NEW YORK—Small businesses have an even smaller margin for error than ever, but the right use of technology could put them on a level playing field with national corporations, according to a report released by the Center for an Urban Future.
Businesses with less than 20 employees make up over 90 percent of New York City’s businesses, but unfortunately, the report says, there is too much of a technology gap in these neighborhood establishments. Better technology could help small businesses “expand their customer base, reduce their costs, and become more efficient,” the report says.
Over 80 percent of the businesses aren’t effectively using the technology available by creating websites, using online marketing, digital inventory tracking, or automated payroll systems. Only 60 percent are using an email with a professionalized domain name (as opposed to a @aol.com or @yahoo.com, the report says); and barely two-thirds are using social media.
However, most respondents said they do plan to adopt more technology—over 77 percent of low-to-moderate (LMI) income businesses and over 90 percent of non-LMI businesses.
According to the respondents, the two main reasons for not adopting more technology are the cost of doing so (47 percent), and lack of awareness (32 percent).
Denise Porcaro, owner of the flower shop Flower Girl in the Lower East Side, said in the report that she was reluctant to start a website for her company. She opened her company in 2007 but only launched her website last year, and has found that her sales have risen because what her customers wanted was to be able to browse the selection of flowers from home.
A lot of small business owners say, “I have a website but I am not getting any business,” according to Eduardo Giraldo, former head of the Hispanic Chamber of Commerce of Queens, in the report. “But it doesn’t work that way. You have a website and you have to advertise and market that website,” he said.
In addition to launching a website and implementing e-commerce systems, social media is inexpensive and makes a big difference, the report says. It helps business owners develop better relationships with their customer base. Social media also allows businesses that don’t require e-commerce to develop a web presence with Facebook or Twitter without the hassle of designing a website.
“If you divided technical assistance organizations between pre- and post-startup service providers, there is far more support for start-up businesses,” said Paul Quintero, CEO of AccionUSA, according to the report. “But the better bang for the buck is to help existing businesses.”
By taking an existing establishment that has already made significant investments in their business and positioning it for growth, there is a quicker opportunity to create more jobs than with start-ups.
A 25 percent increase of small businesses using sufficient technology should be a goal for the city within the next three years, suggested the report. The NYC Department of Small Businesses (SBS) offers programs and grants for technology education and renovation on a regular basis, and the NYC Business Solutions Centers offer courses on social media and e-commerce as well.
But some businesses don’t have the money to upgrade systems on their own, and the education offered for free is limited. For example, many Business Solution Centers in the city offer courses on QuickBooks, an accounting program, but there are currently no classes in Spanish.
The report recommends creating more education initiatives, such as an “AmeriCorps-like small business technology corps” to encourage collaboration between small neighborhood shops and bodegas and tech-savvy recent college graduates to help implement the necessary technology.
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