3 Things You Should Know About Small Business: Feb. 1
NEW YORK (
) -- What's happening in small business today?
1. Google lessons for Facebook.
The investment world is waiting for
Facebook's
imminent initial public offering (rumor has it the valuation is at a massive $100 billion), but some are already comparing it with
(GOOG) - Get Report
.
|
Google's much-buzzed about IPO in 2004 raised $1.9 billion and turned hundreds of employees into millionaires overnight. The question is if
will suffer from the same pitfalls that have plagued Google in recent years, such as stagnant growth, privacy concerns and a talent exodus?
How Facebook reacts once it becomes a publicly traded company will likely harbor lessons for small businesses. After all, the social media giant was once just a small start-up itself.
One concern already: what Facebook plans to do when it reaches its user saturation point. Google's attempts to expand its offerings haven't always been successful. How will Facebook enhance its wide-reaching social network when growth tapers off?
Another issue to consider is the so-called brain drain. A slew of early Facebook employees have already left to build their own companies, and there is likely to be more leaving after the IPO. How will Facebook keep its talent?
2. Small-business Super Bowl ad.
It's not often a small company is able to secure TV time during the most-watched sporting event of the year. But that's exactly what the
Ewing Marion Kauffman Foundation
has done. The organization, dedicated to furthering
, will air one 30-second public service announcement during Super Bowl XLVI that will hopefully "inspire the next great entrepreneurs to take action," it says.
3. How to finance your start-up.
With home prices still depressed, tapping a
to fund your new business isn't likely, says
The Wall Street Journal
. Besides personal credit and any savings, there are other ways to finance your start-up, some more "alternative" than others.
Peer lending, which includes
such as
as well as crowdfunding sites including
, are part of a small but fast-growing market for microloans.
Asset-based credit got more attention when banks slashed credit lines during the worst of the financial crisis. This type of financing is typically seen in the retail and garment industries, the
Journal
says, but has been extended to other industries that also have accounts receivable and other assets. Interest rates on these types of loans can be more than 20%, according to one source, though as lenders compete for this business, they may come down.
There are signs the credit crunch is beginning to ease as lending standards become more flexible and there is more demand for SBA loans. In the meantime, another option is to find an angel investor -- keeping in mind that an angel investor will wind up with an equity stake in yoir firm.
-- Written by Laurie Kulikowski in New York.
To contact Laurie Kulikowski, send an email to:
Laurie.Kulikowski@thestreet.com
.
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http://twitter.com/#!/LKulikowski
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