Alexandria State of the Market Report Released

State of the Market ReportIn mid-September, the Alexandria Economic Development Partnership (AEDP) released their bi-annual State of the Market report. This document focuses on the first half of 2015 and contains valuable information for small business owners in the City.

This publication is part of AEDP’s research and data series on the City of Alexandria. This report is released twice a year and provides the latest updates on the City’s economy, the status of different development projects, insights into the office and retail markets, and residential sales patterns. Each report features a spotlight section that goes into more depth on a particular topic. This report’s spotlight is on TSA’s relocation to Victory Center.

In addition to a wealth of indicators and data, the report also includes several short articles on a variety of topics. In the office section of the report, there is a discussion of how cities and counties are incorporating light industrial space and flex uses into urban landscapes. There is also an article on the rise of boutique office and how businesses are looking for unique and collaborative spaces.

The retail section of the report covers recent openings and new businesses in the City. There is also an in-depth discussion of the trends in retail, both in Alexandria and beyond. There are also features on future retail in the Oakville Triangle study area and on product development entrepreneurship and the rise of maker spaces.

The report provides basic information on Alexandria’s economy and on the housing market in the City. In this report, there is also an overview of some of the planning efforts for future development in Eisenhower West, Old Town North, and the Oakville Triangle/Route 1 area. All of this information is important for and relevant to small business owners in the City. We hope you will take the time to read the report and reach out to AEDP if you have any questions.

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From Ideas to Brick-and-Mortar Store

This week’s post was written by Ray Sidney-Smith of W3Consulting, social media consultant and facilitator of the monthly Roundtable for the Alexandria SBDC. 

Ideas to Brick and Mortar Store“Big box retailers, at some point, define the competition,” said Retail Architect Bridget Gaddis, AIA, Leed AP, and Principal of Alexandria-based architecture studio, Gaddis Architect. With over 20 years of commercial retail design, Bridget knows what she’s talking about when it comes to taking your retail concept and bringing it into reality. She presented a seminar workshop entitled, “From Ideas to Bricks and Mortar Store” at the Alexandria Small Business Development Center recently to help educate retailers and forthcoming retailers for the Alexandria Small Business Retail Mondays, a series of educational programs for retail small businesses throughout the City of Alexandria, Virginia, throughout July and August.

So, if big box retailers are creating the standards for small business retailers to compete and prosper, what can you do to set yourself up for success? It turns out that proper lighting, showing your merchandise, saying what you sell, and creating a shopping experience, said Gaddis, are just a few ways you can champion your retail design success. Here are my non-architect’s takeaways of just some of the highlighted points Bridget illuminated (pun intended) during her presentation.

Get a retail store prototype made.

As Bridget demonstrated in her seminar, one of the primary goals of a retail project is to make sure that your retail marketing objectives are met upon opening your store. One of the best pieces of advice offered was the production of a retail store prototype with the help of a retail architect. This can eliminate many of the unknowns that can plague a project as well as illuminate some of the guesswork from what will happen and how it will look at completion.

High contrast lighting is better than brightness.

Something very interesting to me, that when you are planning your retail store you should really look to have high contrast lighting versus bright lighting. Bridget gave the example of several stores that had low ambient lighting but stronger direct lighting on the products themselves. This makes sense as what’s more important, the walls or selling your products?

“Warm, white lights extend the amount of time a customer spends in a retail store.” ~Bridget Gaddis

Mannequins as design strategy. You can even use it to sell hardware!

When designing your retail clothing and accessories stores, you may want to think about how mannequins and other props play into your overall marketing strategy. The more people see themselves wearing your clothes or the accessories that you sell, the more likely they are to buy.

Test for the “Tchotchke Effect” (flea market look): take photos of your display in black-and-white.

Clutter isn’t good for the home and certainly not good for the retail store environment. If I can’t see all of your products clearly, or if I’m nervous about turning around in your store but actually knocking some expensive product off the shelf, I’m not going to be in the most ready state for buying now. Make sure that aisles are clear and passable, that products are displayed together in an organized fashion and are complementary, and, even in small spaces, that there’s enough visual space between sections or categories of products. In this case, less is more often greater sales generated than inventory displayed.

How often should a retail store update their storefront to stay visually relevant?

The tip that Bridget Gaddis offered was practical: pay attention to design trends and think about updating your retail store and storefront accordingly.  You can read interior design blogs, like Go To Gaddis’ blogs, As well as subscribing to Twitter profiles, facebook pages and Pinterest boards that are showing design and marketing trends that can inform your decision whether or not your storefront or retail store is looking current.

Show your merchandise.

This advice marries well with the cluttered retail environment issue. If you block purposefully or inadvertently customers’ views of your product, they won’t see them to buy them. It’s as simple as that. So, it’s best to showcase your actual merchandise and not hide it in seemingly clever displays that may not really tell me which or what your product is.

Say What You Sell.

Any store signage and other words that appear to the customer from the storefront or within the store needs to tell the customer what it is you sell. From personal experience, I have walked through Old Town and not been able to decipher what a store actually sells as I walk by. Since I couldn’t determine what it is that they sold, I have never stepped foot in the store. That’s hardly the non-invitation you want to present as you launch your retail store.

Create a shopping experience.

The final tip that I picked up from the seminar was the contextualizing of the age-old principle of creating a shopping experience. As with any restaurant or retail store, people are expecting to experience your brand as much as they are to buy your product. As you plan out how your bricks and mortar store is going to look, take into account how you are future customers will experience your brand from visual, layout, sales, and customer service perspectives.

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Solopreneurs – Could You Really Be Considered an Employee?

This post is a continuation of last week’s topic and was written by Patricia Frame of Strategies for Human Resources, our guest author for our solopreneur blog series.

Solopreneur - Could You Really Be Considered an EmployeeRecently, the US Department of Labor (DOL) issued new guidance on when a person is an independent contractor and when they are an employee. Even if you have your own company, if you are a solopreneur you need to understand the new rules to protect yourself. Under these rules, many legal reviews indicate that many independent contractors now will be considered employees instead.

Under the new guidelines issued July 15, 2015 for classifying such workers the DOL looks closely at what the ‘economic realities’ are to decide whether a worker is economically dependent on the employer or are actually in business themselves.

There are six factors which the DOL typically will assess in total and none are considered alone. These include:

  •  The extent to which the work performed is an integral part of the employer’s business
  •  The worker’s opportunity to manage for his/her profit and loss (not including ability to work more hours)
  •  The relative investments of the employer and the worker
  •  Whether special skills (business skills, not technical ones), judgement, and initiative are required to perform the work
  •  Permanency of the relationship
  •  Degree of control retained or exercised by the employer, not including flexible work options.

Certainly those solopreneurs who once were employees and then moved out to become consultants or contract workers AND who still work primarily for their old employer are at risk.

But you may be at risk also if:

  • You have only 1-2 clients
  • You work in a role where you are on-site at a client full-time or part-time regularly or serve as an interim executive
  • You have not yet set your business up fully
  • You are at risk under the factors mentioned above.

Whether you are obviously at risk or not, you should take precautions to ensure you can maintain your independent status, if you wish to remain independent.  This could include:

  • Documenting all your client engagements regularly with any agreements you sign, their business information, and the scope of your work for each client.  Many of us sign non-disclosure or confidentiality or other agreements with our clients. Be sure you have copies of these as well as any agreements or contracts you have your clients sign.
  • Establishing your business visibly within your community and field. This could include having a website or business profile on social media, the advertising you do, your business cards and other marketing materials, and so on.
  • Maintaining required business licenses
  • Having separate business banking accounts and other business relationships

Note that the DOL has stated that having a business incorporated is not in itself enough to prove you are a real business and not an employee.

All this advice seems simple and obvious, but often we know what we should do but we do not actually do it all. This is especially true if you started your solopreneur work as something to do until you could find a new job.

If you are re-classified as an employee, you lose the business deductions on your taxes although you may gain benefits from regular employment. The choice should be made by your decision and actions, not inadvertently.

If you need assistance and advice to ensure you are building a successful business, the Alexandria SBDC offers a range of services. Check our website for those which will help you succeed!

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Important Independent Contractor Rules Change

Independent Contractor Rules ChangesThe US Department of Labor (DOL) has issued new guidance that redefines independent contractors (often called 1099 workers after the IRS form.) This is critical to your business if you use independent contractors since many now will be considered employees instead.

Under the new guidelines issued July 15, 2015 for classifying such workers, the DOL looks closely at what the ‘economic realities’ are to decide whether a worker is economically dependent on the employer or are actually in business themselves.

There are six factors which the DOL typically will assess in total, and none are considered alone. These include:

  • The extent to which the work performed is an integral part of the employer’s business
  • The worker’s opportunity to manage for his/her profit and loss (not including ability to work more hours)
  • The relative investments of the employer and the worker
  • Whether special skills (business skills, not technical), judgement, and initiative are required to perform the work
  • Permanency of the relationship
  • Degree of control retained or exercised by the employer, not including flexible work options

What does this mean for your business?

Just because a person wants to be considered an independent contractor does not mean you should allow it.  While many businesses prefer to use independent contractors to save on payroll taxes and benefits, neither the DOL or IRS have approved  that practice, as both large and small firms have learned in past cases.

Independent contractors should be used carefully and not commonly.  Now you need to keep detailed documentation on each independent contractor to show how you determined the person was not an employee.  Such documentation could include:

  • The work requirements used to seek independent contractors’ bids include:
  • Project work plans which show the limits of the work
  • Business cards, W-9s, business website links, and copies of business licenses
  • A list of other current clients of each independent contractor or such pages on their website
  • Correspondence related to the work

In addition, various legal newsletters have recommended the following practices to help support your determination that the person is an independent contractor and not an employee:

  • Do not provide internal email addresses
  • Do not normally invite them to employee functions
  • Do not provide any employee benefits

This new guidance means it would be wise to look at all independent contractors you are currently working with and assess whether each is actually independent or should be considered an employee.  Doing this review now will help you avoid legal risk, including pay, benefits, compliance, and tax problems.  For further information, talk with your employment attorney or contact us for a legal or HR consult appointment.

For more information, please reverence this guidance from the Department of Labor.

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Advice to Government Contractors for Fiscal Year End

We’re less than a month away from the end of the Federal fiscal year, and we know our clients may be wondering about what they should do to prepare. So, we asked John Boulware, our Federal Government Contracting specialist, if he had any advice for our clients. His response is below:

Federal Contracting Fiscal Year EndAll government contractors should be bracing for another round of cuts forced upon Federal agencies by sequestration. Some contractors will be surprised at the cuts they must absorb or the option years that are cancelled as a result of painful cuts forced on many Federal agencies.

Agencies will be forced to make some more hard choices, as they have done in the last few years. Some of these choices may simply be made based on how well the Federal agencies know and trust their supporting contractors or on how closely connected contractors are with agency program staff who have the money.

If you have not maintained really close contact with your Federal client’s program staff, it may be too late for you, but don’t give up yet. Stay close to your client’s program staff in September and October. Meet with them as often as possible hoping that you can build on the good relationships you have developed over the last few years and convince your clients that your firm is the one they must protect.

In meeting with them, make sure you have a purpose your client will appreciate. For example, ask to meet with them to explain some adjustments you think you can make to bring added value to your contract. Then, when you meet with you client, be specific and show the added value.

If you have additional questions about government contracting, please visit our government contracting resource page. If you would like to set up an appointment to speak with one of our government contracting specialists, please complete our request for counseling questionnaire.

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Census Business Builder: Data for Small Businesses

Census Business BuilderWe know how important good data is for small businesses as they develop their business plans or look to grow their businesses. In the past, it has been challenging to get the information needed from a single source. Now, there’s a new tool available to help small businesses with their research needs.

Earlier this month, the U.S. Census Bureau released a tool to help small business owners explore data on demographics and economic information. The tool is called the Census Business Builder: Small Business Edition and provides information that is useful to new small businesses and to those looking to expand. The video below, from the U.S. Census Bureau website, provides an overview of the tool:

The tool was designed to be easy to use and allows each small business owner to select their type of business and anticipated business location. Because the tool is map-based, it is easy for business owners to look at surrounding areas to compare different jurisdictions to their neighboring areas.

The tool also allows users to download and print maps, data, and reports that can then be used in developing business plans or for other research purposes. The tool includes data from the American Community Survey 5-year Estimates, the County Business Patterns, Nonemployer Statistics, the Economic Census, and ESRI data on consumer spending.

Currently, the tool provides information on 49 business types in six categories: construction, food services, health care, personal services, professional services, and retail. The U.S. Census Bureau plans to continue adding business types in future iterations of the tool. Quarterly updates are planned and will include additional content and functionality.

In order to make the site user friendly, the U.S. Census Bureau has developed several video tutorials to walk users through the tool. These answer common questions about how to use the tool and demonstrate several of the features that business owners will find useful.

We are excited for this new tool and the potential it represents for our clients. If you have any questions about this tool or would like more information, please feel free to reach out to us. Happy researching!

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Credit Card Liability Changes – The Time to Act is Now

Credit Card Changes EMV ChipDo you accept credit cards as payment for the goods and services that you provide to your customers? These days, most small businesses answer “yes” to that question. For those who currently swipe the magnetic stripe on credit cards, including most restaurant and retail establishments, there are major changes coming soon that may have serious implications for your business.

The major credit/debit card issuers have begun to distribute new cards that contain an embedded chip on the front which should make fraudulent card use more difficult. The fraud reduction benefits of the new cards will not be realized if merchants do not have the technology to accept the new cards. It is important for all merchants who accept these cards to upgrade to the new technology because on October 1, 2015 there will be a shift in the fraud liability. This means that, after that date, merchants who swipe chip cards will be liable for any fraudulent transactions, not the bank.

What should you do?

  1. First, if you have not already been contacted by your merchant services provider, payment processor, or financial institution, you should contact them. The solution for each merchant will depend on how they have set up their payment processing, how it interfaces with their POS (Point of Sale) system, etc. At the very least, you will need to acquire new devices that will be able to process the new cards in place of the swipe machines currently in use. There are varying charges and steps necessary, depending on the system that you use. Again, your best source of information should be your current processor.
  2. If you find that the new technology changes will not work with your current POS system, and you want to continue with that system, you may need a change in processing companies. This is why all merchants who swipe cards should be taking action now – October will be here sooner than you think.
  3. There is a great deal of information in the press and on the Internet about these changes. One of the most complete and unbiased resources is This site has listings of videos, Frequently Asked Questions, and other information to help you. Educate yourself now, talk with your providers, and begin to determine the best solution for your particular circumstances.

At 9:00 am on September 23rd, the Alexandria SBDC will be presenting a one-hour workshop on this issue to clear up and clarify any remaining questions. The presenters will be Chris Harrison and Scott Johnston of WorldPay. We encourage everyone who accepts credit card transactions to attend this free one-hour session. Register for the event here.

Small Business Owners – Don’t put this off!!!  Now is the time to act.

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Let’s Pop the Bubble on Startups, Ideas, and Investments

This blog was written by Tim Berry and was originally posted on the SBA website on July 28, 2015.

Let's Pop the Bubble on Startups Ideas and InvestmentsMaybe it’s because business schools teach it that way. Maybe it’s because it’s easier to write about. Maybe it’s because of the dream and the glamor involved. Whatever the reason, there is widespread misunderstanding about the reality of business ideas, startups, and investors.

This misunderstanding results in a stream of questions on social media, blogs, and entrepreneurship sites. They come with different wording around these core concepts:

  • I have a great new business idea, but no money. Where do I find investors?
  • I want to start a business but I have no money and no contacts. Where do I get investors?
  • I have a great idea for an existing company. I don’t have the resources. How do I sell it to them?
  • I have a great business idea but I don’t have experience or resources to execute. How do I sell my idea?

Let’s look at reality in this area. Consider this a reality check.

Very few startups get outside investors.

Only two or three of every 100 real startups get outside investment from angel investors, and about one per 1,000 get venture capital in the beginning. That’s a hard number to track down because statistics vary and they depend on definitions. The SBA reports about half a million startups with employees per year, but there are about five times more businesses without employees than those with, so I figure anywhere from half a million to two million startups per year in the U.S. alone. The Angel Capital Association says there are only about 75,000 angel investments and 5,000 venture capital investments per year, and many of those are duplications, second and third rounds, or new investments in already-existing companies.

Those numbers make sense to me. After all, outside investment is a special case in startups, related to the best of the best, normally only startups with a lot of potential growth, experienced teams, and product-market fit. Investors need companies that aren’t just likely to succeed, but likely to succeed and sell out within five years or so.

What doesn’t make sense is how many people think the natural, normal process of starting a business involved getting somebody else’s money. That’s the exception. The rule is elbow grease and shoe leather, struggling to get the first customers, focusing on a subset of the larger vision, starting with what you have, not what would be ideal. This is the realm of the normal, in which entrepreneurs turn to friends and family for help, they borrow from house equity, and they work their startup in their spare time. And sometimes, when they have a business plan and some minimal startup resources, they go to their local banks and get an SBA-guaranteed loan through the bank.

For those who complain that they can’t get startup investment, as if that were a natural right, I say welcome to entrepreneurship. Nobody is entitled to startup investment. Build a startup that’s a good investment, and you’ll get investment. Do the work.

Nobody invests in business ideas.

No offense, but your idea, no matter how good, has no value. What gives it value is the work involved in getting started. You develop the idea, gather a team, do a product prototype or minimum viable product, and prove the concept with actual users, subscribers, customers, distributors, or whatever consists of traction in that business.

You don’t even own that idea. If it’s an invention, you have to design and describe and win a patent to own it. And patents don’t always protect against imitations. You can own a creative work with copyright, which covers books, software, pictures, and art. You can own commercial words, images, sounds, and such with trademark. But you don’t own a business idea.

Companies don’t buy ideas. They don’t even listen to idea-holders wanting to pitch ideas.

You have to do the work.

A business idea doesn’t make you an entrepreneur. It doesn’t entitle you to investment. It puts you in the same boat as the rest of us, facing the journey of execution that turns an idea into a business of value. You aren’t entitled to financing; your business has to earn that with milestones met and progress made.

Does that sound daunting? Here’s the good news: If you’re there, at the start of the journey, you’re in good company. Millions of entrepreneurs have done that already, the vast majority of them without somebody else’s money to help. Solve a problem, give value, make the world better for your potential customers, and you can do it. Do the work.

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