How to Grow a Small Business

By Carleigh Lowe Friday, February 12, 2010 has a fantastic article written by Elsie Morales on How to Grow a Small Business. Below is an excerpt:

The evidence indicates that, while the corporate world continues to struggle, Americans are having more and more success finding their own solutions. According to the Kauffman Foundation’s most recent edition of their “Index of Entrepreneurial Activity,” new business formation was already on the increase in 2008, with the trend expected to continue in 2009. In fact, according to recently released data from the Job Market Index published by Chicago-based outplacement consultancy, Challenger, Gray & Christmas, the number of job seekers starting up their own businesses hit a four-year high in 2009. Enrollment in entrepreneurship courses has also risen in business schools across the country.

The percentage of unemployed people becoming entrepreneurs soared 69 percent to 8.6 percent last year, from a record low of 5.1 percent in 2008, according to Challenger. That’s close to the 2002 record level of jobless becoming self-employed. “Rather than endure several more months of unemployment as employers slowly move toward renewed hiring, many job seekers are opting to exit the labor pool and start their own firms,” the consultancy’s chief executive, John A. Challenger, said in a statement. “The start-up rate might have been even higher if banks had loosened their lending standards.”

The biggest gains in the ranks of the self-employed jobless came in the more experienced 55-and-older age bracket, according to Challenger. Some 93,000 people ages 55-64 joined the ranks of entrepreneurs in 2009, while a stunning 213,000 people ages 65 also struck out on their own. The younger generations were less enthused. The number of job hunters ages 35-44 who started their own businesses dropped by 70,000, while the 16-19 age bracket dropped 38.8 percent.

“Entrepreneurship used to be thought of as a young person’s endeavor, as it requires a significant amount of energy and drive,” Challenger found. “In fact, seasoned professionals have a decided advantage over their younger counterparts.”

In order to satiate the entrepreneurial spirit of our readers, this month PODER brings you an interview with Raffi Amit, a professor of management at the Wharton School of Business, and his insights on what every entrepreneur should know before taking the leap. Also, once you jump into the market, you’ll find some help from our accompanying 10 suggestions to improve business on the cheap.

A key question that all would-be entrepreneurs face is finding the business opportunity that is right for them. Should the new startup focus on introducing a new product or service based on an unmet need? Should the venture select an existing product or service from one market and offer it in another where it may not be available? Or should the firm bank on a tried and tested formula that has worked elsewhere, such as a franchise operation?

Raffi Amit, a professor of management at the Wharton School of Business, discusses these questions and more in a conversation with Knowledge@Wharton, the school’s online business journal. In the process, Amit offers insights into how entrepreneurs can identify new business opportunities and evaluate their potential and risks.

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