WASHINGTON – Getting loans flowing more normally to creditworthy small businesses will help the economic recovery, Federal Reserve Ben Bernanke said Thursday.

Small businesses — more so than big companies — rely on bank loans to expand operations and hire. Small businesses usually help drive job creation during recoveries but credit clogs have hurt hiring.

Lending to small businesses is declining even though the economy is improving. Lending has dropped from almost $700 billion in the second quarter of 2008, a period when the country was embroiled in a financial crisis, to $660 billion in the first quarter of this year, Bernanke said in prepared remarks in Detroit. Many lawmakers on Capitol Hill have complained about small businesses wanting to take out loans but having trouble getting them.

Bernanke, however, said it’s difficult to divine whether the decline in lending to small businesses was being driven more by weaker demand or reduced supply because loans are harder to get. Lenders and borrowers have different perspectives the problem, he said.

“For example, some potential borrowers have been turned down because lending terms and conditions remain tighter than before the financial crisis, perhaps reflecting banks’ concerns about the effects of the recession on borrowers’ economic prospects and balance sheets,” Bernanke said.

“From the potential borrowers’ point of view, particularly a borrower who has been able to obtain loans in the past, these changes may feel like a reduction in the supply of credit,” he added. “From the lender’s point of view, the problem appears to be a lack of demand from creditworthy borrowers,” he said.

Getting bank lending flowing more normally again is a delicate dance for the Fed and other banking regulators.

As regulators encourage banks to make loans to sound borrowers, they are also working to make sure banks get back on firmer footing after suffering through the worst financial and economic crises since the 1930s.

The Fed has been reaching out to small businesses in an effort to come up with ways to help ease the credit problem. Bernanke’s meeting in Detroit was one of a series of such sessions the Fed has been conducting. The findings from the meetings will be presented in a conference at the Fed in the summer.

Bernanke didn’t talk about the future course of interest rates.

The Fed has pledged to hold rates at record lows near zero to support the recovery. It meets next on June 22-23.

In separate remarks delivered in Georgia, Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said he supports the Fed’s current stance on rates. “The conditions that require a change of policy are not yet at hand,” he said. However, at some point the Fed will need to start pushing up rates to prevent inflation, he said.

Bernanke did observe that the country in now in an “economic expansion, with jobs once more being created rather than destroyed.”

However, he said persistently high unemployment, now at 9.9 percent, is a “difficult issue” that imposes “heavy costs on workers and their families as well as society as a whole.”

This spring’s college graduates face better job prospects than the dismal environment encountered by last year’s grads. But that doesn’t mean the job market is thriving.

Average starting salaries are down, and employers plan to make only 5 percent more job offers to new graduates this spring compared to last spring, when job offers were down 20 percent from 2008 levels, according to a study by the National Association of Colleges and Employers, which tracks recruitment data.

Liam O’Reilly, who just graduated from the University of Maryland with a bachelor’s degree in history, said he had applied to 50 employers — to be a paralegal, a researcher for a policy organization, an administrative assistant — but he had gotten hardly any interviews. While continuing to search for something he truly wants, he has taken a minimum-wage job selling software that includes an occasional commission.

“Had I realized it would be this bad, I would have applied to grad school,” Mr. O’Reilly said.

The study by the National Association of Colleges and Employers found that 24 percent of 2010 college graduates who applied for a job have one waiting after graduation, up from 20 percent last year. But the average salary offered to graduates with a bachelor’s degree has slipped 1.7 percent from last year, to $47,673.

Salaries for finance majors rose 1.6 percent, to $50,546, while those for liberal arts majors fell 8.9 percent, to $33,540. For graduates with computer-related degrees, salary offers rose 5.8 percent, to $58,746.

Patricia Rose, director of career services at the University of Pennsylvania, said that students had more choices this year. “Last year, people found employment, but there was a sense of musical chairs, that if there’s an empty seat, take it,” she said. “This year, there’s a little more sense of ease.”

Persistence, connections — and credentials in hot fields like finance and computer science — are especially helpful, say economists and college officials.

Jenna Alt, newly graduated from the Rensselaer Polytechnic Institute in Troy, N.Y., applied for 20 jobs in construction management in New York beginning last fall, but came up empty-handed. While she was attending a tennis party at her aunt’s house, she said, “A friend of my aunt’s said, ‘You seem like an intelligent young lady. One of my brother’s friends owns a construction company in D.C.’”

Thanks to that referral, Ms. Alt will join Clark Construction in the Washington area in September, and she feels grateful. “Only about a third of my friends have jobs lined up after graduation,” she said. “If you have a job, you’re lucky.”

College officials say there is more of that luck going around this year.

“We’ve seen glimmers of hope,” said Thomas C. Devlin, director of the career center at the University of California, Berkeley. “There’s been a steady but gradual uptick in employer activity.”

Economists are less upbeat than college officials, however, and the possibility of a double-dip recession is a growing concern. Some economists worry that the uptick in job offers might peter out if the economy stalls because of the stock market turmoil and the financial chaos in Europe.

Thomas J. Nardone, an assistant commissioner of the Bureau of Labor Statistics, said that the jobless rate for college graduates under age 25 was 8 percent in April, up from 6.8 percent in April 2009 and 3.7 percent in April 2007, before the recession began.

The 8 percent unemployment rate is lower than the nation’s overall 9.9 percent jobless rate, but it is high for college graduates, who typically have a lower unemployment rate than those without bachelor’s degrees. Mr. Nardone noted that for high school graduates under age 25 who did not enroll in college, the jobless rate was 24.5 percent last month, up from 11.4 percent in April 2007.

When the academic year started, many employers were pessimistic because of the recession and decided to send fewer recruiters to campus. But with the economy picking up, some companies are making more job offers than they had expected just a few months ago.

“I’d call it a just-in-time job market,” said Thomas Tarantelli, director of career development at Rensselaer Polytechnic. “Many employers are holding back, waiting to see what their profits and orders will be, to see if they’re able to hire.”

As the economy has improved, Wells Fargo Bank has increased hiring for financial analysts and entry-level positions in marketing and auditing, while Deloitte, the consulting and accounting firm, has hired 5,300 college graduates, up from 4,800 last year (but down from 5,400 in 2008).

“Our businesses are beginning to pick up,” said Diane Borhani, Deloitte’s national director of campus recruiting. “Our hiring demand is directly correlated to our business growth.”

As always, strong students are rising to the top. Deloitte snatched up Andrew Stern, a graduate of the Wharton School at the University of Pennsylvania, whose academic concentration was organizational effectiveness.

He said that after Lehman Brothers collapsed in September 2008, business students felt a surge of pessimism about their job prospects, but that the dark mood had lifted.

“Things are looking up — companies are returning to campus, and they’re confidently hiring,” Mr. Stern said. “The vast majority of my friends that do not have a full-time job are going to graduate schools.”

Andrew Sum, an economics professor at Northeastern University, said the job market was awful for this year’s college grads and high school grads. Many college graduates are finding jobs that do not require bachelor’s degrees, like retail clerk, office assistant or barista, he said. Using federal labor statistics, he has found that only 51 percent of college graduates under age 25 were working in jobs that require college educations, down from 59 percent in 2000.

“If you work in a job that doesn’t require a college degree, you’ll make 30 or 40 percent less,” he said. “One reason a lot of high school grads are having such a hard time is you have college grads willing to take jobs that high school grads used to get.”

Many students who pursued degrees in what they thought were high-demand fields, like nursing and teaching, have discovered that openings in those fields are not plentiful. “Two years ago, all our nurses would have multiple job offers, but today a lot of them aren’t even offered an R.N. position,” Mr. Sum said. “They will be offered only a health support position.”

While jobs might not be plentiful, advice is.

Jeffrey D. Rice, career management expert at the Fisher College of Business at Ohio State University, advised job seekers to look to where federal stimulus money was being spent — health care, green industries and education — and to other growth areas like risk management, telecommunications and digital recordkeeping for health care.

“Even in a bad economy you have to look at where pockets of opportunity are,” he said.

Linda Arra, director of career services at Lafayette College in Easton, Pa., said, networking was vital in today’s highly competitive job market. “This generation has an independent spirit and feels they should do things on their own,” she said. “But when there is a great opportunity and an employer has all these applications, you really need someone inside advocating for you.”

However, many graduating seniors still find themselves out of luck.

Roberto McQuade, who majored in communications arts and political science at the University of Wisconsin, has applied for 20 office jobs with pharmaceutical companies and architecture and real estate concerns.

Without a paycheck, he plans to move in with his parents. “My mom bought me this book — it’s like how to find a job when there are no jobs,” he said. “It’s not easy. I’m doing my best to stay optimistic.”

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As the job market begins to loosen up, human-resource managers might increasingly be surprised by an announcement from employees they haven’t heard in a while: “I quit.”

In February, the number of employees voluntarily quitting surpassed the number being fired or discharged for the first time since October 2008, according to the Bureau of Labor Statistics. Before February, the BLS had recorded more layoffs than resignations for 15 straight months, the first such streak since the bureau started tracking the data a decade ago. Since the BLS began tracking the data, the average number of people voluntarily leaving their jobs per month has been about 2.7 million. But since October 2008, the average number dropped to as low as 1.72 million. In March, it was about 1.87 million.

And recent sentiment indicates that the number of employees quitting could continue to grow in the coming months. In a poll conducted by human-resources consultant Right Management at the end of 2009, 60% of workers said they intended to leave their jobs when the market got better. “The research is fairly alarming,” says Michael Haid, senior vice president of global solutions for Right Management. “The churn for companies could be very costly.”

Adecco Group, a world-wide staffing firm based in Zurich, has seen several of its clients ask for candidates for key positions after employees made surprise departures, says Vice President Rich Thompson. Although so far there haven’t been widespread departures, Mr. Thompson says his company is readying itself for large-scale changes within the next few months. “We’re preparing for a massive reshuffling of talent at all job levels in all industries,” he says, noting that the recession earlier this decade was so short and shallow that the turnover this time around is likely to be much greater.

Recruiters and human-resource experts say the increase in employees giving notice is a product of two forces. First, the natural turnover of employees leaving to advance their careers didn’t occur during the recession because jobs were so scarce. This created a backlog of workers waiting for better times to make a move to better jobs. The median monthly voluntary turnover rate in 2009 was 0.5%, half of the rate in 2008, according to the Bureau of National Affairs, a specialized news publisher for professionals.

During the recession, even if they heard of an opening, employees were reluctant to switch employers, says Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania’s Wharton School of Business. “The idea of moving when the world was already in uncertainty was quite scary,” he says. But those hang-ups are disappearing, and employees are becoming more receptive to recruiter calls and beginning to tap their networks again for signs of opportunities, he says.

Another factor making it harder for companies to retain employees is the effect of the heavy cost-cutting and downsizing during the downturn on workers’ morale. A survey conducted last summer for the Conference Board, a management research organization, found that the drivers of the drop in job fulfillment included less satisfaction with wages and less interest in work. In 2009, 34.6% of workers were satisfied with their wages, down more than seven percentage points from 1987. About 51% in 2009 said they were interested in work, down 19 percentage points from 1987.

“Employees feel disengaged with their jobs, which is going to lead to a lot of churn as we come out of the recession,” says Brett Good, a district president of Southern California for Robert Half International, an executive recruiting firm.

Mr. Good, who worked for Robert Half in the San Francisco Bay Area earlier this decade,says his company saw a “tremendous amount” of departures from technology companies that needed to be refilled when the dot-com recession ended. Already, Mr. Good says he’s received calls from executives who nine months ago felt trapped because of economic conditions and didn’t want to lose sure-thing positions, but now feel they’re able to move on. “They feel like ‘a bird in the hand’ isn’t good enough anymore,” he says.

An increase in turnover can be costly for companies. It typically costs a company about half of the position’s annual salary to recruit a person for that job, but the cost can run up to several times that if the position requires rare skills, says Right Management’s Mr. Haid. Convincing employees to stay might not be cheap either. Nearly 5,400 members of TheLadders.com, a job board for positions that pay $100,000 or more, responded to an April survey that asked how much more money it would take to convince them to stay if they wanted to leave. More than 20% said it would take a raise of more than $25,000. In all, about 50% of respondents said it would take more than $15,000.

To re-engage employees, Robert Half International is advising clients to hold town hall meetings and one-on-one sessions with employees to hear grievances and try to rekindle interest in the company among workers, Mr. Good says. Some clients had made broad-based cuts in departments based solely on salary or without regard to employee tenure, damaging the trust of the employees who survived, Mr. Good says.

Florida Hospital Flagler, an 850-employee hospital in northern Florida, faced a 30% turnover rate in 2008, almost double the average for area hospitals, says Alyson Parker, director of human resources. That dipped to 20% in 2009 as the economy suppressed voluntary departures, but the hospital still spent $3 million in 2009 on covering open positions, and finding and training new employees. The average search for a new nurse, for example, costs the hospital between $52,000 and $60,000, Ms. Parker says. This year, the hospital implemented regular town hall and department meetings, and one-on-one “stay” interviews for employees to air grievances and give ways to improve the work environment. So far, the measures have helped the hospital to lower its turnover rate by about 2 percentage points. “We’re trying to catch people before they even start looking for a new job, which will become even more important as the economy improves and more opportunities at competitors open up,” Ms. Parker says.

Human-resource managers often have trouble getting resources from top management until employees actually start to leave, says Mr. Cappelli. In the late 1990s, companies that were losing employees started to offer concierge services, discounted lunches, and hiring bonuses in a mad scramble to keep employees and recruit new ones, a trend Mr. Cappelli says could come back if the job market continues to improve. But this time around, Mr. Cappelli says companies might try to deal with more nuanced employee requests, such as lowering stress at work, improving work-life balance, and creating more opportunities for career advancement within the company.

For some employees, it might be too late. Dice.com, a job board for tech professionals, asked members what could persuade them to stay in their jobs if they found another opportunity. More than 57% of the 1,273 surveyed said nothing could persuade them to stay. Of those who said they could be persuaded, 42% said they wanted a higher salary and 11% wanted a promotion.

Business owners who seek financing face a fundamental choice: Should they borrow funds or take in new investment capital? Since debt and equity are accounted for differently, each has a different impact on earnings, cash flow, and taxes. Each also has a different effect on leverage, dilution, and a host of other metrics by which businesses are measured. The planned use of funds will also affect the choice of financing, with one option more appropriate for certain uses than the other.

2. Debt

Debt can be a loan, line of credit, bond, or even an IOU — any promise to repay borrowed amounts over a certain time with a specified interest rate and other terms. Debt is accounted for as a liability of the company, and interest payments are deductible business expenses. In the event of bankruptcy or insolvency, debt holders take priority over equity holders.

For a small business, debt financing has both advantages and disadvantages. On the plus side, debt can be relatively simple to secure through a bank or other financial institution and is available with a broad range of terms, allowing you to customize the debt to meet your specific needs. Whether you are seeking a three-month bridge loan or a long-term commitment, you can usually find an institution that’s willing to work with you. And since most debt entails regularly scheduled payments of interest and often principal as well, debt is easy to plan around. Perhaps most important, debt, unlike equity, will not dilute your ownership interest in your company.

On the minus side, however, financing with debt can be more expensive, and you will have to meet scheduled interest and principal payments regardless of your cash flow. Although loan terms can be negotiated to build in flexibility, ultimately the money must be paid back.

Debt is most often used to fund a specific project or initiative that has an identifiable implementation time frame. It’s also used as a cash flow backup in the form of a revolving line of credit. To attract lenders, you will need to have a good personal and business credit history, sufficient cash flow to repay the loan, and/or sufficient collateral to offer as a second source of loan repayment. In smaller businesses, personal guarantees are likely to be required on most debt instruments. You should also not be carrying significant debt already.

3. Equity

Equity differs from debt in that it represents a permanent ownership stake in the company. When you finance with equity, you are giving up a portion of your ownership interest in — and control of — the company in exchange for cash. Equity investors may demand dividends or a portion of annual profits. But most investors in small businesses seek long-term capital gains on their investment, meaning that at some point these investors may look to opt out. This can mean the eventual sale of the business or the need to bring in replacement investors in the future.

The most common sources of equity financing for small businesses are personal savings or contributions from family, friends, and business associates. Venture or seed capital companies can also be sources of new capital, although they generally deal in larger financings. If your business is incorporated, anyone contributing equity capital would receive shares in the business. If it is a sole proprietorship or a partnership, they would receive an ownership share of the business.

While equity financing can be used for many different purposes, it is usually used for long-term general funding and not tied to specific projects or time frames. The major disadvantage to equity financing is the dilution of your ownership interest and the possible loss of control. Moreover, equity investors in smaller businesses generally look for high returns over time to compensate for the risk.

4. Striking a balance

In practice, most businesses use a combination of debt and equity financing. The trick is getting the right balance. If you have too much debt, you may overextend your ability to service the debt and can be vulnerable to business downturns and changes in interest rates. On the other hand, too much equity dilutes your ownership interest and can expose you to outside control. The mix that best suits your company will depend on the type of business, its age, and a number of other factors. For a small business, a local community bank will consider an acceptable debt-to-equity ratio to be between 1:2 and 1:1, although debt ratios vary significantly from industry to industry. Startups and newly launched firms will likely be heavily weighted toward equity since they have not had time to establish a credit history and may face negative cash flow in the early years. Whatever your mix, keep in mind that you can often negotiate terms with both lenders and investors, making debt more like equity and equity more like debt.

Since Eamonn Coughlan, 57, was laid off from his job managing a Jaguar dealership over two years ago, he has sent out over 2,000 resumés but still hasn’t landed a job. He is convinced that his age is to blame for his inability to get back into the workforce.

“I had one head-hunter tell me that I will never again find a full-time job,” Coughlan said. “She was very pleasant about it. She said they’re looking for someone 30 or 35 that they think will work for another 20 years. They look at you and think you’ll work for another 7 or 8 years, and that’s it. Depressing is hardly the word.”

Coughlan, who has over 25 years of management experience, said he rarely gets called for an interview but when he does, he is immediately written off because of his age.

“One guy that was supposed to interview me saw me in the waiting area through the window of his office. Minutes later, his secretary came out and told me he needed to cancel the interview but didn’t specify the reason. He must have been expecting someone a bit younger.”

Coughlan is one of 2 million unemployed people in the U.S. who are over the age of 55. Although the unemployment rate for people 55 and older dropped from 7.1 to 6.9 percent in March, the AARP Public Policy Institute reported that the average duration of unemployment for older jobseekers was almost three weeks longer in March than it had been in February, and was substantially higher than the 31.1 weeks for the unemployed under age 55.

Deborah Russell, director of workforce issues for AARP, says older jobseekers are facing a number of challenges that their younger counterparts are not.

“Many older unemployed people we’ve talked to have found themselves unemployed for the first time in a really long time,” Russell said. “The job search process has changed significantly. Jobs are now being posted online instead of in newspapers, so you have to post your resumé online, and that’s a challenge for older job seekers. And let’s not forget that there continues to be bias out there with respect to the capabilities of older workers.”

According to the latest statistics released by the U.S. Equal Employment Opportunity Commission, more than 45,000 charges of age discrimination were filed in 2008 and 2009, up from about 30,000 in 1999 and 2000. And this number doesn’t reflect the cases of people like Coughlan and Karen Fink of Dearborn, Michigan, who were disregarded by employers during the interview process because of their age.

“I was 56, and interviewers would walk in a room, look at me, and check their watch to see how fast they could conclude the interview,” said Fink, who was unemployed for over a year after being downsized out of her social service organization, where she was the second in command. “I felt like I had stepped across some invisible line and was now in the ‘too old for us’ line. It’s funny, I had never thought of myself as old before that.”

Despite the fact that the number of age discrimination cases being filed has dramatically risen over the past couple of years, it’s becoming increasingly difficult for workers to prove their claims. A 2009 Supreme Court decision in the case of Jack Gross v. FBL Financial Services, Inc. found that older workers bringing age discrimination claims must meet a higher standard to prove their claims than others who have been subject to unfair discrimination at work.

Congress is currently considering legislation that would overturn that decision, restore the burden of proof to the employer rather than the employee and ensure that age discrimination is treated in the same way as race or sex discrimination. The first hearing for the bill, called the “Protecting Older Workers Against Discrimination Act,” is scheduled for next week.

“We’re working towards getting this enacted this year,” said Cristina Martin-Firvida, AARP’s director of government relations for economic security. “All we want is for older workers to be treated no differently than anyone else. Someone who’s been the victim of an employment action on the basis of age should have the same rights in court as someone bringing a race or gender claim.”

In the meantime, AARP is sponsoring 48 career fairs in 19 states across the country in the coming months to help jobseekers over the age of 50 re-enter the workforce.

Russell says the best thing older workers can do to compete in this fierce economy is to be persistent.

“I’m always amazed by how, oftentimes, one will submit a resume and then just wait to hear back,” Russell said. “Finding a job is a job in and of itself. Don’t give up. Be persistent and use the resources that are at your disposal.”

Business owners who seek financing face a fundamental choice: Should they borrow funds or take in new investment capital? Since debt and equity are accounted for differently, each has a different impact on earnings, cash flow, and taxes. Each also has a different effect on leverage, dilution, and a host of other metrics by which businesses are measured. The planned use of funds will also affect the choice of financing, with one option more appropriate for certain uses than the other.

http://www.entrepreneur.com/homebasedbiz/homebasedideas/article201588.html

OK, you’re going to think I’m nuts, but listen up. Because right now is a terrific time to start a new business.Yes, I am very much aware of what’s going on in the economy and the stock market. Yes, I know credit is tight, customers are cautious, the equity in your home is plummeting, and your 401(k) is more like a 201(k). Doesn’t seem promising for starting a business, does it? But it is.

History bears me out. When times are bad for the economy, it can be a great time to start a business. In fact, 16 of the 30 companies that make up the Dow industrial average were started during a recession or depression. These include Procter & Gamble, Disney, Alcoa, McDonald’s, General Electric and Johnson & Johnson.

Let’s take a look at the years 1973-1975. At the time, the United States had an unpopular president, was in the midst of the Watergate scandal and was at the tail end of an extremely costly war that had divided the country. Gas prices jumped by nearly 50% in two years. Consumer confidence dropped to an all-time low.

It was a terrible time to start a business, right? Well, here are just a few of the companies started in those awful years of the early 1970’s: Supercuts, Chilis, Cablevision, Industrial Light & Magic, Famous Amos cookies, Oakley and, oh, yes, a small company called Microsoft.

Why? What makes it possible for new companies to thrive when times are so bad? Why can it be a good time to launch out on your own?

First, there’s a lower “opportunity cost.” In good times, if you already have a safe job or the company down the street is hiring, starting your own business means giving up the opportunity of a good job. There’s a cost to that: a salary, health insurance, other benefits.

Of course, if you have a good job or are offered a good job, I’m not telling you to quit to start your business now. But what happens if you lose your job or you’re just finishing school and no one’s hiring? There’s little opportunity cost in hanging up your own shingle rather than staying home and watching a rerun of “The Simpsons” or Oprah.

 OK, but that might just mean creating some income for yourself until you find a job. What actually makes it a good time to start the next Intuit, Whole Foods, J.Crew, Costco, or Applebee’s (all launched during recessions)?

 Here’s what happens in bad times — disruption. Disruption means things change. And things often change quickly and dramatically. When things change, there are opportunities. And entrepreneurs seize opportunities — that’s what makes them entrepreneurs.

 Some of the things that are changing:

 •Weakened competitors. It’s likely that many of your competitors are facing tough times, tightening their belts, perhaps retiring or selling out. Hey, even many of the biggest companies are closing up shop.

 •Customers seek cheaper alternatives. When times are good, customers are likely to stick with the suppliers they’re used to — even if they’re a more expensive alternative. Now, however, customers are looking around for cheaper alternatives to get the products and services they need.

 •Big corporations cut back. They slash their marketing and reduce their services, especially to “smaller” customers who might be great customers for you.

 •Loyalties loosen. As competitors reduce services to customers, and as customers look around for cheaper alternatives, it means they’re less likely to be loyal even to longtime suppliers.

 That means opportunities for you. Specifically, what you can do:

 •Be the inexpensive alternative. Target customers who use more expensive options now.

 •Market aggressively. As loyalties loosen, your competitors’ customers are more willing to jump ship.

 •Innovate. Come up with new solutions, especially less expensive ones, for customers’ problems; they’ll be in a more receptive mood.

•Present yourself as an outsource source for big corporations. You’ll be less expensive than the in-house staff they’re laying off.

•Hedge your offerings by also having products and services that are counter-cyclical.

 •Expand. See if you can acquire some of your weakened competitors.

 In a world of good times, customers are happy, with the attitude that “if it ain’t broke, why fix it?” But suddenly, things are broke — and they need fixing. You can be the fixer.

Sara Blersch got her hazel eyes from her mom and her sense of humor from her dad. Research suggests she may also have inherited their entrepreneurial tendencies–her parents founded Chainsaws Unlimited, a power-tool retail store, in 1978, and Blersch followed in their footsteps by founding her own floral design and greenhouse retail business, Daffodil Hill Growers, six years ago.

It’s no secret that children of entrepreneurs are especially likely to go into business for themselves. But Scott Shane, a professor of entrepreneurship at Case Western Reserve University and author of the new book Born Entrepreneurs, Born Leaders: How Your Genes Affect Your Work Life, says entrepreneurial prowess may have as much to do with nature as nurture.

“If you ask people whether they think there’s such a thing as a ‘born entrepreneur,’ most people say yes,” Shane says. “There’s a widespread belief that there is some underlying, innate component to entrepreneurship, and we wanted to see if there was some literal truth to it.”

Shane and other researchers studied rates of entrepreneurship in hundreds of pairs of identical twins, who share 100 percent of their genes, and fraternal twins , who share 50 percent of their genes. They discovered higher rates of shared entrepreneurial tendencies among the identical twins and determined that roughly 30 to 40 percent of the tendency to be an entrepreneur is innate, not taught. 

“We expected there would be a genetic component to entrepreneurship,” Shane says. “We were surprised to find that the magnitude of that genetic component was pretty sizable.”

That came as no surprise to Dave Brautigan, chief operations officer of Atlanta Refrigeration Service, who describes himself as a “serial entrepreneur.” Brautigan remembers helping his grandmother bind books for the small publishing company she owned with his grandfather, and spent weekends and summer vacations making service calls with his dad, who co-founded Atlanta Refrigeration Service in 1969.

So it was no surprise that when he got to college, Brautigan launched a business of his own, Crescent Marketing Service, a marketing company that netted exclusive rights to distribute door-hanger bags to dorm rooms on 13 college campuses. He sold the company after graduation and shifted his focus to his dad’s company, expanding it to the U.S. Virgin Islands and taking it from eight employees in 2002 to 109 today.

Brautigan says it’s easy to identify the shared traits that make him and his dad successful in business–both are determined, independent extroverts who relish hard work. What’s tough is pinpointing whether those characteristics are inherited or learned.

“I want to say it’s genetic, because I can remember sitting at a barstool when I was really little and just chatting with whoever was there while my dad made a repair at a restaurant,” Brautigan says. “I’ve never had a problem with public speaking or engaging people in conversation. But I wonder if I was left alone, playing video games, if I would have developed the same trait.”

If it’s clear that there’s some genetic component to the tendency to be an entrepreneur, what’s less clear, Shane says, is the exact mix of factors that lead to that tendency. “We’re saying that there’s a genetic component here, but there are many paths to get the same genetic effect,” Shane says.

Inherited genes may lead to certain physiological effects, which could account for personality traits common among entrepreneurs, such as extroversion and openness to new experiences, Shane says. For example, people with low levels of the “feel good” chemical dopamine in their brains are more likely to seek new or novel activities, such as starting a business.

But genetic tendencies are influenced by a variety of environmental factors, and Shane says it’s nearly impossible to completely separate nature from nurture.

For example, it’s not clear whether a child born with perfect pitch ends up being a professional singer because of his innate musical talent, or because that talent led to voice lessons, artistic scholarships and other opportunities that made the career more likely.

“Even if a person has this innate makeup that makes him or her more likely to be an entrepreneur, genes interact with environmental stimuli,” Shane says.

Blersch says this is where it gets tricky for her family, too. She knows she shares her dad’s willingness to take calculated risks and his gift of gab, both of which have served them well in business. But she doesn’t know whether she was born with these traits or if she learned by watching him.

“My dad is such a people person, and I think that’s really important when you’re in business for yourself,” Blersch says. “We can both see someone’s face once and remember their name, and we can talk to them about what they bought last week and how they liked it. But I don’t know whether that’s a nature thing, a nurture thing or a little bit of both.”

Shane and other researchers studied rates of entrepreneurship in hundreds of pairs of identical twins, who share 100 percent of their genes, and fraternal twins , who share 50 percent of their genes. They discovered higher rates of shared entrepreneurial tendencies among the identical twins and determined that roughly 30 to 40 percent of the tendency to be an entrepreneur is innate, not taught. 

“We expected there would be a genetic component to entrepreneurship,” Shane says. “We were surprised to find that the magnitude of that genetic component was pretty sizable.”

That came as no surprise to Dave Brautigan, chief operations officer of Atlanta Refrigeration Service, who describes himself as a “serial entrepreneur.” Brautigan remembers helping his grandmother bind books for the small publishing company she owned with his grandfather, and spent weekends and summer vacations making service calls with his dad, who co-founded Atlanta Refrigeration Service in 1969.

So it was no surprise that when he got to college, Brautigan launched a business of his own, Crescent Marketing Service, a marketing company that netted exclusive rights to distribute door-hanger bags to dorm rooms on 13 college campuses. He sold the company after graduation and shifted his focus to his dad’s company, expanding it to the U.S. Virgin Islands and taking it from eight employees in 2002 to 109 today.

Brautigan says it’s easy to identify the shared traits that make him and his dad successful in business–both are determined, independent extroverts who relish hard work. What’s tough is pinpointing whether those characteristics are inherited or learned.

“I want to say it’s genetic, because I can remember sitting at a barstool when I was really little and just chatting with whoever was there while my dad made a repair at a restaurant,” Brautigan says. “I’ve never had a problem with public speaking or engaging people in conversation. But I wonder if I was left alone, playing video games, if I would have developed the same trait.”

If it’s clear that there’s some genetic component to the tendency to be an entrepreneur, what’s less clear, Shane says, is the exact mix of factors that lead to that tendency. “We’re saying that there’s a genetic component here, but there are many paths to get the same genetic effect,” Shane says.

Inherited genes may lead to certain physiological effects, which could account for personality traits common among entrepreneurs, such as extroversion and openness to new experiences, Shane says. For example, people with low levels of the “feel good” chemical dopamine in their brains are more likely to seek new or novel activities, such as starting a business.

But genetic tendencies are influenced by a variety of environmental factors, and Shane says it’s nearly impossible to completely separate nature from nurture.

For example, it’s not clear whether a child born with perfect pitch ends up being a professional singer because of his innate musical talent, or because that talent led to voice lessons, artistic scholarships and other opportunities that made the career more likely.

“Even if a person has this innate makeup that makes him or her more likely to be an entrepreneur, genes interact with environmental stimuli,” Shane says.

Blersch says this is where it gets tricky for her family, too. She knows she shares her dad’s willingness to take calculated risks and his gift of gab, both of which have served them well in business. But she doesn’t know whether she was born with these traits or if she learned by watching him.

“My dad is such a people person, and I think that’s really important when you’re in business for yourself,” Blersch says. “We can both see someone’s face once and remember their name, and we can talk to them about what they bought last week and how they liked it. But I don’t know whether that’s a nature thing, a nurture thing or a little bit of both.”

2. Create pages and groups around. This is a great way to build community, and get people behind your brand or favorite cause. The LA2M community is growing large on Facebook, my Ingenex Digital Page could use a few more fans.

3. Be enthusiastic and consistent in all your efforts. Any social media presence on Facebook needs a social person behind it to build buzz. Empower someone in your oganization to be this person and have them build a community around your brand. Scott Monty does a great job of this for Ford Motor Company.

4. Show your personality. Facebook allows you to upload photos and video and share them with your entire network. Sure you can use YouTube and Vimeo and Flickr for photos and video too, then you post all your video and photos on Facebook with the click of a button. Charlie Wolborg has some fun videos he uploads from his vlog.

5. Comment on people’s status. A great way to show you care and build relationships with people is to comment on their status. With Facebook it’s easy to talk to our friends weekly as opposed to yearly, or completely losing connection. It facilitates connection. All these comments show up on their wall. For tips on how to use your wall click here.

6. Facebook Events are one of my favorite features. LA2M posts our events on Facebook, and everyone can say whether they are attending or not. Love it! The one thing is, nobody is “really” committed to coming if they say they are on FB, so it’s not the most accurate RSVP mechanism. You may want to use Evite for that.

7. Use Facebook ads. To build your brand you can buy some advertising on Facebook. These ads allow you to target by location, demographic, interests, and more. It’s a great way to put your logo up in front of people. And they most likely will not click on it, so the billboard like presence is good value for you on a PPC model.

8. Open up your office security networks to allow your employees to use Facebook at work. And then empower them to be fans of your company, share information, and be ambassadors for your brand. Firewalls will keep employees focused, but it will also keep them from talking about your company on Facebook.

9. Keep up with people you know in business on Facebook. I encourage you to let your guard down and socialize with people you do business with. This is a fabulous way to build relationships and have fun. Because if business is not fun – why do it. For more fun business tips visit Seth Godin’s blog.

10. Share links. You can take links from your company web page and share them on Facebook through the posted items application. If you have something worthy to share, share it with your network. Post it to your group or page. This keeps your network in touch with your web site, and is a good way to drive new visitors to your site.