Years ago, Pink Jeep Tours, a Sedona, Arizona, company that offers guided Jeep tours through nearby red-rock formations, booked tours by entering basic customer information into a DOS-based program and then scheduling and organizing tour lengths and party sizes on magnetic boards. Unfortunately, if someone brushed up against the boards, magnets would come tumbling off, tour guides wouldn't have a clue which parties were scheduled when, and chaos would ensue--that is, until the company installed a new Windows-based reservation system that electronically schedules each day's tours.
A retailer of fine wine, food and gift baskets with six locations, Merchant of Vino Corp. juggles immense quantities of inventory. The Southfield, Michigan-based company used to run out of customers' favorite wines. But thanks to a new bar-coding system and a customized software program to capture detailed purchasing information, wine connoisseurs nearly always find what they want.
The Las Vegas owner of Gotcha Covered Wholesale notices he's spending far too much time re-entering invoices into his home computer for products purchased right off his truck--and too little time on the road getting orders for his cut flower business. The solution? By using a laptop computer, he slashed his invoicing time in half.
These are just a few examples of the small businesses reaping the rewards of the technology revolution, from higher productivity and improved customer service to increased sales, a better image and greater professionalism.
Twenty years ago, far fewer technologies were available for small businesses. And those that wanted technology had to pay dearly for it. Today, however, most small-business owners wouldn't dream of opening their doors without a computer, voice-mail system and fax machine. Indeed, the last two decades have seen a metamorphosis of the small business from a low-tech enterprise into a lean, mean, high-tech machine--and the future promises only more of the same.
Taking The High-Tech Road
Behind all the fancy packaging and snazzy sales pitches, what most technologies promise small business is simply the ability to get more work done in less time. In a 1996 study by KeyCorp, a Cleveland-based banking firm, 45 percent of those surveyed said technology has allowed their small businesses to perform faster and more efficiently.
Pink Jeep Tours is a prime example of how a technology investment can spur productivity. In the old days, its reservation staff had to navigate software with multiple screens, entering customer data with much difficulty, and tours were frequently overbooked--and underbooked--because employees didn't schedule them efficiently on the magnetic board. The new software installed two years ago, which has a more user-friendly interface and automatically schedules tours at maximum occupancies, has cut the average time it takes to book a reservation from five minutes to one. "We were able to drastically increase the efficiency and accuracy of our bookings," says company president Shawn Wendell.
Customer service is another area that benefits from technology. By implementing a new voice-mail system, database or fax-back service, small businesses can score big points in customer satisfaction. "[Technology] has increased our customer service tremendously because we don't run out of stock as often," says Merchant of Vino's president, Marc Jonna. "Our customers are delighted because we're more in tune with their buying habits."
Some technologies, particularly the Internet, have transformed small businesses from local ventures into global operations. In other instances, however, technology has had the opposite effect: It's allowed businesses to stay small. Whether entrepreneurs are doing the books themselves with accounting software or cutting back on customer support staff, technology is playing a big part in keeping the "small" in small business. "Technology has helped me keep the quality and customer service high while keeping my business small," marvels Gotcha Covered Wholesale's co-owner Courtney Young, who has done it all himself since 1992 with the help of a notebook computer, portable printer, pager and cellular phone.
A less tangible--but important--impact is the creation of a more nimble, competitive entrepreneur, thanks to recent advancements in mobile technology. The introduction of portable computers, cellular phones, pagers and, more recently, wireless communication has given small companies greater freedom, flexibility and efficiency when on the road, severing the cords that traditionally tied them to the office.
Barriers Come Tumbling Down
Anyone who has invested time or money in technology has a horror story or two to tell. Software wouldn't load correctly, costly equipment had to be replaced six months later because it was already outdated, employees couldn't get a grip on the newfangled system--these are all frustrating side effects of the growing presence of technology in business.
For cost-conscious entrepreneurs, the biggest downside associated with technology is the high price tag. According to KeyCorp's survey, 38 percent of the respondents said cost is a barrier to technological advancement.
"The investment was much heavier than we anticipated," admits Pink Jeep's Wendell, who spent $200,000 in hardware and software upgrades alone over the past two years. "We had to rebudget our long-term expenses and really tighten our belts."
Even so, Wendell, like a growing number of entrepreneurs, understands the value technology brings to a business. "While [small businesses] view cost as a barrier, many are realizing the benefits they can get, and, in certain instances, they're able to [bite the bullet] and pay for it," says Robert Straus, a small-business analyst at IDC/Link, a technology research firm in New York City.
Meanwhile, industry forces have made it easier for entrepreneurs to open their wallets. Prices, particularly for personal computers, have dropped dramatically, while performance has continued to improve. As a result, says Straus, the payoffs have become much more attractive for entrepreneurs than in years past.
Another common complaint is difficulty in learning to use the high-tech equipment that's supposed to make life easier. About 23 percent of small-business owners surveyed by KeyCorp said learning to use technology was a major problem. The trend toward "plug and play" features, which promise to considerably reduce setup time and offer more friendly interfaces, has quieted some complaints. However, many say what's really making a difference is the recent wave of small-business computers, servers and software boasting few setup requirements, customized software, and fewer bells and whistles than their corporate counterparts. "Because products are being specifically designed for the [small-business] segment, use is much greater than in the past," says Straus.
The movement toward small-business technology has also aided entrepreneurs in finding the exact technology they need--something that was difficult for about 8 percent of KeyCorp's survey respondents. Also easing the pain is the fact that, for many high-tech buyers, it's not their first time around the technological block. Says Straus, "Because [small businesses] are going through the purchasing cycle for the second or third time, they've gotten a lot smarter in acquiring [technology]."
Look Into My Crystal Ball . . .
Joe Entrepreneur sits at his computer reading through the day's e-mail. When he's done reading a message, he simply waves his hand, and the software automatically scrolls down to the next one. The phone rings. It's his accountant, and she wants his latest financial information--right away. With a click of the mouse, the entire month's finances are condensed into a coherent, one-page summary that he fires off via e-mail. Then, because he realizes it's just two days before his business trip, Joe goes online with a high-speed ADSL connection, views a hotel property, then books a reservation without leaving a credit card number because his computer has the latest "smart card" technology.
Welcome to the small business of the not-too-distant future. These high-tech tools are just some of the exciting advances industry insiders predict small businesses will be using in the next three to five years. Many of the technologies are already here; they're just being fine-tuned.
Central to these upcoming products, say technology executives, are the enhancement and development of communications tools. As we enter what some are calling the "era of communication," we will see not only the proliferation of technologies like desktop videoconferencing, corporate Intranets, and paging and wireless communications but also the emergence of new ways of interacting, resulting from the merger of computing and communication.
Consequently, industry insiders believe small businesses can expect to use more efficient communication channels, particularly the Internet. "Clearly, the Internet is going to become more pervasive in the next few years," says Jacques Clay, general manager of Hewlett Packard's extended desktop business unit. "Small businesses will use it to communicate with customers, sell products via their Web pages, and create very targeted advertising for local, regional or international audiences."
Sam Jadallah, Microsoft's vice president of small and medium-sized business sales and marketing, envisions enhanced business-to-business communication as well. "Small businesses will find suppliers on the Internet, bid for business or submit offers to suppliers," he says. "There will be a huge movement to empower [entrepreneurs] to communicate more effectively."
Another trend, say experts, will be the development of smarter, more intuitive software that interprets and reacts to body language. They also anticipate the evolution of applications that don't just store information but format and analyze it in a fashion that's easier for small businesses to act on.
"The emphasis will be on turning information into knowledge you can use," explains Richard LeFaivre, vice president of Apple Computer's technology group. "That means software will be able to analyze documents, do intelligent searches, extract relevant information and simplify it. Future software growth will be centered around knowledge manipulation and access technologies."
Wave Of The Future
As we move into the next century, experts agree that technology and small business will undoubtedly become synonymous. As more entrepreneurs harness technology's power to lower costs, increase productivity and level the playing field, there will be far fewer technology have-nots and far more tech-savvy entrepreneurs and employees. Consequently, the experts challenge entrepreneurs to embrace technology, if they haven't already, and to prepare for the future.
"Right now, there are 20th-century entrepreneurs and 21st-century entrepreneurs. It's a mind-set," says Daniel Burrus, a technology forecaster and author of Technotrends: How to Use Technology to Go Beyond Your Competition (HarperBusiness). "Those becoming 21st-century entrepreneurs are beginning to look at using technology to compete on a new plane and to use the tools to change the rules of the game."
What technologies will prevail in the next 20 years, and how will you be using them? Predicting what will be around is anyone's guess because, in technology years, 20 years is an eternity. However, industry experts offer these best guesses--and far-out predictions--for technologies small business will use in the year 2017.
Intelligent agents: These software programs can be set up to retrieve detailed information or perform specific tasks automatically. While you're tending to your business, intelligent agents will be behind the scenes booking your airplane flight, scanning articles for precise information or monitoring changes in world oil prices.
Virtual reality: This includes both two-dimensional and three-dimensional virtual reality experiences. A Web site could contain your 3-D virtual store, which customers with computers, virtual reality gloves and goggles could "enter." Specialized software would simulate experiences as if customers were walking around the store, picking up the merchandise and sampling it.
Supercomputers: Expect very powerful computers that handle virtual reality, text-to-speech capabilities (such as turning a faxed document into a speech message retrieved via telephone), and speech-to-text capabilities (such as dictating a letter over the phone). Computers already in development have rudimentary text-to-speech capabilities; in the near future, this technology will become far more advanced.
Sophisticated presentation tools: Thin, flat-panel displays similar to TV screens could be used to display advertisements; holographic images could be projected in midair to help an audience visualize your product.
Advanced expert systems: These software programs capture people's expertise, convert it into a set of rules, and apply those rules to problem solving. Industry experts could clone their knowledge and make it available to others to solve dilemmas or improve processes without an on-site consultant.
Of course, while these future technologies sound intriguing, what's truly exciting are the changes they'll likely bring to your business. Suffice it to say, technology companies, small businesses and industry experts alike are bubbling over with optimism about the benefits technology will bring down the road. Perhaps Straus puts it best: "I'm bullish on technology and all it will do for small business in the future."
How They Did It
Merchant of Vino Corp.
With its fully automated sales process, Merchant of Vino in Southfield, Michigan, is the toast of the town. At each store location, ergonomically designed customer checkout terminals reduce cashier fatigue and provide better customer service, while its managers' workstations contain powerful software to analyze the sales performance of each product. The equipment lineup:
- 1 3.12 Novell 25-user network
- 1 Hewlett Packard 5 laser printer
- 8 National Cash Register (NCR) 7452 Pentium cash registers with Dynakey units (combination cashier display/keyboard) and NCR Scanmaster Software (customer checkout software)
- 8 NCR 7870 bar-code scanner/scale units
- 10 Hewlett Packard terminals for managers' workstations running Software 4 (extensive sales reporting program)
- 2 Norand RT1000 FM radio-frequency handheld terminals (instant pricing updates from aisles)
Pink Jeep Tours
The Sedona, Arizona, company's employees have shifted into high gear, thanks to a multiple-server system that allows for faster communication among employees. A customized reservation program captures all necessary tour information and alerts users if expeditions are overbooked. Pink Jeep's equipment:
- 1 Compaq Proliant 1500 Dual P166 file server running Windows NT Server 4.0 software
- 7 NEC P100/P120 Workstations running Windows 95 and NT Workstation 4.0
- Jeep Expedition and Tours Software (customized reservation application)
- 7 ViewSonic P815 20-inch monitors
- 1 Lexmark Optra Rn+ laser printer with Ethernet card
- 1 NetWorth 16-port 10MBps HUB (workstation connector)
- 1 Cisco 16-port 100MBps HUB with fiber- optic up link
- 1 Cisco 2501 Router (transfers data to LANs)
- 1 NEC Neax 2000 PBX (phone system)
Gotcha Covered Wholesale
A true road warrior, Courtney Young practically runs his entire Las Vegas flower business from his combination truck/trailer. When clients page Young, he returns the call via cellular phone, pulls up a custom-made template on his notebook computer, then faxes the order to a supplier. Clients are also impressed with how Young can furnish accurate (and legible) invoices on the spot. His equipment:
- 1 Toshiba 115CS notebook computer with Microsoft Office 97 and Floral Accounting System software (for invoicing)
- 1 Hewlett Packard portable DeskJet 340 printer
- 1 Iomega Zip drive (100MB memory storage)
- 1 NEC pager
- 1 Motorola Ultra Classic II cellular phone
Contact Sources
Apple Computer Inc., Apple Technology Group, (408) 974-7800;
Burrus Research Associates, (800) 827-6770, (414) 786-2308, (http://www.burrus.com);
Checkfree Corp., 4411 E. Jones Bridge Rd., Norcross, GA 30092, (770) 734-3404;
Gotcha Covered Wholesale, 4132 S. Rainbow Blvd., #189, Las Vegas, NV 89103, gcovered@juno.com;
Hewlett Packard, (800) 752-0900, (http://www.hp.com);
IDC/Link, 2 Park Ave., #1420, New York, NY 10016, (http://www.idcresearch.com);
KeyCorp, 127 Public Sq., #84, Cleveland, OH 44114, (216) 689-4489;
Merchant of Vino Corp., 254 W. Maple Dr., Birmingham, MI 48009, (810) 540-9640;
Pink Jeep Tours Inc., P.O. Box 1447, Sedona, AZ 86339, (520) 282-5000.
This story appears in the May 1997 issue of Entrepreneur. Subscribe »
