Technology helps small businesses

Both in the United States and around the world, technology plays a key role in helping small businesses become more efficient. Michael Gallant, the founder and CEO of Gallant Music, lives in New York City briefs about it. When Alex Goretsky and his business partner, Girolamo Aliotti, decided to open Caffè La Stazione in San Francisco, California, they dreamed of making the small coffee shop an authentic Italian experience for their customers.

US commerce secretary, Gary Locke visited a New Delhi store which uses GoConnect technology during his trip to India in February this year.Their dreams were coming true and a growing number of repeat customers were enjoying the experience, or most of it. Some customers complained because the shop had no mechanism for accepting anything other than cash payments-until the owners learned about a technology called Square from a helpful patron.

Square provides its users with a small scanner that attaches to an iPhone or an iPod Touch, allowing businesses like Caffè La Stazione to swipe credit cards, accept payments and e-mail receipts without significant infrastructure or expense.

“People love it,” Goretsky says. “We no longer have to apologize to them for not taking credit cards, and that makes us look better in their eyes.”

Caffè La Stazione is just one among many small businesses to turn to technology to grow and thrive. Both in the United States and around the world, technologies play a key role in helping small businesses become more efficient.

Internet-based services make it easier to start and run a small business; there are sites that help with everything from a company’s registration to payroll handling, tasks that traditionally required time and paperwork. Some technologies offer unique approaches to raising capital. New York-based Kickstarter, for instance, allows users to post proposals for independent, creative projects and solicit funding from visitors to the Web site. Spanning the worlds of film, visual art, dance and other disciplines, Kickstarter proposals contain multiple giving levels, where supporters receive tiered amounts of project-related gifts and recognition in return for their money.

“Kickstarter makes it easier-and even possible-to fund your great idea,” says Dan Abelon, a San Francisco-based entrepreneur and founder of the dating Web site SpeedDate.com. “Most people don’t know how to raise money and turn an idea into reality and also don’t have the connections to do so. Kickstarter seems to solve this problem.”

Larger and more established companies also offer products and services designed for small companies. Cisco Systems, for example, created a small business line that offers routing, network storage, security and conferencing technologies on an appropriate scale for small businesses. Cisco staff members also blog about products aimed at small businesses and topics that concern them. Recent posts include “Ensuring Small Business Network Security” and “How the Right Partner Can Make Technology Perform for Your Business.”

The reach of technology enhancements is not limited to the U.S. market or developed countries in general. Around the world, hundreds of thousands of entrepreneurs have benefitted from technology services such as Kiva.org, a Web site that facilitates microloans to small businesses in need of capital. As of March 2011, Kiva has committed more than $199 million in loans to nearly half a million entrepreneurs all over the world. (See SPAN’s September/October 2010 article on Kiva.)

“They also do a good job of making lenders feel that they have control over who they lend to and educating people in the developed world about the challenges of emerging economies,” says Abelon.

In Africa, wireless telecommunication has helped to create numerous technology applications for small businesses that lack access to the Internet. Entrepreneur Raymond Rugemalira recently won a grant in the African Diaspora Marketplace competition for his plan to create a virtual, wireless marketplace to match small farmers in Kenya with potential buyers of their products.

Perry Klebahn, an entrepreneur and professor at the Institute of Design at Stanford University in California, sees tremendous potential in projects like Rugemalira’s. “It is clear that the cell phone is all that is needed in emerging markets to make a communications infrastructure that is flexible and accessible to small business owners,” he says.

In the near future, more business-friendly technologies are likely to be available to entrepreneurs in developing countries. And small business’ use of these technologies will only increase, according to Abelon. “…Technology makes it possible for people to build products, especially on the Web, for low cost and have the potential to reach global markets,” he says. “It’s also easier to acquire customers when you can promote your business for virtually no cost using the Web and social media. The possibilities for economic development are really outstanding.”

But technology never will replace an entrepreneur’s creativity, business instincts and skills. That is why it always should be seen as a means to an end, Klebahn says. Companies should never lose sight of their core purpose. “Focus on making a great product and service for customers and the tools you need will surface,” he adds.

(Courtesy: Span Magazine, May/June 2011)

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