Business startups are on the rise, helped by Internet tools

4th June 2018   ·   0 Comments

By Susan Buchanan
Contributing Writer

Business startups in Louisiana and the nation have recovered from a downturn as entrepreneurs harness internet technology. Startups shrank when credit tightened in the 2007-2009 recession. And in 2010, U.S. starts were the lowest since the Bureau of Labor Statistics began tracking them in 1994.

Since the recession, entrepreneurs have worried about being strangled by big box stores like Walmart and Target and being outfoxed by the tech gang—Amazon, Google, Apple, Facebook, PayPal (eBay) and Microsoft. These tech lords control cloud services and app platforms, and they’ve amassed patents.

But lately, startups have learned to use the internet to their advantage whenever possible. “The climate for startups has improved since 2010,” Elizabeth Townsend Gard. social entrepreneurship professor at Tulane University, said last week. “With today’s Internet tools, you can start a business much more quickly and less expensively, and can often do it without a lawyer, an accountant or a web designer.” She unveiled a podcast with students early this year in far less time than it took to launch a bigger business in 2015.

Three years ago, Townsend Gard and her husband Ron Gard of Limited Times LLC, a Tulane spin-out company, introduced the Durationator Copyright System, a software platform that determines the copyright status of objects and creative works worldwide. Universities, museums and libraries use it. The Durationator is distributed by Thomson Reuters in New York.

In February, Townsend Gard and her students launched a podcast called “Just Wanna Quilt,” including more than 75 interviews with quilters and others discussing the craft. The project, conceived last summer, crystallized fast.

Startups can create an LLC with LegalZoom.com, founded by a group of attorneys in 2001, and can do their accounting with Intuit’s online QuickBooks. Among the many, useful tools for business owners are Weebly.com for setting up websites and online stores; Trello.com for project management; 99designs.com for logos and art services; and myCorporation.com for filing documents.

One advantage of today’s tools is that startups can tackle tasks quickly, Townsend Gard said. Contrast that with her earlier work on the Durationator with news and analytics giant Thomson Reuters. “You might wait three weeks for the next meeting,” she said.

But on the downside, a problem that she’s heard about from other startups is the cost of shipping products. “Shipping can be much more expensive for firms starting out than for big, established companies,” she said.

In 2016, Artice Hunter launched Artice Creative Designs, LLC, in Marrero. She plans to use etsy.com, an online arts-and-crafts marketplace, to sell her wreaths and centerpieces. Hunter got her start after her minister liked the prizes she made for a 2015 church raffle and suggested she go into business. “I’ve always been creative,” she said.

Hunter looked into government programs and contacted banks, but hasn’t found seed money yet. She’s not sure if her status as a young, African American woman has hurt her chances financially. She’s been able to hang onto her business, however, because of word-of-mouth interest and encouragement from her family, friends and church.

Asked about competition from stores like Walmart, which sells wreaths and decorations for every season and most occasions, Hunter said her products are made with love and the best materials. They’re handmade and they last. Friends have advised Hunter to raise her prices. “But I charge fairly and have lots of repeat customers,” she said. She also embellishes shoes and does party decorations.

It’s not easy to keep a new business alive. According to the Bureau of Labor Statistics, in the most recent survival rates for U.S. establishments that started in the 1994-2015 span, 56.3 percent were able to hold on for five years and 34.9 percent for ten years. Those numbers were last updated in April 2016.

The state of Louisiana has a number of offerings for startups. “We have more than 7,000 clients participating in our Small and Emerging Business Development Program, providing technical and managerial assistance to small businesses and micro-businesses,” Louisiana Economic Development Secretary Don Pierson said last week. Micro-businesses have four employees or less.

SEBD provides accounting and marketing help, legal services, and entrepreneurial and industry-specific training. Two-year survival rates for firms receiving SEBD assistance were 91.2 percent in 2017, 87.3 percent in 2016 and 87.8 percent in 2015, Pierson said. That was above the national, two-year survival average of 67 percent since 2014, according to the Small Business Administration’s Office of Advocacy.

The Louisiana Contractors Accreditation Institute helps small businesses owned by minorities, women and veterans learn industry basics, Pierson said. The institute prepares participants for the business and law portions of the state’s contractor’s licensing exam. LCAI graduates totaled 149 in the spring of 2017, 132 in fall 2017 and 83 this spring.

“Our Small Business Services team coordinated with our LED FastStart team and local stakeholders to create LouisianaBusi-nessConnection.com, an online portal that makes opportunities at economic-driver companies and prime contractors available to minority-, woman- and veteran-owned businesses and other small firms in Louisiana,” Pierson said.

Meanwhile, the U.S. Small Business Administration is one of the best-kept secrets in the federal government, “but we’re working hard to change that,” Michael Ricks, district director of the SBA’s office in Louisiana, said. “Most small startups don’t come to the SBA for assistance in the beginning. After they’ve been in business for awhile, however, they reach out to us for help.” Eventually, many startups seek information at www.sba.gov/learning-center.

Startups wanting in-person service from the SBA use programs offered by the agency’s resource partners. Services are free to small owners, who often need help with business plans and funding ideas. Small Business Development Centers across Louisiana are found at www.lsbdc.org.

Two Women’s Business Centers exist in the state, Ricks said. One is affiliated with the Urban League, servicing the New Orleans area. To learn more about it, see www. urbanleaguela.org/WBRC. The Goodworks Network at www.goodworknetwork.org/wbc caters to women in Baton Rouge and environs. The Veteran’s Business Outreach Center, located at Mississippi State University, covers Louisiana, and is on the web at www.vboc.msstate.edu.

SCORE is a volunteer group of professionals sharing their knowledge with local businesses, Ricks said. Its chapters are listed on www.score.org/find-location.

If you really want your own business, don’t listen to naysayers, Artice Hunter advises. “Keep networking and getting new ideas and knowledge so your dream stays alive,” she said. “Treat your existing customers well, and they’ll tell others about you.” She’s encouraged by people who have made small fortunes selling their crafts on Etsy.com.

U.S. startups that were a year old or younger totaled 415,226 in the year ended March 2017, up from 326,091 in 2010, the Bureau of Labor Statistics said. Startups contribute greatly to employment. As older firms cut jobs or close, small new firms create them.

LED Secretary Pierson said in the last year of complete data, small businesses in Louisiana employed 917,466 people in 2015, providing over 53 percent of the state’s private-sector jobs. That was mostly at firms with less than a hundred workers each.

This article originally published in the June 04, 2018 print edition of The Louisiana Weekly newspaper.