After a summer of scandals, we're checking in on the Chancellor's agenda.
Time and money are often in short supply for small business owners, and investing in technology doesn’t always rise to the top of their priority lists. But new tools like tablets and Square and greater access to broadband infrastructure are making it easier for businesses of all kinds, from bakeries to mechanics, to make use of technology. We consider new options for small businesses on the tech front, looking at local programs and national trends.
- Sarah Needleman Reporter, The Wall Street Journal
- Rob Mancini Chief Technology Officer, The District of Columbia
- Marla Bilonick Director of Small Business Development, Latino Economic Development Center
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. It's Tech Tuesday. To start up, some entrepreneurs get plenty of attention for the innovative ways they use technology to fuel their businesses. But small business owners are also using technology to boost sales and be more efficient.
MR. KOJO NNAMDICupcake bakeries, auto mechanics, farm stands and knitting shops are all making practical and clever use of technology's new and old in their day-to-day operations using tools and greater access to tech infrastructure to reach a broader customer base, keep better track of their expenses and even cut back on their payroll.
MR. KOJO NNAMDIHere to explain how small businesses, new and well-established alike, are incorporating technology into their workplaces is Rob Mancini. He is the chief technology officer of the District of Columbia. His staff provides technology services and leadership for city agencies, employees, over 600,000 residents and businesses and millions of visitors to the District. Rob Mancini, thank you for joining us.
MR. ROB MANCINIThank you. It's great to be here.
NNAMDIAlso joining us in studio is Marla Bilonick. She is director of small business development with the Latino Economic Development Center. LEDC, as it's known, helps people buy and stay in their homes, keep their rental housing affordable and start or expand small businesses. Marla Bilonick, thank you for joining us.
MS. MARLA BILONICKThank you. It's a pleasure to be here.
NNAMDIJoining us by phone from New York City is Sarah Needleman. She's a reporter and assistant small business editor for The Wall Street Journal. She also writes "Accidental Entrepreneur," a monthly column on starting a business for the first time. Sarah Needleman, thank you for joining us.
MS. SARAH NEEDLEMANMy pleasure.
NNAMDII'd like to tell our Tech Tuesday listeners that you, too, can join the conversation by calling us at 800-433-8850. Especially if you own a small business, give us a call and tell us how you use technology on a daily basis. 800-433-8850. You can send us a tweet, @kojoshow, or email to email@example.com. Sarah, I'll start with you. It seems small businesses have a lot of new tech tools to choose from. Based on your experience covering this field, what has changed over the last few years?
NEEDLEMANWell, entrepreneurs have actually come out with a lot of products for entrepreneurs and, of course, big companies too. A classic example would be devices like Square and Intuit's GoPayments. These are little devices that you could attach to an iPhone or an iPad to allow customers to swipe their credits cards. And this is popular among small businesses that operate at craft shows or farmers markets and even in a brick-and-mortar store.
NEEDLEMANIt's cheaper than the typical swipe fees that credit card companies charge when you use their devices. And they're very popular among consumers. You can get a receipt that's digital. So that's an example. And there's also just more affordable software. There's also the cloud and a number of loyalty programs that are digital now, all designed to aid small businesses and attracting customers and having a more seamless checkout experience.
NNAMDIMarla, and then Rob, I imagine that answers may vary, but is there a primary barrier that small business owners you work with face when it comes to incorporating more technology into their workplace?
BILONICKI would say for us, the primary barrier is information, and that's really where an organization like LEDC can come in and provide entrepreneurs with information really about what's out there and about how to use the tools that are there. And so that's really sort of what we envision our role to be. But I think information is the primary barrier. And a lot of times, small businesses are also immigrant-owned businesses, and so add language on top of information barriers and, you know, hopefully those can be overcome and through that used.
MANCINII think it's a standard thing for any business, how do you reach customers? How do you interact with those with whom you want to do business? And I think to the extent that our government can do its part to help foster that relationship, create an environment where that can thrive, we're very interested in doing that sort of thing. And I think today, you reach customers by making sure you're using the same technology that they're carrying around with themselves every day.
NNAMDI800-433-8850 is the number to join this Tech Tuesday conversation on small business technology. If you own a small business, but you've been reluctant to embrace technology, tell us why. 800-433-8850. You can also go our website, kojoshow.org, and ask a question or make a comment there. Whatever the barriers might be, how do you get people past them, Marla?
BILONICKThe method that we use is a very tried and true method which is basically through training and one-on-one sessions with individuals. And so, you know, we had trainings and continue to have trainings ranging from very basic computing, all the way up to leveraging technology once you know how to use it to reach customers, as Rob said, or become more sophisticated in terms of management tools. So really, it's getting the information into people's hands through class settings and individual settings.
NNAMDISame question to you, Rob.
MANCINII think from the government perspective here, we want to do everything that we can to make sure that there's a strong and healthy business environment. And I know Mayor Gray and Deputy Mayor Hoskins, they work so hard on that, and they're getting it right, and they're very tech-centric. I think for my agency, excuse me, we haven't typically had a very large role in that area until the last couple of years.
MANCINIAnd thanks to the Department of Commerce getting us to allow those grant dollars, we've been able to invest a lot of our time in infrastructure, education and training, as well as a level of outreach to the communities to help break down some of those barriers and find better ways to help those. And we don't know everything about making economic development work, but if we're getting into communities and talking to people there, we're going to find out what their needs are.
MANCINIAnd we know technology. They know what they're trying to do. If we can make a good marriage there, then government's doing everything it can to try to help solve that problem.
NNAMDIIn case you're just joining us, it's a Tech Tuesday conversation on small business technology. That was the voice of Rob Mancini. He is the chief technology officer for the District of Columbia. Also joining us in studio is Marla Bilonick, director of small business development with the Latino Economic Development Center. Joining us by phone from New York is Sarah Needleman. She's a reporter and assistant small business editor for The Wall Street Journal.
NNAMDIShe also writes "Accidental Entrepreneur," a monthly column on starting a business for the first time. Sarah, in the tech field you just heard Rob mentioned, you want to be able to have small businesses keep up with whatever people are carrying around in their pockets, the devices they're using right now. In the tech field, the game can change rather quickly however. Is it hard for smaller companies who don't necessarily have dedicated staff for this purpose to keep up with the constantly changing landscape?
NEEDLEMANIt certainly can be especially when we're talking about software that needs to be integrated throughout a company. If it's a -- say a marketing agency as opposed to a retail store, there are many employees who are tapping into this. And there's, you know, technology does constantly get updated and needs to be changed. And certain technologies will interact with other technologies so there has to be sometimes IT services involved. And this can be somewhat costly.
NEEDLEMANSo when we talked a moment ago about some of the reasons why small businesses may be small to adopt new technologies, this can be one reason. And another I would add is security fears. There's concerns about identity theft for customers or for the business itself to be hacked. And so -- and then there is the learning curve. So they may not have the in-house IT, they may have to pay for it. And depending on what the small business is trying to accomplish, that could add up.
NEEDLEMANEven though prices have gone down, it can still be a significant financial burden, depending on the type of business you have and a number of employees who may be using the technology.
NNAMDII'd like to go to the phone, and I'm going to go to, first, Allan and then Heitzy (sp?) who have, I think, opposing views of technology in business. But I'm going to start with Allan in Washington, D.C. Allan, you're on the air. Go ahead, please.
ALLANWell, thank you so very much, Kojo. I think a very timely topic, and to your guests, good afternoon.
ALLANI am in a service-oriented business. I provide computers -- I'm sorry, tax and accounting services to people. And technology has absolutely made me an expert in my field. The technology for tax processing has been essential to making me competent in doing and providing work as well as across the country. So that's enabled me to do that.
ALLANAnother piece of technology that has benefitted me in helping me to become virtual, my office is where I am by virtue -- by means of a cellphone or my more portable computers that I've been able to access. So that technology, the piece that I totally embrace, the ability to be able to provide the convenience of swiping your payments via your card or giving me the information helps my clients to be able to do business spontaneously if need be, but conveniently. So I'm a proponent of technology.
ALLANMy career, my profession was an IT developer. My business as an accountant has been an accidental consequence to the actual money that I earn. So now I'm providing a service. And I'm a proponent to say that, yes, technology works. People must be able to handle their paperwork. And then the last of the piece that I'll share is the ability control the paperwork, to manage the paperwork.
ALLANThe scanning of documents, making it easy to compile data for your own accounting purposes but being able to give your client something that they can also carry with them or access. So our small businesses must embrace it -- this technology and incorporate it in every way that they can in their business, and it will expand.
NNAMDIAllan, I'm going to put your on hold if you don't mind. Before -- well, let me have Marla respond, and then I'm going to put you on hold and talk with Heitzy and see if you too can have a dialogue. But first, you, Marla.
BILONICKGreat. I just wanted to add, this was a perfect call right after Sarah's comments because I actually think what we found and underestimated is that technology comes with this myth of costs. And I will not downplay that because it is a fact. But in the case of the caller, he could actually potentially eliminate the need for a brick-and-mortar location altogether. So you're eliminating the lease or the deed...
NNAMDIOr the rent.
BILONICKRight, you know, and therefore, really eliminating so many costs. And then you're eliminating having to outsource services that you, as an individual, can do if you master the technology. So I just think it's, you know, of course, plays to my spin on the topic, but I do think it's an excellent example of how technology can actually provide cost savings.
NNAMDIBut I still want to know where you, Allan, in case you mess up my tax refund and I need to find you and choke you. But here's Rob Mancini. You got anything?
MANCINIYes, I do. I really like Sarah's comments there. And I want to take a different spin on that myself. I think small businesses are smaller. They're more nimble. If they're just getting off the ground, they can make these sorts of investments that midsize and large businesses are chasing today. So everybody talks about cloud in a big business and how we're going to change our legacy infrastructure and our legacy environment to be able to participate with cloud.
MANCINIBut a small business can start off that way, and there's an advantage to that. And it does cost a lot less when you're using those types of services. I think small businesses have the advantage there.
NNAMDIAllan, allow me to put you on hold to see if there's anything that you might have to say that can respond to the comments of Heitzy in Bethesda, Md. Heitzy, you are now on the air. Go ahead, please.
HEITZYKojo, I don't want to disappoint you by not being -- taking the opposing view. I think it's more just a different view.
HEITZYMy business is -- I'm an artist. I'm a ceramic artist. So I definitely need my bricks and mortar because that's how I create my work.
HEITZYAnd then when I -- I guess what I have to say is I think that the ability to use technology is really generational. I'm in my mid-50s. And for me to try and figure out how to sell my work on Etsy, which is one of these craft websites, or how to use even something like Square, it's a really big learning curve for somebody in my generation. That doesn't mean I don't think it's very useful. It's -- I think it's essential.
HEITZYBut I think one of the real difficulties is that unless you have, in my case, a child at home, which I don't anymore, who can teach me how to use this stuff, I can end up making investments in technological software that I then can't use 'cause I don't know how to manipulate it. So for example, I have Quicken and I have QuickBooks, and I still don't know how to use them. So I'm still using my old pencil and paper to keep track of my accounts.
HEITZYSo it's -- I think some of it is that with small business, because you don't have an IT person on staff as you might in a larger operation, it just becomes much more challenging to figure out how to use that, particularly if you're a little bit older.
NNAMDII'm glad you shared that with us, Heitzy. We do have to take a short break right now, and I'm going to ask you to keep listening even though you may not be on the phone any longer because you raised some crucial issues that I think all of our panelists would like to respond to. So thank you very much for your call. And, Alan, thank you, too, for your call. We're going to take a short break.
NNAMDIWhen we come back, we'd be interested in hearing from you if you'd like to join the conversation at 800-433-8850. Or send email to firstname.lastname@example.org. We're talking on Tech Tuesday about small businesses and technology. I'm Kojo Nnamdi.
NNAMDIIt's Tech Tuesday. We're talking about small business and technology with Sarah Needleman. She's a reporter and assistant small businesses -- small business editor for The Wall Street Journal. She also writes "Accidental Entrepreneur," a monthly column on starting a business for the first time. Marla Bilonick is director of small business development with the Latino Economic Development Center, which helps people buy and stay in their homes, keep their rental housing affordable and start or expand small business.
NNAMDIAnd Rob Mancini, he's the chief technology officer for the District of Columbia. His staff provides technology services and leadership for city agencies, employees, our over 600,000 residents and businesses and millions of visitors to the District. I know the comments of our last caller caused you all to have been thinking, she making the point that she feels that there's a generational difference. But I'll start with you, Marla Bilonick.
BILONICKIt was interesting. It just made me think of a client that we had worked with that -- on a daycare center in D.C. And it's a mother-and-daughter team, and they faced a lot of similar issues to the caller, Heitzy, that had called in, in that the mother sort of, although she had a lot of experience in the industry, felt very challenged when it came to technology, and the daughter felt more comfortable with the technology. And it was really a nice scenario because they could sort of go through the trainings together and gain that knowledge together.
BILONICKBut it certainly is a hurdle, the generational challenges. And I think we've seen, unlike in our traditional service delivery, that existing businesses sometimes have a large technology hurdle to get over whereas startup businesses that may be of a different generation of ownership are more adept and potentially more receptive to technology.
NNAMDIThoughts that made you have, Rob Mancini.
MANCINII enjoyed hearing that last case because we do know that there are obviously some generational barriers, but I really don't buy that the older generation can't learn this. It's been made very easy, and I think what we really heard with that caller, Kojo, was someone who was actually using some technology but may need some help in the business process in some ways to maybe shorten the workload for her so she can focus on what she tries to do in terms of making her business run.
MANCINISo all of you D.C. businesses out there, small businesses who want to do consulting on business process with technology, I'd like to hear from you. And I think this informs us on whether we can take some of our directions in our Digital Inclusion Program to connect folks with services like those.
NNAMDISarah Needleman, I'm sure you heard Heitzy's comments, too, on what she feels is the generational divide that inhibits her. What are your thoughts?
NEEDLEMANI mean, certainly there are a lot of new technologies out there that older folks have had, you know, some difficult time getting used to. I mean, there has been quite a lot of change if you go back over the past five to 10 years. And, you know, coming from someone who has a mother in their 60s who can't quite figure out how to send an email still, I totally understand. That said, there are so many opportunities to network out there. A small business owner may want to network with younger entrepreneurs.
NEEDLEMANI mean, the entrepreneurs in their 20s and 30s have grasped this very easily. So I would recommend getting out there at some of these networking groups or even looking to some entrepreneurs in your building or down the block from you in your neighborhood and say, hey, I'm having a little tough time getting used to how to use these sorts of things. And chances are that they'll be happy to help because you may be able to impart some knowledge on their behalf that they may not know, that -- from your years of wisdom and experience.
NEEDLEMANSo certainly, it can be intimidating to learn anything new, whether it's technology or process -- a business process or a new language, whatever it may be. But it's certainly wise to not let these things hold you back because they're coming. There's nothing you can do about it. And consumers are starting to use it. So if you're going to stay relevant, you're going to have to make the effort to get up to speed on new technologies.
NEEDLEMANAnd certainly, networking is probably one of the fastest, easiest and most rewarding ways to do it because you'll get a lot more out of it than just learning a new technology. You'll probably gain relationships that could benefit your business in many ways.
NNAMDIHere's Emma in Washington, D.C. Emma, you're on the air. Go ahead, please.
MS. EMMA WARDYes. I'm Emma Ward. I represent the seniors here in Washington, D.C., D.C. Office on Aging. We have a program here in Washington, D.C. where we are teaching our students how to use the iPad. You would be surprised at how enthusiastic they are about learning. They want to learn. Whether you're an adult or whether you're a child, anything that's new to you, you have some apprehension about it. But once you learn it, then you know that you can do it. And you would be surprised at the enthusiasm that our students have.
MS. EMMA WARDWe're talking about people who are 70 up to 90 years old. We've almost finished my program. We're getting ready to do two more. And it's -- I mean, it's amazing, the number of seniors who actually want to take this course. The reason they haven't done it is because nobody has taken the time to actually give them the opportunity to learn it. They want to learn it just as well as the younger people. So I would say it has nothing to do with age. It has something to do with us not being in the workforce.
MS. EMMA WARDBut just because we're not out in the workforce doesn't mean that we don't really want to have a connection, especially the social connection. They are just overwhelmed and just overly excited about the social connections that they are having. So I would say, anybody who wants to learn, get in touch with the D.C. Office on Aging, and we can help you there.
NNAMDIEmma, thank you very much for your call. And once they learn, believe me, they'll be Skyping with their grandchildren till wee hours of the morning when the parents can't get the kids to go to sleep anymore.
WARDYes. 'Cause I can Skype with my granddaughter in Norway.
NNAMDISee? I knew this. Thank you very much.
WARDLike I said, I'm 69 years old.
NNAMDIThank you very much for your call, Emma. Rob, your office's efforts have targeted specific wards here in D.C. where businesses are finding it more difficult to access broadbanding infrastructure, for example.
MANCINIMm-hmm. Yes, we are. This is partly a new focus for the agency to try to make a difference right down to a resident, a business or a visitor. It's also, thanks in large part to the Obama administration's era grant process with the Department of Commerce, which gave us a lot of money to work on this problem. And we did identify that Wards 5, 7 and 8 have particular challenges with broadband adoption, and we have what I would call a four-pronged strategy to work on that.
MANCINIThere's infrastructure access. There's education. There is helping people understand the value of the technology. And there's also mapping those results of broadband. So there are areas in the city where broadband adoption is lower, and we know that there are some generational and some economic reasons for that. And we will stop at nothing to try to impact that. And as we've gone along for a few years, Kojo, spending that grant money, we've learned quite a bit about how to make a difference in broadband adoption in the city.
NNAMDIMarla, when you sit down with an existing or with an aspiring small business owner, where in the bigger picture of either starting or revitalizing a business does technology now fit in to planning?
BILONICKIt's interesting because I think it's actually a critical tool that we may have underestimated initially when we started integrating technology into our service offering. I think for starting a business, it speaks to some of the topics that were raised in your teaser for today's show around credibility and legitimacy. If someone searches for you online and you don't have an online presence, it just turns that potential customer off. So it's really about doing business the way that businesses do business today and not being cut out of that environment.
BILONICKBut secondly, for existing businesses, it's really, really critical as a planning tool, and I think that technological management tools are particularly useful for having some forward-thinking ability and planning ability that might not be present if you're sort of working in a more day to day, reactive way. Just the analysis that you can even do with an Excel spreadsheet versus paper and pencil or zero or QuickBooks versus an Excel spreadsheet, you know, really allow you to take a step back and see how things are moving and how you might want to change management behaviors moving forward.
BILONICKOne client that comes to mind is The Wydown Coffee Bar on U Street. They're currently a pop up, and they're about to move into the new development where Trader Joe's on 14th and U is going to be and they are anticipating tremendous growth. And they actually leveraged a grant that we worked on with OCTO -- sorry, they're 1320 U Street for anyone who wants to stop by and get a cup of coffee there, great, great coffee. But that being said, they've really been using this technology to plan for what's coming down the pike.
BILONICKAnd so they know they have a great product. They know that their demand when -- in the new location is going to be extremely large versus what they currently -- their current capacity, and they're using technology to prepare for that, to see, you know, what sales trends are happening now and how they can fold that into their planning for moving forward. So I think it's just something that when you're in -- immersed in the day to day, technology gives you tools to be able to really be more forward-thinking, which is not always possible without it.
NNAMDIAnd, Rob Mancini, I was just thinking that there are people who, because they like cooking, wanted to start a restaurant in a certain location but in those days, before the advent of this kind of technology, had no way of conducting a market survey to know whether or not people were interested in that. What Marla just seems to have pointed out is that in the grant and the relationship with your office, this 1320 U Street business has been able to do precisely that.
MANCINIAbsolutely. This is -- and we probably should have said something about this earlier, Marla, but the reason that she and I are both here is we sub-granted some of our era dollars to her organization to help us work on this problem. And we, in government, we care a lot, but we know we don't have all the answers and we know there are lots of good civic-minded organizations, excuse me, like Marla's, who can help us find those folks who we want to help.
MANCINIAnd so this was really a good example and we will be doing a lot more of this even after the grant money has gone away. We're going to continue to do this because the mayor wants us to do it. The deputy mayor of economic development wants us to maintain Washington, D.C. as a tech center and a hub. And we will extend and continue our leadership in that area by doing things like this.
NNAMDISo in addition to learning what's trending on Twitter every day, you can be learning what's trending in consumer taste in your particular neighborhood. Sarah, small business owners tend to keep a close eye on the bottom line. Have costs both for services and hardware come down recently?
NEEDLEMANThere has been some lowering of the cost of, you know, the barriers for small businesses to get the kind of technology they need. There are a lot of apps out there. Some are free or just a few dollars for, you know, taking photos of your receipts and having sort of a digital accounts receivable organizational system. So definitely, the cost has gone down. And there are many free resources out there, too, that small businesses can take advantage of through economic development centers. And there's free templates and things like that online.
NEEDLEMANSo, I mean, there are still certain pricey items out there, and small businesses do have the disadvantage. They don't have the scale that larger companies have. So, I mean, a lot of times when you buy in bulk, you can get discounts. But there had been a number of bay companies that have created divisions or sections of their product offering specifically for small businesses that are designed to be at a price point that small firms can afford. You know, companies like Intuit, but bigger software companies as well.
NEEDLEMANAnd they're really targeting their marketing charges group because they realize small businesses are -- there are so many of them out there, and it's certainly an opportunity for them to make money as well. So they are trying to come in at price points that are reasonable and affordable for small businesses, and there are many of them out there.
NEEDLEMANSo it's definitely -- especially in the mobile space, there are many that small business owners can investigate. But like you said, they are in the trenches day to day, and they don't usually have a time to research all of that. But when they do or when they find a good resource out there, it can be very beneficial.
NNAMDIAnd, Marla, I guess, the concern often is with, can I afford this hardware?
BILONICKMm-hmm. That's actually -- going back to your initial question about the hurdles or sort of what would stop someone from integrating technology into their small business, and that's why the partnership with OCTO was so wonderful, is that we, you know, in order to be able to utilize the wonderful technology that's out there to leverage social media, to use even a software like Intuit software, you need the hardware to be able to plug it into.
BILONICKAnd that actually tends to be a more critical barrier for the small businesses that we've been working with. We found that many small businesses had access to Internet, whether that be through their own mobile devices or, you know, I don't know, through a library or something, but they did not have their own business hardware. And that was made possible through the partnership with OCTO. And we actually gave 21 small businesses free hardware to utilize through a competitive process.
NNAMDIHere now is Ethan in Gaithersburg, Md. Hi, Ethan.
ETHANHi. Thanks for having me, Kojo. So I'm actually a 21-year-old. My mom is a doctor in Gaithersburg, an eye doctor in Gaithersburg with her own small business. And the last five years or so, I've been upgrading a lot of her technology. And really, the amount that technology helps small doctor's offices has really been tremendous. All of our records are now on the computer, and all of our equipment communicates directly with those records.
ETHANIt eliminates so much paperwork and potential for error and, you know, patients can interact online with the office scheduling appointments, filling up their paperwork. And it's sort of really have a huge impact on the office and really allowed the staff of the office to focus more on patient care instead of worrying about paperwork.
NNAMDIIt's one of the issues that confronts the nation as a whole as we look at our health care systems, trying to make sure that doctors' offices, many of them in small, sometimes rural areas, do have the kind of technology that coordinates and integrates with other units. Can you talk a little about that, Rob Mancini?
MANCINIYeah, it is something that the nation realizes it needs to resolve. There is no one simple answer to it. And I know rural areas are particularly challenged, and I see that the administration or the Department of Commerce has particular focus in that area. We have a little different challenge in Washington, D.C. though. We have plenty of opportunities to extend broadband in areas where it's not being adopted.
MANCINIBut on a national scale, I think much like we did with our highway system, Kojo, I think we're going to have to have some level of partnership with the industry and government to solve that problem, and it won't be something that we can solve quickly. But we're dealing obviously with health care more than anything else right now. And I think the next -- one of the next big ones, if it's not rail, it's going to be broadband.
NNAMDIThank you very much for your call, Ethan. We move on to John in Fairfax, Va. John, you're on the air. Go ahead please.
JOHNHello. There was a big burst of noise. I assume you're talking about Fairfax?
NNAMDII guess -- yes, go ahead.
JOHNI am online. I'm on the air. I've been teaching a course called the senior computer basics for about 20 years at nursing homes, senior living centers, even public libraries. . And these folks have been using the computer -- their computer -- their new computer skills for make -- building their own businesses, staying in touch with family, going shopping without having to drive a lot. There are an awful lot of things that small businesses can encourage and support both with their employees and their community outreach that can make -- be a benefit to both the population and the businesses.
NNAMDII'm glad you made that point, John, and thank you very much for your call. Sarah, as John was implying, consumers like to shop online. But having a website is also key for local brick-and-mortar shops when it comes to getting customers in the door. How important is it for small businesses to have an online presence?
NEEDLEMANWell, I would say it's pretty important just because nowadays you're not even considered legitimate as a business if you don't have some sort of Web presence. Most people will just look up a business online before they go to it even if they're planning to shop there to check for directions or to look up the inventory or just get a general sense of what it is. So if you don't have a presence online, it's almost as if you don't exist.
NEEDLEMANSo even just having a very basic landing page or a Facebook page, a lot of small businesses and startups in particular that can't afford a domain name or thinks they can't afford one because actually domain names are quite cheap. But they'll set up a Facebook page just to be out there and be reachable to show that they exist. So there's no hard data on it. I mean there had been some surveys that makes this point.
NEEDLEMANBut just in my reporting experience, it's no doubt in my mind whatsoever that having some sort of Web presence is really critical to show the world you exist. You're real. You're legitimate. So, yeah, I would highly, highly recommend it.
NNAMDIWe're going to take a short break. When we come back, we'll continue this Tech Tuesday conversation on small business technology, but you can keep calling. Have you ever skipped the trip to a local retailer because that retailer did not have a website or gone because of that website? Tell us what draws you into local businesses at 800-433-8850 or send us an email to email@example.com. I'm Kojo Nnamdi.
NNAMDIWelcome back. We're talking with Rob Mancini. He is the chief technology officer of the District of Columbia. Marla Bilonick is director of small business development with the Latino Economic Development Center. And Sarah Needleman is a reporter and assistant small business editor for The Wall Street Journal. We're talking about small business technology. You can join the conversation by calling us at 800-433-8850.
NNAMDIMarla, Rob, I don't know if you wanted to comment on the topic we were discussing before we took that break, and that is the importance of having an online presence for a small business.
BILONICKYeah. I would agree with everything that Sarah said. I think it's really critical, and it establishes your legitimacy as a small business to have a presence online. I just wanted to step back from that because we have been talking about online shopping and about how consumers use the Web to purchase products. But I also think, first of all, businesses, the ability to use the Web for online shopping for their own products is hugely significant, and, you know, whether it's for price comparison purposes, for time saving.
BILONICKI mean, my goodness, rather than traipsing around to four different shops, you have it all right there at your fingerprints. You could be doing that at midnight. You know, it's just extremely, extremely convenient. So I think we should also think about the small business owner and the shopping seat, if there is such a thing, you know, because I think that's also extremely helpful from a cost-savings and time-savings perspective.
MANCINIYeah. There's not a lot to add there because I agree with everything both of them said I think you have to have a website. It's your first impression, and you want to make a good impression. And I don't know anybody who's going to shop for something that won't have an opportunity first to look at it online and look at reviews and look at information.
NNAMDIWe all do this nowadays. Sarah, branching out into ecommerce, however, is one way to grow a business, but some owners soon find out there's more to it than they might expect. What kind of factors come into play when people start selling their products online to a larger base or audience?
NEEDLEMANWell, for example, some of the things they find is that when you're dealing with -- or you're communicating with customers over the phone or email, it tends to be a bit different than when you're doing it face to face. Email, you know, in particular, you can't really tell the impression of somebody's voice. So you really don't know if they're kidding or being serious. And their expectations are different.
NEEDLEMANThey want fast communication. So if you get a question from a consumer and don't respond within 24 hours, you may have actually lost a potential sale. You also have to consider -- factor in the cost of shipping, the wrapping of the product, return items. You know, so how things sale online may be different than in a store. I mean in a store you can pick up a piece of clothing and touch and feel it and smell it.
NEEDLEMANAnd there may be music playing on the overhead, and you get this whole vibe that just isn't there online. So you need, you know, superior photography. You really need great pictures to draw people in. You need sometimes video to show the three dimensions of a product and how it moves around. Zappos is an example of a big company that's really mastered this space. So there's a lot more to it than just slapping maybe a product picture online and a price tag and having an ecommerce cart.
NEEDLEMANThe ecommerce technology, the carts and the links to PayPal and sites like that have come down a lot in price, and it's much easier to do it. You can even have a cart through Facebook now without having to create your own ecommerce site. And somebody I think mentioned earlier you could use a site like Etsy to handle the processing of the money and the orders and things like that. But even so, you have to be faster in all these little things, the communication and the packaging cost that can actually add up to a lot of time and energy.
NEEDLEMANYou may have to store more inventory and need more space for it. There may be taxes that you have to consider. If you're selling to customers in other states, technically, you're supposed to pay sales tax to those states. A lot of people don't, but there is legislation pending right now at the federal level that could actually make it so that you have to pay sales tax for each state and find out what each state requires.
NEEDLEMANAnd that's something to keep an eye on because it really could affect whether or not it makes sense to venture into ecommerce going forward. So there's a lot more to it than what meets the eye.
NNAMDI800-433-8850. If you're a consumer, has technology used by local businesses made patronizing them easier for you? Give us a call, 800-433-8850. Marla, we were talking early about how your office partnered with Rob's office on the small business project. What -- and you mentioned early that the -- how people were selective. What were the kind of criteria that owners had to have in order to participate?
BILONICKSo we were really looking to support entrepreneurs who -- for whom technology would have a true impact on either starting or expanding their business. And so there were some criteria that were sort of pluses, I would say, primarily their business location in D.C. because we were focusing on the target wards that OCTO was focusing on, which were five, seven and eight. So a business located there might be at an advantage to -- over another business.
BILONICKBut really, it was about their ability in their narrative and in their projections to demonstrate that integrating this technology would have a really compelling outcome or as far as they could imagine and describe. So that was really for us the determinant factor. We were working with all of these businesses through our workshops and technical assistance.
BILONICKAnd so we had a sense of who they were and really what their challenges were. And we really brought through a great group of businesses for whom I think in the next six months, 12 months and beyond, we'll see a lot of progress with how they've been able to integrate the hardware and software in addition to the tools and knowledge that they got from the training and technical assistance.
NNAMDIWell, I can see how a compelling outcome for the businesses would be in their increased success. But, Rob, from the city's points of view, what is the advantage in encouraging more tech use by small business owners?
MANCINIWell, in -- specifically in five, seven and eight, one of the things we're learning here, Kojo, is that if folks aren't adopting technology down there and businesses are not thriving down there, and we believe that the outcomes can be as good or better as the other wards, we're going to invest -- we are investing some time in finding out whether that's doable. And we're finding that it is. And I think the folks who live in five, seven and eight who don't want to have to go across town to buy some of the things that they would like to buy by walking around the corner, I think they should have that opportunity.
MANCINIAnd we are finding that folks in five, seven and eight are very capable of starting businesses, of using technology. What are those barriers? And are they physical? Are they economic? Are there services not being offered there? And if not, why not? And why can't the government do what it can to encourage that? Or we can't create the outcome, but we sure can support the outcome that we're looking for in a free enterprise economy like this.
NNAMDIWe got an email from Susan, that says, "I just make and sell tie-dyed clothing at crafts festivals and online. Last year I started using Square to process credit card sales at craft fairs, and it has increased my sales because people just don't carry much cash with them these days. My biggest challenge now is keeping track of inventory. I have literally several hundred tie-dyed items or tees and dresses waiting to be dyed in all different sizes and colors and styles.
NNAMDI"I used a spreadsheet to try and keep track of them. But I'm always finding errors when someone orders something my spreadsheet says I have, but which, it turns out, I have sold already. Any technology for small businesses your guests could recommend to help with that?" I'll start with you, Sarah Needleman.
NEEDLEMANWell, I unfortunately don't have a specific example off the top of my head. I do believe that there are a number of products out there that coordinate to help you track inventory. I've spoken to entrepreneurs who've used them. There are cloud-based inventory tracking systems. This is an example of where networking really helps, talking to a small business groups on LinkedIn. There are a tons of them out there.
NEEDLEMANAnd you could actually put out a message, polling your -- the members and saying, what in inventory tracking system do you recommend for a business like mine? And you'll probably get a number of responses. There are many of them out there. So you could look opportunities to network and get some examples.
NNAMDIAny other suggestions?
MANCINII can think of a couple. There are -- what she'd really describing there, this problem, is really a configuration management issue as much as it is a spreadsheet issue. She's talking about something she's already made, and there was an error in the spreadsheet. And that's -- that speaks to how you use technology to manage the various configurations of the products that you're selling. You really have to listen closely to get the nugget of the issue there.
MANCINIAnd there are a lot of business to business solutions -- excuse me there, Kojo -- that we can call on. I'll give that a lot of thought because this is something that -- it informs me on areas that we could help small businesses connect with large cloud providers to provide solutions for small business. And I will keep that in mind.
NNAMDIAnd we move on to Sue in Fairfax, Va. Sue, you're on the air. Go ahead, please.
SUEHi, Kojo. Thank you for taking my call. I'm a small business owner. I'm a photographer. And one of the issues that I have ran into -- I have a website, I developed it, built it and posted all my photos myself -- it's the costs of advertising, if we use this service that charged $200 a month to get us onto the search engines. So when someone looks photographers in your area, it's just -- the cost is overwhelming for me right now.
NNAMDISarah, you have written about this when you a wrote a piece about Google algorithms, and maybe there are other examples that -- the kind of which Sue is referring to. And that is what happens when, you know, either the search algorithm changes and you're no longer near the top, or, as in Sue's case, when it seems to cost maybe more than you can afford to even get on the search engine.
NEEDLEMANWell, one thing to keep in mind about the algorithms for Google in particular is that they're designed to prevent bad actors "from artificially boosting ranking." So if you're playing the game correctly or fairly and following the rule, the tweaks that Google makes to a search engine should not really affect you. It's really aimed at stopping people who are trying to manipulate the search results artificially to their benefit.
NEEDLEMANSo we definitely want to keep in mind what Google requires and doesn't require or doesn't allow rather you to do. As far as cost goes, you know, search engine optimization, you can pay people to do it. If you're just doing it yourself, naturally it's really not that complicated. You can read up online and draw a traffic naturally that way. And by improving your site and making it better at networking and getting links from other websites to your site, those are the ways that you boost your rankings.
NEEDLEMANWhen other reputable sites linked you, it's almost like an endorsement. And Google takes that into account and therefore raises how high you come up in search results. Also, the keywords that you pick should be relevant to your business. So if they're not, that's a sign that you're trying to artificially inflate your website, and Google will actually punish you.
NEEDLEMANThen there's also Google AdWords where you can pay to have your website listed at the top of search results. Or you could use the Google Shopping feature, which used to be free, but it's not now, and again, pay to get higher in the results. I've heard mixed -- I've got mixed responses from entrepreneurs who've done that, and it can be very costly if you suddenly get a lot of hits.
NEEDLEMANAnd there have been claims of competitors purposely clicking on other businesses sites to artificially boost the number of clicks that would add to the cost, so you need to be careful there. But generally speaking, if you play by the rules and create a really good site and network to get relationships from -- so other sites will link to your blogs, et cetera, you should be in good shape, so it's the hard work that you have to put in.
NNAMDIAnd I'm afraid that's about all the time we have. And, Sue, thank you very much for your call. One quick question to you, Rob. Your office, as we mentioned, is working with Marla's organizations. Any plans to partner with other groups on this issue?
MANCINIAbsolutely. We will be creating additional opportunities for either subgranted or locally funded initiatives out of the D.C. government.
NNAMDIRobert Mancini, he's the chief technology officer of the District of Columbia. He joins us in studio along with Marla Bilonick, director of small business development with the Latino Economic Development Center. Sarah Needleman is a reporter and assistant small business editor for The Wall Street Journal. She also writes "Accidental Entrepreneur," a monthly column on starting a business for the first time. Sarah, thank you for joining us.
NEEDLEMANMy pleasure. Sorry, I'm so chatty.
NNAMDIThat's all right. Marla, thank you for joining us.
NNAMDIAnd, Rob, thank you for joining us.
NNAMDIAnd thank you all for listening. I'm Kojo Nnamdi.
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