The 1099 Economy: The New “Old” Entrepreneurs

Each year the U.S. Chamber of Commerce Foundation analyzes data to determine what states have done over the previous year to create jobs and expand the economy.  The analysis is broken down into two parts, one that discusses what states should be doing and one that details what states are doing and then ranking the states using a performance, data-driven model.  The Chamber calls the annual report, Enterprising States, and provides a copy of the 2013 analysis HERE.

The Enterprising States study found a significant shift in the types of new start ups and entrepreneurs in America since the Great Recession.  The Chamber refers to this new economy as a "1099 Economy," which reflects an increase in single owner businesses that do not employ any additional staff and typically work as a consultant or provide professional services under contract to larger corporations.  The "1099" refers to the tax form these self employed contractors receive from their clients that report income – think of them as W2s for the self-employed.  More than one million self employed contractors have started business since 2005 and some estimate more than 10 million people operate similar one-person businesses.  This is almost 8% of the national labor force.  An additional 31 million people claim self-employment income to supplement their primary job, which represents a 52% increase since 2001. 

Often cited reasons for the growth in these 1099 entrepreneurs are layoffs and shutdowns at larger companies that dump older, experienced workers into the job market where they are unable to find equivalent full-time employment.  However, they are able to use their skills, contacts and experience to land contracts for companies not willing or feeling too uncertain about the future to commit to a full-time hire.  Further evidence of this trend is the self-employment rate for workers aged 55 and over is 16.4% compared to 10% for other age groups. 

Arkansas follows that trend as self employment increased by 11% to 136,000 over the last decade.  Plus more than three out of four Arkansas businesses employ just a single person.  Over the course of the Great Recession in 2008 and 2009, firms employing five or more employees lost net jobs and the only category that added net jobs were businesses employing one to four people.

Self employed, 1099ers require similar support and policies that would benefit any small business: improved access to capital, specialized training, networking opportunities and guidance on expanding into new markets.  The Rogers-Lowell Area Chamber can help 1099ers grasp these opportunities to benefit their business.  Visit RogersLowell.com or call 479-636-1240 to learn how the Chamber might be able to help you improve your business.

What’s Working in Job Creation: US Chamber Releases Enterprising States Study

Each year the U.S. Chamber of Commerce Foundation analyzes data to determine what states have done over the previous year to create jobs and expand the economy.  The analysis is broken down into two parts, one that discusses what states should be doing and one that details what states are doing and then ranking the states using a performance, data-driven model.  The Chamber calls the annual report, Enterprising States, and provides a copy of the 2013 analysis HERE.

This year Enterprising States focuses on the importance of supporting small business as a means of economic development and job creation in the United States.  Historically, small businesses have been the country’s primary job creator, but following the latest recession these economic engines have failed to return to their traditional roles.  The Chamber warns that, “[p]olicymakers ignore small business at their own peril and that of the economy.” 

Last year, only 16% of small businesses added employees and businesses five-years-old or younger now employ just 8% of the total work force, which is a decrease of 33% over the past two decades.   Small and new businesses continue to struggle in the post-Great Recession economy for a number of reasons, including significantly lower consumer spending and reduced lending by community banks.  These factors contribute to a less than rosy outlook by small business owners.  The U.S. Chamber surveyed small businesses in January 2013 and found more than half expected business to be worse over the next two years.  This is more than twice as high as the same survey revealed a year earlier.  Lower optimism results in fewer new hires, smaller investment and more defensive operations.

If small and new businesses are not adding jobs, what can states do to encourage small and new business startups?  The U.S. Chamber recognized ten initiatives that appear to be working to support and grow small and new businesses in the country. 

·         Business plan competitions – identify and assist entrepreneurs turn ideas in start ups.

·         Accelerator initiatives – programs that assist startups become stand-alone companies.

·         Economic gardening initiatives – provide resources to existing firms so they can expand.

·         Ecosystem initiatives – focus programs and projects on areas where a concentration of like-mission companies exist.

·         Workforce development initiatives – help business train and locate qualified employees.

·         Seed and venture capital – provides access to funding to help replace diminished availability of bank loans.

·         Networking and collaboration initiatives – match small business with mentors in large business and higher education.

·         International trade – reaching new global markets is vital for start ups and small business

·         Streamlined state administrative processes – efforts to eliminate rules, regulations and uncertainty

·         Broadband investment – high speed online access is critical being competitive

Thankfully, Arkansas utilizes many of these initiatives, but unfortunately many lack sufficient funding to be fully implemented on a statewide basis.  A future blog post will highlight what Arkansas is doing to support small and new businesses.  For more information contact Michael Lindsey at Michael@RogersLowell.com

Top 5 Reasons to Join the Rogers-Lowell Area Chamber of Commerce

By Jacque McQueen

As an Account Executive for the Chamber, I get to hear first-hand from both prospects and new members on why one chooses to join the Rogers-Lowell Area Chamber of Commerce.  The following reasons are often cited and are very good reasons why you should consider joining:

        1.   Awareness
The Chamber provides a complimentary ribbon cutting and announcement of your grand opening, new location, new ownership, and anniversary celebration in the local newspaper,
the Chamber Voice newsletter, and in weekly eNews blasts to influencers and decision-makers
in the community.

2     2.  Exposure
RogersLowell.com enables you to have your business listed in the Chamber’s online business directory along with a free hyperlink to your business web page. You simply provide a 35 word description with keywords that will help people search and find you.  The website utilizes both keyword search and category search for visitors to easily find your business.  The Chamber website also offers affordable advertising opportunities, and your business news and announcements are listed for free in the Chamber News section.

3     3. RFP (Request for Proposal) Connections
Business Connect on RogersLowell.com allows members to submit Request for Proposals (RFPs) to other members. This gives you the opportunity to offer your bid/quote to members when requested and also to submit to a bid request from other members. Good examples of members using this benefit include plumbing quotes, business card quotes, printing quotes, janitorial quotes, etc.  Business Connect connects you to new business and to significant savings for
your business.

        4.  New Contacts & Learning Opportunities
Members love the Chamber’s networking and educational events and opportunities for committee involvement. Most networking and educational events are free and include Business After Hours, Coffee Connection, Community Diversity Celebration, FYI Brown Bag Lunches, Chamber University seminars and numerous committees to get involved with extracurricular activities.  In addition, there is a variety of members-only sponsorship packages available for events and meetings to help increase your visibility and make new contacts.

5     5. Promotion
The Chamber offers you opportunity to submit eCoupons and discounts to be featured on the RogersLowell.com Business Directory’s Coupons and Discounts web page.  These eCoupons
help promote your business to both members and thousands of monthly website visitors. 
It’s free and a very popular benefit with our members for promoting trial offers and competitive discount deals.

These are my top five reasons for new members joining the Chamber but there are many more reasons to join and benefits of membership.  The bottom line is that Chamber membership is an effective business strategy.  Contact me and let’s explore together how Chamber membership benefits you and let’s make it a part of your strategy. 

Call me at either my office (479) 619-3189 or my mobile (479) 387-6546.

The Rogers-Lowell Area Chamber of Commerce is accredited by the U.S. Chamber of Commerce
and is one of only 77 Chambers nationwide to be awarded the highest level of five stars.  The
Chamber is committed to growing business and building community, and provides numerous opportunities for businesses to build new contacts and generate leads throughout the area. 
The Chamber’s mission is to be the voice of business, to promote and initiate responsible
economic growth, and to address community challenges in the Rogers and Lowell Area,
as well as the Northwest Arkansas region.