Social Media: US Small Business Turns to Social Media and New Technologies to Boost Competitiveness

Small Businesses in the US are going through difficult times, but they are fighting back with investment in new technologies.  That’s the conclusion of a report entitled the Small Business Success Index (SBSI) issued by Network Solutions and the Center for Excellence at the University of Maryland’s Smith School of Business.

The SBSI rating for small businesses in the US dropped dramatically in 2010.  The report graded nearly 28 percent of small businesses as “failing in competitive health”, compared to 19 percent of small businesses in 2009.  Overall competitiveness of all small business in the US is now given a score of a D, a drop from the C- that the report assigned last year.  In 2009, 47 percent of small businesses felt that they were positioned to be able to successfully compete against large companies.  But by 2010 that number dropped to only a third (33 percent) of companies that thought that they could be competitive against larger ones.

A major area that is causing problems for small business is the ability to attract and maintain a competitive workforce.    Training, developing and maximizing the productivity of the small business workforce has been difficult for many companies to do.

What are small businesses doing to improve their competitiveness?  Many are looking to competitive advantage from technology, particularly by trying to leverage internet-based technologies.  56 percent of small businesses now have web sites, compared to 46 percent in 2009; and 31 percent of small businesses are using social media, up from 24 percent in 2009 and only 12 percent in 2008.  27 percent of small businesses have created an SEO plan to increase web traffic to their company sites, and 30 percent of companies now say that their web site is now their primary tool in generating new leads, and 16 percent say that it is their secondary tool in lead generation.

63 percent of small businesses report that their use of social media has allowed them to create more loyal customers, but the downside has been that 56 percent report social media is taking up significantly more time and resources than they had expected.

Financially though, small business has been improving.  38 percent of small businesses report that their companies saw growth in 2010, and 35 percent of companies say that they think the business climate is improving for 2011.   73 percent of companies say that they plan to hire in 2011.  The report estimates that this desire to hire could equate to 3.8 million new jobs for the US economy in 2011.