Wednesday, May 26, 2010

The Best Industries for Starting a Business In 2010

This year's burgeoning industries include interactive technology (from mobile app design to tech-savvy translation), wellness (healthy beverages), and little luxuries, such as baked goods.

By Christine Lagorio, Tamara Schweitzer and Josh Spiro
May 24, 2010
 Note: This article was originally published on INC.

Congratulations: You have survived the recession. Now what? If you have ever had the urge to start your own business, now may be a good time to make a move.

To help identify the most promising industries for start-ups, a team of Inc. reporters hit the phones and scoured the data – from the Bureau of Labor Statistics and from private research groups such as Sageworks, IBISWorld, and AnythingResearch.com. Some of the industries we have identified may surprise you. Start-ups that provide a measure of reassuring comfort in our newly cost-conscious era are doing particularly well. Call it the cupcake factor. In addition to bakeries, these sectors include hobby and craft shops, businesses that sell musical instruments and online vintage clothing boutiques. Then there are the ever-expanding storage businesses that supply the space where a lot of that stuff tends to end up. Or, if you are in the mood for more adventure, how about launching a passenger ferry service? Following are 10 of the best industries in which to start a business in 2010.

Environmental Consulting
Helping homes and businesses go green is a $17.75 billion-and-growing industry. Environmental consulting is expected to grow 9 percent a year over the next five years, according to IBISWorld, a publisher of U.S. industry research. This industry is well suited to independent contractors with the skills to install environmentally friendly gear such as wind turbines, solar panels, and green roofs. (Read More)

Mobile Application Design
Sure, iPhones have been around for a while. But with the advent of the iPad, Android phones, and a growing market for mobile apps that work on any Web-enabled phone, there is plenty of fresh territory for programmers, developers, and designers. A particularly hot area for new companies is location-based apps (Loopt and Foursquare are the big ones right now) that work with smartphones' GPS capabilities. This sector has the potential to grow at the same scorching rate at which social media websites such as Twitter and Facebook have grown in recent years. (Read More)

Ferryboats
As highways in and around urban centers become more congested, the old-fashioned ferryboat is making a comeback. Privately run ferry services, as well as tourist excursions, are thriving along the Pacific Northwest coast and on the Great Lakes. Given that new federal spending for building ferryboats and terminals is part of the 2009 economic recovery act, opportunities are expanding. The industry grew 17 percent last year, according to AnythingResearch.com. Barriers to entry, though, are steep. A new Coast Guard-certified ferryboat that carries 150 passengers costs about $6 million. (Read More)

Fun and Games
Craft and hobby supply shops, as well as stores that sell toys and games, have been outperforming the overall retail industry, growing at an annual rate of 9 percent, according to AnythingResearch.com. Musical instruments and sporting goods are also selling briskly. (Read More)

Bakeries
Bakeries, pastry shops, and bagel stores are growing at 5 percent a year, according to AnythingResearch.com. Small indulgences, it seems, are picking up, whereas big purchases such as vacations are not. People are also willing to pay more for gourmet baked goods, says blogger and baked-goods expert Nichelle Stephens. High-end bakeries are "focused on small batches, local suppliers, seasonal ingredients, and lots of creativity when it comes to flavors and combinations," she says. (Read More)

Tea and Healthy Beverages
The top four teamakers control 88 percent of industry revenue, according to IBISWorld. But the remaining 12 percent represents a $264 million market for small, independent manufacturers. The industry averaged annual growth of about 5 percent over the past five years. Healthy beverages with promising growth prospects include antioxidant-rich juices and vitamin-enhanced waters. (Read More)

Crafts and Vintage Clothes Online
Anyone with something to sell – especially in the thriving areas of handmade jewelry and vintage clothing – and a PayPal account can break into this business. Online sales of independent merchants – mostly via sites such as Etsy, eBay, RubyLane, and Supermarket – grew at an annual 6.6. percent over the past five years, according to IBISWorld. (Read More)

Exam Prep and Tutoring
Parents always want their kids to do better on tests. A large number of adults returning to school are also looking for an edge. Given the low barrier to entry, this field is competitive. But if you carve out the right niche, it could be lucrative. The industry, which includes tutoring in such subjects as special education, language, and music, grew about 7 percent last year, according to AnythingResearch.com. (Read More)

Translation Services
The U.S. military, the health care system, and businesses that are expanding overseas are the industry's best customers. Overall, the market grew some 18 percent last year. There are also related tech opportunities in the burgeoning market for mobile on-demand translation via SMS. (Read More)

Self-Storage Leasing
There are already 2.2 billion square feet of self-storage in this country, according to the Self Storage Association. That translates to more than 7 square feet of storage per U.S. resident. But the industry is far from saturated, thanks to the insatiable appetite of American families for acquiring stuff. The $22 billion industry also has low barriers to entry, which helps explain why independent business people own 90 percent of self-storage companies. (Read More)

What Street Vendors Can Teach Us About Bootstrapping and Entrepreneurship

Vincent Fernando, CFA
Note: This article was originally published on OPEN Forum.

Some people are born wealthy enough to take the massive risk which funding a new business entails. Others get seed money from brilliant pitches, luck or connections.

And then, there's the rest of us.

Funding a business, or more precisely, risking losing money when starting a business, is the single largest obstacle for most entrepreneurs. Even good ideas can take time to fine-tune or pan out.

That's why I have the most respect for the 'street-stall entrepreneur' one finds in developing countries. This is the individual who starts out with absolutely nothing, and shamelessly sells any product they can from the street to make his living.

Every day people pass this individual on their way to work, seeing them as nothing more than a poor and desperate punter.

But, there are many cases where the street-stall entrepreneur doesn't let it end here. Over time, this individual rigorously ramps up their business, with no resources but motivation and determination, into a larger, more successful enterprise.

These kinds of people conduct the most raw, basic form of entrepreneurship – struggling to make money while their finances hang by a thread. And I think a lot can be learned from them.

Here are six points every entrepreneur can learn about bootstrapping from these self-made street-stall entrepreneurs.

1. As a micro-entrepreneur, it's crucial to first establish a core cash flow. Don't even think you're 'in business' until you're cash flow positive, even if you have some savings. So, whatever the revolutionary product or service you one day wish to sell, in the beginning it's alright to make extra money by going out and doing something else. This could include taking a part-time job that some might find insulting, or selling products for a third-party marketing firm.

2. But it's okay to avoid getting tied up by a long-term full-time job position if it's going to prevent you from devoting your all to your business. This one is tricky: you need cash flow, but you also need freedom and spare time to invest in your own project. The street-stall entrepreneur knows he could go and find financial security as someone's driver , janitor, or security guard. But he doesn't do it unless it's just a short-term stint; he'll do anything before he signs away his freedom.

This restriction should, in fact, make you work harder and succeed faster, by forcing you to hone your sales skills and make you think extremely hard about how to create near-term cash flow for your business. Remember: you can always look for short-term opportunities based on output of cash, rather than full-time employment.

3. Don't be afraid to sell your products before you even have them in stock – or just sell the exact same thing as other established companies, and do it better. When you're starting out, one of the largest unknowns is whether a product or service will even sell. Answer this question by pitching your product or service to people from day one, even if it seems commonplace, or 'isn't in stock'. The worst that can occur is that people say yes, and then you get to rush to make it all happen.

4. Entrepreneurship is all about simply not paying upfront for anything – through revenue share and partnership agreements, generally. It's rare that you would ever want to hire someone expensive or buy an expensive service early on. Either find a way to agree to a revenue-share model of payment, bring them in as a business partner, or learn to do without them until you have sufficient cash flow coming in the door to cover the cost. Remember: cash flow negative means 'out of business' for you. That's the mind set you need in order to survive when you don't have deep pockets.

Bootstrapping is a way of life for these individuals, and we could stand to learn a lot from them. Most importantly, of course: they teach us that, with the right focus and determination, you're never too poor to start a business.

Flickr Creative Commons photo attribution: JimReeves

Monday, May 3, 2010

IRS Will Host A Special Nationwide Open House on Saturday May 15 To Help Small Businesses And Individuals Solve Tax Problems

WASHINGTON — The Internal Revenue Service will host a special nationwide Open House on Saturday May 15 to help small businesses and individuals solve tax problems.

Approximately 200 IRS offices, at least one in every state, will be open May 15 from 9 a.m. to 2 p.m. local time. IRS staff will be available on site or by telephone to help taxpayers work through their problems and walk out with solutions.

“Our goal is to resolve issues on the spot so small businesses and individuals can put any issues they have with the IRS behind them,” IRS Commissioner Doug Shulman said. “If you have a problem filing or paying your taxes or resolving a tough tax issue, we encourage you to come in and work with us.”

IRS locations will be equipped to handle issues involving notices and payments, return preparation, audits and a variety of other issues. At a previous IRS Open House on March 27, approximately two-thirds of taxpayers requested and received assistance with payments and notices.

So, for example, a taxpayer who cannot pay a tax balance due can discuss with an IRS professional whether an installment agreement is appropriate and, if so, fill out the paperwork then and there. Assistance with offers-in-compromise will also be available. Likewise, a taxpayer struggling to complete a certain IRS form or schedule can work directly with IRS staff to get the job done.

At the March 27 Open House, 88 percent of the taxpayers who came in for help had their issues resolved the same day.

For the State of Washington, the following are the locations for the May 15 Open House:

Each office will be open from 9:00 a.m. until 2:00 p.m. local time.

Everett: 3020 Rucker Ave.
Everett, WA 98201

Seattle: 915 Second Ave.
Seattle, WA 98174

Spokane: 920 W. Riverside
Spokane, WA 99201

Tacoma: 1201 Pacific Ave.
Tacoma, WA 98402

Yakima: 107 S. 7th Street
Yakima, WA 98902

The Open House on May 15 is the first of three events scheduled through the end of June. The next two are planned for Saturday June 5 and Saturday June 26. Details regarding those events will be available soon.

Issue Number: IR-2010-055