By: Sandra Faleris
May 23, 2012
The annual U.S. Chamber of Commerce Small Business Summit, involving over 800 small business owners and entrepreneurs across the country, is taking place in Washington, D.C. this week. The goal is to discuss and attempt to solve common legislative and management issues. This year's summit, held on May 21-23, will also celebrate the Chamber's 100-year anniversary.
At yesterday's DREAM BIG Small Business of the Year awards luncheon, Sam's Club President and CEO, Rosalind Brewer, announced Sam's Club Giving Program pledge of more than $2 million in donations to five leading non profit organizations.
"At Sam's Club our small business owners are our partners, and we want to put our money where our mission is - which is to be agents for and support our members and the small business community," said Brewer. "I realize that I have an incredible opportunity to lead Sam's Club and to be an advocate for our small business owners in America. You are the heart and soul of our economy, and no one takes more risks and works harder every single day than those of you who are out there following your dreams and running your own businesses."
The recipients of Sam's Club generous grants were announced by Brewer, as follows:
•Accion in the U.S.: $520,674 was pledged to Accion to increase direct outreach to small business owners via education and loan kit materials. It will also provide loans and financial education in an attempt to increase the success and stability of small businesses.
•Corporation for Enterprise Development (CFED): $349,545 was pledged to enable CFED to work with tax preparation providers to build their capacity to serve business owners through training and technical assistance in program design, delivery and evaluation.
•Count Me In For Women's Economic Independence: $750,000 was pledged to support the launch of the Urban Rebound Initiative in Los Angeles, Detroit and Charlotte to support 100 women-owned businesses in each market to grow their annual revenues to $250,000 in 12 to 18 months. According to Count Me In, the success of this program has the potential to create $75 million in new economic activity and 600 to 900 new jobs.
•National Association for Latino Community Asset Builders: $250,000 will be given to NALCAB to invest in the expansion and coordination of small business assistance programs in Latino communities across the country. Through grant-making, technical assistance and national training, NALCAB will support the expanion of existing small business development programs in seven markets:
Chicago, Laredo, Los Angeles, Minneapolis, Portland, San Francisco and Washington, D.C.
•Step Up for Small Business Challenge: $200,000 will be given to the top 10 Sam's Clubs that offer the most volunteer hours to local businesses in their communities. Each winning location will be awarded $20,000.
Sam's Club is a division of Wal-Mart Stores, Inc. (NYSE: WMT), is the nation's eighth largest retailer and a leading membership warehouse club with over 47 million members across the U.S., Brazil, China and Mexico.
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The Washington Post
How to prepare for the JOBS Act
By: Nicole Denny
May 21, 2012
Last month, President Obama signed into law one of the most influential pieces of legislation for small to midsize businesses. The JOBS Act provides several avenues for existing small businesses and start-ups alike to raise capital, one of the most difficult barriers of entry for a business to overcome.
By preparing early, many business owners will be able to raise the capital that traditional sources, such as banks, are no longer offering.
One of the most controversial provisions of the JOBS Act allows for crowdfunding, a way for entrepreneurs to solicit capital from non-accredited investors. This provision allows for companies to raise up to $1 million in capital per year via Web sites from individual investors without registering with the Securities and Exchange Commission (SEC).
Prospective investors with an annual income less than $100,000 may invest up to $2,000 or 5 percent of their income to a single issuer. Investors with an annual income greater than $100,000 may invest up to 10 percent of their income up to $100,000 in a single issuer. While the companies themselves will not be subject to SEC regulations, the trading platform Web sites will be heavily regulated. The SEC has 270 days to define what these regulations will be. All companies that receive crowdfunding will be required to issue financial statements annually, at a minimum. Financial statement requirements are based on the amount of capital raised.
For many start-ups, angel investors, venture capitalists and traditional bank financing are not an option. Crowdfunding offers an avenue for entrepreneurs to leverage their networks and online presence into the capital they so desperately need to get off the ground. While the SEC has until after Thanksgiving to decide how it will regulate crowdfunding, there are a few steps entrepreneurs interested in this new form of capital should take now:
●Invest in your online presence.
●Develop a plan -- determine how much capital you really need and create a detailed plan for the use of the capital investment.
● Be prepared to devote time and allocate some marketing dollars perfecting your pitch and answering questions from prospective investors.
●Perform a cost-benefit analysis. If you're looking for $150,000 in capital, you will be required to have your financial statements reviewed by a certified public accountant. Decide if the financial burden of paying for these reviews will outweigh the benefit of the added capital.
The JOBS Act has also removed some of the burdens of an initial public offering (IPO) for smaller filers that are defined as emerging growth companies (EGCs).
To be considered an EGC, you must have less than $1 billion in annual revenue and have had an initial public offering on or after December 8, 2011.
The process to IPO has been eased for EGCs. First, companies are now able to submit registration statements confidentially to the SEC. While these statements will still be required to become public before the IPO roadshow, EGCs will have more time out of the public eye, helping to protect trade secrets.
Under the new act, EGCs are exempt from the internal control audit required by the Sarbanes-Oxley Act. Audits of internal controls create an expensive barrier to entry for otherwise would-be public issuers. Further, EGCs would only have to provide two years of audited financial statements, rather than the three years of comparative statements of operations previously required. These changes create a reduction in audit fees as well as the time and energy spent by personnel generating schedules for the auditors, allowing entrepreneurs to focus on running their companies and building processes in those crucial first few years. However, it should be noted, management will still be required to implement internal controls as well as certify all financial statements.
Finally, for companies not ready to go public, the JOBS Act allows for more shareholders before registration with the SEC. The limit of 500 shareholders has been raised to 2,000, and the cap on private offerings has been raised from $5 million to $50 million, allowing private companies to grow significantly larger without having to adhere to the costly requirements of being publicly traded.
More information will be coming out over the next few months as the SEC proposes regulation for crowdfunding, and it would serve new and seasoned business owners well to stay abreast of the changes affecting the markets in which we operate.