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!
The Wall Street Journal recently reported that there’s never been a cheaper time to start a new business. Small Business reporter Rosalind Resnik says:
Ten years ago, a typical Internet start-up needed $1 million to launch a product and millions more to prove its business model and scale it to profitability or an IPO. Today’s start-ups run lean and mean thanks to the plunging cost of technology and a surplus of real estate and talent. “The popular ‘lean start-ups’ approach favors developing a product and getting it into the hands of customers as quickly and inexpensively as possible,” says Mr. Ronick of UpStartBootcamp.com. “Plus, the stigma of freelancing has lifted for both companies and individuals so start-ups can hire top talent on an as-needed, virtual basis. This lets founders hire better talent with more flexibility, reduced office space needs, and lower benefits costs.” And thanks to the power of social networking, it’s no longer necessary to hire an expensive PR firm to generate press.
Read the full article for the rest of Resnik’s reasons for starting a business this year.
The lending marketing is also starting to open up again (Reuters: “Regulators see small business lending improving“) and there is unprecedented assistance available for the underserved: namely, women and minority business enterprises. For instance, the Small Business Administration (SBA) just announced two new loan initiatives: Small Loan Advantage and Community Advantage. According to a recent press release, these programs “are aimed at increasing the number of lower-dollar SBA 7(a) loans going to small businesses and entrepreneurs in underserved communities. The agency’s most popular loan product, 7(a) government-guaranteed loans can be used for variety of general business purposes, including working capital and purchases of equipment and real estate.” Find out more about the Advantage Loan Initiatives.
Additionally, there is a new emphasis on opening contracting opportunities for women-owned businesses as part of the SBA’s Final Rule, which we wrote about back in October.
Besides these supporting developments, there are many benefits to owning your own business. You can be your own boss. You can achieve financial independence and fully utilize your skills and knowledge, all while maintaining your creative freedom. And if you’ve been laid off or are currently unemployed, see this as an opportunity or an alternative to entering a saturated job market (a huge talent pool of your own potential employees!). So go ahead, take the leap in 2011, and like countless other innovative and creative women (and men), discover the joy of owning a business.
When Sir Edmund Hillary stood on top of Mt. Everest, he wasn’t alone. Beside him was a Sherpa mountaineer named Tenzing Norgay.
Women business owners and entrepreneurs: you don’t need to go it alone!
Being in business by yourself can sometimes be lonely and isolating. Perhaps you’re having issues and problems and you don’t feel comfortable sharing them with your employees. It’s also hard to know if your family and friends “sugarcoat” the feedback they give you.
Peer mentoring is a tool that many women business owners and professionals are starting to use to develop their businesses and strategies. With the guidance of a trained facilitator, a group of peers—often in similar stages of development—meet to exchange feedback, ideas, and concerns. It is an opportunity to benefit from mutual support and experience, to learn from each other’s successes and mistakes. What is it like going through a state certification process? How do you resolve employee disputes? A peer group not only guides you through your struggles, but can relate to them. This is what makes a group mentoring relationship quite different than a business advisory or coaching relationship: you are all in the same boat. Often times, peer mentoring groups also have an educational component (as is the case with the WBC Forum group), enabling members to expand their knowledge base on emerging business tools and management techniques.
In the 2010 report Roadmap to 2020: Fueling the Growth of Women’s Business Enterprise, Marsha Firestone, WPO President and Founder, asserts the value of this model. She says that “collaborative learning draws out the insight and wisdom of each individual participant, resulting in a mix of ideas that benefits the whole.”
What makes a good group:
The group should be comprised of women whose businesses do not compete with yours but are similar in size, revenues and other key characteristics. Some groups might be divided by similar industry, like for those in medical or legal fields, or maybe for those running established family businesses. Group dynamics and group energy are important, and can increase your determination and encourage you to achieve your goals. Openness and honesty is key. Firestone adds: “The effectiveness of the group is entirely dependent on the participants’ willingness to share. Only when people are open about discussing their finances and other sensitive issues will the group benefit the most.”
Benefits to you:
The group functions not only as a sounding board for your issues, but from the members’ collective experience, you gain insight that you would not have gotten from family members or friends, or even mentors. The bonds forged between members of the group are equally as important, and can lead to strategic alliances and future collaborations. And perhaps most importantly, the support of the peer group drives you as a business owner to action: an unspoken intention is not as powerful as an intention you share with a group of peers.
Being a member of a group can provide you with inspiration, ideas and motivation.
What are your thoughts about peer mentoring? Are you a member of a peer group? What was your experience? Share
In light of Veterans Day (yesterday), we wanted to take a moment and thank veterans across the country for their service.
Because of the leadership skills and expertise they acquire during their service, many veterans go on to start and grow small businesses.
The Small Business Administration offers resources to support veteran-owned small businesses. Visit the Office of Veterans Business Development for more resources.
You might also want to check out a post we wrote back in June about the entrepreneurial resources and support available to the men and women who have served our country.
Happy Veteran’s Day!
Remember when we wrote back in March about the work being done to promote contracting opportunities for women and minorities in small business? While those initiatives were focused here in New York State, they coincided with SBA’s initial proposal in February to account for the under-representation of women business owners in federal contracting.
Well this month, the SBA has made its rule official: to implement a women-owned small business (WOSB) contracting program. Because the federally-set minimum of 5% contract allocation to WOSBs has not yet been met, the program will offer the tools and support needed to make up for this deficiency. Astoundingly, 83 different industries have been identified (by this RAND study) in which WOSBs are under-represented or substantially under-represented.
There are some noteworthy provisions of the new rule:
- “Women-owned” is defined as 51% ownership and control of the business by a female US citizen. The firm must be “small” in its primary industry in accordance with SBA’s size standards for that industry.
- The final rule removes the requirement, set forth in a prior proposed version, that each federal agency certify that it had engaged in discrimination against women-owned small businesses in order for the program to apply to contracting by that agency.
- The proposed rule allows women-owned small businesses to self-certify as “WOSBs” or to be certified by third-party certifiers, including government entities and private certification groups. WOSBs that self-certify are required to submit a robust certification verification, to complete the certifications at the federal Online Representation and Certification Application (“ORCA”) Web site, and also to submit a core set of eligibility-related documents to an online “document repository” to be maintained by the SBA.
You can read the full run-down of the final rule components here: PDF
SBA will begin a 120-day implementation process for the program. Contracts should be available in early 2011.
You may know that the Canisius College Women’s Business Center has taken increased measures in the past year to help women in business become certified and obtain contracts, particularly with our certification and contracting webinar series. We look forward to continuing this necessary focus on contract procurement opportunities for women-owned business and working with the SBA as it implements this crucial program.
What do you think about the final rule? Have you experienced the certification and contracting process? Leave a comment.
A majority of the start-up businesses that come through our doors inquire about grants, loans, and initial funding. Answers to these questions are often hard to give. There is a widespread notion that there is money out there for people looking to open a hair salon or consulting firm or whatever it might be. Unfortunately, that is not the reality.
Government grants are given out for research, for non-profits, and not much else (i.e., not for commercial ventures). Even if you happen to be starting a non-profit, grants are often hard to secure, and there are some pretty particular reporting requirements in order to maintain that funding.
Sometimes grants are allocated to small businesses in industries like childcare or green technology through state or local organizations, but they often require matching funds or other combined financing. Business.gov offers this online tool to search for grants you might qualify for.
Loans, on the other hand, are pretty widely available to small business start-ups. Here are some resources:
SBA 7(a) Loan Program guarantees small business loans from banks and other lending institutions for both start-up and existing small businesses. This is the most common option for SBA guaranteed loans and because most banks and some other commercial lenders participate, loans are widely available. While the lender agrees to structure the loan, it shares the risk with the SBA, making it easier to make loans to small business owners. Find out more about the 7(a) Program on the SBA website.
SBA Micro-Loan Program is another lending option with the SBA that provides. These are small, short-term loans that average $13,000 and max out at $25,000 and are distributed through community organizations with SBA funds. Find out how to apply for an SBA micro-loan here.
New York State’s Community Development Financial Institution Assistance Program (CDFI) provides micro-loans to business owners who may not qualify for bank loans, as well as minority and women-owned businesses. CDFI also offers one-on-one counseling and business development assistance to facilitate credit-readiness. Click here to find more information and a list of participating financial institutions.
New York Business Development Corporation (NYBDC) is an organization that works in partnership with lending institutions to provide term loans, many of which do not meet the requirements for traditional financing. NYBDC, a WBC resource partner, handles lending for non-profits, veterans, women and minority-owned businesses, business located in Empire Development Zones, and other conventional business ventures. Find out more about these services on the NYBDC website.
What has been your experience looking for grants and loans as a small business owner or start-up? Leave a comment.
There are lots of programs and opportunities out there for veterans looking for technical assistance and even capital for starting a small business.
A great resource is the Center for Veterans Enterprise (CVE) which maintains the VetBiz Registry, a member site that lists your company in a database of other veteran-owned businesses. Through VetBiz, listed companies are given notice of and special consideration for federal contracting opportunities, and are updated with information and news affecting Veteran-Owned and Service Disabled businesses.
Another resource is the SBA Office of Veterans Business Development, the mission of which is “to maximize the availability, applicability and usability of all administration small business programs for Veterans, Service-Disabled Veterans, Reserve Component Members, and their Dependents or Survivors.” The SBA oversees an outreach program that caters to both start up veteran enterprise and those in existing business. Services include business plan workshops, feasibility analysis, counseling, mentoring, and technical training in more specific areas.
Find out more here.
Use this tool on the SBA website to find a Veterans Business Development Officer near you.
The VA Office of Small and Disadvantaged Business Utilization is also developing a mentor program, not unlike our Business Coaching Program, which is aimed at assisting veteran-owned enterprises to become “viable and/or more competitive in the small business community.” See the details here.
Other organizations and federal offices advocate on behalf of veterans enterprise, such as the National Veteran Owned Business Association and the VA Office of Small and Disadvantaged Business Utilization. These organizations help to guide policy, support the veteran community, and promote veteran-owned businesses as preferred vendors.
Are you a veteran business owner?
What is your experience with the available resources?
– Center for Women’s Business Research
– Committee of 200
- The Hot Mommas® Project Mission
- NAFE (The National Association for Female Executives)
- National Women’s Business Council
- NAWBO (The National Association of Women Business Owners)
- OWBO (The SBA’s Office of Women’s Business Ownership)
- SBA (The U.S. Small Business Administration)
- SBDCs (The Office of Small Business Development Centers)
- Small Biz Nation
- WBENC (The Women’s Business Enterprise National Council)
- WPO (The Women Presidents’ Organization)
Find the full post on the SCORE Women’s Success Blog
You can also check out our blogroll down on the right-hand side.
What sites do you find helpful? Let us know in a comment below.