3 Things You Should Know About Small Business: Nov. 28

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

1. Startups lead recovery in hiring and job creation. The pace of recovery in hiring and job creation since 2008 is stronger in newer firms -- those two years old or younger -- than in more established companies, according to the "Job Creation, Worker Churning, and Wages at Young Businesses" report released Wednesday by the Ewing Marion Kauffman Foundation.

Despite higher employee turnover rates, the share of hiring based on job creation is much greater at startups than at more mature firms. According to the report, four out of every 10 hires at young firms are for newly created jobs, much higher than at older firms, where the ratio fluctuates between 2.5 and 3.3 hires.

The research draws its conclusions from the U.S. Census Bureau's Quarterly Workforce Indicators, which use federal and state administrative data on employers and employees combined with core Census Bureau data. The Census report recently began including firm age and size information, making it possible for the first time to review jobs, earnings and employment turnover using that criteria, and to make regional and demographic comparisons, Kauffman explains.

The Kauffman report also found that, not surprisingly, earnings per worker are lower at young firms than at more mature firms. Just before the 2001 recession, startup employees earned about 85% as much as workers at mature firms. By 2011, this earnings ratio had dropped to 70%, the report says.

2. Six reasons you should relocate your startup. Selecting an appropriate location for your business is just as important as the product or service you are selling. Depending on your industry, there are regions in the U.S. and internationally that might be better suited for your business.

"For example, consumer-focused Internet start-ups thrive in Silicon Valley, Boston's best for biotech and big data, and for media- and fashion-focused ventures, Manhattan's the biggest apple," Forbes contributor Peter Cohan writes.

But, of course, relocating is a pain in the neck, which means the benefits must outweigh the costs. Cohan notes there are six elements to decide whether relocating is the right thing to do: pillar companies or large companies that may have customers for your business; universities, which can offer a great source of intellectual property and talent; human capital including a full range of talent from C-level executives to salespeople to marketers; access to investment capital; mentoring programs and finally, values.

"Silicon Valley has a unique set of values that guide the way people behave -- it bets on ideas that will disrupt the way the world works, it pushes people to give back without expectation of short-term gain, and it rewards intellectual humility," Cohan writes. "Such values may be critical to your venture's prospects for success. One entrepreneur who relocated to Palo Alto told me that in London -- where he came from - it is very difficult to meet with people who have capital or valuable advice and those masters of the universe only help if they see an immediate short-term benefit for themselves. This helped prompt him to leave London."

3. Intersect Fund offers disaster loans to businesses that don't qualify for SBA loans. The Intersect Fund, a New Jersey-based nonprofit microlender, is offering disaster-relief loans to New Jersey businesses that have been affected by Hurricane Sandy. The loans are targeted at businesses that don't qualify for SBA Disaster Loans.

Qualifying businesses must be located in New Jersey and have sustained physical damage during the storm or its aftermath. Businesses can use the funds for things like replenishing spoiled or damaged inventory, making repairs to equipment and leasehold improvements or to replace awnings or signage.

The fund will distribute a maximum of $15,000 at an interest rate of 5% for up to 36 months. There are no application fees or prepayment penalties. Most loan applications will be approved within three days. Applications are available online or by phone at (800) 840-1900.

Founded by students at Rutgers University, the Intersect Fund provide business training, coaching and microloans to minority and low-income business owners in Northern and Central New Jersey.

-- Written by Laurie Kulikowski in New York.

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

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