For the past couple of years Facebook’s primary use has been to keep in contact with old friends and family. Likewise, when people think of Twitter they might think of Ashton Kutcher or Stephen Fry tweeting their latest thoughts in less than 140 characters.
But the need to cut overheads during the recession – especially for a small business venture – has meant that more entrepreneurs are using social networking sites to grow their business. According to a survey conducted at the end of last year by Kleinwort Benson, the private bank, it found that 42 per cent of respondents used Twitter for business purposes, 38 per cent used Facebook and 36 per cent used YouTube.
Websites such as these are a cheap and effective way to get your message across, especially to young people, says Derek Wright, head of entrepreneur initiatives at Kleinwort Benson.
Social networking sites are also time effective. An entrepreneur can use Twitter to tweet about their latest product or business news and include a link to their website. This will immediately update all of their followers, making it a much faster way to connect to potential customers, especially compared to a traditional marketing campaign.
Paul Tustain, founder of BullionVault.com, an internet-based gold trading platform, says that he communicates to his 15,000 users more effectively over the web. He says that the phone is a less effective communication tool for his business because it requires there to be a person at each end, which is more labour intensive.
Social technology is helping to shape the next generation of entrepreneurs: the serial entrepreneur, says Wright. A serial entrepreneur will start a business and then move on to something new. He says that for them the thrill is in creating something new, not the everyday running of the business. “Opportunities are easier to see in the Internet age and you can share ideas more quickly than you could five or 10 years ago,” says Wright.
Another interesting development is that the smart phone is overtaking the laptop as the gadget of choice for entrepreneurs, according to Kleinwort Benson’s survey. This is good news for those who can shift to a mobile office, which can cut overheads even further.
Wright says that entrepreneurs are often used to adapting quickly to new trends and that is why they have embraced new technology with gusto. Anything that can help reduce costs makes good business sense, too.