Small businesses get tech-savvy, even as they fear rising costs

  • Small businesses are becoming more automated, letting employees compress their work hours, or let employees work from home.
  • But some small businesses are still apprehensive about trying new technology because of costs and limited learning resources.


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Small business is starting to go digital, as smartphone apps, cloud sharing and automation help many of them get more work done in less time.

Technology is often billed as a means to replace human labor, yet recent data suggest that small businesses are actually looking to boost headcount, even as they shell out more cash to streamline operations. According to the National Federation of Independent Business Research Center, 36 percent of small companies were not able to fill open positions in June, matching the survey's record high from November 2000. For smaller firms, one method being used to attract new workers is with shorter or remote work hours.

Chris Petrella, the CEO of Unlimited Power, started his company four years ago. He employs veterans to manufacture portable solar microgrids used to increase energy efficiency. By using new technology, Petrella compressed employees' hours to 26 hours per week, and pays them on salary so that they receive the same compensation as they would for a typical 40 hour week.

"Employees come in at 10 a.m. and leave at 4 p.m., outside of rush hour," Petrella said. "It's good for family life, getting kids to and from school."

Petrella has always been forward-thinking about using new technology. His next hope: "Star Trek"-like transporter technology that can ship products instantaneously from place to place.

Until transportation takes a big leap forward, there are businesses like Square. Its website builder Weebly recently partnered with Shippo to make small business shipping more accessible. Invoices and payment are also available via Square.

Marie Rosecrans, senior vice president of SMB Marketing at Salesforce.com, explained that new tools are making tech accessible and helping to "future-proof" small businesses.

Yet data from Salesforce recently showed 62 percent of small businesses would like to employ technology, but don't because it can be expensive. Echoing that theme, a 2013 survey by the National Small Business Association showed that more than 70 percent of respondents felt it was "very important" to keep up with changing technology trends, yet more than 40 percent of them were concerned by costs and cybersecurity breaches.

Those issues are front and center for business owners like El Paso, Texas-based CEO Brianna Barnes, who manages two companies: Kayton Lee Residential and Rosewood Homes.


When she first started the custom home building company three years ago, Barnes used to pour 50 to 60 hours a week into Kayton Lee. Now, she is able to put just 30 hours per week into each company while achieving better output by using iCloud and Excel spreadsheets.

Yet Barnes admitted newer technology is harder to incorporate into her small business, primarily because rising costs and less time to learn operations. She felt the future of tech could be beneficial to her company, but she currently lacks the capacity to make bigger changes yet.


The work-life factor


Mastering technology can be a challenge even for businesses that were themselves born from tech platforms, yet some are embracing tech solutions to make life easier for themselves and their employees.

Take PritchardPeck Lighting CEO Kristin Peck, who built her business off Dropbox. Peck said the live documents help her connect with her 10 employees, as well as clients when sharing lighting designs and links. For her, Dropbox was an affordable option that made it possible for her business to get off the ground.

Employees can use the solution to work from home, collaborate in real time, and helps PritchardPeck provide work-life balance.

She and her business partner Jody Pritchard "built the company on the idea of creating work-life balance," Peck said. "You can't do it tired and worn out all the time. You need to have time to think, rest and travel."

John McDonald, CEO of Semihandmade, was sleeping in his woodworking office back in 2011 when he started a company which creates custom doors for IKEA furniture. Since then, he has driven sales up to $10 million and hired 75 employees, primarily by using technology provided by Capital One that allows McDonald to ensure he's getting the best deals to invest in his business.

For Bonita Webster, founder and CEO of Indy Medical Supplies, a company which sells medical devices to improve quality of life, technology is what helps her keep work hours manageable.

Webster teaches and sells medical devices to larger companies and private owners, relying on YouTube to share videos about how to use difficult equipment rather than spending time re-explaining complicated machinery. She told CNBC that one of her biggest challenge is doing too much by herself.

"When you wear so many hats, some of what you have to do will fall through cracks," she said. "You know what you want to do but you don't have time to do it all."

Even with cost and time being a factor, many small businesses have little choice but to embrace the trend. Eric Edelson, the CEO of Fireclay Tile who uses cloud-based technology to delegate assignments to his 150 employees, said that streamlined technology is all but a necessity in modern day commerce.

"Although some small business might be hesitant to implement newer technology, in the long run, it is beneficial to have these invaluable tools," Edelson said.


SOURCE https://www.cnbc.com/2018/07/26/small-businesses-using-big-technology-attract-more-hirees.html
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