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The Workforce: Where Will the New Jobs Come From?
Later this year, a marketing manager will sit down for his first day of work at HomeAway, a company that helps people rent their vacation homes online. In the firm's sleek Austin,
Texas, headquarters, a glass-wrapped building decorated with travel souvenirs, the marketer will flip on his computer and do his job - a job no one has done before. This, you see, will be a brand-new job, one of the most coveted commodities of economic recovery.
How this job will come to exist is at the heart of the most pressing problem in the economy today. Since the start of the recession in December 2007, the U.S. has shed 8.4 million more jobs than it has gained. The unemployment rate hovers near 10%, and broader measures of labor-market woes that include underutilized workers are as high as 16.8%. Go down the nation's list of economic problems - from mortgage defaults to state-budget shortfalls - and joblessness lurks in the background.
Even as other economic signals have started to turn positive, the jobs situation has remained bleak. In February, the economy lost a net 36,000 jobs, which is leagues better than the 726,000 lost in February a year earlier but points in the wrong direction all the same. Were the economy to magically start generating jobs at a healthy clip - say, 200,000 a month - it would still take 3½ years to return to where we were, never mind the jobs we need for new entrants to the workforce.
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Start-Ups Chase Cash as Funds Trickle Back By Conor Dougherty And Pui-Wing Tam, The Wall Street Journal
Bryan Cooley started Langlearner, an online language-learning tool, in October with $330,000 in start-up money, including $200,000 of his own cash and the rest from a partner. He has talked to several groups of angel investors-small ones that typically put small amounts into very young companies-but remains in limbo.
"They want a sure bet," says the 32-year-old Mr. Cooley, who worked at a defense-consulting concern before starting his company in St. Louis. "We're caught in the situation where we need the money to become profitable, but they want to see profitability."
Small businesses under the age of three are as much as 50% less likely to get a loan or line of credit than more established businesses that are similar in other respects, according to a recent survey of small-business credit conditions, which was undertaken to gauge the impact of the recession by the National Federation of Independent Business.
"They always have more trouble than mature businesses," says William Dennis, senior research fellow with the federation. "But that's pretty high."
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Experts say money may be coming back to the market but not at pre-downturn levels.
By Kimberlee Morrison, Entrepreneur.com
Small-business owners continue to ask the same question: When will
the finance capital return to the market? Many entrepreneurs have seen
their lines of credit reduced, while others have seen the credit dry up completely.
There
do seem to be signs of hope yet; particularly for capital efficient
startups that serve consumers--directly or through larger
partners--says John Chait, partner at Dace Ventures, an early-stage investment firm.
He
warns that the days of investing $12 million into building a startup
brick-by-brick are over. Using infrastructure already created by larger
companies, startups can get products and services to market quicker
with considerably lower costs than before, Chait says.
This trend is being mirrored with bank loans as well. Glenn Gray, president of Sunwest Bank in
Tustin, Calif. says that while the investment and underwriting
environment may be improving, he hopes we never return to the loose
lending standards that preceded the financial crisis.
"[Small
businesses] should expect an environment similar to that of 10 years
ago," Gray says adding that ultimately tighter risk management on the
part of investors is good for business.
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Despite a harsh lending climate, small-business owners have options when it comes to digging up cash.
From Karin Price Mueller, Entrepreneur.com
If you want to expand your business, you're going to need some cash.
Money still isn't falling off trees for small businesses, and the lending seas can be a challenge to navigate. Although you need funding, you want to make sure your deal is better than the one offered by the neighborhood loan shark.
Money might be available thanks to stimulus spending, but that doesn't mean it's easy to get.
Here are a few options:
Traditional bank loans
Your local bank can offer low interest rates and long repayment plans. Sounds good, but some entrepreneurs have found that stricter underwriting guidelines make it nearly impossible for these loans to be approved.
"The negative to a bank is that the loan can often be very hard or next to impossible to obtain,'' says Rick Kahler, a certified financial planner with Kahler Financial Group in Rapid City, S.D. "Also, most bank loans are 'recourse,' meaning if there is a default, the bank can go after your personal assets as well as any collateral secured by the loan.''
Every bank's lending requirements are different, so shop around. Start with your personal bank. If a banker knows you, he or she may offer additional help when you apply.
Government loans
Like traditional bank loans, loans with a government guarantee can
be tough to get, and the process can be painstakingly long. It's not
uncommon for potential borrowers to bail before the loan is approved.
If you can get a government loan, you'll find low interest rates and
long repayment terms. Check the Small Business Administration
website for more information...
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13 Seed Funding Options For Entrepreneurs
By Bernard Lunn, ReadWriteWeb.com
One of the most difficult parts of starting
a startup for any entrepreneur is finding that small bit of seed
capital to get things going. As evidenced by small seed funds like Y Combinator,
a little can go a long way for startup entrepreneurs, but raising that
chunk of change to get started can be tricky. Luckily, there are a
number of different roads you can take to get from concept to Series A.
Below is a list of 13 seed funding options for startup entrepreneurs.
This list is a mix of old, borrowed, new, and blue:
3. Do consulting on the side to self-fund. This is less risky than using credit cards. One partner works for a Big Old Dinosaur on contract for $20k per month and splits it 50/50 with the other partner, who builds the company which is shared 50/50 between the two. It gets a little more complex with more than two people.
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