Archive for March, 2011
An article in this week’s edition of Buffalo Business First reports that although levels of entrepreneurship are the highest they have been in the last 15 years, few of these new enterprises are hiring employees. This data comes from a recent study conducted by the Kauffman Foundation. It seems that while the recession is providing a ripe environment for start-ups (particularly, new tech start-ups), it’s not easy for these individual proprietors to establish and staff their new enterprises.
Niagara County Community College Small Business Development Center (SBDC) counselor Andrea Lizak weighs in: “The main problem is that entrepreneurs can’t afford to hire, so the transition [from entrepreneur to business owner] is difficult.”
Are we reaching a phase in which entrepreneurial growth does not necessarily coincide with job creation or economic growth? Kauffman Foundation president and CEO Carl Schramm says that this trend could have “both short- and long-term impacts.”
It’s clear, however, that the small business sector is growing…gradually. The monthly small business index (compiled by the National Federation of Independent Business Owners) “has hit its highest level since December 2007,” Kent Hoover reports for Business First. Businesses are also investing in equipment (computers and software), according to a study by the NPD Group. So why aren’t small businesses hiring?
What we see here are two parallel issues:
From a broad perspective, how do we invest in small business in a way that promotes job creation? What kind of regulatory atmosphere fosters job growth in the small business sector?
On an individual level, how does one make that transition from sole-proprietor to small business employer?
I don’t know about you, but I’m not an economic strategist. So I’ll defer to the real economic advisers for solutions to our nation’s high unemployment.
But for the individual entrepreneur, we have some insight:
As a sole-proprietor, you are the entirety of your company. But, as you might come to find, you can’t do everything. Still, it’s not as simple as finding the right person and signing their paychecks (if you can even manage to do that, that is). Other administrative and tax-related steps must be taken, such as applying for an EIN, filing I-9s and W4s, and reporting new hires to the state. The SBA outlines these steps in this comprehensive article.
If you’re not yet at this point, then you’re main challenge is how to grow your business. For that, we encourage you to talk to a counselor and explore what specific resources are available to you. You can also check out our small business self-audit to determine what areas you need to work on to establish your business or take it to the next level. Also, I recommend tuning in to this video series put on by SBA and Dell about small business growth strategies.
It’s important to know that this kind of information and support is out there. Because in the grand scheme of things, it’s in everyone’s interest when a small business succeeds, grows, creates jobs, and contributes to our rebounding economy.
What are your thoughts on small business and job creation? What is your experience with the transition from sole-proprietor to small business owner and employer? Let us know in a comment below.
It’s that time of year again, and every online resource for small business has some form of the “tax tips” post (see our roundup below), but we’d also like to acknowledge that this is the time of year to get organized for filing in 2011. For small businesses owners (and the self-employed), most tax preparation actually comes during the tax year: collecting receipts, tracking expenses, measuring revenue, etc. Make sure that you have a good accounting system that you can keep up with. Also make note of the changes to tax law in the upcoming year. Inc. Magazine has a great article outlining what you need to do to prepare for next year.
But for now, April 15th is looming, so let’s see what advice is out there for completing your 2010 tax return:
- AllBusiness.com offers this comprehensive list of ten tips (be sure to check out all three pages): http://www.allbusiness.com/accounting-reporting/corporate-taxes/2975296-1.html
- Inc. Magazine has seven tips for the Home-Based Business: http://www.inc.com/guides/201102/small-business-tax-tips-for-home-based-businesses.html and this advice for the Sole-Proprietor: http://www.inc.com/guides/201101/how-to-find-a-tax-preparer-for-your-small-business.html
- Entrepreneur Magazine reminds you about these small business tax breaks: http://www.entrepreneur.com/article/217811
- And of course, the IRS’ “Filing Season Central” for Small Business and Self-Employed filers: http://www.irs.gov/businesses/small/article/0,,id=134947,00.html
How are you filing this year? What are your tax issues? Let us know in a comment below!