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Digital Solutions: The Way Forward for Small Businesses
by Charles Dearing Fri, 06/03/2016 - 08:01
The internet and the technological innovation it has inspired have revolutionized the business world. Some of the most profitable businesses today are entirely web-based enterprises. Consumers, likewise, are taking their dollars online to buy everything from groceries to cosmetics and music. But despite this ever-growing digital marketplace, more than 50 percent of small businesses today don't even have a website.
The global economy is a dynamic, competitive place. Businesses that want to succeed have to adopt technological solutions to stay competitive in such a marketplace. Those that don't, fail—plain and simple.
In 2013 the local online marketing firm Yodel conducted a survey of small business owners across the United States. The firm contacted operators in a variety of service sectors, and their findings are fascinating and alarming at the same time. Sixty percent of small business owners, according to the survey, don't utilize software-based solutions to manage their schedules or relationships with their customers. Fifty-two percent don't have a website and 56 percent don't analyze the effectiveness of their marketing campaigns. This kind of apathy towards technology is an invitation to failure. We can say so with confidence because we've seen failure to adopt technology take many successful businesses into bankruptcy and out of existence.
The international bookseller Borders offers us a perfect case study of what happens when companies turn a blind eye to technology. Once the operator of 659 bookstores around the globe, Borders Group went belly up in 2011. Experts cite a variety of reasons for the company's failure after nearly 40 years of growth, but chief among them were Border's lack of web presence and late entry into the e-book market.
For years, Borders outsourced its online book sales to internet retail giant Amazon. It wasn't until 2007 that Borders offered its customers the opportunity to purchase books and music online. By then it was too late, though. Amazon and Barnes & Noble had the Internet book market locked up. Almost no one went to borders.com to make purchases because the company had no brand recognition online. Their failure to recognize the importance of the now massive e-book market was also key to Borders' failure. The bookseller opened an e-book store only a year before they closed their final 399 stores. When they did, they did not develop a proprietary e-reader, instead outsourcing the task to third party developers. Combined with its massive debt load and unsustainable expansion of stores, it's no surprise that the company failed.
So if a failure to keep up with technological evolution can bring a giant retailer like Borders down, it could undoubtedly do the same to almost any small business. Operators who want to avoid a similar fate need to get a website online and begin utilizing social media in a hurry. Both options are relatively inexpensive and make an important statement about a company's reputation. As Forbes contributor Erika Andersen explains, “When I’m looking for a local business to deal with...the first place I look is online. And if I find that a service provider doesn’t have a website...I discount it immediately. I assume (rightly or wrongly) that the enterprise is unprofessional and low quality.”
Another simple strategy to staving off obscurity as a small business is to integrate technologies like modern POS software. Operators in the retailer sector may want to check out a vendor like Retail Management Solutions. Though they cater primarily to pharmacies, RMS illustrates the power POS systems can give to small businesses. By offering a variety of POS systems, loyalty programs, and POS supplies, the vendor enables their customers to grow in ways that are impossible with just a simple cash register.
Returning to that Yodel survey for a moment, 42 percent of small business owners said they worry about finding new customers, and 33 percent worry about retaining existing customers. Nearly the same number of operators also admit to ignoring technologies that could help address both concerns. In an economic climate where retailers are going bankrupt, and consumers continue going online to shop, there isn't a clearer way to highlight how essential technology is for small businesses today.