Thinking About Starting a Business in 2011? Read this First.

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Most small businesses struggle during times of recession, but some prosper because of tough times. One thing is for sure: the startup landscape has changed.
So if you’re thinking about starting your own business in 2011, first know the trends that will affect you along the way. Presented by National Federation of Independent Business,

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Thinking About Starting a Business in 2011? Read this First.

  1. 1. Thinking About Starting A Business in 2011? Read this first
  2. 2. <ul><li>Fact: Most small businesses struggle during times of recession… </li></ul><ul><li>But some prosper because of tough times </li></ul><ul><li>+ Certain industries actually fare better when consumer and business confidence are low </li></ul><ul><li>+ Laid-off workers are creating businesses in droves </li></ul><ul><li>+ Government incentives are piling on to encourage entrepreneurship and hiring </li></ul><ul><li>= The startup landscape has changed </li></ul><ul><li>So if you’re thinking about starting your own business in 2011, first know the trends that will affect you along the way . </li></ul>
  3. 3. Low Input Costs <ul><li>The reigning trend: most businesses start with low input costs, according to data from MyCorporation, an Agoura Hills, Calif., company that helps startups file incorporation and trademark paperwork </li></ul><ul><li>Attributed to laid-off professional workers who incorporate merely to support their freelance work in between jobs </li></ul><ul><li>Also attributed to the lack of credit available (or given) to new business owners in a recovering economy. </li></ul><ul><li>After all, if you can’t get enough financing to buy equipment for a new T-shirt manufacturing company, you may be forced to start a T-shirt logo design company instead. The latter wouldn’t require as much cash at the outset. </li></ul>
  4. 4. Must-Have Products and Services: Get in on the industries faring well <ul><li>Wonder which industries are actually doing well these days? Try alcohol and chocolate. Those products, experts say, are creature comforts that help people get through tough times: </li></ul><ul><ul><li>Beer, wine and liquor wholesale profits grew 18%, and sales grew 5% in 2010, according to Sageworks.  </li></ul></ul><ul><ul><li>The confectionery industry as a whole grew 3.7% from spring 2009 to spring 2010. </li></ul></ul><ul><ul><li>Other industries doing well include: </li></ul></ul><ul><ul><li>-Repair service, since consumers are spending less on new stuff </li></ul></ul><ul><ul><li>-Web-based technology like software and mobile apps for phones (According to a report in Inc. magazine, one venture capital firm set aside $100 million alone to invest in app producers ) </li></ul></ul><ul><ul><li>*Keep in mind that if you don’t start a business in a lucrative industry, perhaps you can start a business that caters to one* </li></ul></ul>
  5. 5. Increased Tax Deductions for Startups <ul><li>Take advantage of the bigger startup tax deduction </li></ul><ul><li>New tax deduction available in 2011 to help spur entrepreneurship and hiring </li></ul><ul><li>Previously, startups were only allowed a $5,000 deduction for startup expenses , but the Small Business Jobs Act expanded that to $10,000 </li></ul><ul><ul><li>“‘ Startup expenses’ are defined as costs related to investigating the creation or acquisition of an active trade or business,” says Deborah Sweeney, CEO of MyCorporation.  </li></ul></ul>
  6. 6. Incorporating in a Business-Friendly State <ul><li>A big part of starting a business is deciding where to incorporate </li></ul><ul><ul><li>based on data from MyCorporation, Texas is quickly becoming a popular place for startups to incorporate. Why? Sweeney points to its low taxes and smaller government. (The Texas Legislature only meets for 90 days every two years—very rare for a state with such a large population.) </li></ul></ul><ul><ul><li>Delaware is usually the top state to incorporate a large business, but those “corporate-friendly” policies don’t necessarily apply to small business, Sweeney says. Plus, thanks to its exporting prowess and largely recession-proof energy industry, “Texas has remained stable throughout the recession.” </li></ul></ul><ul><ul><li>(See also: 6 Tips for Selecting the Right Company Location .) </li></ul></ul>
  7. 7. 10 Tips for Starting a Business in a Down Economy <ul><li>Buy used equipment. The market is flooded with used furniture and office equipment as businesses shut their doors. Look for closing announcements in your local business news and then contact the operations/engineering department for a deal. Craigslist and eBay are also good places to find used office equipment. </li></ul><ul><li>Use your membership discounts. As a member of NFIB, you can save up to 68% on office supplies . Other associations that you belong to may offer similar discounts to help get you started. Do your research before you buy. </li></ul><ul><li>Dial HR. Local companies with recent layoffs can help identify available talent. Contact their human resources departments to see if they have recommendations to help you start staffing. </li></ul><ul><li>Barter for goods and services . Companies such as BizXchange provide a network for business bartering. </li></ul>
  8. 8. 10 Tips continued <ul><li>Start it on the side . Keep your current job or continue your job search while building your new business. If the new business takes off, turn your focus solely to it; if not, you'll have something on which to fall back. Consider these 9 tips on starting a business while you're still employed . </li></ul><ul><li>Together is equal. If you're venturing out on your own, separate your new business from all your other businesses and respective business partners. Without that legal separation, the failure or success of your new business will be owned, in part, by your other businesses. </li></ul><ul><li>Offer discounts to a small number of customers who pay up front to increase cash flow. </li></ul><ul><li>Offer flexible terms. Struggling businesses may switch vendors if you are willing and more able to work with them. </li></ul><ul><li>Take advantage of slow times. Work out all the kinks and pitch your business to anyone and everyone you meet. When the market picks up, you'll be ready to soar. </li></ul><ul><li>Customer service . A no-cost frill that is worth cash to your customer. </li></ul>
  9. 9. Helping you further: 7 Business-building Basics for First-time Business Owners <ul><li>Build your business around your knowledge or passions -- those things will get you through the tough times. </li></ul><ul><li>Fill an existing need in the market. </li></ul><ul><li>Get a mentor . </li></ul><ul><li>Put together a long-term business plan . </li></ul><ul><li>Get the financing . NFIB and the Small Business Administration show you how. </li></ul><ul><li>Structure your business correctly ; NFIB helps you figure it out. </li></ul><ul><li>Signed, sealed and delivered . When still small, it is tempting to seal deals with a handshake -- bad idea. As the business grows, it can take more than a handshake to get out of those deals. </li></ul>
  10. 10. For more information on starting a business , this year or next, visit: <ul><li>http:// www.nfib.com /business-resources/start-a-business </li></ul>Also, be sure to check out NFIB’s Small Business Webinar Series for an interactive way to learn more about how to own, operate, and grow your small business! Go to >> Webinars

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