eventually level the playing field between employers and workers. Small business owners continue to feel the brunt of the shortage, as many of them can’t compete for workers in the labor force with larger competitors when it comes to salaries. 

So which industries are getting hit the hardest in terms of unfilled job openings and worker shortages? Based on information gathered from the Bureau of Labor Statistics, the worker shortage continues to affect companies with both hourly and full-time workers for different reasons. Here are some of the most impacted industries.

Accommodation and Food Services

Waiter, Waitress, labor shortage, Kapitus

A shortage of table servers has been felt by nearly every independent restaurant in the past two years.

Restaurants had a quit rate of 7.6% in September 2022 – the highest of any industry measured by the BLS – with 193,000 job openings compared to 139,000 new hires, leaving 60,000 job openings. These include table servers, cooks, bartenders, and other staff. The National Restaurant Association (NRA) predicts the shortage will continue for the rest of this year and into 2023. 

Restaurants laid off thousands of workers during the COVID-19 pandemic, and those workers have been slow to return. The reasons include low wages – the federal minimum wage for tipped workers is still $2.13 per hour (the NRA, ironically, has lobbied Congress every year for a decade against raising that wage). Restaurant jobs also often require long hours, low pay, and no benefits. According to a study by Blackbox Intelligence and Snagajob, 15% of restaurant workers left the industry during the pandemic to move into different industries that offer higher wages and benefits, such as education, warehouse jobs, and starting their own businesses. 

Retail Trade

Retail workers had a quit rate of 4.9% in August 2022, with job openings outpacing new hires by more than 25,000. This follows the laying off of over 2 million retail trade workers due to store closings at the height of the COVID-19 pandemic. Amazon predicted in a recent report that it could run out of warehouse workers by 2024. Many retail workers laid off during the pandemic decided to switch careers or retire. 

Despite the median salary of retail workers increasing to $18.50 per hour in August 2022 (from $14 per hour before the pandemic), a study by Cogsy showed three main reasons retail stores are having a hard time finding workers:

  1. Low compensation. The retail industry has never been a high-paying field, and most jobs don’t provide benefits.
  2. Customer-facing retail workers are usually the first people to be laid off during an economic downturn – that job instability was magnified by the pandemic, and
  3. Difficult working conditions. This has been a problem facing retail workers for decades, especially since the “just in time” inventory technique (companies being lean on inventory based on seasonal expectations) was invented to cut costs at large retailers. This inventory technique generally made it possible for retailers to cut the hours of retail workers and put them on often unpredictable, makeshift schedules. 

Transportation

The transportation industry, including truck drivers and rail workers, saw a 4.6% quit rate in August

Truck driver, labor shortage, Kapitus

A nationwide shortage of truck drivers has contributed to supply chain disruptions and inflation.

2022, as the US faces a shortage of about 2.6 million truck drivers overall, despite a general increase in pay. This shortage not only affects the roughly 3.1 million transportation and warehouse small businesses in the US, but it also is one of the root causes of the recent global supply chain disruptions. 

Like with many industries, the worker shortage in transportation existed before 2020 but was compounded by the global pandemic. According to business consulting firm MossAdams, the primary causes of the shortage isn’t salary, it’s due to the fact that the job requires long hours away from family, the fear of contracting COVID-19 and the fact that the transportation workforce is aging, and few millennials and GexXers are willing to replace them. 

Healthcare

Industries that require skilled workers are also facing a massive labor shortage, and salary may not be the overriding reason. In August 2022 there were 1.7 million job openings in this industry, particularly for nurses, while only 717,000 were hired. According to the American Medical Association, the country will also face a shortage of some 38,000 to 124,000 primary care doctors over the next 12 years, even though salaries in these professions are typically higher than the national median household income. 

According to the AMA, many medical school graduates are becoming discouraged by the fact that independent primary care doctors’ offices are being quickly swallowed up by large health care providers. That, combined with doctor burnout from the pandemic; rising medical school debt; increased medical malpractice insurance premiums, and the red tape that independent doctors often face when it comes to sharing electronic health records, many hopeful doctors have been discouraged from entering into the industry.

One-Third of Nurses Plan to Leave

Labor shortage, nurses, Kapitus, small business

Job burnout is the predominant reason for the shortage of nurses in the health care industry.

A study by Fierce Healthcare showed that one-third of nurses across the country plan to leave their job over the next year, exacerbating a problem that the healthcare industry has been suffering from since before the pandemic – a national nurse shortage. Last year, BLS data showed that the country is going to need an additional 275,000 by 2030. Despite a median national income of over $82,000 per year for registered nurses in the US, many are quitting due to burnout, according to the study. 

Most healthcare facilities were already suffering from a high patient-to-nurse ratio, and COVID-19 greatly expanded that number. The study also found that 65% of nurses endure constant beratement, and in some cases, physical assault, from patients. Most don’t feel appreciated by the doctors they are assisting. This is compounded by a current shortage of nursing schools and faculty in the US.

Construction 

The quit rate among construction workers was 4.7% in August 2022, and in the same month, the industry was short by over 33,000 jobs. Cornerstone, one of the leading publications for the construction industry, expects that the current overall shortage of 430,000 construction workers in the US will expand over the next two years, as new construction projects will increase with the passage of the Infrastructure Investment and Jobs Act in 2021.

Several factors are contributing to the shortage, according to a study by Cornerstone: 

  • First, many construction workers were forced out of their jobs during the pandemic and decided to retire. In total, 40% of the construction workforce is expected to retire over the next decade. 
  • Second, there aren’t enough carpentry trade schools in the US to meet the increased demand for skilled construction workers – contractors, designers and workers with the knowledge to build specialized construction projects. 
  • Third, many contractors in the US have yet to embrace digital technologies to make projects more efficient, on time and on budget, thus slowing down the number of projects that they are qualified to complete.

To compound that, wages are still relatively low for construction workers – the median annual salary for a construction worker was only $39,190 as of September 2022. The pandemic made working conditions hazardous.

How Can Companies Combat Labor Shortages Going Into 2023?

Unfortunately, for small business owners struggling to find workers, there are no easy answers. The labor shortage is persisting, and it appears that it isn’t just a passing fad – it can only be solved by making permanent changes. Study after study has shown that employees in some industries are demanding better pay and benefits, while in other industries, workers are demanding a better work-life balance and better working conditions. The best solution to this problem is to examine the workplace you are providing for employees and look for ways to improve it.

Small business video Kapitus lending

Tips on Making the Perfect Video for Your Small Business

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If you’re a small business owner, being camera shy is more than just a personal insecurity – it’s a trait that can threaten your livelihood. Study after study has shown that using videos is now more important than ever to promote your business. Consider that online shoppers, on average, consume up to 16 hours of videos per week, according to a study on video marketing statistics by Wyzowl. 

Videos provide what text can’t, which is both audio and visual stimulation. A little more than 87% of consumers surveyed said they’d rather watch a video about a product than read about it. Additionally, over half of consumers say that they watch video product reviews before making a purchase, and most said that they believe videos explain products better than text.

How Can Videos Benefit Your Business?

Many small business owners, however, are still reluctant to make videos to benefit their enterprises, either because they believe video production will cost too much, or they simply aren’t comfortable with the idea of putting themselves in front of a camera. Including videos on your website or for social media, however, can benefit your business in a myriad of ways and may not cost as much as you think. Videos can:

  1. Gain a following on social media. A strong social media strategy for your business can invite thousands of followers and produce a huge return on investment. In 2021, the video-based social  media platform TikTok surpassed Google as the most popular domain in the world, showing that browsers prefer watching videos on their social media platforms than all other types of posts. Since then, Instagram and Facebook created algorithms prioritizing videos over photo-based posts. 
  2. Tell your story. A short video introducing your story and how you became a small business owner can form an emotional connection with your customers and thus increase your sales. Whether it’s on Youtube, Facebook, Instagram, or your own website, a clever video about you and your brand – rather than a block of text that drones on – can bring followers and increase business.
  3. Win grants and other contests. Winning free money is always good for business. Grant opportunities for small businesses have increased since the COVID-19 pandemic began in 2020. Many grant contests, including Kapitus’ $250,000 Building Resilient Businesses contest and the FedEx Small Business Grant contests accept video submissions for prizes.
  4. Provide customer testimonials/product demos. Consumer researchers have shown that a large majority of buyers watch product reviews before making purchases, so it’s no surprise that one of the most effective marketing tools are videos showing customers raving about your product and demonstrating how your product is meeting their needs. 
  5. Improve your internet search rankings. Much like you do with your website and blog articles, you can add meta data and descriptions for your videos, thus increasing your chances of popping up in search results on Google and other search engines. 


Should you Hire a Video Production Company?

There are hundreds of companies out there that can provide you with the necessary equipment and expertise on how to create effective videos for both your website and social media and give you a much better chance of getting an ROI on your videos than if you made them yourself. While a good video production company can help you tremendously, their services will probably set you back thousands of dollars, depending on the video you’re making and how long you plan to be shooting. 

If you believe that investing in a video production company will help you, you need to do your research as you would before purchasing any other product or service. Search for reviews and testimonials about the company before you hire them, and have the company give you examples of past videos they’ve made for other clients to get a sense of their style. 

How can I Create a Video?

If you decide to go it alone, there are several cost-effective ways to make your own promotional videos. Whether you’re creating a video to promote your products, telling the story of your business or submitting a video as part of a grant contest, you’re most likely going to need to invest in some equipment and editing software, take time to learn how to make an effective video, as well as get your creative juices flowing on how you will connect with your audience. 

That said, to make a video that will grab the attention of your viewers, there are several steps and suggestions you’re going to need to follow:

#1 Invest in Video Editing Software

You want your video to be sharp, visually appealing, have the right background and be well-edited. Including minor special effects and a custom background will also help make your video more attractive, and this is where video editing software will come in handy. Popular software editing video packages such as InVideo, Adobe Premiere Pro and Cyberlink’s PowerDirector 365 can easily walk you through the process of making a great video and add the effects you’re looking for, such as customized backgrounds, audio effects, streaming images and lighting options. 

These packages can typically cost several hundred dollars but are significantly cheaper than hiring a video production company. 

For example, check out this storytelling video from a small business, which used video editing software to compile and smoothly streamline images and audio to tell the story of Sipping Streams Tea Company.


 #2 Purchase Video Equipment

Obviously, you want your viewers to be able to clearly see and hear you in your video, so it’s worth making an investment in some basic video equipment. Video equipment doesn’t have to cost a fortune either. While a $2,000, high quality hand-held video recorder would certainly be useful, you don’t have to spend that much. A basic tripod, an updated smartphone with high quality camera/video recorder, a small microphone and the right lighting can do the trick. These are low-cost items that can turn you into a video wizard overnight. 

(Pro Tip: Make sure you don’t have bright lights behind you when you’re speaking into the camera, so you don’t end up looking like a shadow. Also, use a good microphone so that your audience can clearly hear you.)

#3 Have a Script Ready

Before you make a video, carefully consider who your audience is and spend time crafting your message to say exactly what it is that you are seeking to convey. 

Remember, when you make a video, this is your chance to speak directly to your audience. You may want to make flash cards highlighting the most important points you wish to make, as well as informing your viewers of the value you bring to them.

For example, this educational video from River Pools is a great example of a small business owner succinctly articulating the informative points he wants to make in a visually friendly way.

#3 ‘Same as it Ever was, Same as it Ever was’

Kapitus small business video lending Vince Calio

You never want to be a “talking head” in your business video, unless you’re a member of the 80’s band, Talking Heads.

That’s what viewers will be saying if your entire business video is simply someone’s face blandly speaking in front of a plain white wall. So, unless you’re a member of the popular 80s band Talking Heads, you generally want to avoid being a talking head in your video. You can do this by featuring varied and colorful backgrounds to keep the viewer engaged.

This video from the 2022 winner of the FedEx Small Business Grant competition, the SuitShop, for example, does an excellent job of smoothly transitioning between visually appealing images and clearly articulating its message, which set it apart from other contestants.

#4 Plan and Coordinate for Product Demos/Customer Testimonials

One of the most effective videos for your business is a video of real customers demonstrating and raving about your product. These videos, however, will take more time and effort to produce than others. While advice about lighting, sound and colorful backgrounds still apply, you’re probably going to have to get real life customers to agree to be in your video and create scripts for each of them. Second, you may have to shoot in multiple locations, and third, you must make sure your product can be easily demonstrated. 

This is where you may want to hire a video production company to ensure you get the highest possible ROI on your video. A great example of a high-quality customer testimonial video is this one from Magic Flask,  which showcases customers using the product.

#5 Social Media is a Different Animal

Social media video posts, especially for the world’s most popular video platform, TikTok, require different types of videos than ones you would create for your website or YouTube. These videos shouldn’t be professionally made, rather, viewers should be able to relate to them on a personal level. 

When making a short video for TikTok or Instagram, you should first ask the question, “What aspect of a person’s life should I be showcasing, and how can I showcase that in an amusing and entertaining way?”

Here are some examples of successful small business videos on TikTok that are both affable and entertaining.

#6 SEO Your Videos

Now that you’ve made a video for your business, you want people to be able to find it. Google, however, loves content that has a mix of text, videos and images, so when you go to embed your video on your website, it’s important that you optimize it with keywords in the description, as well as meta tags and descriptions so your video appears in the results of searches on multiple search engines. 

#7 Don’t get into Legal Trouble

We live in the most litigious environment at any point in our history, so when you make a video for your business, you want to make sure you avoid legal trouble. This means (among other things):

  • Getting permission to use music. Musicians are especially touchy these days, so you want to obtain the proper permission to play a song by a popular artist in the background of your video.
  • Avoiding the sight of company logos (aside from your own) in your video. This can even include a Starbucks coffee mug or any other item with another company logo on it, as that has the potential for a copyright infringement lawsuit against you.
  • Not having children under the age of 13 in your videos – even though you have the best of intentions, this is something you want to avoid, as the Federal Trade Commission has strict laws against advertising to children, especially if your product involves alcohol.

You may want to run your video by your small business’ attorney before you publish it to make sure everything is hunky dory. 

Videos are Essential

Making videos for your business will take time, effort, and some money – depending on the equipment you purchase and whether you hire a production company – but videos now should be an essential part of your marketing strategy no matter what type of small business you own. A well-made video clearly appeals to consumers more than texts and can increase brand awareness, consumer engagement and even revenue for your business.

Building Resilient Businesses Contest Kapitus Small Business

Help Kapitus Award $250,000 in Cash Prizes to Deserving Business Owners!

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Kapitus is excited to announce the finalists for its inaugural, $250,000 Building Resilient Businesses contest after weeks of painstakingly judging over 300 video submissions. The contest was launched this summer as a way for Kapitus to give back to the small business community, which represents the backbone of America’s economy and personifies the American Dream of hard work, sacrifice and success. 

The submissions, which came from small businesses scattered across 37 states and the DC metro area, were all distinct and well-thought-out, but 15 videos stood out for their passion, storytelling, creativity, and the ways in which they would use the first-place prize of $100,000 to benefit and grow their businesses. 

Now that the 15 finalists have been chosen, Kapitus is relying on you, the public, to vote on which of the finalists should be included among the 7 winners of the competition.

Vote for your favority business

The prizes are: 

  • 1st place (one winner): $100,000
  • 2nd place (one winner): $50,000
  • 3rd place (five winners): $20,000
  • All winners will be given a complimentary, 8-hour consulting/advisory session to help them with their businesses. Advisory sessions are available in digital marketing, financial management and data analytics.

The finalists’ videos were chosen by members of Kapitus based on their storytelling, creativity, enthusiasm and the ways in which they would use the $100,000 for their business, but members of the public can use whatever criteria they see fit when voting. To vote for your favorite, please go to https://kapitus.com/brb-vote/, carefully watch the videos, and select the one you believe stands out above the rest. Only one vote is allowed per person and voting is open from Monday, September 19, 2022 through Monday, October 10, 2022

Please help us congratulate the 15 finalists (listed in reverse alphabetical order): 

  1. The Tree Yoga Cooperative – South Los Angeles, CA – Black & Latina-Owned hub of holistic wellness and community support. We provide accessible, inclusive, trauma-informed and culturally centered yoga classes and training to all body types, abilities and ages.
  2. the Enchanted Rose Emporium – Vancouver, WA – Providing a unique collection of vintage style gifts and craft supplies emphasizing sustainability and teaching classes in the handcrafting skills of yesterday to children and adults – preserving these art forms.
  3. TFTI Experience – Houston, TX – Houston’s original photo experience. 15+ creative installations for jaw-dropping photos including Infinity Mirrors, LOVE Letters, Upside Down room, DJ Confetti Room and more. TFTI has something fun for everyone.
  4. Superfit Hero – Los Angeles, CA – Superfit Hero is the world’s most inclusive line of premium plus size activewear for women, with sizes L-7XL. Fitness is for Every Body.
  5.  Strands of Faith – Pearl, MS – SOF is a conscious beauty brand curated and formulated with cruelty free rich ingredients to nourish, restore, and refresh textured strands while increasing moisture-length retention and overall healthy hair.
  6. Stir it Up – Fairbanks, AK – Inspired by a little boy with allergies and a town lacking options, Stir It Up provides options for your dietary lifestyle, guaranteed. A women-owned company specializing in gluten-free, vegan, vegetarian & low-carb options.
  7. Postal Petals – West Hollywood, CA – A new way for people to enjoy the beauty of flowers through the experience of arranging them. Fresh-cut flowers are shipped nationwide for customers to create their own DIY floral arrangements.
  8. Play Pits – Atlanta, GA – 100% all-natural deodorant, free of aluminum, parabens, synthetic fragrances, and harsh chemicals. Play Pits is a mother’s solution to providing a kid-friendly, all-natural hygiene option for youth with active lifestyles.
  9. Monolith Games – Siloam Springs, AR – A small husband- and wife-owned board and card game shop. We have created a safe space where people can hang out, play games, and above all – be themselves.
  10. Kai’s Kookies – Houston, TX – Specialty bakery offering low-carb gluten-free treats with no added sugar. Inspired by a father and daughter who recreated their baking style due to allergies and a commitment to improving health.
  11. Frères Branchiaux Candle Co – Indian Head, MD – Frères Branchiaux Candle Co. is a mission-based company that creates vegan fragrance products. Founders Collin, Ryan, and Austin Gill have donated $40K to homeless shelters through sales of their products.
  12. Fat Lady Cakes – Amherst, NY – Fat Lady’s Cakes and Pies specializes in the creation of gourmet desserts made from all-natural ingredients. From classics to new innovations, we offer a full range of flavorful treats.
  13. Courtside ATL – Lithonia GA – Creating VIP basketball experiences where anyone can participate, by deconstructing the game into: Shoot, Dribble & Pass. We employ tech features to transform, gamify and transfer content for elevated experiences.
  14. Brash Brownies – Winston-Salem, NC – A mobile, black woman-owned, bakery with small batch desserts based on old family recipes and innovative imagination. Brash Brownies is bringing Louisiana culture to North Carolina.
  15. Black People Will Swim – Long Island, NY – Smashing the stereotype that Black people don’t swim, Black People Will Swim is based on four foundational pillars encouraging people to F.A.C.E. (Fun. Awareness. Community. Education) their fears.

Official winners will be announced by October 28, 2022.

(Originally Published September 19, 2o22)

Kapitus small business rent crisis lending

Small Business Rent Crisis: What You can do to Survive

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Small businesses, facing a markedly different world than the one they faced at the height of the COVID-19 pandemic, are getting hammered by rising rents and demands for back rent payments. Rising inflation, employee shortages, rent increases and federal pandemic relief funding running dry have all contributed to 40% of small businesses in the US not making the rent in August 2022, according to Alignable – up from 33% in March. Another 45% of small businesses said that their rent has increased since 2021.

This has become an urgent crisis for Main Street businesses in virtually every industry that operates out of physical locations. Small agricultural businesses, independent restaurants, nonprofits, automotive dealerships, and the travel/lodging industry have been hit the hardest, with 50% of agricultural companies and 46% of restaurants missing their rent payments in August 2022. 

Small Business Kapitus lending rent crisis Alignable

Roughly 40% of small businesses missed their rent payment in August 2022, according to Alignable.

What can Small Businesses do?

If your small business has missed a rent payment or if you are struggling to figure out how you’re going to meet your next rent payment, your options obviously aren’t great. There are, however, some steps you can take to try to help ease your situation. 

Kapitus spoke to Stephen Cameron, president and founder of Level On Demand, a real estate services company that provides small businesses with real estate services such as contract reviews and property analysis. Cameron, a 20-year veteran of the commercial real estate market, shared his advice on how to deal with the current rent crisis.

#1 Know Your Landlord’s Situation

Before you try to negotiate with your landlord on missed or late rent payments, it’s important to first research whether the landlord is even allowed to compromise. Commercial real estate spaces are often owned by investment funds such as hedge funds or private equity firms, or even by pension funds or family offices. 

Hedge funds and private equity firms often require their landlords to enforce lease agreements to the letter with no room for negotiation, while a family office or pension fund will see some payment as better than nothing. If this is the case, you may want to consider moving your business to another space altogether.

#2 Read Your Lease Carefully!

If you informed your landlord that you’re going to be late on your next rent payment, it’s important to

Kapitus Small Business Real Estate Stephen Cameron Level On Demand rent crisis

Stephen Cameron, president of real estate consulting firm Level On Demand, stressed that small businesses should know their lease agreement before negotiating with their landlord.

read your original lease agreement, as most agreements do contain a grace period to make the payment on time. Often, these grace periods are three- to five days, and sometimes can even be up to 15 days. 

“The more important part of the lease to check is how many days you – as a tenant – have before you’re in default,” said Cameron. “This is much harder to recover from than just making a late payment. 

Cameron also stressed the importance of notifying your landlord in writing if you know you’re going to be late with rent, let them know you’re going to make that payment and see if it’s possible to negotiate late fees, as many landlords would rather avoid going through the hassle of looking for a new tenant. 

“If you have missed your payment deadline and any grace period, in most cases it is to your advantage to make written contact with your landlord as soon as possible,” said Cameron. “Sometimes it’s easy to forget that, in many cases, landlords are not large corporations, but just people who have a mortgage to pay and just want everything to work out with minimal problems.”

#3 Can You Negotiate Late Fees?

Negotiating late fees often depends on the goodwill of your landlord, because those fees are usually spelt out in your lease agreement. According to Cameron, these fees can range from 5% to 15% of one month’s rent, and a tenant won’t be in good standing with the rent until the full rent and late fees are paid. Cameron warned that “This is a commercial space, not a house; the eviction process is not as friendly here.”

Eviction rent crisis small business Kapitus Stephen Cameron Level On Demand

Negotiate with your landlord early, as the eviction process for small businesses is a lot harsher than for residential properties.

He also emphasized that it’s important to negotiate late fees and a grace period before you sign a lease. “For anyone contemplating signing a new lease right now, who may be concerned they will need a longer grace period, there are options,” he said. “Especially in the case of new, seasonal or sales-dependent businesses, negotiating with a landlord to get a few ‘freebies’ or months per year in which rent can be paid late without a penalty or fee is not out of the question. Just be prepared for a landlord to ask for something in return.”

#4 How do you Negotiate Your Lease?

If you are looking for a lower rent but don’t want to move, one strategy you may want to consider is negotiating a new lease with your landlord. 

This isn’t going to be easy because landlords, like small businesses, felt the brunt of the economic impact of the pandemic. Many small businesses could not pay rent for months during the height of COVID, and many more still owe back rent.

Before you attempt to negotiate, Cameron suggests trying to gauge whether your landlord is in good shape or hurting financially before you negotiate a new lease. 

“There are a lot of motivations, financial and otherwise, in play these days, so asking for a reduction in rent or to keep it at its previous rate is very common right now,” he said. “I’m seeing tenants across the country having more success negotiating down their base rental rates in exchange for increases on their variable expenses, such as common area maintenance, utility reimbursements, etc.”

#5 Consider a WFH Arrangement or Shared Space 

Obviously, a working from home arrangement isn’t an option for businesses such as independent

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Many small businesses have turned to shared workspace arrangements to mitigate rising rents.

restaurants and small construction companies. However, if your business operates out of an office, working from home or even moving to a cheaper, shared space through companies such as Industrious or Regus can be a much more cost-effective option for you, as it has become for many companies since the beginning of the pandemic.

“For smaller or more agile companies, having a dedicated mailing address may be enough,” said Cameron. “I’ve seen many of these companies supplement their occasional need for dedicated space by having company retreats at larger Airbnb homes or even reserving hotel-style conference rooms.” 

#6 Is it Worth Buying Your Property?

If you believe you can save enough for a down payment and can afford to wait until interest rates come down again, there are definite advantages to purchasing the space in which your business is housed outright. The biggest being that (depending on the purchase arrangement with your bank) your monthly payments will be fixed and never increase, and you’ll never have to beg for an extension or negotiate a lease with a landlord again. Not only will your property become an investment, but purchasing the property can also reap tax and depreciation benefits of ownership. 

There are also disadvantages of ownership, however. For one thing, it takes away your ability to easily move locations. Second, just as you are responsible for maintaining your house, you will be responsible for maintaining your business property, which can be costly. If you need a new roof or wish to re-landscape the space, you will be responsible for paying for that.

“Ultimately, the choice for a small- to medium-sized business between remaining a tenant or purchasing a property should be looked at objectively,” Cameron warned. “I’ve seen many business owners absolutely fall in love with a space that was perfect for their business but had no real value to anyone else. When it came time to move the business and find a new tenant, there were none to be found.”

#7 If you Have to Move…

As we are living in uncertain economic times, moving your business and finding a cheaper location won’t

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If you have to move your business to another location, you may have to settle for less space if you want a decrease in rent.

be easy, but if you’re unable to reach an agreement with your current landlord, you may not have a choice. 

If your business relies on local customers, you’re probably going to need a space in the same neighborhood in which you currently operate. Since you’d be seeking a space that is ideally cheaper than the one you’re moving from, you may have to consider making due with a smaller space since the commercial rent market is fluctuating right now. 

As previously mentioned, if you do move to a new space, carefully negotiate your lease with your new landlord.

Carefully Consider Your Options!

Being late on or missing your rent payment is never ideal and comes with few easy answers. The worst thing you can do, however, is to just ignore the situation. You should realize that you do have a few options, the first being to make sure you keep your landlord in the loop as to what’s going on. Carefully try to renegotiate, and in case that fails, it’s crucial to have a backup plan. 

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