Learn the Top 5 things you need to know about these changes including how to protect your business and how to take advantage of short term opportunities… some may end as soon as Oct 31.

1) Securing a Government Subsidized Loan
If you need capital, now may be the perfect time to get funding backed by the government. The Recovery Act, signed earlier this year, reduced (or eliminated) fees for getting an SBA Loan as well as increased the guarantee up to 90%. These changes make an SBA loan a very attractive option for small businesses seeking capital.

In addition, the SBA created a loan program called “America`s Recovery Capital” (ARC Loans) that makes zero interest short term loans.

These attractive options won’t last forever. Combine that with a potential upcoming inflationary period that may increase rates on any loans and now may be a great time to secure additional financing for your business.

2) Health Care
With so much uncertainty revolving around this topic it is hard to predict the outcome, but significant changes for small businesses are likely to occur.

A hot topic for entrepreneurs is the proposed legislation that requires small business owners to provide health insurance for their workers. This may place an additional burden on small businesses with either added expenses or penalties.

The bill could benefit small businesses in some ways such as forcing insurers to accept all applicants, which is often an issue for companies who do not have a large workforce. Also, some claim the proposed legislation could save small businesses “$855 billion nationwide over the next decade.”

3) Government Grants
Some grants, such as the NIH’s SBIR and STTR grants are only on short term extensions. Right now they are extended until Oct 31 and there is no word yet on whether they will renew or in what form.

There is no long term assurance that any grants or programs, such as many SBA programs, will continue once there is a push for budget cuts.

4) New Requirements for Small Businesses
A big result of the financial meltdown was that companies were going out of business and investors, customers, vendors, and eventually the US government got stuck with losses or debt.

Now, many states are requiring businesses, from hair salons to travel agents to mortgage brokers, to have surety bonds to do business in that state. You should find out if your state requires a surety bond for you to do business. Even if it was not the case before, new regulations may change that.

Also, companies with federal contracts over $100,000 must comply with the new E-Verify system. More companies may be required to comply in the near future. Even if you are not required to comply it may be beneficial to voluntarily implement the system to protect your company against fines.

5) Patent Law
The Patent Reform Act of 2009 plans to convert the US patent system from a first-to-invest structure to one that is based on first-to-file. Several large companies including IBM and Microsoft are backing this proposal. This is not applicable to all companies, but in to some it may be a significant change.

This is a Guest Post by Brant Bukowsky from AngelInvestmentJournal.com

The advantages of the ‘pull’ model are fairly obvious, because as soon as the development or beta phase is complete, sales by the client who ‘pulled it’ are inevitable and forthcoming. However the drawback of this style is that the initial interested ‘puller’ may be the only client who needs such a product/service or is willing to pay for it. Conversely, by developing a business using the ‘push’ model, the startup has the opportunity to sell their widget to as wide a market as they wish, and products can be produced with extensive potential applications. Although the push startup may not have a concrete buyer in place prior to launch, as in the case of the pull model, the push-type startup does not encounter the same risks associated with exclusively having only one client.

My revelation in contemplating my own predilection for one model over the other got me thinking about which is most optimal given differing environments. The aforementioned VC tended to fund businesses in the telecommunications sector, and the reason for this was that the fund was backed by a leading phone company. Their methodology was simple: ask their current clients what they were in need of, or what was lacking in the market, and then invest in businesses which produce that exact need. This allowed the fund to enjoy a tangible payback period, which could be easily predicted, as they had the benefit of knowing precise future cash flows and margins before even investing in the pulled product or company. Imagine that you could invest a certain amount in a business today and know with certainty (often backed by quasi-binding letters of interest to purchase) to whom and how much of those products would be sold next month—not a bad way to invest.

The flip side of this is the push method, and what I now understand to be my own modus operandi, whereby the product comes first and the customer base is then filled subsequent to going to market. This model allows an entrepreneur to build a product or service in almost any sector, assuming a certain propensity to operate in an industry where the founder has some experience, and sell to a variety of customers. The snag here is that from an investment perspective there is a higher risk associated with backing or launching a business that doesn’t secure customers in advance of its launch.

While a pull method uses supply as the initial impetus for growth, and a push strategy uses demand as its catalyst, in contemplating your own strategies for launch consider not only your own risk tolerance, competitive strengths or experiences, but also deliberate whether you have the network to create a pull model and build your startup around a particular need from a particular customer. If you are like me when I got my start, chances are your network is still in its preliminary stages, and as such you may want to consider buying or developing a product or service that fills a void that is felt by a multitude of customers, not just one, through a push model. For me, that was the printed T-shirt business.

This is a guest post by Harley Finkelstein, LL.B. (JD), MBA (cand.). Harley is a serial entrepreneur who has launched a number of successful tech startups, and he is the founder of one of Canada’s leading apparel companies, Fink, Inc. Additionally, Harley serves as a mentor to the Ottawa Centre for Research and Innovation (OCRI), and sits on the financing committee for the Canadian Youth Business Foundation (CYBF). In 2007, Harley founded Innoventure Capital, a unique seed financing firm that provides funding and strong mentorship to early-stage startups. Innoventure’s latest startup is Smoofer.com, which purports to be Canada’s leading online T-shirt shop. Harley recently received his law degree from the University of Ottawa, and will be completing his MBA at the school’s management faculty in summer 2009. In 2005, he graduated with distinction from Concordia University, where he received his degree in Economics. Harley may be reached at Harley@Finkinc.ca.

Depressions, recessions, slumping economies. These economic conditions are nothing new. For ages, economic times have had an ebb and flow cycle. For those starting up a business, you can wait for the good times to come around, or you can do what these famous companies did and move full steam ahead despite an economic recession.

1. Microsoft Corp.

Not only was this computer technology conglomerate founded in tough economic times of 1975, its founder, Bill Gates, was a Harvard University dropout. But with all its adversities, it has flourished to a billion dollar company.

2. Hyatt Corp.

You might think it risky opening up upscale hotels during a time when people were less likely to travel and vacation. But that’s exactly what this hotel chain did from 1957 to 1958 during recessionary times under President Eisenhower.

3. Trader Joe’s.

When this famous grocery store opened its doors as Pronto Markets during the economic slump of 1958, it was an instant success. The Trader Joe name change in 1967 was the start of its new branding image of offering unique products under its own label.

4. General Electric.

GE is probably one of the first companies to make history by getting started during the economic recession of 1873. Although the tough economic times lasted for six years, the incandescent lightbulb created by Thomas Edison continues to shine 136 years later. Today, GE is the 10th largest company in the world.

5. Revlon Cosmetics.

Founded in 1932 deep in the years of the Great Depression, Charles and Joseph Revlon unveiled their new opaque nail enamel. Tapping all their resources, the brothers grew their company into a multimillion dollar enterprise within six years.

Other well-known companies that opened for business during recessions are: Fortune Magazine in 1930, Hewlett-Packard in 1939, Burger King in 1954, Sports Illustrated magazine in 1954, IHOP Restaurants in 1958, The Jim Henson Company in 1958, FedEx in 1973, CNN in 1980 and MTV in 1981.

These companies are proof that you can start a business and prosper during an economic recession. Do you think a recession is the best time to start a company? Leave a comment with your thoughts.

Matthew Toren

David Nilssen is co-founder and CEO of Guidant Financial Group, Inc. Guidant helps aspiring entrepreneurs to invest their retirement funds into a business or franchise without taking a taxable distribution or incurring penalties. A strong believer in broad diversification and hands-on investing, Nilssen is regularly invited to speak at top venues throughout the country as a leading expert in alternative small business financing. Along with his 100+ employees, Nilssen has helped nearly 6,000 individuals use their retirement funds to invest in alternative assets.

Under his leadership, Guidant was named the 6th fastest growing company in WA, and is currently known as the largest provider in the franchise financing industry. Its success has earned the company top national and regional recognition, including: U.S. Chamber of Commerce Blue Ribbon Small Business (2007 & 2008); Bellevue Chamber of Commerce Eastside Small Business of the Year (2007); Washington CEO Magazine Best Companies to Work For (2007 & 2008); and U.S. Chamber of Commerce NW Small Business of the Year (2007). In 2008, his firm was included on the Inc. 500 list (#384).

In 2007, the Small Business Administration (SBA) named Nilssen the national Young Entrepreneur of the Year award, and the Puget Sound Business Journal named him one of the top 40 entrepreneurs under 40 years of age. In 2008, Ernst and Young named him a finalist for their coveted Entrepreneur of the Year award.

An avid investor himself, Nilssen has purchased millions of dollars in real estate and helped to initiate many businesses within the service industry, including a real estate agency/property management firm and real estate development company. Nilssen, and his company, have been highlighted in media sources such as CNBC, Fortune Magazine, The Los Angeles Times and The Wall Street Journal.

Adam: What is the start-up story behind your business venture?

David: I was developing real estate in Bremerton, Wash., in 2002. The market was prime! That year, a friend introduced me to a real estate broker from Bellevue, Wash., who had built a business around helping investors find both speculative and income producing properties. Soon after meeting, we decided to work together on a major real estate project – one that required more capital than we had. When we asked our attorney for her advice on raising additional funds, she suggested we look at self-directed IRAs as a potential source of investment capital. Although it was still a fairly new concept to her, she explained that one could actually invest their retirement assets in real estate without taking a taxable distribution or incurring penalties. I specifically remember looking across the table at my business partner and thinking “What?!” If that was true, I could see it being huge for my real estate development business.

That meeting with our attorney launched a frustrating research and development project. It was frustrating because there were only a handful of companies that provided “real estate IRAs” and they all had different interpretations of the laws, their fees were expensive, and their processes were slow and complicated. After some heavy duty research and paperwork, we finally got a handle on the process and helped one person invest their IRA funds in one of our projects. We were amazed – and so were they, when they got a fantastic return in less than 12 months! Word got out, and the phone started to ring…. This business was started by an accident of fate, but we ran with it. We hired the right team and built a customer-centric organization around investing with self-directed IRAs. Six years later, we made the Inc. 500 list!

Adam: What is your definition of success, and has your company achieved it?

David: Have we achieved success? Sure – a level of it. Our clients have been very successful because we’ve given them access to alternative investments and to a level of personal financial control many never knew was possible. To me, their success is also ours. I have an insatiable appetite for both personal and professional development, and I’ve been privileged to watch Guidant play a role in this development in clients and employees. Despite inevitable ups and downs, my belief in our mission and the viability of our products remains as high as ever. While we have definitely achieved a high level of success, I believe we will enjoy even more success in the future.

Adam: To what do you attribute your company’s recent achievements?

David: I believe our achievements are due to the fact that we hired a great team, focused on our customers as unique individuals with unique needs, and we continue to invest in scalable technology. Each year we realize productivity gains because we continue to improve our customer experience without having to scale overhead.

Adam: What 4 pieces of advice would you give to aspiring entrepreneurs?

David:

A. “Don’t take yourself so goddamn seriously.”

Although it can apply to all aspects of life, when it comes to business, this quote by Ben Zander is one of my very favorites. I often find that too many new entrepreneurs are afraid to be wrong, or they’re not open to outside feedback or employee perspectives. You don’t have to do it all, you don’t have to pretend you’re invincible, and it’s okay to be wrong!

B. Invest in technology so your business can scale!

It seems expensive at first, but if it’s done right, it will pay significant dividends as your business grows.

C. Hire potential first, experience second.

Some of the greatest hiring investments we ever made were in people who had infectious energy, tremendous ambition and a passion for teamwork and excellence.

D. Have fun.

I have to include this! You spend more time at the office than you do with your family. So believe in what you do, love those you work with and enjoy the time you’re there. If you don’t, then it becomes just a job — one with 100 times the stress!

Adam: Describe/outline your typical day?

David:

5:30 a.m. Wake up and have breakfast

6:15 – 7:30 a.m. Work out at the gym

8:00 a.m. Head to work after grabbing a Starbucks and a newspaper

8:00 – 9:00 a.m. Work on projects for the Seattle Entrepreneur Organization (I’m a Board member)

9:00 – 11:30 a.m. Attend various meetings, participate in conference calls and respond to email

11:30 – 1:00 p.m. Lunch (Generally a meeting)

1:00 – 2:00 p.m. Catch up on email (It’s never-ending!)

2:00 – 3:00 p.m. Have one-on-one’s with staff

3:00 – 4:00 p.m. Research and write for blogs or articles

4:00 – 5:00 p.m. Re-cap with senior executives

5:00 – 6:00 p.m. Plan for tomorrow’s meetings

6:00 – 8:00 p.m. Dinner

8:00 – 10:00 p.m. Catch up on TIVO or read a book

10:00 p.m. Head to bed and think about where the next phase of growth will come from, how we stay ahead of our competition, what training to give staff… Eventually I get back up about 11:30 p.m. and start responding to email again. An iPhone is dangerous for insomniacs!

Adam: Where did your organization’s funding/capital come from, and how did you go about getting it?

David: We started Guidant with less than $10,000 and a couple of laptops. The company was cash-flow positive from the get-go. Recently, a few of our executives asked to invest in the company. We felt like this was a great example of a team truly believing in the company’s potential, so there are a couple of convertible notes outstanding.

Adam: What stops you from throwing in the towel and giving up during those frustrating days of running your business?

David: You get frustrated because you are not seeing the results you want and that you know are possible. If you sincerely care about the business, then you generally don’t want to throw in the towel. There is a greater responsibility that an entrepreneur feels. If you are a great entrepreneur, you recognize it’s not all about you. It’s about your staff, your clients, your partners – and then you. If you are a servant leader, giving up is never an option.

Adam: Do you believe there is some sort of pattern or formula to becoming a successful entrepreneur?

David:

* Be manically focused on your vision
* Hire great people
* Love what you do
* Do the right thing no matter what

Adam: Who has influenced you most and been your greatest inspiration?

David: There have been so many!

My grandfather was an amazing man. As an Oakland, Calif. police officer he saw the worst side of people and yet he always seemed to see the good in others. He was a dedicated husband, an amazing father, a charitable person and a good friend.

When I need a personal pick-me-up, I turn to Anthony Robbins. His message is phenomenal – it’s not what happens to you but how you respond to it. It’s your choice. You have the ability to determine your “state,” and I try to remember that every day.

Ben Elowitz at Wetpaint.com has been a tremendous mentor to me. Ben started FatBrain.com, an online bookstore that eventually sold to Barnes & Noble. Then he co-founded BlueNile.com, which he sold via an IPO. Ben has taught me that only I get to determine how much I can accomplish.

Adam: What book has inspired you the most?

David: I read Rich Dad, Poor Dad by Robert Kiyosaki when I was 20. I quit my job three months later and have never had (as my grandfather would say) a “real job” since. Although it is definitely not my favorite business book, it does provide a simple explanation as to why owning a business is the greatest investment on the planet.

A great book I’ve recently read is The Breakthrough Imperative. It’s a phenomenal book about how great managers get tremendous results. It was written by Mark Gottfredson and Steve Schaubert who are both directors for Bain and Co.

Adam: How do you go about marketing your business? What has been your most successful form of marketing?

David: Our marketing budget is heavily weighted toward channel marketing. Our business helps people buy alternative assets inside their retirement plan. The two most common investments made by our clients are real estate and small businesses. Because of that, we spend a tremendous amount of time building relationships with professionals who are involved in those types of transactions. (i.e., real estate agents, business brokers, etc.). Search engine marketing is also a major part of our promotional efforts. Lastly, we have a comprehensive content strategy that has allowed our web site to increase its value for natural searches.

Adam: In one word, characterize your life as an entrepreneur.

David: Unpredictable.

Adam: Excluding yours, what company or business do you admire the most?

David: Earlier I mentioned Ben Elowitz and his company WetPaint.com. I am enamored with Wetpaint because of its ability to allow anyone – especially those without technical skill, to create and contribute to web sites written for – and by, those who share a passion or interest. To do this, Wetpaint combines the best aspects of blogs, wikis, forums and social networks so anyone can click and type on the Web. They have created well over a billion websites in just two years off their platform.

Adam: How do you achieve balance in your life?

David: Ha! That’s funny.

Adam: Where do you see yourself and your business in 5 years? 10 years?

David: Guidant Financial Group will continue to be a thought leader in small business and self-directed IRAs. Five years from now, Guidant will have many sister companies, all of which are focused on helping individuals and entrepreneurs take a more active role in their investments.

As for me – I will continue to be a board member for Guidant, but I do not see myself as the “Chief” much longer. Over the next few quarters, I will look to take on an evangelical role for the company which will allow me to do what I do best (and love to do!).

Guidant wasn’t my first business, and it certainly will not be my last. There are many more to come!

Adam: If we could introduce you to anyone, who would it be and why? (You never know who we know!)

David: That’s easy: Magic Johnson. I was a HUGE Lakers fan growing up, and Magic was/is my all-time favorite basketball player. He’s had phenomenal success, faced tremendous adversity and is a very successful businessman.

A very close second would be Anthony Robbins – mainly for the same reasons, but he also inspires and motivates me.

—————–

Adam Toren