Social Media Is the Great Equalizer for New and Growing Businesses

Social networking provides a very high ROI (return on investment). Small business owners who begin to implement a thoughtful social strategy will generally see results quickly in terms of growing visibility … increasing site traffic … an expanding network … better Google results — and all for primarily an investment of their time and effort (human resources versus capital outlay). That’s why it is such a good tool for new, small and growing businesses. And: Social networking strategies are equally accessible to companies of any age (new, expanding, established), size or location (urban or rural). Finally, a tool that levels the playing field for smaller companies

Entrepreneurship Remains Strong in 2008 with Increasing Business Startups

Activity rate increased among many groups including immigrants, women and older Americans and in all regions except Midwest, which had a slight decline

(KANSAS CITY, Mo.) April 30, 2009 — New business formation increased in 2008 but, in what may be a potential harbinger of the current economic recession, U.S. entrepreneurship rates increased for the lowest-income-potential and middle-income-potential types of businesses from 2007 to 2008; it decreased for the highest-income-potential types of businesses. This is one of the shifts in firm formation trends found in the annual Kauffman Index of Entrepreneurial Activity, a leading indicator of new business activity that provides the earliest documentation of new business development across the United States. Analyzing matched monthly data from the Current Population Survey since 1996, the Kauffman Index allows comparisons of new business creation over time.

"The overall pace of entrepreneurial activity did not suffer during the recession in 2008, which is great news. This is consistent with historical patterns, to the extent we understand them, which indicate that entrepreneurial activity is largely insensitive to the economic cycle," said Robert Litan, vice president, Research and Policy at the Kauffman Foundation. "So far, at least through 2008, this pattern is holding up."

Overall, the 2008 entrepreneurial activity rate increased slightly over 2007. An average of 0.32 percent of the adult population (or 320 out of 100,000 adults) created a new business each month—representing approximately 530,000 new businesses per month—as compared to 0.30 percent in 2007. While entrepreneurial activity has remained generally consistent over the past decade, the Kauffman Index points out important shifts in the demographic and geographic composition of new entrepreneurs across the country.

Key findings include:

• The oldest age group—ages 55 to 64—experienced a big increase in business-creation rates from 2007 to 2008 and, as a result, has the highest level of business creation (0.36 percent).
• The activity rate increased sharply for immigrants in 2008—from 0.46 percent in 2007 to 0.53 percent in 2008—further widening the gap between immigrant and native-born rates. Although the increase in entrepreneurship rates among immigrants was driven entirely by low- and medium-income-potential types of businesses, immigrants also are more likely than U.S. natives to start high-income-potential types of businesses.
• Latinos' entrepreneurial activity rate increased from 0.40 percent in 2007 to 0.48 percent in 2008, continuing an upward trend that began in 2005. Over the thirteen years of the study, Latinos have had the highest percentage increase in entrepreneurial activity (from 0.33 percent in 1996 to 0.48 percent in 2008).
• Asian-Americans' entrepreneurial activity also increased sharply, from 0.29 percent in 2007 to 0.35 percent in 2008. Non-Latino white business-creation rates increased slightly, while African-American rates slightly declined.
• Entrepreneurial activity increased from 2007 rates for both men and women (from 0.41 percent to 0.42 percent for men and from 0.20 percent to 0.24 percent for women).
• With the exception of the Midwest, all regions saw increased entrepreneurial activity from 2007 to 2008.
• The states with the highest 2008 entrepreneurial activity rates were Georgia, New Mexico, Montana, Arizona, Alaska and California.
• The states with the lowest entrepreneurial activity rates were Pennsylvania, Missouri, Wisconsin, West Virginia, Iowa and Ohio.
• Among the United States' fifteen largest metropolitan statistical areas, Atlanta had the highest entrepreneurial rate (0.74 percent) in 2008. Philadelphia had the lowest rate (0.16 percent).

"The total business creation rate increased over the past year, but this masks diverging underlying trends. Entrepreneurship rates increased only for low-income types of businesses and not for high-income types, which may be early signs of how the recession is impacting firm formation," said study author Robert Fairlie, professor of economics and the director of the Master's program in Applied Economics and Finance at the University of California, Santa Cruz. "The continuing effects of the recession on business creation are important because entrepreneurs contribute to economic growth, innovation and job creation in the United States."

Unlike other studies that capture young businesses that are more than a year old, the Kauffman Index captures all adults ages 20 to 64 when they first create their businesses, including both incorporated and unincorporated businesses, and those who are employers and non-employers. The Kauffman Index of Entrepreneurial Activity, defined as the percent of the adult U.S. population of non-business owners that start a business as their main job each month, is conducted annually.

2007 data show that external credit provides increasing percentage of financing as startups age

(KANSAS CITY, Mo.) April 8, 2009 — Now in its fourth year of data collection, the world's largest longitudinal survey of new businesses shows that external debt markets become increasingly important during startup companies' early growth years. In 2007, the 2,915 entrepreneurial firms surveyed injected an average of $53,000 into their businesses, with 62 percent of that capital coming from outside debt markets. By comparison, external debt markets provided 40 percent of financing in these companies' first year of operation.

These and other data were released today in the latest Kauffman Firm Survey (KFS), a Ewing Marion Kauffman Foundation-funded study of new businesses founded in 2004 and tracked over their early years of existence. The KFS fills a void in valuable data collection on young U.S. businesses, providing an understanding of how businesses are organized and operate in their early years, and shedding light on survival and growth indicators.

"This report highlights the importance of external financing for young business and sheds new light on our understanding of the credit constraints they feel," said Robert E. Litan, vice president of Research and Policy at the Kauffman Foundation. "In addition to studying actual debt and equity financing, the 2007 survey asked about credit applications. It will be interesting to compare these data with research on their financing in 2008, which clearly was a more challenging credit market."

The KFS started its baseline study with a cohort of 4,928 firms that began operations in 2004. This group of companies is tracked annually and asked detailed questions that cover a range of topics, including the founders' backgrounds, the sources and amounts of financing, firm strategies and innovations, and outcomes such as sales, profits and survival. The project has an additional four years of study planned. At the end of the project, the KFS will contain data from 2004 to 2011.

Twelve percent of the firms in the KFS study submitted new external credit applications for debt financing in 2007. Of those firms that sought financing in 2007, 70 percent always received approval. Nearly 18 percent had mixed results, and slightly more than 12 percent of the firms said their loan applications always were denied.

For those whose loan applications were denied, almost half said insufficient collateral to guarantee the loan was a primary reason given for the denial. The second-most common reason was flaws in the owner's personal credit history.

Less than 10 percent of black-owned firms applied for new credit in 2007, compared with nearly 13 percent of firms owned by non-Hispanic whites. Seventeen percent of firms said they did not apply for credit at some point when they needed it because they feared their loan applications would be denied. Women and African-Americans were more likely than men and whites to have avoided applying for credit for this reason. Nearly 40 percent of African-Americans said they feared being denied, compared with 14.5 percent of whites.

Interestingly, however, among the group that feared denial, a higher proportion of firms—20.7 percent—applied for credit than those in the overall sample who applied (12 percent).

Other key findings from the latest report include:

• About 90 percent of firms that began operations in 2004 survived through 2005, while about 80 percent survived through 2006 and 73.4 percent through 2007. Most of the remainder of firms closed either permanently or temporarily over the period, while a small number, 3.5 percent, either merged with or were sold to another business.
  
• Surviving employer firms increased average employment from 4.6 employees in 2004 to 6.7 employees in 2007.
  
• About 40 percent of firms had revenues greater than $100,000 by 2007, compared with just 17 percent in 2004.
  
• About 17 percent of firms have a national market area, and more than 13 percent of firms had some international sales.
  
• More than 25 percent of firms sold at least some of their goods or services on the Internet. Nearly one-fourth of those firms had Internet sales that were more than half of their total sales.

  The KFS dataset is accessible to scholars worldwide, and all reports in the KFS series are available for download. The public-use microdata file and reports are available at http://www.kauffman.org/research-and-policy/kauffman-firm-survey.aspx.

Small Business Technology & Quality Assurance

As strong markets for U.S. exports was a highlight of the fading economy of 2007, according to The Small Business Economy (http://www.sba.gov/advo/research/sb_econ2008.pdf) report by the U.S. Small Business Administration's Office of Advocacy, it is a testament to the unyielding power of small businesses.

In 2007, as housing sales fell and energy prices increased, small businesses faced growing challenges. A year that showed strong growth in the second and third quarters ended with fourth quarter growth down an annualized 0.2 percent. Still, the economy generated 1.1 million new jobs, largely in the service sectors populated largely by small businesses. Small businesses continued to lead job growth in the first quarter, creating 74 percent of the net new jobs. But, by the fourth quarter, businesses of all sizes were cutting jobs. These trends continued into 2008 and 2009.

Small businesses ability to maintain and create growth is an indicator that the small business community will lead America out of its present state. With improved processes, previously only mastered by larger businesses, small businesses, we believe, may become the backbone of our entire economy.

To improve operational processes of a business, through a top to bottom analysis, a business owner must look at three things. 1) Technology and Quality Assurance, 2) Decreasing Operations Costs, and 3) Processes that are on brand.

In this article, we will discuss why creating and evolving a set of processes for all aspects of your business decreases costs. It's "Total Quality Management."

Processes are how the work gets done in your business; how products get manufactured; how money is exchanged; how services are delivered. Brand is the personality of the company; what your customer is forming a relationship with. If you don't have a process for everything you do, and things aren't continuously done in a consistent and intentional way, a company risks not only costly inefficiencies, but also a weakened brand. A weak brand = a weak relationship with customers.

It is impracticable to maximize business performance with flawed or inefficient processes. It's essential to continually improve your processes, eliminate waste, reduce costs, and increase efficiency in technology (web solutions in specific when speaking of small businesses). Take Toyota, for example. Company leaders have been working on constantly improving their business processes for over 50 years. Yet, they still don't consider their processes for manufacturing perfected and they continue to evolve them.

When you look at things from a process point-of-view, you'll find the root of the problem and replace it with something more effective and efficient (web design, search engine optimization advertising, brand strategy, and b2b marketing). Process improvements reduce costs by saving time, eliminating rework and redundant tasks and that translates into Profit Improvement. Your bottom line will thank you for changes … and your brand and longevity will be improved.

Historically, small businesses have been at a disadvantage in process development because they haven't had the resources of larger companies. Not anymore. IN:FUSE takes big business expertise to the small business market. For seasoned support in small business process improvement and to become more profitable in the current economic downturn, contact IN:FUSE now at 651.307.5593

An Intro:

Our specialty is crafting strategies and deliverables for our clients to help acquire,retain,up-sell,cross-sell, and win back their customers. At an extremely reasonable cost, IN:FUSE will provide the following deliverables to businesses –even those in their infancy or stagnant state:A full public relations and marketing campaign strategy:business plan composition,market analysis,financial modeling,and project implementation;If needed,communications support and development:business partnership formulation and company establishment;Significant site traffic guaranteed in just a few months: a complete website design and hosted plan,system driven content management,bookkeeping and accounting solutions,and tax preparations.Any service from IN:FUSE can be offered independent of any package.

IN:FUSE is a Twin Cities based company dedicated to small business sprawl and entrepreneurial growth within our communities.IN:FUSE is woman and minority owned and is devoted to seeing, what are classically untargeted market segments,ultimately become successful;IN:FUSE holds strong to diversity in its branding approach.

IN:FUSE is a team of seasoned professionals who strive to provide comprehensive, cost-effective small business solutions.
We offer expertise in business strategy, technology, brand strategy, communication, design services, legal, and accounting.
IN:FUSE provides a one-stop shop solution. Our price sensitive cost point enables start-up and small businesses to have access to industry standard technology and marketing strategies.
Our approach is focused on service, accountability, measurability, value and ROI.

IN:FUSE aspires to fill the void of cooperative economics between social programming (non-profit organizations) with business development (for-profit models).

Our specialty is crafting strategies and deliverables for our clients to help acquire, retain, up-sell, cross-sell, and win back their customers.

Attempting to bring about social economic growth through business
expansion is difficult for the entrepreneur. However, it is the only way.
Ideas are conceived by the individual.

Without the daunting restrictions of task management, the individual
is free to create and develop their ideas in an innovative and fearless
environment.

The developed idea is then extended from the individual to the
stakeholder, from the stakeholder to the community, from the
community to the city and state, and eventually to the nation
and globe.

IN:FUSE will be the guidebook for this journey.