Success Story: A.M. Pyrotechnics, LLC
Childhood vision becomes entrepreneurial reality for pyrotechnics manufacturer
All kids are fascinated by Fourth of July fireworks displays. About 30 years ago a certain young farm boy in Polk County was no exception to that rule.
Since then that farm boy has proved it is an exceptional individual who knows at an early age what he wants to be when he grows up ... and then follows through and becomes exactly that.
"I absolutely loved fireworks as I was growing up on my folks' farm," says Aaron Mayfield. "But it wasn't just the noise and bright lights that fascinated me ... it was the artistry of the whole experience. I knew early on I wanted to make this my life's work."
Growing up as an only child on the 200-acre farm near Pleasant Hope, Aaron was relentless in his fascination with pyrotechnics. His parents didn't quite understand his single-minded determination, but as the years passed they helped mold it in an entrepreneurial direction.
Today Aaron is the owner and operator of A.M. Pyrotechnics LLC a few miles south of Buffalo, Mo. The company, which Aaron started in 1996 as a designer and developer of professional pyrotechnic displays, was created to meet local demand.
He began selling consumer fireworks in 1995 to help fund a large display he was creating for his church. The show drew more than 300 people. Word soon spread that Aaron produced a dazzling display. Other local groups asked him to produce shows for them. That led him to research the industry and his local market.
"I proceeded to acquire all the information I needed to meet legal requirements and then I began with three small displays ... for a local baseball team, a local church and a small private show."
After producing and performing those displays he realized this was the business for him. So he created a marketing plan, approached several large display coordinators and started A.M. Pyrotechnics.
Read the complete A.M. Pyrotechnics success story with additional photos.
Improving the SWOT Process Can Boost Business Planning
SWOT (Strengths, Weaknesses, Opportunities and Threats) is a common methodology used by many businesses for strategic and annual planning, product introductions and competitive analysis.
As a business counselor and former Missouri Quality Award examiner I've seen many businesses use the SWOT process. Unfortunately most have not used it well. The approach I often see is a group of individuals tossing out ideas, comments, suggestions that usually address their own interests or preconceived notions. The results of such an approach are neither comprehensive nor balanced.
A more systematic approach is critical to the quality of a SWOT analysis. A common means to conduct a more balanced and comprehensive SWOT is to categorize the strengths and weaknesses as anything internal to the business while opportunities and threats represent anything beyond the control of the business. This methodology has its applications, but if the SWOT process is not guided beyond this initial stage the results can still be disappointing. Refocusing the SWOT categories and using additional criteria to analyze each category will produce a better result.
While a traditional SWOT compares internal factors to external factors, the revised SWOT focuses on comparing the current situation to a potential future situation. The first step is to adjust the definitions of each category. In this case the strength and weakness categories should focus solely on the current business situation. The opportunities and threats should focus solely on the future. By analyzing the current situation versus the future, a business manager is able to make better informed decisions.
Read the rest of this article on the using the SWOT process.
Skelton Procurement Conference Draws Record Crowd to Warrensburg
A record 373 registrants and 82 exhibitors participated in the annual Rep. Ike Skelton Procurement Conference May 29, at the University of Central Missouri in Warrensburg, according to Morris Hudson, director of the Missouri Procurement Technical Assistance Centers. The meeting marked the 21st edition of the conference, hosted by Skelton (D-Mo., 4th District), chairman of the House Armed Services Committee.
Director of MO PTAC Morris Hudson (right) greets conference keynote speaker Lt. Gen. William Caldwell IV (center) and conference host Rep. Ike Skelton.
The conference brings together representatives of industry and government in a "tradition aimed at enhancing economic development by improving access to information for Missouri's small businesses," said Skelton.
In addition to Rep. Skelton, special guests included Lt. Gen. William Caldwell IV, conference luncheon keynote speaker and commander of the U.S. Army Combined Arms Center at Fort Leavenworth, Kan.; Rear Adm. Sean Crean, deputy assistant secretary of the Navy for research, development and acquisition; and Steve Flick, government contractor and president of Kingsville, Mo.-based Flick Seed Co.
Among the 16 formal presentations at the day-long conference were sessions covering: selling to the government, SBA financing, base and post contracting, contract pricing and estimating, business marketing, and financing in today's economy. Presenters and facilitators for the event included MO PTAC counselors and staff, members of the Heartland PTAC, the MO SBTDC, and the UCM SBTDC staff directed by Mark Manley.
Your local PTAC can help you win government contracts. Appointments may be made for consultations on procurement issues by contacting the PTAC office near you.
SBA News
SBA launches ARC loan program to help struggling businesses
WASHINGTON - Small businesses suffering financial hardship as a result of the slow economy may be eligible to receive temporary relief to keep their doors open and get their cash flow back on track through to a new loan program, according to SBA Administrator Karen G. Mills.
The SBA started guaranteeing America's Recovery Capital (ARC) loans June 15. ARC loans are deferred-payment loans of up to $35,000 available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt. ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.
"These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times," said Mills. "Together with other provisions of the Recovery Act, ARC loans will free up capital and put more money in the hands of small business owners when they need it the most. This will help viable small businesses continue to grow and thrive and create new jobs in communities across the country."
As part of the Recovery Act, the ARC program was created as a no-interest, deferred payment loan to help small businesses that have a history of good performance, but as a result of the tough economy, are struggling to make debt payments.
ARC loans will be disbursed within a period of up to six months and will provide funds to be used for payments of principal and interest for existing, qualifying small business debt including mortgages, term and revolving lines of credit, capital leases, credit card obligations and notes payable to vendors, suppliers and utilities. Repayment will not begin until 12 months after the final disbursement. Borrowers don't have to pay interest on ARC loans. After the 12-month deferral period, borrowers will pay back the loan principal over five years.
ARC loans will be made by commercial lenders, not SBA directly. For more information on ARC loans, consult this list of FAQs or visit www.sba.gov/recovery/arcloanprogram on SBA's Web site.
SBA to offer floor plan financing to
auto, RV, other dealerships beginning July 1
KOKOMO, Ind. - The U.S. Small Business Administration will offer government guaranteed loans to finance inventory for eligible auto, recreational vehicle, boat and other dealerships under a pilot program announced recently by SBA Administrator Karen Mills.
Dealer Floor Plan (DFP) financing will be available beginning July 1, said Mills. She announced the new program during a visit to Kokomo, Ind., with Dr. Ed Montgomery, President Barack Obama's director of Recovery for Auto Communities and Workers.
"Countless small businesses, including dealerships, across the country are facing significant challenges as a result of the uncertainty in the auto industry," Mills said. "Floor plan financing can offer some dealerships the opportunity to get through these tough economic times by allowing them to keep their inventory and cash flow intact, as well as save the jobs these small businesses provide."
Mills and Montgomery discussed the DFP pilot program, as well as other resources offered by SBA and the federal government to help small businesses in communities impacted by the troubles facing the auto industry.
"From supporting nearly $4 billion in lending to small businesses across the country since February to the Dealer Floor Plan financing, the SBA is making the resources provided in the Recovery Act accessible and working to provided needed credit," said Montgomery. "The president is committed to continuing to work with federal officials to identify resources like these that make a real difference in the lives of our auto communities and workers."
Floor plan financing is a line of credit that allows dealers to borrow against their inventory, and then repay that debt as they sell their inventory or borrow against the line of credit again to add new inventory.
Under the DFP pilot program, the SBA will provide loan guarantees for lines of credit through its 7(a) program. DFP loans will be made through SBA lenders only for titled inventory, including autos, RVs, manufactured homes, boats and motorcycles. The pilot program (www.sba.gov/floorplanfinancing) begins July 1 and will be available through Sept. 30, 2010, when the SBA will decide whether to extend the program.
DFP loans will be available for a minimum of $500,000 up to the $2 million allowable under the 7(a) program. With a maximum repayment term of five years, the loans will come with a 75 percent government guarantee. Borrowers also will benefit from the temporary elimination of fees on 7(a) loans made possible by the American Recovery and Reinvestment Act of 2009.
Effective Federal Income Tax Rate for Small Businesses Varies by Legal Form of Organization
Sole proprietorships face lowest rates, S corporations highest
WASHINGTON - The effective federal income tax rate faced by small businesses varies by the legal form of organization, according to a report issued recently by the Office of Advocacy of the U.S. Small Business Administration. Average rates range from 13.3 percent for sole proprietorships to 26.9 percent for S corporations. The effective federal income tax rate is the actual amount of taxes paid by a firm as a percent of its net income.
Exceptions to the normal statutory tax rates, such as deductions, exclusions, and credits, have the effect of lowering the tax rates paid by firms. The result is a difference between the statutory rate and the actual or effective rate paid by the business or its owners.
Overall, small businesses of all types pay an estimated average effective tax rate of 19.8 percent. Sole proprietorships face a 13.3 percent rate, small partnerships face 23.6 percent, and small S corporations face 26.9 percent. While not directly comparable, the rate faced by small C corporations is 17.5 percent.
The progressivity of the tax code also affects effective rate calculations, as firms with less income face a lower statutory rate. Nearly 60 percent of small sole proprietorships have a net income of less than $10,000, while only 3.1 percent have a net income of at least $100,000. On the other hand, more than 18 percent of small S corporations have a net income of at least $100,000.
Maryland-based management consulting firm Quantria Strategies LLC wrote Effective Federal Income Tax Rates Faced by Small Businesses in the United States, with funding from the Office of Advocacy. The authors primarily used data from the Internal Revenue Service Individual Statistics of Income Public Use File, 2004, as the basis for the study. For the purpose of this study, the authors define a small business as a firm with less than $10 million in gross receipts.
For more information and a complete copy of the report (www.sba.gov/advo/research/rs343tot.pdf), visit the Office of Advocacy Web site at www.sba.gov/advo.
Business Going Green
Businesses taking energy-saving steps this year may get bigger tax savings next year
The recently enacted American Recovery and Reinvestment Act (ARRA) of 2009 contained a number of new or expanded tax benefits on expenditures to reduce energy use or create new energy sources.
The Internal Revenue Service reminds businesses that many energy-saving steps taken this year may result in bigger tax savings next year. IRS encourages businesses to explore whether they are eligible for any of the new energy tax provisions.
An IRS Fact Sheet provides a list of ARRA energy provisions. More information on a wide range of energy items is also available in the special Recovery section of the IRS Web site at www.irs.gov/newsroom/article/0,,id=206875,00.html.
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