There are any number of pitfalls entrepreneurs can make when trying to start a business. USA Today columnist Steve Strauss has advice on four start-up mistakes to avoid.

1. Don’t take on too much debt. It’s expected that most entrepreneurs will have to take on some debt, but Strauss says to keep it to a minimum and have a plan to pay it back. It’s easy for a business to go under as debt accrues interest and cash flow shrinks.

2. Not having a marketing plan. The only way to get your name out there is through marketing and advertising. Social networking is a great way to do it on the cheap, says Strauss. On his web site www.MrAllBiz.com , he offers a webinar called Marketing on a Shoestring.

3. Don’t jump into decisions without carefully consideration. Before entering a partnership, for example, work on a project together to find out if your styles and goals are compatible. Strauss also says to beware of bad vendors and lousy locations.

4. Not having a great team. The problem with being too independent is that there is not another person around to give you feedback and share the work, says Strauss. How do you build a great team? The Small Business Administration and its Related Small Business Development Centers offer no-cost and low-cost counseling and training seminars. Find interns at local business schools, or consider hiring part-time employees. Tap business associates and fellow entrepreneurs to serve as informal advisors.

Austin is the best city in the country to start a small business, according to a Portfolio.com/bizjournals study.

The Portfolio study analyzed the nation’s 100 largest metro areas, looking for the places that are most conducive to the creation and development of small businesses.

The highest scores in the study went to areas that have prosperous economies, are expanding rapidly, and are densely packed with small businesses. A small business is defined in the survey as any private-sector employer with 99 or fewer employees.

Despite the recession, Austin experienced impressive population, job and small business growth. The number of small businesses in the Texas capital increased 5.6 percent between 2006 and 2007, the latest period covered by official statistics. The typical metro area experienced small-business growth of 1.4 percent, said Portfolio.

The most promising region for entrepreneurs is the South, which is home to 12 of the 20 best metros for small businesses, according to Portfolio.

Rounding out the top five cities are Baton Rouge, La.; last year’s top city, Raleigh, N.C., came in third; Charleston, S.C. was fourth; and Portland, Maine was fifth.

Detroit came in last in the small-business rating, along with Youngstown, Dayton, and Toledo, Ohio, and Milwaukee.

With the collapse of secure corporate jobs, more people are pursuing an entrepreneurial path, says Entrepreneur.com.

The Kauffman Index of Entrepreneurial Activity, which measures new startups, shows a slight rise in the creation of small businesses even since the recession began, and that is expected to continue through 2009, according to Entrepreneur.com. About 1 million people a year become self-employed, and enrollment in entrepreneurship programs at universities is up.

But how does this square with the hits small businesses have taken in the past two years?

Many experts say that the recession is actually the perfect time to begin planning a small business startup. Office space and supplies are cheaper; with larger companies closing or downsizing, there are service gaps in many areas; and with the high unemployment rate there are plenty of talented people looking for work and ready to hustle.

While entrepreneurs may not see an immediate payoff, smaller, more flexible and creative companies are the business model of the future. And new technology will be the key to creating this new entrepreneurial society.

“Suddenly, you don’t have to have a large physical plant to start a company,” Michael S. Malone, author of “The Future Arrived Yesterday: The Rise of the Protean Corporation and What It Means for You,” told Entrepreneur.com. “The cost of entry is getting close to zero — now the little guys can build a business without the overhead. The best strategy is to get small and adaptable, strip things to a solid core and hire from the cloud of talent out there — then blow up like a puffer fish when you encounter a potential market.”

Cupcakes are the latest entrepreneurial frontier, at least according to the New York Times.

New York City’s Magnolia Bakery, which was featured in an episode of “Sex and the City” and a popular “Saturday Night Live” video, seems to have started the cupcake craze which is quickly spreading to other parts of the country. Traffic to cupcake blogs is on the rise, and the Food Network will debut a new series called “Cupcake Wars.”

The market research firm Mintel predicts cupcake sales nationwide will grow by 20 percent in the next five years, the Times reported.

The Times outlines four cupcake business models:
— The Chain: You need a great product, brand and location to get a chain off the ground.
— Web-Only Store: One blogger decided to start selling cupcakes through her Web site, but has yet to make enough money to quit her day job.
— The Cupcakes and More Store: A number of bakeries make cupcakes their signature product but also sell coffee, lunch fare and other baked goods to draw more customers.
— The Cupcake Bakery: This means making enough cupcakes to sell to other bakeries and stores. One business owner stressed the importance of branding and marketing in making this kind of operation successful. For example, she lets customers know her cupcakes are made with organic, local and natural ingredients.

If you’re looking to start a small business, you should consider Oklahoma City as a launch pad, according to a report by CNNMoney.com.

Growing economies, affordable workers, stable housing markets and low crime are the factors entrepreneurs should consider when starting a small business, said the CNN report.

CNN used 2007 U.S. Census data to compare a city’s population and the number of small businesses employing up to 50 people. They determined the top 10 small-business-friendly cities are:

1. Oklahoma City
2. Pittsburgh
3. Raleigh
4. Houston
5. Hartford
6. Washington, D.C.
7. Charlotte
8. Austin
9. New York City
10. Baltimore

On today’s college campuses, environmental awareness goes way beyond recycling drives or Earth Day rallies.

At places like Sinclair Community College in Dayton, Ohio, students are making their own Earth-friendly biodiesel fuel by converting used cooking oil from the dining hall, said a Jan. 22 article by The Associated Press .

“It ends up as a product that is more friendly to the environment. And we’re teaching with it,” Woody Woodruff, director of facilities at Sinclair, told the AP.

The college is one of many making biodiesel, an alternative fuel produced from renewable oilseed crops, such as canola or soybean, or from used vegetable oil and other fats, the AP said.

Others include the State University of New York, which uses biodiesel for about 8 percent of the fuel used on campus, and Dickinson College in Carlisle, Pa., which produces 50 to 150 gallons of biodiesel each week to power campus lawn mowers, a garbage truck and farm equipment, the AP said. In Kansas, the University of Kansas uses biodiesel for lawn mowers, backhoes, front-end loaders and other construction equipment.

The AP interviewed Neil Steiner, a 22-year-old architectural engineering student from Oklahoma. “I’m really into green buildings, and it was the greenest thing I could get my hands on,” he said.

Most colleges make biodiesel by chemically converting used cooking oil from campus dining halls, the report said.

Estimated U.S. sales of biodiesel have jumped from 75 million gallons in 2005 to 700 million gallons last year, according to the AP. The cost of making biodiesel $1 a gallon, the report said.

A new requirement by the Obama administration will hopefully spur the 21 largest banks receiving U.S. government money to lend more to small businesses.

The new rules, outlined in a March 16 Associated Press story, have those banks reporting monthly on how much they lend to small businesses. All others are being called upon to make an “extra effort” to boost small business lending.

The announcements came March 16 as part of a broad package aimed at small business that was being unveiled by President Barack Obama and Treasury Secretary Timothy Geithner, the AP said. The package also includes reduced small business lending fees and an increase on the guarantee to some Small Business Administration loans.

“We know that small businesses are the engine of growth in the economy, and we absolutely want to do things to help them,” Christina Romer, who heads the White House Council of Economic Advisers, told the wire service. “There are already a lot of things to help them in the recovery package, and some of what will be coming out are the things that were in the recovery package: increasing the SBA loan guarantees, lowering fees.”

Republicans appeared to embrace the efforts, but with some qualifications.

U.S. Rep. Eric Cantor of Georgia said: “We’ve got to do something to help these small-business people. We know that they’re the job creators in this economy. And the problem … I think we’re seeing out of the Obama administration is a lack of focus on how to get things going again.”

The new measures have the government stepping in to buy loans, temporarily eliminate upfront fees of up to 3.75 percent and some processing charges on certain SBA loans typically passed along to borrowers, the AP said. It also increases the government guarantees on certain loans to 90 percent, up from 85 percent for loans below $150,000 and 75 percent for larger loans.

Just when it seems like the bad news couldn’t get much worse, tales of economic success amid financial chaos are thankfully bubbling up.

And it’s in the form of successful entrepreneurship, everything from shoestring-budget start-ups to major viral marketing coups by tiny companies.

Recession be damned, some entrepreneurs are not only doing well, they are doing exceptionally well, wrote Jill Priluck of MSNBC’s “The Big Money” on March 17.

“With less overhead, a slim-to-none bureaucracy, and a philosophy that goes against even the most innovative Fortune 500 game plan, little guys in industries such as finance, marketing, entertainment, and media are busy, some more than ever, and a few are moving into territory where the big fish can’t swim. Whether making deals, planning ad campaigns, or signing talent, all small fish have the same slogan: lighter, cheaper, faster,” she wrote. “Welcome to the Little-Guy Economy, where boutique investment banks make deals while big finance is frozen, where Web geeks field calls from big media and corporate clients who need viral video and other digital-branding tools, where small law firms prosper and laid-off lawyers open their own shops, where independent music labels innovate faster, and where the word “team” can have a whole new meaning.”

Finance is perhaps the most interesting example, where small firms are playing a strong hand, particularly in the credit markets, where huge loans are history.

“While firms like Goldman Sachs and JPMorgan Chase depend on freely flowing credit markets, boutique firms, which do smaller deals, rely more on private equity sponsors—and don’t have the same bank, credit, or securitization obligations,” Priluck wrote.

If small is in, then it doesn’t take long for some bigger fish to swim over and take a look.

New York City Mayor Michael Bloomberg — as big a billionaire as there is — is now looking to spearhead small business and entrepreneurship in the financial services sector, Priluck wrote.

Video producers Lindsey Johnson and Leo Borovskiy of Lush Life Productions know how it is to make it big when your administrative assistant is your voice mailbox.

They turned a viral marketing jackpot and YouTube sensation “The Chad” into a thriving business that today includes clients like Hearst Digital, Priluck wrote.

“We’ve gone from only working for advertising agencies and marketing companies to having corporations directly approach us with their brands and ask, ‘What can you do and how much can you do it for?” Johnson told Priluck.

The federal government is pouring cash into huge financial firms with very little oversight while even the slightest hand out to small business owners brings “we-need-scrutiny naysayers” out of the woodwork, says journalist JJ Ramberg of “Your Business.”

Ramberg, who anchors the MSNBC weekly show on small business, continued in her March 18 blog post:
“Maybe I’m missing something here, but small businesses are the lifeblood of the economy, and they are struggling right now largely through no fault of their own. They can’t get loans because the big boys messed up the system; and the faltering economy — caused in large part by the big financial firms — is also taking a big bite out of their sales,” Ramberg wrote. “All they want is a little bit of a break. So many entrepreneurs I’ve profiled in this blog — and many of the ones who post comments here — are struggling to keep their doors open.”

The impetus for her outrage came from a recent proposal by President Barack Obama to boost declining lending on Small Business Administration-backed loans. The idea was to do such economy-stirring efforts as directly purchasing up to $15 billion of securities backed by loans from the SBA, eliminating fees and increasing loan guarantees.

But it soon ran into criticism, she said, citing a Wall Street Journal story that worried the Obama administration could be creating incentives for another run on unwise credit and create a huge pool of unregulated money.

“I’m all for putting a lid on the bailout free-for-all with tougher standards and regulations,” she wrote, “but isn’t it odd that when small businesses want a helping hand suddenly the scrutiny reaches a fever pitch?”

The massive $789 billion stimulus package just passed by Congress contains plenty of cash to shore up ailing banks, but little in the way of direct spending for small businesses, a Feb. 11 report by The Associated Press said.

“The plan does extend two provisions of 2008’s economic stimulus bill that allow small businesses to take a bigger upfront deduction for the cost of new equipment,” the AP said. “But companies whose sales are hurting may be reluctant to make big expenditures, putting those tax breaks out of reach.”

Raymond Keating, chief economist with the Small Business & Entrepreneurship Council, told the AP small business owners needed something better. “We need incentives in the private sector for people to take risks and expand business. Unfortunately, there’s very little of that in this package,” he said.

The savior for small businesses, economists say, will come when consumers start dusting off their wallets.
“The best thing to happen to small business is if customers come in,” William Dunkelberg, chief economist with the National Federation of Independent Business, a Washington-based small business advocacy group, told the AP.

The big problem with the economy now is “the guy whose job is not at risk has been scared into not spending,” he said, adding the recession’s grip will ease when they start buying again.

In the meantime, small business advocates say extending the Section 179 and bonus depreciation provisions into 2010 because makes more sense because it is unlikely small businesses will be investing much in the near term.