§ 15-04 Selection Criteria.
a. Eligibility. Basic eligibility will be determined based on an Applicant's ability to meet the requirements set forth in subdivision a of 66 RCNY § 15-03. Ineligible Applicants will be eliminated from further consideration.
b. Preliminary Ranking. DSBS will rank all eligible Applicants using the following numerical rating scale:
1. Business Criteria.
(a) Number of years in operation (1 - 5 points, with 1 point for 3 - 5 years and 5 points for 12 years or longer);
(b) Time remaining on current lease (0 - 5 points, with zero points for less than 1 year and 5 points for more than 10 years);
(c) Amount of real estate cost increase (1 - 5 points, with 1 point for 5 - 10% and 5 points for 40% or more);
(d) Number of employees (0 - 5 points, with zero points for 0 - 1 employees and five points for twenty or more employees);
(e) Nomination for DSBS' Community Cornerstone Program (1 point for nominated businesses);
(f) National retailers/chain store(s) within a five block radius of Applicant's business location offering the same goods or services (0 - 5 points with zero points for no nearby chain competitor and 5 points for 5 or more chain competitors); and
(g) Neighborhood/community engagement (0 or 1 point for engagement that may include, but not be limited to, sponsoring local community projects, hosting community events, featuring local artists, musicians or performers, and/or sourcing/featuring local products or services).
2. Neighborhood Criteria. DSBS will consult independent and current data sources to assign a score to Applicant for each of the following neighborhood criteria:
(a) The percentage of small businesses in the neighborhood of the Applicant's Business (1 - 3 points, with 1 point for neighborhoods where the percentage of small businesses is greater than 30% of all local businesses and 3 points for neighborhoods where the percentage of small businesses is less than 20% of all local businesses). "Small business" and "neighborhood" will have the same meanings as those terms have when used in the Association for Neighborhood Housing and Development's Equitable Economic Development Indicators;
(b) The number of small business loans in the neighborhood of the Applicant's Business (1 - 3 points, with 1 point for neighborhoods determined to have a high number of small business loans (approximately 3,000 or more) and 3 points for neighborhoods determined to have a low number of small business loans (approximately 1,200 or fewer)). "Small business" and "neighborhood" will have the same meanings as those terms have when used in the Association for Neighborhood Housing and Development's Equitable Economic Development Indicators;
(c) The household median income in the neighborhood of the Applicant's Business (1 - 3 points, with 1 point for neighborhoods determined to have a neighborhood household median income of approximately $60,000 per year or higher and 3 points for neighborhoods determined to have a neighborhood household median income of approximately $42,000 per year or lower). "Neighborhood" has the definition set forth in the American Community Survey;
(d) The percentage of change in the presence of national retailers/chains in the neighborhood of the Applicant's Business (1 - 3 points, with 1 point for neighborhoods with an increase of 20% or less in the number of national retailers/chains since 2009 and 3 points for neighborhoods with an increase of 35% or more change in the number of national retailers/chains since 2009). "Neighborhood" will have the same meaning as the term has when used in the Center for an Urban Future's annual reports on the prevalence of chain restaurants;
(e) Neighborhood affordability (1 - 3 points, with 1 point for businesses in neighborhoods classified as high income and 3 points for neighborhoods classified as both low income and gentrifying, as defined in the Furman Center State of New York City's Housing and Neighborhoods. "Neighborhood" will have the same meaning as the term has when used in the Gentrification Analysis of the Furman Center's periodic reports on New York City's housing and neighborhoods.
3. Based on the numerical scores assigned to each Applicant, DSBS will identify the fifty Applicants with the highest scores. A tie between Applicants with the same scores will be broken by analyzing points granted for individual business criteria first, followed by neighborhood criteria. These fifty Applicants will be given an opportunity to receive an initial Business Needs Assessment. In the event that one or more of these fifty Applicants do not complete the initial Business Needs Assessment, DSBS may select replacements from the remaining ranked businesses, in order in which such businesses are ranked.
4. Any Applicant that is not identified as being among the fifty Applicants with the highest scores will be offered other DSBS services to address its needs.
c. Initial Business Needs Assessment.
1. The initial Business Needs Assessment will require each Applicant to attend in-person meeting(s) with an expert advisor assigned by DSBS. The meeting(s) may take place at Applicant's business and/or a NYC Business Solutions Center and will span a total of up to four (4) hours.
(a) During the initial Business Needs Assessment, Applicants will be asked to provide business financial statements, and to answer questions about the business' financial position. In addition, Applicants will be asked to rate and demonstrate their willingness to implement and make operational changes recommended by DSBS.
(b) Businesses that fail to participate fully in the initial Business Needs Assessment or to timely provide requested documentation will be deemed ineligible for further consideration for the Program, but will be referred for other appropriate DSBS services.
2. The following rubric will be used to complete the initial Business Needs Assessment, resulting in a score for each Applicant.
Financial Management
The Financial Management assessment category considers the adequacy of key financial management practices and systems, and the availability of financial statements covering a time period appropriate to assess Applicant's financial position.
Availability of Financial Statements Possible Points
0 1 2 3
Income statement Cannot produce 1 year or less Between 1 & 3 years More than 3 years
Balance sheet Cannot produce 1 year or less Between 1 & 3 years More than 3 years
Inventory Controls 0 1 2 3
Does applicant have a system or practices to accurately track inventory on a daily, weekly or monthly basis? No system or practices Existing but inadequate system or practices Existing & adequate system or practices N/A
Months of inventory reports available Less than 1 1 - 6 7 - 12 More than 12
Sales Tracking 0 1 2 3
Does applicant have a system or practices that accurately track sales on a daily, weekly or monthly basis? No system or practices Existing but inadequate system or practices Existing & adequate system or practices N/A
Months of sales reports available Less than 1 1 - 6 7 - 12 More than 12
Payroll Records 0 1 2 3
Does applicant use a payroll provider, payroll software, or other system that provides accurate records of wages, taxes, and related benefits? No system or practices Existing but inadequate system or practices Existing & adequate system or practices N/A
Months of payroll records available Less than 1 1 - 6 7 - 12 More than 12
Financial Position
The Financial Position assessment category considers how Applicant performs against industry standards for key financial metrics provided by expert consultants on NYC business performance and/or national standards. Information gathered during the Financial Management assessment will be analyzed and scored, as described below.
Product Cost Possible Points
0 5 5 10
Divide total sales by cost of goods sold to calculate this percentage for every month over the past twelve month period, then calculate an average describing the year overall. Insufficient records to calculate one year average At financial risk = higher than 35% At competitive risk = lower than 18% Healthy = 18 - 35%
0 0 1 2
Calculate the same average for all prior years for which reliable data is available and consider whether there is an upward, neutral or downward trend. Insufficient records to calculate trend Upward trend Neutral trend Downward trend
Labor Cost 0 5 5 10
Divide total sales by cost of labor (wages, taxes, insurance) to calculate this percentage for every month over the past twelve month period, then calculate an average describing the year overall. Insufficient records to calculate 1 year average At financial risk = higher than 35% At competitive risk = lower than 18% Healthy = 18 - 35%
0 0 1 2
Calculate the same labor cost average for all prior years for which reliable data is available and consider whether there is an upward, neutral or downward trend. Insufficient records to calculate trend Upward trend Neutral trend Downward trend
Occupancy Cost 0 5 10 N/A
Divide total revenue by total occupancy costs (rent + real estate taxes + property insurance) to calculate this percentage for every month over the past twelve month period, then calculate an average describing the year overall. Insufficient records to calculate At financial risk – higher than 10% Healthy – 10% or lower N/A
Net Profit Margin 0 0 5 10
Using data from the past twelve months, subtract all costs (operating expenses, cost of goods sold, etc.) from all revenues (sales, fees, other income) to find net profit. Divide net profit by revenue to find net profit margin and compare to industry standards. Insufficient records to calculate or negative Positive & more than 50% above industry standard Positive & more than 50% below industry standard Within 50% of industry standard
Implementation Feasibility
The Implementation Feasibility assessment category considers the feasibility of implementing projects to improve the Applicant's financial position. Applicant will be asked to rate its openness to make specific types of changes and asked to describe examples of past, related attempts to strengthen the business.
Openness Rating (OR) Openness Demonstration (OD)
Unwilling or Resistant Somewhat Willing Enthusiastic Past attempt? Total (OR x OD)
1 2 3 Yes (x2) No (x1)
Willingness to cut operating costs (ex: add Point of Sale system to improve inventory control, upgrade equipment to lower energy costs)
Willingness to adapt existing goods & services (ex: analyze profitability of specific products services and eliminate unprofitable offerings; reduce product costs; increase prices)
Willingness to try to increase profits by adding new products & services (ex: add alcohol sales, new product line or online sales)
3. The twenty Applicants with the highest initial Business Needs Assessment score will be selected to receive an Intensive Business Needs Assessment and grant funding. In the event of a tie, Applicants with the highest number of years in business, in descending order, will be selected. If the number of years in business also results in a tie, Applicants with the greatest number of employees, in descending order, will be selected.
4. In the event that one of the twenty selected Applicants does not complete an Intensive Business Needs Assessment and/or enter into a grant agreement, DSBS may select replacements from the remaining Applicants, in the order of their total scores.
(Added City Record 6/21/2018, eff. 7/21/2018)
