3 Things You Should Know About Small Business: March 20

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

1. Jon Bon Jovi and the Department of Veteran Affairs launched a mobile app contest. The U.S. Department of Veteran Affairs, U.S. Department of Housing and Urban Development and Jon Bon Jovi and his JBJ Soul Foundation launched Project REACH on Monday, a competition to create a mobile app to help the homeless find vital services.

The competition is asking software developers to create a user-friendly application that provides real-time information to help service providers in aiding homeless veterans and others find available shelters, meals and care.

Contestants have from March 22 through July 27 to submit an app. Winners will be announced Nov. 9. Five finalists will be awarded $10,000. There will be one grand prize winner who will get an additional $25,000.

2. A Kauffman study finds start-ups declined in 2011.The rate of business creation "dipped" last year, and start-up founders remained more likely to be sole proprietors rather than hire employees, according to the annual Kauffman Index of Entrepreneurial Activity.

The index shows business creation fell 5.9% from 2010, to roughly 543,000 businesses created each month in 2011. Still, the numbers remain among the highest levels of entrepreneurship over the past 16 years, Kauffman says.

"The Great Recession has pushed many individuals into business ownership due to high unemployment rates," said Robert Litan, vice president of research and policy at the foundation. "However, economic uncertainty likely has made them more cautious, and they prefer to start sole proprietorships rather than more costly employer firms. This 'jobless entrepreneurship' trend negatively affects job creation and the larger economic recovery."

New entrepreneurial activity was highest among 45- to 54-year-olds (the second-highest age group surveyed).

"Entrepreneurial activity rates reflect changing demographics," said Robert W. Fairlie, the study's author and director of the master's program in applied economics and finance at the University of California, Santa Cruz. "Despite a slight decline in entrepreneurial activity rates this year, the share of new 55- to 64-year-old entrepreneurs has risen from 14.3% in 1996 to 20.9% in 2011 due to an aging U.S. population."

Another finding: Among the U.S. 15 largest metropolitan statistical areas, Los Angeles had the highest entrepreneurial rate (580 per 100,000 adults), while Chicago and Detroit had the lowest at 180 per 100,000 adults.

3. QSR Magazine is giving tips on local marketing. In response to one restaurant owner's query, QSR Magazine offers several tips about how to market locally.

"Mass media advertising can be expensive, and it's not that effective for a small business like yours. Using local tactics to build a strong and loyal customer base in the 3-5-mile trading area around your locations will have much more impact," QSR says.

Three important elements to a good local-store marketing program are: partnerships with other businesses and organizations in the community, putting a face on the business and using local media to get essentially free advertising.

Finally, be persistent. "Local-store marketing may be inexpensive, but it requires a long-term commitment. It's an ongoing process that builds awareness and traffic over time, not overnight. Develop a six-month plan and stick with it. Then take stock of what worked, adjust what didn't, and recommit for another six months," QSR says.

-- Written by Laurie Kulikowski in New York.

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

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