Back in 1984, when County Fair Food Stores was founded, we were probably 10 years behind the big stores technology-wise. Now we're only 1 or 2 years behind. We've closed the gap because the price of technology has dropped so much.
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Lewis Fuller
President of Fuller Medical, a 15-employee medical-equipment and -supply company based in Gadsden, Ala., with $1.7 million in sales
We subscribe to a CD-ROM look-up system called Epic Plus, from Medical Data Institute Inc., in Langhorne, Penn. The system goes a long way in helping us compete with larger companies. Every two months we receive updated information in CD-ROM form on a wide array of medical equipment and supplies so we can easily learn about items we might not have in stock. For example, a rehabilitation hospital referred a patient to us who needed a specialized pediatric walker -- an item we'd never heard of. We consulted the CD-ROM system to learn about it, to find a vendor who supplied it, and to get pricing information. Without the system we'd have had to make dozens of phone calls, with no guarantee of finding the item. With the system we can often track down items in less than 30 minutes. That ability has given us a reputation for finding the unusual, and we've been able to pick up many customers that larger companies don't want to bother with.
Now that PCs are so accessible, I don't know of anything large companies can provide that small businesses can't. I'm currently working on a bid with an agent in Kuwait City. Before the information-technology boom, I probably would have had to live in a big city like New York, close to freight forwarders and other services, in order to get the job. Now I can live in Gadsden, where my overhead is low and the quality of my life is better, and still carry on business. With a telephone line, you can compete with anybody, anywhere.
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Jordan Ayan
President of Create-IT Inc., a small-business consulting firm in Naperville, Ill., with more than $4 million in sales
One piece of technology that I think will really level the playing field for small businesses is the World Wide Web. In terms of advertising, the Web puts small businesses on equal footing with much larger ones. In the past the costs of advertising nationally have been prohibitive for small companies. Now, with a couple hundred dollars a month and a little knowledge about how to design a Web page, the small-business person can advertise to a national audience. I don't think the Web reaches significant numbers of people yet, but in three years or so it may be a very competitive advertising medium. In fact it may even surpass television advertising in popularity.
One thing that slows down traditional large corporations is the inefficient flow of information. Small businesses don't have that problem. They're champions when it comes to moving information -- and information technology lets them communicate even faster.
Once I had a major Fortune 500 company as a client. I had entered the company's name on my list of wanted topics in CompuServe's on-line news-clipping service, and one day, before a meeting with one of the company's divisions, I checked the latest news clippings. There I read that the division was being sold to IBM. At the meeting I said to the group manager, "So I guess you guys are going to be wearing white shirts pretty soon." He had no idea what I meant. When I told him what I'd read, he was shocked. The news had not filtered through the organization.
Small businesses used to be information poor, but that's no longer the case. Before the IT wave, small-business people were consumed by the day-to-day aspects of running a business, and doing research was difficult -- it usually meant making trips to the library or hiring someone to do it. Now the information is at everyone's fingertips.
KNOCKING DOWN WALLS
U.S. Secretary of Labor Robert Reich believes that technology is setting small businesses free
Information technology is obliterating the distinction between small business and big business. Big businesses are becoming collections of small businesses, and small companies are partnering with one another, creating virtual corporations for a given period. Many industries that have been dominated by large corporations, like the automobile industry, are becoming networks of small suppliers linked through IT. Take Chrysler Corp., for instance. For its latest-model car, Chrysler used a large company for its upholstery, which in turn drew on a whole network of smaller suppliers. Through IT, the suppliers all shared the same data on supplies and information on how to produce components inexpensively. The Boeing Co. used the same strategy to build the 777, using subcontractors in the United States and abroad.
In the past, one of the major barriers to entry for small business into fields dominated by large players was access to information. But large companies no longer have a monopoly on information regarding emerging technologies, consumers, capital markets, or even personnel. Today, small companies can rapidly form niche markets using all this specialized information.
During the 1980s all businesses -- large and small -- made a huge investment in IT, and that investment continues. But they didn't invest in the human side. For IT to generate value for small businesses, the businesses have to have people who can use it to identify and solve problems. There's a scarcity of people who can use the hardware and software that is piling up -- even applications as simple as spreadsheets. Big businesses can afford to train people or pay higher salaries to attract the people who have IT skills. To solve the problem, some small businesses are forming consortiums and teaming up with community colleges to develop curricula based on skills -- especially IT skills -- that small businesses need. And President Clinton is proposing a tax break of up to $10,000 for people who need to go back to school to learn those skills. The biggest handicap for small businesses is the shortage of people trained in IT. In every other way, IT is taking down the walls for small businesses and allowing them to compete more effectively.
