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TheStreet Open House

3 Things You Should Know About Small Business: July 26

Stocks in this article: FB

NEW YORK ( TheStreet) -- What's happening in small business today?

1. The age of F-commerce has arrived. More and more small businesses are taking their companies to Facebook (FB), and not just creating a page on the social media site for fans to "like." These businesses are setting up e-commerce shops to sell directly through Facebook as opposed to a website, according to the New York Times.

Facebook uses start-up Payvment, which provides shopping transaction support. Payvment says it has 170,000 clients and is adding about 1,500 stores a week, many with fewer than five employees, the Times says.

Small businesses seem to be having more success selling through Facebook than their larger retail counterparts: Gap, Nordstrom, J. C. Penney and GameStop have all shut down their Facebook stores, primarily because customers are already used to shopping on their direct websites, the article says.

But there are challenges. For one, customers have yet to trust the Facebook storefront. And business owners need to remember that they don't own their storefronts, Facebook does.

2. And the states that are most business-friendly to black business owners are ... Black business owners are increasingly gaining in entrepreneurial success, and parts of the U.S. like Texas, Ohio and Pennsylvania, among others, are seen as more favorable locations for these business owners, according to Huffington Post.

According to the most recent Census data from 2007, the number of black-owned businesses in the U.S. rose 60.5% between 2002 and 2007, to 1.9 million. That compares to a national rate of growth for businesses at 18% during the same time period. Black women-owned businesses particularly excelled, HuffPo notes.

That said, black-owned businesses generated just 0.5% of all receipts in 2007, according to the Census report.

"Black business owners have to do what any other business owner has to do in order to succeed," Maggie Anderson, author of Our Black Year told HuffPo. "The difference is that it is harder for a black business owner, even when they do exactly what any other entrepreneur does."

Lack of access to capital, mentors and networks are particular challenges for black business owners, as well as cultural barriers which prevent business longevity once they have been established, Anderson says.

"A lot of that restricted access has to do with covert, sometimes arbitrary and latent racism that still exists in our banks, other funding sources, and the overall close-knit nature of the industries they may try to penetrate," Anderson says.

3. IRS audits of S-corps aren't leading to increased tax collection. The chief watchdog for the Internal Revenue Service expressed concern this week that the agency's increased auditing of S-corporations wasn't leading to additional taxes owed, according to Reuters.

Treasury Inspector General for Tax Administration Russell George said this was troubling because "the agency is spending a significant amount of resources on unproductive audits."

In a sample analysis of S-corps, which typically have assets below $10 million, for the fiscal year that ended Sept. 30, 2011, 62% of the audits completed did not recommend any tax changes.

The Treasury Inspector General recommended improved scrutiny by the IRS when seeking out S-corps that owe taxes, the Reuters report states.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

To follow Laurie Kulikowski on Twitter, go to: http://twitter.com/#!/LKulikowski

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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