Business Information for Entrepreneurs by an Entrepreneur

Are you a small business owner struggling in the flailing economy? You, like many other small business owners, can get help as a result from the Small Business Financing and Investment Act of 2009.

Also known as the “Small Business Bailout Act,” this much-needed funding was a welcome relief to many business owners who watched as corporate giants such as AIG, JP Morgan, and dozens of national banks received billions in bailout funds. Now, $44 billion has become available for small business owners like you to help keep your business afloat and sustainable for the future.

How does this money help?

• Loan Guarantees – You can apply for business loans with a guarantee from the Small Business Administration. With loan guarantees, you are more likely to get approval for loans from your bank or financing company. Get startup loans, micro-loans, and other low-interest loans that will put much-needed cash capital back into your business.

• Save jobs – You now have access to capital to keep your business going without laying off workers. In times of economic trouble, companies tend to lay off employees in order to reduce expenses. However, how can your business grow when you have fewer workers? Keep your employees and help the unemployment rate through the funding allocated in the new act.

• Government Grants – Apply for government grants that you do not have to pay back at all. Grants are available for your business to convert to “green” technology and sustainability, to make improvements to your community, for research, or even to hire and train new employees.

The new bailout for small business is about choices. The money set aside for this bill is a way for business owners to have better options of staying alive and fruitful in a troubled economy. The small business bailout money is expected to create or save 1.3 million jobs each year.

Don’t let your small business dwindle and fail due to the recession. Now small business owners have options. Get the financial help you need by talking to your local chapter of the SBA and applying for loans and grants that will sustain your business.

Since the global recession officially began in December of 2007, thousands of small businesses have filed for bankruptcy. Indeed, economic times have been tough, and sometimes the only resort for small business owners is to shutter their doors.

However, there is good news on the horizon! Small business bankruptcy analysis performed in September 2009 by Equifax is showing that there are locations in American where bankruptcy is fast receding.

East Coast Recovering Faster than the West

While western states are still having a tough time and bankruptcies continue to rise, more and more eastern cities are showing improvement. From the second fiscal quarter to the end of the third fiscal quarter of 2009, Charlotte, NC saw a 69 percent drop in bankruptcies. Other cities with dramatic decreases were White Plains, NY with 49 percent and Atlanta, GA with 44 percent.

In addition, Equifax reported the top 15 cities with the fewest bankruptcies. All but two cities were located in Eastern states, such as New York, New Jersey, Massachusetts, Pennsylvania, Virginia, West Virginia, North Carolina, Georgia, Ohio, Michigan, and Florida.

The Future of Bankruptcies across the Country

The study and statistics included small businesses defined as commercial entities with less than 100 employees. It is estimated that more than 25 million small businesses operate in the United States. Of those 25 million, 9,361 filed for bankruptcy in September of 2009 alone, which is up 27 percent from 7,386 in September 2008.

However, the recovery effort is underway. In addition, with the Small Business Bailout passed by Congress, small business owners are finding ways to keep afloat. Small business loans, micro-loans, grants, and other financial aid are available to help business owners remain viable while the economy continues to try to improve. Over $60 billion has been set aside for small business owners.

The government is hoping that the bailout will help save or create 1.3 million jobs per year. Although bankruptcies continue to rise today, the hope is to help reduce the number of bankruptcies quarter after quarter. If you own a small business that is on the verge of bankruptcy, don’t become a statistic. Get help from your local SBA today and find out how you can prevent bankruptcy.

According to the 2009 National Small Business Cybersecurity Study, you are most likely not adequately prepared for internet security. The study was co-sponsored by the National Cyber Security Alliance (NCSA) and Symantec and included responses from over 1,500 small business owners from around the United States.

The statistics show that most small businesses do consider internet information security a priority, even though 65 percent of respondents said that internet and internet communication was critical to their success. Here is a sample of the valuable information handled and stored via the internet:

• Customer data 65%
• Financial records 43%
• Credit Card info 33%
• Intellectual property 20%

Yet, surprisingly few small business owners do anything about cyber security. Only 28 percent of American small businesses have any type of internet security policy in place. Only 35 percent of small businesses even provide training to their employees about internet security and safety. And an astounding 86 percent of small businesses do not have an employee dedicated and focused on Information Technology security.

These numbers are startling – especially considering that there are over 20 million small businesses operating in the United States. A breach in internet security can lead to extreme losses of vital customer and company data.

How can you improve your internet security policies? Here’s a start:

• Check for viruses and malware at least once a week. 9 out of 10 small business owners thought they were safe from viruses, but only 53 percent checked their computers on a weekly basis. Check that your spyware and anti-virus software is updated at least once a week.

• Back up files. This cannot be stressed enough. Always back up your important data. Good business practice means backing up your critical data on a daily basis.

• Use strong passwords. Internet hackers are surprisingly resourceful. Make sure that all your passwords are changed frequently, and use authentication technology. Passwords should be at least eight characters and include both letters and numbers or symbols.

Don’t let your business become a security risk for your customers or your important business data. Make sure you employ strong cyber security policies that ensure the integrity of your computer data and reduce your risk of becoming a cyber target.

Don’t let the recession dampen your company’s holiday spirits. Show your employees your appreciation for them by throwing them a festive holiday party – even on a budget!

Although many companies are paring down their ordinarily over-the-top parties in favor of simpler ones, it is still possible to throw a great party that will be enjoyed and remembered by your employees for years to come. It is important to remember that most employees will appreciate the gesture more than the affair. Paring down the expenses will often go unnoticed, but your kind deeds will not!

• Instead of hosting your event at a restaurant, consider catering a lunch at the office. An office is often a more informal get-together, as it allows employees to interact in a more comfortable atmosphere. In fact, many employees will enjoy an informal luncheon or dinner much more than a stuffy restaurant.

• If a catered affair isn’t in the budget, consider a potluck dinner. Potluck dinners are making a comeback as more and more people find themselves in tight financial situations. Many employees will relish in bringing in and sharing their favorite dish, and there is sure to be plenty of delicious entrees to go around!

• Consider hosting a party at your house. It will give you a chance to mingle with your employees on a more personal, unassuming level. It will also show your employees your commitment to them and your gratitude for their service.

• Instead of a professional band or DJ at your company party, consider using an iPod and dancing to your favorite tunes. Ahead of time, you can ask your employees for a list of their favorite songs to make the event personalized for everyone.

• To save on restaurant or catering costs, consider having your holiday party on a weeknight or during the day instead of the evening. Often times, catering halls and restaurants will offer reduced prices if you have your function during an off-peak time and day.

• Shorten the duration of your holiday party, and you’ll find that your bar tab will be considerably less.

• Make it a family affair and keep the menu simple and the kids entertained with fun music and games. A simplified menu of cold cuts and chicken fingers will save your budget, and your employees and their families will be grateful for hosting a family-friendly affair!

Many of us have used Windows Vista for our businesses, and we are more than happy to say good-bye to it. But is Windows 7 any better?

The newest Microsoft software seems to have convinced many users that Windows 7 is so good that the mess that was Windows Vista is just a distant memory.

Windows Vista was a stain on Microsoft’s reputation, and Windows 7 was created to convince many disgusted PC users that help is on the way.

But the question remains: should you invest in Windows 7 for your small business, or will it too end up disappointing?

Battery Life Advantages

For starters, it looks as if Windows 7 will offer better battery life for your business’s computers, and although it hasn’t proven to be quicker than Windows Vista, it seems to speed up many processes nonetheless.

Say Good-Bye to Fluff Software

Windows 7 doesn’t come burdened with loads of “fluff” software, which has made many users quite happy as well. In other words, all that extra software that was always pre-installed on earlier versions of Windows is now no longer there.

Upgrades Simplified

Windows 7 can also be upgraded quite easily and affordably as well, and it has given faster result than Windows XP.

Microsoft’s list of advantages of Windows 7 includes:

• Windows 7 will allow users to see fewer alerts and warnings from their computers. In other words, all those pop-up windows that have plagued many Vista owners are a thing of the past!

• Icons and windows have changed, thereby helping users locate and store information.

• Microsoft says it has improved the speed of Windows 7 and has reduced the amount of memory it needs to run.

Personalization a Big Hit

Many users have touted the ability to personalize Windows 7, and the customizable options are a big hit. For many businesses, however, it is the mobile computing and networking capabilities that have been popular for users of Window 7. For those businesses upgrading to Windows 7, it is important to implement a local network for your business.

President Obama recently criticized large banks for failing to lend stimulus money to the taxpayers who kept America’s banks from completely sinking. Ironically, small businesses, and in particular entrepreneurs, have found that the very banks they supported are now closing their doors on them.

The money small businesses so desperately need to continue their operations, pay their employees and help grow the economy has been less and less available, and President Obama says he not happy at all about this turn of events. He went to say that he will take every step to encourage banks to meet their responsibilities and begin lending to small businesses once again.

Small Businesses Caught in the Fray

The President’s argument against the nation’s banks was further backed by three specific proposals that are designed to help small businesses get their hands on loan money. This is part of the President’s small business rescue plan that was introduced more than a year ago.

While his intentions may be good, the question is: can he really get these proposals passed? And if he does, will they even help?

Many of the nation’s banks were part of the Trouble Asset Relief Program, also known as TARP. Much of the funds, however, were not doled out for small businesses, thereby putting small businesses in quite a predicament when it came to lending.

New Small Business Initiatives for TARP

The new initiatives, however, are designed to change the way TARP has been used. Some of the highlights of these initiatives include:

• Giving community banks with less than $1 billion in assets lower interest rates than typically offered: three percent instead of five percent. However, the community banks would be required to submit a lending plan that will show their plans for small business lending.

• The limit on SBA-guaranteed loans will increase from $2 million to $5 million, and SBA’s micro-loan program will increase its limit from $35,000 to $50,000.

The National Small Business Administration, of course, spoke out to urge these reforms to pass quickly so that banks can continue with their small business lending.

Now the questions remain, once again, if these new reforms will make a difference when it comes to small business lending. We’ll be watching the legislation closely.

Does your geographic location impact your success as a small business? CCN Money just announced their newest list of the 50 best places to launch a small business. From strong housing markets to stable economies and large pools of qualified workers, the cities chosen by CNNMoney.com have one thing in common: they are the place to be for entrepreneurs who want to succeed in starting new small businesses:

Here are the cities that made the Top 10, according to CNN Money:

1. Oklahoma City, OK

Oklahoma received top honors as the number-one place in which to start a new business for a number of reasons. From the second lowest foreclosure rate among metro areas in the nation to the second lowest median rent price in the country, Oklahoma City has proven itself, time and time again, to be a diverse, progressive city with growth in a number of industries, including medical research, energy, education and government.

2. Pittsburgh, PA

Long gone are the days of steel mills and dirty skies. In fact, Pittsburgh, PA has made a new name for itself through its top-notch universities and its prominence in all things technology, including robotics and artificial intelligence. And, of course, Pittsburgh has become a world renowned city for its leading healthcare.

3. Raleigh, NC

Raleigh, NC first draws entrepreneurs in with its epicenter of technology, Research Triangle Park. Located just a few hours from both the coast and the Appalachian Mountains, Raleigh attracts a wide variety of tourists. Homes are quite affordable here, and the technology markets are highly competitive, making this city a popular destination for young professionals.

4. Houston, TX

Houston has seen increases in its economy over the last decade because it has diversified its economy and committed a great deal of capital to improvements, including the public transportation system and the Texas Emerging Technology Fund. The Texas Emerging Technology Fund has targeted the energy, aerospace, information technology, nanotechnology, biotech and medical industries. Houston now has some of the best healthcare in the country, including the world’s largest medical center.

5. Hartford, CT

Hartford, CT is an historic city with a rich background. From specialty manufacturing and technology firms to a plethora of cultural amenities and public parks, Hartford is a low-cost alternative to the nearby cities of Boston and New York City.

6. Washington, D.C.

From politicians, lobbyists, lawyers and highly educated professionals, Washington, D.C. still remains a highly popular place in which to start a small business. Although rent is high, many business owners are still drawn to Washington, D.C. because of the unsurpassed opportunities found here.

7. Charlotte, NC

Known as a leader in manufacturing, Charlotte, N.C. now enjoys more than 1,900 manufacturers, from computer electronics to bio-medical companies. This city also boasts the second largest financial sector in the nation, trailing only New York City. As a result, Charlotte is home to several Fortune 500 companies. With a steady growth in population and a low unemployment rate, Charlotte continues to attract new talent and entrepreneurs.

8. Austin, TX

Start-up businesses thrive in Austin, TX. Known for its appealing tax structure, which includes no state personal income tax, business development is alive and well in this southern city.

9. New York, NY

With all of the people, jobs and services found here, it’s no wonder that New York City is still the place to be for business start-ups. Although this city is known for its high rents and wages, entrepreneurs come here, time and time again, because of the abundant opportunities.

10. Baltimore, MD

Baltimore offers plenty to small business, including the Emerging Tech Center, which helps tech startups, and the Baltimore Development Corporation, which offers low-interest loans to small businesses. This area is also known for its biotech startups, mainly because of the wide availability of research grants.

Do you think your small business is protected against predatory lending and unscrupulous financial practices? Think again. Many small businesses are being caught in an unfair Catch-22, and the government is not taking action to protect you. If your small business has debt, then the laws that protect consumers from predatory practices may not apply to your company.

Is it a Personal or Business Loan?

It is important to first understand that most lenders see small businesses merely through the individuals who own them. In other words, your ability to obtain a loan as a small business will likely be directly related to your personal credit.

Most lenders expect small business owners to secure their own debt, and rates and terms of small business loans are directly influenced by the business owner’s personal credit and financial situation.

Where is the Protection for Small Businesses?

One would assume that small businesses would be granted the same protection as consumers when it comes to predatory financial practices. Unfortunately, however, this just isn’t the case. In fact, the Truth in Lending Act and the Fair Debt Collection Practices Act, both of which are designed to protect consumers from predatory lenders, do not cover business to business transactions!

A fine example of this is the new credit card legislation, which is set to go into effect in February 2010. Although the law is designed to protect consumers from unfair credit card practices, small business cards are not included.

Therefore, small businesses are left out of important legislation that could protect them from questionable credit card practices. One would think that a small business owner would be afforded the same protection as a consumer, but this just isn’t the case.

The line between consumers and small businesses have become so blurred that small business owners have been essentially caught in the middle and left without adequate protection, merely because no one can decide whether to treat them as a business or as an individual.

While we hope that the legislation will change to protect small businesses with the minimum rights that consumers enjoy, in the interim, it is important to consistently stay ahead of the fine print in your loans and credit card debt.