Great question. As an entrepreneur, (founder of Dating Revolution, launching on December 1, 2008) my biggest challenge has been to find funding. Unfortunately in these times the states have a hard enough time making their own budgets tie, so lending money to entrepreneurs is unlikely.

What might be nice though would be a tax credit or a reduction of the capital gains tax or dividends tax associated with investments in (and the proceeds from) startups. Currently startups have a hard enough time going head to head against other potential investments. Perhaps a reduction of taxes on proceeds from investments in startups might reduce the opportunity cost associated with the startup investment in comparison to a more traditional investment.

Please note -- I am NOT an economist of any sort. This post is based on my needs / desires as the owner of a startup and not whether or not this is sound advice for a state or local governmental organization. (So no need to reply to my post with explanations of how it's not in the state's interest to do this)

Links:

• http://www.thedatingrevolution.com

posted November 17, 2008

Hi Chad,

There will be a lot of suggestions around taxes, of course, but one of the under-rated elements is the amount of time ti takes to obtain permitting for new construction. We have a former army base in the area that somehow managed to offer expedited permitting (guaranteed 75 days)...whereas normal permitting times can be as long as 6-10 months, even longer. I think expedited permitting would really help. Once businesses make a decision, they like to move fast...it reduces risk.

Josh.

posted November 17, 2008

Chad,

I think States can do a great job of promoting entrepreneurship by outsourcing more projects to small businesses. This could be a win/win/win for the state, the community and the entrepreneur.

The ability make state contracts more available to the small business owner could help stimulate the local economies. Jobs could be created in the private sector, the state could benefit from services that are provided at potentially lower cost and this could provide much needed cash flow to the small business owner who might not be able to access liquidity.

In addition, this could create additional tax base both for the business owner but also for personal income tax.

Taken one step further, the state could create a preferred referral network for small businesses to connect with others as part of the bidding process. Thus providing some support for each participant and additional work.

Obviously, there are the more traditional issues such as tax incentive schemes and creating ways to make the permit licensing process easier to navigate.

Lastly, it would be nice if the states were in a position to offer SBA type financing. Some do, however they are subject to the same liquidity issues that the federal SBA system faces in the banking industry.

I think the real answer is in sparking commerce through a managed works type program.

Thanks,

Jason

posted November 17, 2008

-Provide tax incentives for small business startups.
-Streamline the filing process for starting a new business.
-Simplify tax filing for new and small businesses.
-Provide 0%-low interest loans for capital investments for small businesses.
-Subsidize health benefits or offer a group buy-in option for small businesses that want to offer benefits to employees.
-Through policy revamping, make it more difficult for employees to sue employers and for individual consumers to sue businesses for rediculous reasons.

posted November 17, 2008

Encourage entrepreneurship in the schools.

This organization (BUILD) is incredible and is teaching and encouraging high schoolers to develop business plans, improve their communication and presentations skills, launch businesses, and helps them to market and profit from their businesses. www.build.org

I wish there was a program like this active in every high school in the nation.

posted November 17, 2008

I'm going to take food out of the mouths of hundreds of attorneys with this idea.

States create barriers to entry for many businesses because of licensing and registration requirements. Individuals who want to start a business go to attorneys and spend money to find out whether they can do what they want to do, what it's going to cost, what the timelines are going to be, etc.

So what if I could go to a state website and say that I want to open a nail salon in X City in Y County in Z state and it would basically give me a customized Word file with flowcharts, checklists, phone numbers, spreadsheets, budgets, applications, etc. ready to be filled in ... all with appropriate disclaimers that what has been provided is not the be-all-and-end-all but a starting point and that it would need further fleshing out to be a real, live business plan?

Although small business are as varied as the imaginations of the entrepreneurs involved (hey, there are people who specialize in cleaning up gruesome crime scenes), certain businesses are staples of the little guy and for them it would help to just lay out for them as much as possible, the same way an academic advisor at college used to do. And I think it could be done in an automated way by a state agency charged with promoting small business...

Links:

• http://www.ja.org/

posted November 17, 2008

Imagine if the State of California was to use its official offices to carefully select 100 small businesses and put them together in such a way as to turn the collective capital needs of those businesses into a financial product (the "module"). Then imagine if the State was to use its official offices to encourage the involvement of experienced, private sector experts to manage the module and solicit private investments for the product, under the State's strict & transparent oversight.

Other than the minor, recoupable costs of establishing the module, all other costs would be born by the future performance of its product.

Now imagine hundreds of these modules, of varying types, sizes and ratings. Some modules would include 100 small businesses with various needs for capital but with the investor's risk spread out across the whole. Other modules might include a dozen larger firms. Some modules would be rated higher than others. Some would be tailor made for individual, small investors while others would created specifically for large and institutional investors. All would be managed by private sector talent, under the oversight of the State in a way that offers every investor complete transparency and strict accounting.

Virtually no tax dollars would be used, though the State could also be an investor in the modules. The revenues generated by each module would pay for the cost of establishing and managing them.

posted November 17, 2008

Make loans easy for any business who are boot strapped and have potential, you'll know it when you see it.

posted November 17, 2008

States can encourage foreign Collaboration especially in the Engineering Manufacturing Industry for your enterpreneur to understan the Labour Economics , which is a must to Survive the Globel melt down.
As the Existing small business requires the Reform in this Particuler Area !!
However state should also Initiate the recent Technology Campaign for Competative Rating..& better promote for the small scale & Medium Scale Industries ..entrepreneurship.
Manish Mazumder.
Managing Director - www.abhishekfilter.com

posted November 17, 2008

I think the State of Wyoming does a great job of this with one concept.

The SBA, the University of Wyoming, the Wyoming SBDC, the Wyoming Business Council, Manufacturing Works, the Marketing Center, and the various Economic Development organizations around the state, the Women's Business Development Center, and others, have all networked together. If you plug into any one of them, they'll refer you for your other needs to other organizations. Once you get plugged in, you can move from one to another, depending on what you need.

They also sponsor a Phase 0 SBIR Grant program. It is a preparatory grant, which helps the awardees prepare their grant application for the SBIR Phase 1 Grant.

It is a fairly easy state to start a business in. Hard to market here, sometimes, but easy to get started.

Laura

posted November 19, 2008

I doubt anyone in Washington D.C. has thought of this, but there should be a way to use some of the 'bailout' money to grant loans to state, county and local small business incubators and economic development centers for startup companies that have a STEM (that's Science, Technology, Engineering and Mathematics) product/service and are launching and planning to operate above the lifestyle level. The loans can be structured for the invigoration of emerging products such as alternate energy, for example (one of many examples out there) that have a focus on rapid growth and employment opportunities. As these are loans, interest could be levied, but at a more attractive rate than a bank would offer, and the government would have a greater possibility of seeing a return if they don't concentrate on Mom and Pop shops. This would also create jobs, which we need right now, and developing these type of businesses will help us regain our cutting edge in the 21st century.

It's a hairbrained idea (and I'm famous for thinking outside the box like this), but I think it could fly, if positioned and presented properly. I like everyone else's idea, I just think this could be a creative way to use the bailout money that may actually produce results.

All the best,
MD

posted November 21, 2008