November 26, 2014

Steven Aldrich of GoDaddy: 50% of SMBs Still Working in the Stone Age

According to a newly released GoDaddy survey, even with all of the affordable and easy to use apps available today, there is a large number of small businesses out there that just haven’t made the leap to the cloud.

Steven Aldrich, SVP of Applications at GoDaddy, joins us to share and discuss some of the findings from the study, including what working in the Stone Age is costing small businesses that are slow to step away from the pad and pencil.

* * * * *

small businesses not using technologySmall Business Trends: Can give us a little bit of your personal background?

Steven Aldrich: I’m an entrepreneur at heart; paper route, summer storage business in college, built lofts for folks with my roommate, started a business and have been CEO of a couple.

I was fortunate enough to become part of GoDaddy as we were transforming the company to help really bring individuals through the process of successfully founding, running and growing their businesses. I’ve been involved in small business my whole life at this stage.

Small Business Trends: Can you talk about the tax survey you just released?

Steven Aldrich: GoDaddy has historically been known as a domain name registrar. Meaning, we help small businesses pick the right name for their business and then use that to build websites, host their website, send email.

The last few years we started to broaden that set of services we’re bringing to small businesses. One of the services we added was online bookkeeping. We wanted to take a pulse of how small businesses today, are thinking about both, keeping records for their business, tax time, given that, that’s a timely topic right now and just hear how businesses are doing on those couple of topics and that’s what we’re going to talk about.

Small Business Trends: Can you give us some of the high level key findings from the survey?

Steven Aldrich: The one that is not surprising, but always surprises if that makes sense, is that small businesses, by and large, are still trying to maintain an understanding of their business by hand.

We found that over 50% of small businesses still track how they’re doing on either a spreadsheet or pencil and paper. When we talked to small business owners and asked them why they said, ‘I know it’s not perfect but I’m able to get by.’

Then when we asked them if they were confident in knowing how they were doing. Almost half of them said, ‘No.’ Then we said, ‘Are you asking an accountant for help?’ Again, half of them said that they never talk to an accountant. Those that do, only half of those talk to their accountant more than once a year.

What we found was that spreadsheets and paper are still the rule, rather than the exception.

Small Business Trends: Wow, I’m seeing here more than half of SMB’s still use pen and paper or a spreadsheet to track expenses?

Steven Aldrich: Yes, and what that means is two things. One, it’s extra work. When we talk to small business owners, they get so excited about finding customers, delighting those customers, having those customers come back and delivering excellent products and services to them. If you’re doing this work by hand, this is one of the least pleasant tasks that small business owners talk about – keeping the books and doing their taxes.

So it gets pushed to the bottom of the stack, and at the end of the day, they collapse into bed. This is the stuff that doesn’t get entered in the spreadsheet or doesn’t get written down in the ledger or in the expense book.

That means the small business owners not as up to date on what’s going on with their business – really come home to roost at tax time. That’s when you need to have your revenue and your expenses ready to roll so that you just pay your fair share of taxes, not too much and not too little.

In the survey, this time a huge percentage of these small business owners, 40%, are taking 6 or more hours and many of them actually said it was taking days to just organize the information for their taxes. One of the things we know that means is the business owners are either not spending time with their customers, not spending time with their family, or not sleeping. None of those three things are good.

Small Business Trends: What’s the difference between those who actually do use an online service versus the small businesses not using technology and still operating like they’re in the Stone Age?

Steven Aldrich: We asked folks that are using the GoDaddy Online Bookkeeping service, ‘How long did it take you and how confident were you in the outcome?’ We found it takes six or more hours, even days, using manual methods or spreadsheets.

But folks using online bookkeeping from GoDaddy took two hours on average. That’s because the data is being collected everyday automatically, behind the scenes from your bank accounts, your credit card accounts, your PayPal or Etsy, your Amazon or Ebay accounts. Your invoices can be sent and payments tracked automatically.

So, you’ve got an ongoing record of how you’re doing and you’ve got it on the desktop, you’ve got it on your mobile device. When it comes time to getting your schedule C ready, which is what small business owners almost all file with their 1040’s, they’re ready and literally they hit the button that says schedule C worksheet. They take a look, make sure any uncategorized stuff gets taken care of at that time, and then they can enter that data into a tax prep program like TurboTax.

Or hand it off to their accountant, which we’ve heard now from lots of folks saves not only the business owner time, but it also saves the business owner money. Because they don’t have to go and pay an accountant to do all the data entry. Which the accountant doesn’t want to do anyway. Right? They want to do the value added stuff.

Small Business Trends: There’s a lot of information coming out of this study. Can you give me one or two things that surprised you in the results?

Steven Aldrich: When you ask the small business owner. ‘How confident are you that you know what your tax situation is going to be for the last year?’ Only 15% said that they knew how much they owed.

That’s a wake up call to the community saying, ‘We’ve got to help small business owners break this Gordian Knot of fear around taxes and not knowing that there’s a better way to stay on top of the business.’

There is the ability now for that small business owner to not only have their cake and eat it too, but also know how they’re doing without having to become an accountant themselves. They can spend their time on their business and we’re delighted to be able to be a part of that at GoDaddy.

Small Business Trends: Where can people learn more about the survey and things that GoDaddy is doing specifically for small businesses?

Steven Aldrich: I’d recommend they go to GoDaddy.com. It’s a really terrific place to find the breadth of things that we do for the small business owner.

We’ve got the ability for people to get a domain, so they can choose a name for their business. Get a website. Get hosted. We’ve got some new services around finding new customers called GetFound. We’ve got the ability to run your business and be more productive with things like Office365 from GoDaddy and invoicing and bookkeeping tools as well.



This interview on small businesses not using technology is part of the One on One interview series with thought-provoking entrepreneurs, authors and experts in business today. This transcript has been edited for publication. To hear audio of the full interview, click on the player above. 

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Brent Leary


Brent Leary Brent Leary is a Partner at CRM Essentials and organizer of the Social Business Atlanta conference. Brent serves on the advisory board of The University of Toronto CRM Center of Excellence, writes the Social CRM column for Inc.com's technology site, and blogs at Brent's Social CRM Blog.

7 Reactions

  1. I’m not sure if Steven was at the helm at the time, but Go Daddy made it big by spending 80% of their first year marketing budget on that Super Bowl ad that launched them into stardom. Giving credit where credit is due, that was a darn gutsy move!

    • Thank you for the kudos although I was not at the helm then or now (Blake Irving is our CEO) … I lead one of the business lines for the company. GoDaddy did take a big shot at creating brand recognition with its first Super Bowl ad and it worked. That is only a piece of success as product, brand, and customer care all work together to earn the customer’s business and keep it over time.

  2. This article is dead-on we see similar trends in the micro business. From the side working in technology for many years and bringing huge savings to medium and large companies, it just make sense that small and micro business will follow through especially as technology is making big steps towards micro business and its very affordable. To extant this is what can help micro business compete with the franchise and bigger chains, however the traditional barrier of change is very strong, and micro business resist the change and therefore have very low progress in technology acceptance. This is certainly challenging technology leaders to find ways to increase micro business acceptance. At referafriend.co we are trying to aggregate multiple technologies to get into the world of micro business, our platform include online payments, online appointments, Google marketing, Facebook and Twitter integration. We are still thinking on creative ways to help micro business increase acceptance of technologies.

  3. Brent: It is fascinating to see how GoDaddy is branching out with new services. Next product, virtual assistant services?

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