Where to Find Top Talent

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Small businesses can also find good candidates through universities. Owners and managers can show up at career fairs, ask campus career centers to refer candidates, and post to job boards and lists that go out to students, recent graduates, and alumni. Companies need to raise their profile on local campuses to get students' attention, says Lindsey Pollak, an author and career expert who works with students and young professionals. "The students would love to work for you, they just don't where to find you," she says. Firms can get involved on campuses even before they need to hire by working with classes on consulting projects and hiring interns, says Erik Medina, director of graduate career services at Indiana University's Kelley School of Business. "You'd be surprised, a little bit of good marketing, a little bit of good outreach can go a long way to distinguish yourself from the very large well-known firms that most students focus on," he says. This year in particular is a good time to recruit on campuses, Pollak says, because many large firms won't be hiring.

Wherever entrepreneurs look for new employees, they shouldn't wait until they have to fill an opening. By constantly networking with an eye open for potential hires, owners and managers can keep a pool of candidates in mind for when they do want to bring someone on board. Continually identifying good candidates is particularly important for small companies because the time and money they invest in filling each position compounds the cost of a mistake. Says Pollak: "It is so much more dangerous for them to make a bad hire because 1 out of 50 employees is so much more damaging than 1 out of 50,000."

For more suggestions on where to find employees, online and off, flip through this slide show.

More elements of this special report are available in the related items box on the upper right side of this page.

Tozzi covers small business for BusinessWeek.com.