Power surge

Entrepreneur, Nov, 1998 by Mark Henricks

If it wasn't for technology, Richard Pollock's company might be out of business. Software for managing inventory and an online connection to customer credit reports have turned International Neon Products Inc., Pollock's Chicago sign-parts distributorship, from a firm struggling with outstanding client debts and poor customer service to one enjoying robust growth and profits.

"Every employee here has a PC - the guys in the warehouse, the receptionist, the salespeople - even I do," says Pollock. "Now when somebody asks for credit, we dial in to the computer system and give them an immediate answer. That's gotten rid of the bad debt."

International Neon Products' inventory system allows anyone in the company to see if any part is in stock at any time. "Before, when a customer came in, somebody would have to run to the back and see if we had it," says Pollock. "Now our customer service is phenomenal."

Pollock is far from being the only entrepreneur benefitting from technology, according to the results of a recent study by Dun & Bradstreet (D&B), an international business information provider. In December, D&B surveyed 500 business owners nationwide, posing technology questions in 20-minute phone interviews. Businesses ranged in size from one to 500 employees, and sales ranged from less than $100,000 to more than $10 million. Most had one to five employees. Responses were categorized by each firm's size and according to the owner's ethnic background and gender.

The study found that, by and large, small businesses are embracing technology, from fax machines and pagers to laptop computers and Web sites - and with generally positive results.

Among the key findings was widespread, rapidly growing use of the Internet. Nearly 69 percent of small-business owners polled were connected to the Web. Survey respondents also reported nearly universal use of late-model desktop computers; a full 95 percent said they used Pentium-level PCs. They also indicated a generally high level of comfort with technology. Nearly three-fourths rated themselves as up-to-date with the latest technology.

The survey's highlight was the 69 percent Internet usage figure, says Mike Azzi of Murray Hill, New Jersey-based D&B. It's especially sizable considering that in a survey done six months earlier, D&B found just 47 percent of respondents were on the Net.

"Our basic impression from this survey is that small business is making a decent amount of progress with technology," says Azzi. "But the 22 percent jump in the number of small businesses using the Internet - in a six-month period - that's pretty significant."

A MARK OF RESISTANCE?

of course, some small businesses have been slow to embrace technology. Sheree Thomas, president of Smoke Busters of Texas Inc., has grown her Cedar Park odor-elimination service to six people in six years without the benefit of anything more than a fax machine, pager, cell phone and a single PC which, she confesses, she uses mostly for playing solitaire.

"Right now I don't even have Internet access," says Thomas. "But I hate to admit that. I feel so backward." Thomas says she intends to get e-mail soon to communicate with a company that's marketing a smoke-cleansing product she invented, and she may consider putting up a Web site to help franchise her company.

The study found entrepreneurs as a group are lagging behind big businesses in networking their computers - only three in 10 firms have LANs, and just 10 percent of those without LANs are planning to install them in the next year. In addition, many entrepreneurs lack internal e-mail - just 23 percent have it. And only 32 percent of those with Web sites are taking precautions to protect the sites' integrity.

For many relatively low-tech entrepreneurs, lack of gadgetry is a personal preference. Jane Wesman, president of Jane Wesman Public Relations Inc. in New York City, got e-mail for her six employees a little more than a year ago and still asks employees to use paper planners and keep their addresses in a desktop card file.

Paper-based information can't be lost in system crashes and disk failures, contends Wesman. And, for her purposes, she considers a low-tech system faster. "It takes me one second to look up a name in my Rolodex," she says. "I don't have to close one program and open another to get it."

But while entrepreneurs may differ in their levels of devotion to technology, the general trend is clear. Nearly four in 10 surveyed said they plan to buy new PCs in the next year. And nearly half the owners who use the Internet at work feel they're not taking full advantage of its business potential.

POWER UP

Eric Schechter, president of Great American Events Corp. in Scottsdale, Arizona, says his 20-employee promotions and marketing company would be hard-pressed to put on its annual conference without computers to prepare materials and manage registration lists. "In fact," says Schechter, "we couldn't do it without technology. If the network goes down, we're in trouble."

Despite using e-mail for only a little more than a year, Wesman already sees it as indispensable. "My business wouldn't run without e-mail and Internet access," she says. "All our clients want to e-mail us."