L.A. Drops a Notch on List of Best Places to Start a Business

The Los Angeles metropolitan area slipped one spot to 33rd place on a list of the best places in America to start and grow a business.

Los Angeles and California may boast a varied and thriving economy with millions of small businesses. But Cambridge, Mass.-based Cognetics studied only “baby gazelles”--fast-growing young companies.

“Los Angeles and San Francisco both don’t do that well,’ said Cognetics President David Birch, an economist and demographer. “People have stereotyped little [growth] pockets within those areas--Silicon Valley, Orange County or the movie industry. They tend to think that’s the economy, and it’s not. The economy has got millions of businesses in it, and the majority of them are fairly mundane and are not growing as much as . . . they are in other places.”

Many of the immigrant-owned businesses in Los Angeles and Orange counties tend to grow more slowly than gazelles and serve neighborhoods rather than the nation, Birch said. While Los Angeles ranked in the 53rd percentile in start-ups, it ranked only in the 39th percentile in growth, he said.

The study counted firms that started in the last 10 years and employ at least five people, as well as firms that were at that stage four years ago and have grown significantly since. It looks at those firms in proportion to the total number of businesses in a state or metropolitan area.

Phoenix maintained its lead position on the list of 50 top cities, with Salt Lake City remaining No. 2. Raleigh-Durham took over the third spot from Atlanta, now fourth on the list. In state rankings, California stayed in 20th place. Utah, Nevada and Arizona took the top three slots, in that order.

SBA Briefings: The Small Business Administration will sponsor briefings today and Thursday to explain a controversial new program that will affect all minority subcontractors on federal jobs and the prime contractors they work for. The cost is $50 at the door.

New federal regulations that go into effect June 30 will require disadvantaged businesses that subcontract on federal jobs to be certified by the SBA--which will check to make sure they are owned and controlled by an individual who is a minority or otherwise meets the agency’s definition of disadvantaged.

If firms are not certified, prime contractors will not be able to count them toward minority subcontracting goals.

The program was set to take effect Jan. 1, but was pushed back at the eleventh hour after prime contractors and minority business owners complained that it was under-publicized and confusing. Only about 400 subcontractors had applied for certification by Jan. 1, out of an estimated 40,000 that are eligible.

The SBA is holding the two-day training session from 8:30 a.m. to 4 p.m. at the Hyatt Regency Los Angeles, 711 S. Hope St. The $50 fee covers both days.

The sessions also will cover the regulations for small disadvantaged businesses contracting directly with the federal government.

Beginning last fall, businesses in certain industries where disadvantaged firms are underrepresented became eligible for a price adjustment of up to 10% on federal prime contracts. But they too are only eligible if they are certified as disadvantaged by the SBA.

GSA Suppliers How-To: The U.S. General Services Administration is hoping to increase its small, minority-owned and women-owned suppliers. A 10-city tour will stop in Los Angeles on Jan. 22 to teach interested entrepreneurs how to get a piece of GSA action by becoming a GSA federal supply schedule contract holder. Entrepreneurs who gain such status have the best shot at doing business with the Department of Defense and other federal agencies.

GSA’s procurement with women-owned businesses increased from $97 million in 1992 to $352 million as of August. Of the existing 7,000 schedule contract holders, 77% are small businesses. However, only 8% are women-owned, and only 5% are minority-owned or other so-called small disadvantaged businesses.

The briefing starts with registration, networking and continental breakfast at 8 a.m. and runs through noon at the Embassy Suites hotel on East Imperial Avenue in El Segundo. To register, call (310) 417-5170 or fax (310) 417-7991. Or go to https://gsa.ccops.com on the Internet. The cost: $15.

Latina Business Seminar: Latina entrepreneurs are invited to participate in a free business seminar sponsored by Washington D.C.-based LatinaStyle magazine on Jan. 23 in Anaheim.

The Orange County stop is part of a seven-city tour launched last June in Los Angeles after editor and publisher Anna Maria Arias surveyed her readership and found that 20% of the magazine’s subscribers are entrepreneurs.

Latinas are starting businesses faster than any other group in the country, creating enterprises at four times the rate of the general population. Growth rates are fastest in traditionally male-dominated fields such as construction, agriculture and wholesale trade.

The daylong event at the Disneyland Hotel will feature tips on financing, insurance, the Internet, technology, marketing, communications and professional services. It will also feature a Latina businesswoman fashion show.

The event is co-sponsored by the Small Business Administration and the Orange County Hispanic Chamber of Commerce, among others. For reservations, call (800) 651-8083 by Jan. 18.

Lee Romney can be reached via e-mail at lee.romney@latimes.com.