Technology is generally considered a driver of economic growth, yet only 4.9 percent of all US businesses are technology businesses. For the other 95 percent of small businesses, technology is not what they're selling, yet it is critical to fueling the operations.
Recently we talked with a group of Goldman Sachs 10,000 Small Businesses alumni to explore how small business owners utilize technology to meet their business needs. Overall, we found these companies look to technology to help them communicate, collaborate, and coordinate, as well as provide checks and controls within and across all aspects of their businesses. Of course, this means that technology is considered quite broadly. To Terri Jenkins, owner of Clear Blue Sky Digital, an internet marketing and advertising company, technology includes "any of the tools that help us do our day-to-day work, communicate with each other as well as our clients."
While small business owners overwhelmingly see technology as integral to competition and business growth, they also share a common set of hurdles around affordability, accessibility and adaptability of technology as highlighted in Babson College's study, The State of Small Business in America, released earlier this year. Though business owners broadly recognize the power of technology, some issues remain:
- Identification of available technology is idiosyncratic
- Evaluation is daunting
- Migration is painful
- Integration is complex
- Training is time-consuming
- And, costs really add up
To this last point, costs include not only dollars, but the cost of time to implement and maintain. Costs can be managed in a variety of ways but this starts with acknowledging and embracing the power of technology to take business to the next level. As Jason Volmut, owner of technology consulting and outsourcing company, CPURX, explained it, "most technology we invest in is no longer a capital expenditure - it's more an operating cost." This reframing thus allows a business owner to assess and meet his or her specific technology needs on an on-going basis and to create more accurate forecasting. In all cases, though, investments in new technology should be carefully considered and play a meaningful role in streamlining business operations.
Rising Above Technology Challenges
Despite this shared set of concerns around technology adoption, small business owners of all industries and sizes are adopting a wide array of technologies, at a variety of price points, to help connect, streamline, automate and grow their businesses. Some of the day-to-day uses we heard from alumni include project management platforms integrated with messaging and scheduling to coordinate teams and initiatives, video platforms to connect virtual offices and meet with clients around the world, and cost-effective customer relationship management programs to track and leverage client engagement.
Some are also creatively taking their use of technology to the next level. Jason Olsen, co-owner of Prestman Auto based in Salt Lake City, shared that his company currently uses Bluetooth technology and a custom app to manage car inventory in their dealership and is even considering drone technology to help automate further. Russel Kohler, owner of Heber Valley Artisan Cheese, part of a 4th generation dairy farm also in Utah, uses robot technology to basically allow his dairy cows to milk themselves four to five times a day. This has allowed him to grow his business and, as he says, "compete on the worldwide stage."
Given small business owners' awareness about the power of technology, even with challenges it can bring, how can they embrace technology tools to meet, and anticipate, their business needs? The group shared what they've learned to seamlessly integrate technology and build tools to become more competitive:
- Develop a list of your specific business needs, weigh priorities and evaluate available technological tools to meet your particular need and price point.
- Engage your team when evaluating new tools. Their front-line experience allows them to identify and right-fit technology solutions.
- Talk to those more technically inclined than you and read reviews, such as from user groups and industry-based trade associations. Take advantage of trial periods to assess a product beyond the upfront bells and whistles and learn firsthand how it works within your business.
- Consider how technology tools fit together. For instance, how can my CRM talk to my accounting system and connect to my communications plan? Be strategic in deciding what tools need to connect, and how, to help avoid surprises later.
- Train employees early and well to encourage successful adoption of new technology. Explore training resources and support available with each tech tool.
- Disaster recovery needs to be part of the plan, and not for just data. David Girdner, owner of IT solutions company Antropy, Inc., encourages impact analysis--review tools used and determine how long you could afford to have that tool out of service. The results of that review create an agenda for emergency planning.
To all the small business advisors/consultants/mentors/coaches out there: help business owners understand their technology options--what their needs are, how to ask the right types of questions, and where to go for answers.
And to business owners: get involved. Stay on top of, or in front of, the trends and familiarize yourself with the technological tools that your industry will soon embrace, and share that information with your fellow business owners--we all benefit from increasing the accessibility and successful adoption of business-changing technology.