Entrepreneurship Statistics are Beginning to Show Strength Again

Entrepreneurship Roars Back. How Do We Keep it That Way?

 

Entrepreneurship

Entrepreneurship

 

The Startup Boom is for Real. Finally

There’s a lot of excitement over entrepreneurship and startups. Even experienced angel investors have missed or ignored the long-term decline of startups in the United States. Now the 2015 Kauffman Foundation Index on Startup Activity shows that this year there’s finally good news. 2014 saw the biggest jump in year-over-year startup activity in the last 20 years, and a decisive improvement in the five-year downward trend.

Entrepreneurs are starting new companies at a fast clip. That’s because there are simply more opportunities thanks to gradual recovery in the broader economy and an improving employment picture.

 

Small Business Start-ups

Small Business Start-ups

 

Who Starts All These Companies?

The report also includes some interesting—and in some cases, counter-intuitive observations about the entrepreneurs who are starting all these new companies.

1. 52.4 percent of the founders are over 45 years old. In 1996, only 38.3 percent were. The dominance of college students and entrepreneurs in their 20s has been vastly over-hyped. Experience and proven expertise definitely have their place in startup businesses.

2. Along with “consultant,” “entrepreneur” has often served as a nice way to say “unemployed” since 2008. But 79.6 percent of the new entrepreneurs were starting their businesses because they wanted to, not because they were out of work. This is a huge improvement from 2010, which saw the lowest proportion of “opportunity entrepreneurs” in the history of this report.

3. Immigrants are very entrepreneurial: they’re twice as likely to start new companies as people born in the United States. Immigrants are a growing force in American entrepreneurial life. More than twice as many of 2014’s new entrepreneurs were foreign-born as compared to 1997.

4. Sadly, the number of women starting new companies has not increased much. 36.8 percent of new entrepreneurs in 2014 were women, close to 2008’s 20-year low of 36.3 percent.

5. Venture Capitalists funded less than 1 percent and angel investors funded less than 3 percent of all new firms. Debt is the most common capital source for new startups, most of which are not scalable enough to be interesting equity investments.

 

Technology Incubators

Technology Incubators

 

Silicon Valley, Boston, Austin… and Montana

Two complementary reports rank states and metropolitan areas in the United States.

Among the states, Montana is ranked number 1, followed by Wyoming, and North Dakota. Obviously, these are low-population states. Colorado is number 4, and Denver is number 5 among metropolitan areas, up from number 8 in 2014.

Austin, Texas is the top ranked metro for 2015, followed by Miami, Florida, and San Jose-Sunnyvale-Santa Clara, California (Silicon Valley). Rust-belt cities like Pittsburgh, Pennsylvania, Milwaukee, Wisconsin, and St. Louis, Missouri, continue to see fewer new startups.

 

Silicon Valley

Silicon Valley

 

Help the Good Times Keep On Rolling

For investors and civic leaders looking to foster entrepreneurship in their local areas, Kauffman provides a wealth of tips and things to consider.

1. Play to your local strengths. What are the industries or resources that can help encourage new businesses? Not every city can be another New York or Silicon Valley. Leverage key local players like large manufacturers and colleges and universities.

2. Be open to immigrants. Your local economy needs their drive and skills. Welcoming global talent is simply good business.

3. Make a fuss about successful local entrepreneurs. They are role-models for business founders, and can attract the press and investors.

4. Does your locality have any antiquated or unnecessarily restrictive occupational or professional licensing requirements that will discourage startups? It’s time to simplify and open things up to new talent.

5. Ditto local tax codes. Civic leaders would also be wise take a hard look at how hard it is to do business with your city. Is it easy to apply for permit—and to pay for them?

6. This one’s for state governments: Rethink your policy on non-compete clauses. Entrepreneurs thrive best when companies are not encouraged to overuse non-compete agreements. California, for example, disallows non-compete clauses except for equity stakeholders in businesses.

 

Business Start-ups

Business Start-ups

 

Angel investors, venture capitalists, and civic leaders will all welcome the large increase in new startup activity. These are the companies of the future, who will provide returns to the investors who back them and revenue and dynamism to the cities where they grow. It’s important not to take anything for granted. Taking a hard look at laws and policies would be a very good thing to do in order to keep the entrepreneurial renaissance growing.

 

From the Author:

Thanks for looking over my column. I have fun with writing about local business and administration matters. I’m an entrepreneur deep down, and enjoy folks who wish to grow companies and add to the marketplace.

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Lower the Potential for Identity Theft With These 8 Strategies

Reduce the Risk of Identity Theft With These Eight Strategies

Tax fraud

Tax fraud

Believe it or not, identity theft is a problem with tax filing. Many people are filing taxes under false Social Security numbers, and the IRS is getting savvier about this common practice. They are throwing down the “gauntlet,” so to speak, on people who do engage in fraudulent activity. This season, the IRS is exposing the latest tax scams. Identity theft is one of them. If you want to do your part in reducing identity theft, here are eight strategies to help you prevent it from occurring in your life:

Identity Protection PIN

Identity Protection PIN

1. Use Identity Protection PINs

Using the Identity Protection PIN (IP PINs) can help to prevent future identity theft as it relates to tax filing. The IP PIN is a unique, six-digit number that is assigned each year to people who have been victims of identity theft. The PIN will help people who are filing federal tax returns avoid delays. This new program has been offered to 1.7 million taxpayers who would like the opportunity to opt into the IP PIN program. Nearly 1.5 million IP PINs have been issued to date.

Social Security card

Social Security card

2. Protect Your Social Security Number and Card

Do not carry your Social Security card on you. Also, avoid carrying any documents on you that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN). Experts recommend not storing your SSN number in your computer for fear of it being compromised.

SSN

SSN

3. Refrain from Giving Your SSN to Businesses

Just because someone asks for your SSN doesn’t mean you’re entitled to give it. You should only share your SSN when it’s required. This will help you protect your SSN and prevent anyone from using it to file a fraudulent tax return, which has become a problem.

Credit Theft

Credit Theft

4. Check Your Credit Report at Least Every 12 Months

You should check your credit report at least every 12 months. If you check your credit report frequently, you can identify the problem before it grows into a full-blown issue. You should always try to check your credit report as often as possible.

firewall software

firewall software

5. Protect Your Personal Computers

Always ensure that your firewalls and anti-virus software are up to date. This will prevent anyone from hacking your SSN from your essential documents stored online. Most people are unaware how easy it is to install spyware on someone’s computer. This is why it’s just best to refrain from storing your personal information on your computer.

6. Review Your Social Security Administration Earnings Statements Regularly

You should review your earnings statement annually. If there is fraudulent activity, you’ll catch it before anyone can do too much damage. Anyone who is using your SSN will be caught when it hits your earnings statement.

Harrassing Telemarketers

Harrassing Telemarketers

7. Don’t Give Personal Information Over the Phone

Avoid giving your personal information over the phone or through the mail. This is yet another way for people to intercept your data and use it for unscrupulous means. It’s best to avoid giving out your personal information over the phone, through the mail, or via the Internet.

Home safe

Home safe

 

8. Secure Your Personal Information in Your Home

Secure your personal information in your home instead of digitally. A fireproof safe is probably your best solution. Though it may seem antiquated not to store these items digitally, it will prevent identity theft if it is stored in a secure safe.

effective strategies

effective strategies

These Strategies Work

As a result of the IRS’s concerted efforts to combat identity theft, the IRS has protected over $63 billion in fraudulent refunds and has ceased 19 million suspicious returns. In 2014, over 1,063 identity theft-related investigations were launched. Last year, there were over 748 sentences given compared to the 438 in 2013, which was a 75 percent increase. The crimes were not taken lightly, and in one instance, one person was sentenced 27 years.

It’s important to the government to resolve these issues, but taxpayers should do whatever is necessary to prevent this from happening. These eight tips are the first steps in the prevention process. Otherwise, you’ll be vulnerable and invite problems. While identity theft is never your fault, you should do whatever is necessary to prevent it. Try these eight strategies. They are effective, and they work.

On the topic of ID theft, make sure that when you file your 1099s, W-2s and other tax forms online, ask your provider about what they do to ensure the information is secure. For the last few years, I’ve used eFile4Biz.com to efile 1099 forms for my clients and their contractors and employees. Their service was touted as being outstanding when asking around my peer groups.

I enjoy the fact that after I file 1099 online for a client, they will also print and send out the form copies to employees. I no longer do that time-consuming work. What a weight off my shoulders.  And, it gives me time to manage clients, instead of sitting at a printer all day. You should check them out below.

If you have ideas on this topic to share, please visit our Diigo page here and leave your comments or suggest some useful links to explore on this topic.