Entrepreneurs by nature want to know what they can do to guarantee the success of their fledgling business. While there are no silver bullets, some practical things (you know, for Practically Friday) can be done to increase a new enterprise’s odds of success and growth, at least online.
Alicia Robb and E.J. Reedy highlight a few of these in their paper, "Casting a Wide Net: Online Activities of Small and New Businesses in the United States" using data from the Kauffman Firm Survey. (If you don’t have time to read the full report, there’s a handy factsheet available with the key findings.)
It should come as no surprise that businesses in this age of at-your-fingertips information need a website, especially if they want to grow and thrive. At the most basic level, they need to be findable. In terms of a measure of future success, having a website made the most difference of all the online tools examined. Robb and Reedy showed that young firms with a website usually started start bigger and grew faster than firms without one. These firms also had a larger survival rate and larger financial assets and revenue. Companies should ideally also have email, and, if engaged in sales, a way for consumers to purchase their goods online, though these tools had much less of an effect on growth and overall success.
Speaking from personal experience, I once looked for language schools in my
neighborhood and found a reference to only one. When I went to its listed
website, the site was no longer active, so I assumed the school had gone out of
business. A friend referred me to what I thought was another language school in
the area; he didn’t know the name, but knew where it was. When I went to check
it out, I was very surprised to find it was the same school; it had just let
its website lapse for some reason. How many others assumed the school was no
longer there based on its lack of a website? This assumption is a very
dangerous for any company trying to grow. (I’ve encouraged the school’s owners
to reinstate their website for this very reason – while they haven’t yet done
that, at least the school now has a Facebook page, which gives it some online presence.)
Looking at other online tools for businesses, social media options are newer and as-of-yet less studied in this respect. One organization, the Center for Marketing Research at the University of Massachusetts Dartmouth, has been tracking the use of social media tools by companies in the Inc. 500 since 2007. In its fifth annual study from January 2012, 91 percent of the Inc. 500 companies currently use social media for brand marketing, increased exposure, and a means to have a dialogue with customers. Most use Facebook, Twitter, and LinkedIn. The new kids to the party, Google+ and Pinterest, were not a part of the study, while MySpace use has all but vanished for everyone except musicians (a group not in the Inc. 500). Blog use declined for the first time in 2012 as companies experiment with these still-newish and ever-changing tools to find what works best for them.
It remains to be seen how social media use affects the performance of startup companies. Even though they’re free, good use of these tools may be difficult for new companies with limited time and financial resources. Social media, as we all are well aware, can be a complete time-suck, often requiring a dedicated person to really do it right. The companies in the CMR study did feel that the tools were effective in terms of spreading awareness about their brand and interacting with customers, something future studies will hopefully examine in greater detail.
While our tech-savvy Growthology readers surely have websites for their businesses already, this research provides evidence for those startups and entrepreneurs you know who have been on the fence about or just slow in getting a website up and running. Technologically speaking, it’s the best thing they could do for the health of their new business.
Many entrepreneurs use social media for different reasons. In the case of small businesses, while looking for information to grow their businesses and create jobs, this could be more effective for their companies if the entrepreneurs follow their network and join the conversation. Sometimes, the information is where you are not expected to see it. We have to look everywhere and everyday to know whose doing what and when.
Someone could be surprise to see how people are creative to get exposure on social media even thought they do not have access to the internet at home.
When someone has access to the internet for at most two hours a day, this is very challenging to juggle from one site to another. Sometime you glance at them and left things to be completed for another time. County public library and municipal public library have their input on that by giving people access to internet.
In this era where many unemployed are trying to get back to the workforce, social media is an opportunity for entrepreneurs and young companies to gain exposure. Not in the tech industry, having a website could be challenging and many entrepreneurs may not able to afford a domain for $ 10- $ 18; however, Wordpress, the website company, makes it easier for this group of people- having a website for free, friendly and easy to access in less than 20 minutes. We can call it “web life savior”; therefore, the entrepreneur will have a domain whenever he/she can afford it. I say “Wow”. For now I can say, Wordpress reliefs the financial burden on many small businesses and entrepreneurs,its customers, for a while until they can afford to upgrade their sites.
Young companies and entrepreneurs are mastering a skill on how to communicate effectively on social media. This communication skill is different in its way from what we knew before. Someone can interfere to your business life by being your mentor without telling you. You can also choose someone or a group of people or companies to be your mentors for a while without asking them. The matter is everybody is trying to do the right thing on social media to make the world a better place. The giver gives away, the taker takes away, and the giver-taker redistributes what she/he takes accordingly; we become a social happy family.
Posted by: Marguerite Bessard | August 23, 2012 at 02:09 PM
The website is "Wordpress.com" not wordpress
Posted by: Marguerite Bessard | August 23, 2012 at 02:53 PM
Something else that is often ignored in articles like this are the infrastructure tools that make a business efficient, professional and successful. Things as simple as hosting services and conference bridge services can make the difference between a credible company and one that seems unstable. For example, we got burned with using a free conference service when we were told well after the fact that we lost a bid for a high-profile project due to the fact that we sounded amateurish. After hearing that, we bit the bullet and went for one of the new low-cost, full featured services that allows you to record your own conference message with their professional voice talent(http://www.brandedbridgeline.com) and moved our web and server hosting to a more reputable cloud provider (http://www.linode.com). Cover all of your bases!
Posted by: Tammie Childs | August 27, 2012 at 04:33 PM
@Marguerite - You're right, WordPress is a powerful, free tool for entrepreneurs just getting started. I personally know several small businesses whose websites operate on the platform.
@Tammie - Valid point. The Kauffman Firm Survey doesn't currently study such things to my knowledge. But yes, oftentimes you get what you pay for, and sounding amateurish or looking unprofessional is the last thing an entrepreneur wants when getting started.
Posted by: Mindee Forman | August 28, 2012 at 12:13 PM