Every year, thousands of young men and women sign up to serve and protect the nation by joining the United States armed forces. According to Department of Defense data released in 2013, since the U.S. went to war in Afghanistan in 2001 and Iraq in 2003, roughly 2.5 million members of the armed forces, including the National Guard, have been deployed. Jonathan Rodriguez is one of them. Rodriguez, a native Miamian of Colombian descent, joined the Marines as a reservist when he was just 18.
“I went to the Marines because I wanted to go to college and do something to help people,” Rodriguez said. “Shortly after enlisting, I was activated and deployed to Iraq.”
Rodriguez, a University of Miami graduate, learned the ropes quickly and found himself in a number of combat situations during his time in the Marines.
“I spent four months serving as an infantry mortarman responsible for operating equipment and weapons in combat,” Rodriguez said. “It was an experience that taught me a lot.”
In 2005, Rodriguez took the skills and discipline he learned during his time in the Marines and embarked on the road to entrepreneurship inspired by his parents, who were in the oil business in Colombia.
Today, at 32, Rodriguez is the owner of Tayrona Oil. He and his cousin, Aharon King, a fellow Marine, are partners. Tayrona Oil, named after the Tairona people of Colombia, is a veteran-owned firm certified as a Disadvantaged Business Enterprise (DBE). (see box.)
“The Tairona people are known for their knowledge and self-sufficiency,” Rodriguez said. “And I think that’s always been my vision for this business. I wanted to acquire as much knowledge as possible and be a company that can stand on its own.”
Headquartered in Coral Gables, the firm employs its partners and contracts with other firms, known as “common carriers,” to transport their fuel to clients. The company is also part of the SBA’s 2016 Emerging Leaders Program, a training initiative to accelerate the growth of established small businesses in urban areas that have been identified as having a high potential of success.
“Right now, in our business we manage the delivery of oil, propane, diesel and other fuel for major government contracts and commercial accounts,” King said. “Our clients include FEMA, the U.S. Air Force and the National Park Service. We buy fuel and lubricants from refiners, brokers, suppliers and distributors in order to service the contracts we have around the country.
With revenues of nearly $440,000 in 2015, Tayrona Oil is on a mission to become more profitable through expansion. Key to their company’s effort to grow sales is acceptance in the U.S. Small Business Administration (SBA) 8(a) Business Development Program. By participating in the program, the company hopes to secure more government contracts. But the company was in need of guidance, after a previous application to the program was rejected earlier this year.
The company was also looking for ways to raise capital for their planned expansion. To get assistance and create a solid plan for the company’s future growth, Rodriguez and King turned to the counselors at the Miami-Dade office of SCORE, a national nonprofit organization of retired volunteers who have built successful businesses during their careers.
SCORE identified two counselors to help Tayrona Oil achieve its goals of funding a company expansion and successfully enrolling in the SBA 8(a) Business Development Program. SCORE volunteers use their business skills and experience as successful entrepreneurs to offer mentoring services to small business owners free of charge. The SCORE team included Jonel Hein, deputy district director of the SBA’s South Florida District Office in Miami. Hein has been with the SBA for more than 20 years and has worked at various levels of the administration throughout her career, including economic and business development. She has also served as a lender relations specialist and has extensive lending experience, having worked as a loan officer before joining the SBA.
Larry Schaad is the president of Liquid Capital. The company provides funding solutions for growing small and medium-sized businesses to do things like restructure, launch new products or expand market share.
Schaad has more than 20 years of experience helping businesses secure different types of financing. Schaad is a former vice president and relationship manager for Bank of America and also served as a vice president at Raymond James Bank.
After working with Tayrona Oil for about three weeks, the SCORE team helped the company create a solid plan to achieve a successful expansion. To achieve the company’s primary goals, the counselors recommended the following:
Update the business plan: The counselors agreed that the first step for Tayrona Oil was to update its business plan. The counselors stressed that to obtain the capital necessary to expand operations, the company must make updating their business plan a priority.
“Every business needs a plan to achieve its goals, and it needs to be updated on a regular basis,” Schaad said. “And there are consequences to not having one. For example, when a company is out trying to raise capital, it will lose out on funding opportunities because there is no business plan for investors to read. It’s essential to the process.”
The SBA offers resources to help small business owners create a plan including free templates and an online tool that provides step-by-step guidance.
“By working with SCORE and the SBA, we saw just how important an updated business plan is to helping us get to the next level,” Rodriguez said. “We took a weekend and updated it to include financial projections for the businesses and how we plan to execute the expansion. It was a good exercise for us to think our plans through again and make sure everything we had planned was doable.”
While Rodriguez and King were able to update their business plan in a weekend by doing it themselves, Schaad cautioned them early on about using companies that charge exorbitant amounts of money to write business plans.
“If you’re going to outsource the job of writing your business plan, you need to be sure you’re using a reputable company,” Schaad said. “And it doesn’t cost tens of thousands of dollars to have a professional business plan written.”
According to Schaad, the average fee to have a professional write a business plan is between $500 and $3,000.
Establish a relationship with a lending institution: To secure capital for their expansion, the counselors encouraged Tayrona Oil to start a relationship with a lending institution.
“Like many small businesses, this company is in need of funds to expand,” Schaad said. “It’s important that the owners establish a working relationship with a bank or credit union.”
To do that, Schaad recommended that Tayrona Oil create a target list of lending institutions they intend to approach. Next, he suggested that the owners review the requirements of each lender to find the best fit. Then, assemble all of the documents that lender will want to see before making the approach.
“One of the things that I see often in financing is a slow drip of documents from the business seeking a loan to the lender,” Schaad said. “It hinders the process and everything takes longer. To make things easier, don’t piecemeal documents. Gather everything up front.”
Hein suggested that Tayrona Oil consider an SBA guaranteed loan.
“The SBA is on track to do $1 billion in loan volume this year,” Hein said. “We have a list of participating lenders that we connect business owners with, including Wells Fargo and J.P. Morgan.”
While the SBA does not make direct loans to small businesses, it does determine the guidelines for loans, which are then made by its lending partners, which include banks, community development organizations and micro lending institutions.
“The SBA guarantees repayment of these loans,” Hein said. “This eliminates some of the risk for our lenders. So when you have a business that applies for an SBA loan, it’s really applying for a commercial loan, which is structured according to SBA requirements with an SBA guarantee. Having an SBA guaranteed loan can give a business the access to capital it needs to succeed.”
Schaad also encouraged Tayrona Oil to look at alternative forms of funding if an SBA loan is not feasible, such as “purchase order financing,” in which small businesses can get capital to fill customer orders.
Both Schaad and Hein urged the owners of Tayrona Oil to protect their individual credit ratings.
“When you are seeking capital from a lending institution, many times the lender will look at the credit histories of the company’s owners,” Hein said. “So it’s important to make sure that you are up to date on your payments and have a good history.”
Secure a spot on the SBA 8(a) program: Tayrona Oil wanted to secure participation in the SBA 8(a) Business Development Program, which offers a broad spectrum of assistance to small businesses that are at least 51 percent owned or controlled by individuals identified as socially and economically disadvantaged, including African-Americans, Hispanics and Native Americans.
“The program gives disadvantaged small businesses access to work through government contracts,” Hein said. “Participation in the program takes place in two phases over nine years. We have a four-year developmental stage and a five-year transition stage which allows businesses to graduate out of the program.
Participants in the program receive a number of benefits, including the ability to pursue sole-source contracts up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing.
Tayrona Oil applied for the program, but was rejected.
“The application is very comprehensive and a lot of documentation is required,” Rodriguez said. “Having been through the process once before, we had a good idea of what we needed to improve on the next time we applied.”
The counselors worked with Tayrona Oil and provided advice on ways to improve the application this time around.
“We recommend that small businesses interested in the program first visit our website to review the requirements, before submitting an application,” Hein said. “We also have online resources that provide tips, articles and other information that a small business will find useful.”
Tayrona Oil submitted its application in early September and is currently waiting to hear back about acceptance.
“We are confident about our chances this time,” Rodriguez said. “The Miami Herald gave us a great opportunity to get our business on track through this makeover. SCORE and the SBA have also given us invaluable advice and guidance that will keep us on the road to knowledge, success and self-sufficiency.”
Tasha Cunningham can be reached at @advocatebrands.
Disadvantaged Business Enterprises (DBEs) are for-profit small business concerns where socially and economically disadvantaged individuals own at least a 51 percent interest and also control management and daily business operations. African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans, and women are presumed to be socially and economically disadvantaged. Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis.
To participate in the DBE program, a small business owned and controlled by socially and economically disadvantaged individuals must receive DBE certification from the relevant state.
For more information, see www.dot.state.fl.us/equalopportunityoffice/dbecertification.shtm.
The business: Tayrona Oil was incorporated in 2005 and recently moved to BizNest, a co-working space at 2000 Ponce de Leon Blvd., Coral Gables. (tayronaoil.com). The company sells fuel to government agencies and commercial customers.
The challenge: Tayrona Oil sought a small business makeover to assist with updating their business plan, securing financing to expand and help with completing an application to participate in SBA 8(a) Business Development Program.
The experts: Jonel Hein is the deputy district director for the SBA’s South Florida District Office in Miami. Hein is responsible for daily operations in Miami and two alternate work sites in Tampa and Fort Pierce. Hein focuses on building and maintaining with small business owners and serving as a resource to help them succeed. Larry Schaad is the president of Liquid Capital. With more than 20 years of experience in lending, he specializes in finding financing solutions for small businesses.
The makeover: In about three weeks the SCORE team worked with the SBA to help Tayrona Oil update the company’s business plan, prepare to seek capital from lending institutions and apply to SBA 8(a) Business Development Program. They helped Tayrona Oil identify lending programs to secure financing, reviewed the company’s updated business plan and worked with the owners to finalize the company’s application to the SBA 8(a) Business Development Program.
Based in Washington, D.C., SCORE is a nonprofit with more than 12,000 volunteers working out of about 400 chapters around the country offering free counseling to small businesses. There are seven chapters on Florida’s east coast, including SCORE Miami-Dade, with more than 90 volunteer counselors. Counselors from SCORE Miami-Dade meet with small business owners and offer free one-on-one counseling as well as dozens of low-cost workshops. SCORE Miami-Dade also offers a Season Pass, which includes the opportunity to attend an unlimited number of workshops during the year. To register or learn more, click on “Local Workshops” on miamidade.score.org. To volunteer or learn more about SCORE, go to www.score.org or www.miamidade.score.org.
Get Your Share of County Business: Join SCORE Miami-Dade for a workshop that will help small business owners understand what it takes to do business with Miami-Dade County. Lawanda Wright-Robinson, technical assistance coordinator of the Small Business Development Department for Miami-Dade County will present information about the County’s programs for small business and give an overview of its purchasing process. Thursday, Sept. 15, from 6 p.m. to 8 p.m. Get more information here.
Rules of Thumb Webinar with Fast Company’s Co-Founder Alan Webber: This SCORE webinar features Alan Webber, the co-founding editor of Fast Company magazine. Webber was the editorial director and managing editor of the Harvard Business Review. He will share his insight into how to work smarter and grow a business. Thursday, Oct. 6, at 1 p.m. For more information, click here.