By Michael Perrone
March 5, 2009
Each week we hear about another set of layoffs or early retirement packages from companies struggling to cut costs. With the highly competitive job market, many of the unemployed decide to forgo the job search and make the entrepreneurial leap to start their own small business.
The U.S. Small Business Administration reports 99.7 percent of the country’s employers are small businesses. Though small businesses make up the majority of employers, they only represent 50.2 percent of the non-farm, private sector workforce.
With each layoff and severance package doled out by big business, the U.S. gains another potential entrepreneur that can create jobs. In fact, the U.S. Small Business Administration reports 60 to 80 percent of the net new jobs created during the past decade came from small businesses.
The opportunity exists, but starting a successful small business is not without its challenges. From cash flow and customer retention to long hours and lost sleep, there is a litany of considerations each new entrepreneur must weigh. While one could write a book about each of these topics (and many have) there is a common thread that can help small businesses overcome many entrepreneurial challenges - that’s technology.
Small business technology is more critical than ever. Services and software previously reserved for big business are now readily available to today’s entrepreneur and this technology is permitting small businesses to do more. Small-business-focused accounting software allows an entrepreneur to effectively manage his books, digital timesheets enable accurate time tracking to increase efficiency and smartphones provide instant e-mail access for mobile employees. Bundling technology solutions also provides significant savings to budget-conscious entrepreneurs.
When reviewing the available technology services, new entrepreneurs need to understand the services they use for their personal life do not always translate well to business. Filing a small business income tax return is much different than filing an individual return. Likewise, new entrepreneurs assume their business can use the same phone and Internet services they use at home when in reality, home phone and Internet services are not robust enough for business use.
Business-focused services are calibrated to the needs of the business world and ensure companies provide their customers with high-quality service. A T1 line for high-speed Internet service provides faster transmission speeds and more reliable performance than DSL or cable connections. Business-grade local and long distance phone service offered by a Voice Over Internet Protocol (VoIP) carrier provides better call quality than consumer-focused carriers. Similarly, your personal mobile phone may play music and have a camera, but a business can increase efficiencies by using an Internet-enabled smartphone like a BlackBerryÃÂ® that offers e-mail access.
If you’ve been recently laid off you have every reason to be upset. When the anger fades you should examine the opportunity before you. Michigan and other states are pining for you to start your own company and allow you to finally call the shots and reap the rewards of your success. Leveraging your career skills to create your own company is not only smart, but presents an opportunity to sell goods or services to an industry you know inside and out.
Rarely has there been a time when individuals can make as meaningful an impact on their communities as starting a small business can today and there is technology to support your entrepreneurial endeavor.
Michael Perrone is vice president and general manager of Detroit operations for Cbeyond, a small business communications provider. He can be reached at [email protected].