Herndon, Virginia (PRESS RELEASE – September 16, 2010) – U.S. small businesses, typically known as the innovation engine that fuels the nations’ economic growth, have reached a roadblock when it comes to marketing innovation. Contrary to the optimistic outlook in 2009, the fourth wave of the Small Business Success Index (SBSI), sponsored by Network Solutions and the Center for Excellence in Service at the University of Maryland’s Robert H. Smith School of Business, indicates that the recession is stifling small business owners from pushing the limits on innovative marketing. Only 37% of small businesses say they are highly successful at coming up with new ideas to grow their business compared to 47% last year.
“Creative thinking and the determination to push the limits on innovation are the hallmark characteristics of entrepreneurs,” says Tim Kelly, CEO, Network Solutions, an advocate of small business success. “Having a strong presence on the Web gives business owners a great launch pad to showcase their innovative spirit and build brand awareness for the products and services they offer.”
Those businesses that are successful in innovation and marketing use technology as a source to generate leads, build brand awareness and develop new ideas for overcoming challenges. In addition, they are more likely to be minority owned. Small business owners who are highly successful at marketing and innovation differ from the majority:
- 39% consider internet technology to be important to their business
- 26% use online advertising, more than other businesses (18%)
- 72% expect to make a profit from using social media
“The ongoing recession has certainly pushed our limits on marketing and innovative thinking. It’s difficult to stay inspired and optimistic when the economy remains stagnant,” says Heidi Kallett, owner of The Dandelion Patch, a stationary and gift retail business. “Technology is a huge ally for small businesses. I stay ahead of the curve by leveraging the internet and social media to stay connected with my customer base and also maintain an online presence for Dandelion Patch. The internet has no doubt helped me to form personal relationships with my customers.”
The Network Solutions Small Business Success Index allows business owners to score themselves on six key dimensions:
- Capital Access
- Marketing & Innovation
- Customer Service
- Computer Technology
Key highlights from the Small Business Success Index:
Websites remain no. 1 priority for small businesses: Companies remain invested in maintaining their websites: 67% of small businesses have or are likely to have a website in two years. Websites are the fastest growing online solution and remain at the core of online presence. Rather than replace website investments, social media is increasing them. Of those small businesses that use social media, 30% are likely to increase their investment in their website because of social media, and another 60% do not plan to change their website investment in the next year.
Social media usage by small business shifts from lead generation to increased brand awareness: While six months ago small businesses were focused on the ambitious goal of attracting leads with social media (71% vs. 73% in Dec 2009), they now look to social media simply to build awareness of their organizations (77% vs. 56% Dec 2009). They are also more likely to use social media to stay in touch with their current customers (62%) than six months ago (46%).
Small business exports decline while buying supplies from outside the U.S. increases: The number of companies conducting business globally has dropped from 19% to 14% since December 2009, but companies buying supplies from outside the country has seen an increase from 11% to 18% since December 2009. Also there is a positive correlation between small businesses using social media and the income they generate from multiple countries.
Access to capital continues to be a roadblock for small business growth: Only 36% are successful in covering long-term capital needs, which is slightly worse than a year ago when it was 39%. Capital access combined with the stifling of innovation seems to pose a huge roadblock to small business sustenance.
“Small business owners who hit roadblocks on marketing and innovation should turn to social media,” said Janet Wagner, director of the Center for Excellence in Service at the Smith School. “Tools such as Twitter and Facebook have made it faster, cheaper, and easier for even the smallest business to communicate with its customers and get ideas for new products and services. Technology-savvy small business owners who leverage the Internet will be in a strong position to compete going forward.”
If you are a small business owner, and want to understand what these findings mean for your future, join the #NetSol tweet chat on Sep 15th from 1:00 PM to 2:30 PM EDT. You can register at http://netsol.eventbrite.com/. Steve King, well known small business expert and President of Emergent Research, a small business consulting company, will share the top ten findings from SBSI and their effect on your future growth.
About the Robert H. Smith School of Business:
The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 13 colleges and schools at the University of Maryland at College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, MS in business, Ph.D. and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs at locations in North America and Asia. www.rhsmith.umd.edu
About Network Solutions, LLC:
Network Solutions, the leading provider of online solutions for small businesses, offers a full range of services including: search engine marketing, Web hosting, Web site design, e-commerce, SSL certificates, e-mail and domain name registration services. Network Solutions draws on 31 years of experience to make it simple and affordable for customers to build and manage an online presence through a one-stop Web Solutions provider. Additional information about Network Solutions’ offerings is available at about.networksolutions.com.