FROM TAX breaks to public-works projects, President Obama’s economic-stimulus package contains a number of measures to help struggling businesses recover from the worst economic downturn in decades.
The bill promises to allocate $110 billion toward new tax breaks for businesses between 2009 and 2010, according to Moody’s Economy.com. But tax savings isn’t the only perk that small-business owners can take advantage of: Another $550 billion is earmarked for new projects, injecting money into everything from health care and education initiatives to infrastructure projects, such as modernizing roads, bridges and mass transit systems. There will also be billions set aside for alternative-energy production and other environmentally-friendly projects like constructing green buildings.
The Congressional Budget Office doesn’t expect much spending to begin until 2010. That means savvy small-business owners, even those who don’t already work in industries that stand to benefit — such as alternative energy, construction and housing — have time to get positioned to profit, says Bill Reichert, managing director for Palo Alto, Calif.-based venture-capital firm Garage Technology Ventures.
We checked in with small-business experts from the entrepreneurial research organization Ewing Marion Kauffman Foundation, Garage Technology Ventures and commercial lender KeyBank, as well as small-business consultants to see where they think opportunities lie. Here’s what they say are the five of the best businesses to be in now:
Alternative Energy Equipment Installers
The Obama administration hopes to double the production of alternative energy over the next three years. To do so, it has earmarked $50 billion in the stimulus plan. That could prove to be a sizable windfall for companies that make solar panels or wind turbines. However, the barrier to entry is likely too high for most small businesses, says Reichert. “The best [and easiest] way to get into something like solar is to be in the business of installing solar panels,” he says. While big alternative energy installers such as SolarCity and Akeena Solar already cover much of the country, there are regions where these companies don’t already have a presence. And in the coming years, there will likely be plenty of work to go around, he says.
Education Information Technology
“There will be a boon in educational [information technology] systems,” says Thom Ruhe, the director of entrepreneurship at the Kauffman Foundation, based in Kansas City, Mo. In particular, he sees opportunities for those who can improve the way students learn and communicate, whether it be through educational software or wiring classrooms for Internet access. After all, he says, “people still use phone chains on snow days.” If the stimulus plan passes, child-care centers, school districts and universities will receive a $140 billion boost. In the bill that the House passed Wednesday, $79 billion will be spent on helping states avoid cutting educational programs, among other things.
Health Care Technology
Early in his campaign, Obama called for greater transparency of health-care information and costs. As the president seeks to make his goal a reality, companies that, say, host web sites that allow consumers to compare the cost of procedures or doctors’ visits could stand to benefit, says Anthony D. Begando, CEO of Tenon Consulting Solutions, a small business consulting firm in Alpharetta, Ga. “Consumers are going to want to understand more about the costs behind providing medical services,” he says.
One of the primary goals of the stimulus plan is to create or save between 3 million and 4 million jobs by 2010 — and someone’s got to train them, says Reichert from Garage Technology Ventures. Those who want to start a business training workers how to retro-fit buildings and homes for energy efficiency, for example, probably won’t have a hard time finding funding, he says. Demand should increase as companies hire more specialized workers to fulfill the government’s goals.
“I don’t care what industry you’re in, there are a number of opportunities out there for professional services firms,” says Maria C. Coyne, executive vice president of KeyBank in Cleveland who focuses on small-business issues. (Professional services can include everything from financial-planning advice from a certified financial planner to strategic plans for improving productivity from a business consultant.) As the government attempts to revamp how it handles everything from health care to Wall Street, professional advice will be in high demand, she says. Accountants, consultants and attorneys — especially those in real estate — will be in particularly good shape to weather the downturn. “The work might not be pretty, but at least they’ll be busy,” she says.
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