The question is: Can a small business continue to exist in today's competitive world without computerizing?
The answer: Maybe, but computers are going to be a major part of commerce by 2000, so why not start the process now?Here are the results of a recent survey of 200 businesses with fewer than 100 employees and sales of less than $5 million by the Claris company, a developer of office productivity software for small businesses. (Please note that these figures exceed our personal definition of a small business as having less than 10 employees and less than $5 million in sales; but the data are interesting).
- What's important: An overwhelming 86 percent of business owners surveyed say that "maintaining good business contacts" plays a major part in the long-term success of their business. The question is how to accomplish these contacts. We've long supported the ideas of joining the organizations where your customers congregate, but the emergence of online activities of industry associations say we also need to be active in the electronic world.
Electronic world activity can mean anything from simply having a computer database of your customers where you can do billing, accounting and record-keeping to a system where you can automatically send mailings, letters and similar materials to support your business activities. With the emergence of the Internet, it also could mean going online with e-mail and new group activities supporting your industry and the customer base you serve or actually advertising on the Internet by developing a Home Page presence.
- Business failure predictors: As indicated above, keeping in contact with business contacts is a most important function for growth. More to the point, 46 percent of those surveyed said that failure to maintain contact with existing customers is the No. 1 principal reason for failure!
Keeping in contact with customers is one area where computers can help. The very fact that you have your accounts receivable on a computer means you have a beginning database of information about that customer. Even the sparse data-keeping permitted by most accounting packages contains fields that can be used for everything from what day of the week is best to contact the customer to their preference in ice cream flavors (if that's important to you).
Expanding this information and then using it to improve customer contact could be the simplest method of staying in business. This is where the outside vendors like Claris can help with their productivity systems.
- What about the Internet? There's scary news here. With only 4 percent participation in Internet advertising, small businesses are rapidly falling behind their larger competitors. Unless action is taken soon, the larger companies will be eating their small business competitors for lunch.
The complexity of using the Internet for business is daunting, but the rewards of learning to use this new tool are worth the effort - and it could mean the difference between success and failure.
We suggest you develop a home page on the Internet as soon as possible. Having your presence on a mall of some type is preferable to going it alone, and malls are always looking for additions.
Whatever vehicle you use to promote your offerings, the person who develops your home page should show you how to advertise on the many Internet search engines. Using these search engines is how prospective customers find you. They use key words that describe your offering. For example, a printer could use such words as "printing," "labels," "bookbinding," "stationery," "business cards" and similar "business joggers."
In addition, you should experiment with online sales of your products. The Internet is new, and although there's a lot of speculation as to what works and what doesn't, nothing will work if you're not there.
- What else? Spend some time with your computer guru to learn how you can use these tools to obtain new business and stay in touch with present customers. Don't neglect the basics of bookkeeping and payroll writing, but do explore the future.
For a free copy of the Claris survey, call Liana Miller at 213-629-4974.