Business Information for Entrepreneurs by an Entrepreneur

This month, survey results announced that the number of small businesses using social media have doubled since 2008. This news was published on the Small Business Success Index co-sponsored by Network Solutions and the University of Maryland's Robert H. School of Business. The researchers asked 500 business owners during December of 2009 about their social media use, and the results were interesting.

Small businesses saw substantial growth in the frequency and use of social media as a way to reach customers. From December 2008 to the end of 2009, the number of small business owners using social media doubled from 12% to 24%. That's a lot of business owners actively participating in social media such as Facebook, LinkedIn, Twitter, YouTube, and company blogs.

How Small Businesses Socialize

Of the small businesses who actively participate in social media, 75% said they have a company page on a social network site. 69% said they actively update their company status and post articles or other links of interest on social media sites. And 57% said they are continually building a network through sites like LinkedIn.

Though Twitter usage is relatively small, with only 26%, it is still a growing trend, and businesses are continually exploring the uses of the site. Most of those who use Twitter say they post Tweets about areas of expertise, and 16% say they use Twitter as a service channel for customers.

Uses of Social Media

61% of business owners say that social media is used to attract new customers, while 46% use it to stay connected with current customers. 52% say they use social media to develop awareness of their business.

The Bottom Line and Social Media

Does using social media ultimately affect the bottom line? Most business owners think so. 70% of business owners who use social media say it meets or exceeds expectations, while only 26% say it falls short of expectations. 53% said social media has paid for itself, while 22% believe they have shown a profit from social media use.

And though most small businesses are not profitable through social media, 45% said they expect social media to be profitable in 2010. Are you going to be one of the profitable ones?

See how our sister site, MailerMailer, conducts their annual business planning meeting every January. Highlights:

1. Create a list of accomplishments and shortcomings of the prior year.
2. Review company values to make sure new goals are in line with what is important to us.
3. Discuss opportunities, competition, industry direction and other items to come up with key goals.
4. Assign difficulty level and priority for each to determine which ones go to the top of the list.
5. Create a spreadsheet for each quarter that lists each goal and who is responsible for working on it.
6. Meet regularly throughout the year to make sure you are on track to meet each milestone and to adjust your plan as necessary.

Starting a business can be expensive.

Did you take note of the other meaning of that statement? If you read it carefully, it also says that starting a business doesn't have to be expensive.

Most entrepreneurs have a "perfect picture" in mind when they imagine their new business. And to attain that perfect image, inclusive of a well-decorated office or retail store, more than sufficient inventory, and all the latest high-tech equipment, those entrepreneurs usually must spend a lot of effort in the beginning trying to raise money.

But did you know you can start a business without financing? Or considerably less than you imagine? Bootstrap financing has been around for years, and many smart entrepreneurs got started this way. Why? There are many reasons, including:

• No Investors - Investors can be great when you need money. But you have to answer to them about your profits (or lack thereof), and they can also get involved in the decision-making of your business.

• Save money on interest - Without investors or loans, you save considerable money on interest expenses.

• Valuable market experience - By making sales to help finance your business, you get to focus on actual business activity and gain valuable information about your market and industry.

What is bootstrapping? Entrepreneurs who bootstrap use their own resources as much as they can to help their business. Not only do they try to use their own funds, but smart bootstrappers get businesses going in money-saving ways.

For example, say you wanted to start a nice restaurant. It would take a considerable six-figure capital amount to get the business built even before you made your first plate of pasta. But a bootstrapper will start small, like opening a catering business. By collecting deposits upfront, a catering entrepreneur could work out of a friend's industrial kitchen and never have to put any money into the actual operation of the business. Job by job, and by saving frugally, the catering entrepreneur could eventually have enough money to open his or her own restaurant - as well as a built in client base.

The key is to have a big picture, but start small. Sell products on eBay. Use affiliates to help make sales. Bootstrapping is a smart way to begin and grow business without gathering a tremendous obligation to pay back investors and banks. Get your business started today with bootstrapping, and the money you earn will go right back into your business.