The Small Business Success Index provides small business owners and entrepreneurs with best practices to improve their businesses. This is part of a series of interviews with small business owners, entrepreneurs and small business experts providing their insights about the index results.
Erica Douglass started her own Internet-based business (a web hosting company) during the tech downturn and at the age of 20. She noticed that many large web hosting companies were going out of business and her customers wanted good web hosting company referrals. Erica felt at that time she couldn’t find one. Despite having little or no concept of how to run a business, she started her own.
At the ripe age of 27, Erica decided to “retire” and sold her business for $1.1 million. It grew to over $1 million per year in revenue without any investors and Erica spent less than $25,000 on marketing. She now provides insights about her business experience on her site Erica.biz.
IF YOU LIKE THE INTERVIEW YOU ARE ABOUT TO READ, YOU WILL LOVE THIS:
At the end of this month, Grow Smart Business – a new Network Solutions blog, resource hub, and home to the Small Business Success Index – hosts its first webinar hosted by Network Solutions CEO, Roy Dunbar
Learn from the risks taken, lessons learned, and success attained from a great webinar panel. Join entrepreneurs and business leaders for this free, live webcast. And get a chance to learn from their experience in securing capital and deciding their approach to marketing.
When: Thursday, April 30 from 2-3pm ET,
To register: Visit http://growsmartbusiness.eventbrite.com.
Network Solutions: What did the study reveal to you about the success of small businesses in 2008?
Erica: The study revealed that even though we tech folks consider the Internet to be “saturated” and no longer growing, there are clear opportunities for helping small businesses take advantage of online technologies. It fascinated me that the only technology more than half of the small businesses polled use is email. Clearly, there are ample opportunities for companies wanting to help more small businesses grow using the Internet.
Network Solutions: The study captured six dimensions for measuring success: Capital Access, Marketing and Innovation, Workforce, Customer Service, Computer Technology and Compliance. What do you think are the top priorities for making small businesses more competitive?
Erica: Marketing, to me, is really the key. Learning how to talk about your business in terms of what your customers want as opposed to what you offer is a key concept, yet many small business websites (and even business cards!) still say the same thing: My name ___; my company is ___; we do ___. There’s no acknowledgement of what customers actually want. As the old saying goes, you shouldn’t advertise that you sell drills; you should advertise that your customers will get their paintings hung with your help.
Network Solutions: According to the results, Capital Access and Marketing and Innovation were the two biggest inhibitors for success. Do you agree? Why or why not?
Erica: I definitely agree. Capital was a struggle for my company as well, and marketing is a challenge for nearly all small businesses.
Network Solutions: How does the current economic state affect Capital Access and Marketing and Innovation?
Erica: Capital access is becoming better with new 90%-guaranteed SBA loans, but many business owners should reconsider whether they need capital at all. Can you cut down your hours at work (something many employers may be happy to do in this environment anyway) and use that extra time to start your business? Instead of searching for capital first and developing a product second, entrepreneurs today have to create a product that people love first, and place capital-raising on the back burner.
Network Solutions: The results show that 1/3 of small businesses feel they are successful in building the profitability of the owner. What is your advice for entrepreneurs and small business owners in terms of increasing the value of their company?
Erica: The wisest thing you can do as a company owner is to find a niche and dominate it. In my former industry, web hosting, no acquirer wanted to buy a generic “web hosting” company that did everything. I ended up splitting my company into two pieces, selling one piece, reinvesting the capital earned, and then selling the second, larger piece later. “Web hosting” isn’t a niche. “Small business web hosting” isn’t a niche. But “dedicated servers for Silicon Valley’s hottest startups” is a great niche. (That was mine.) Another good niche I’ve seen more recently in web hosting is “Blog hosting, with WordPress pre-installed and all the plugins you need ready to go.” It’s a great idea that was long overdue.
I wrote about niches in my blog post “Why Your Business Isn’t Doing As Well As It Could Be.”
Network Solutions: According the study, “small businesses rely on a range of Internet business solutions and computer technologies to succeed.” What online services do you think best help entrepreneurs and small businesses? Why?
Erica: The best online services to help entrepreneurs will really be the businesses helping entrepreneurs figure out what services are most productive for them. Setting up Twitter and Facebook accounts, for instance, isn’t as productive as knowing how to use those services for maximum gain.
Network Solutions: In your opinion, how can entrepreneurs and small businesses use the SBSI to their advantage?
Erica: Knowing what other small businesses are struggling with will help you create a better product, especially if (like many small businesses) your target market is other small businesses. Make some phone calls to current or prospective customers and ask how you can best help them. As I like to say, pretty much every small business that’s even marginally profitable has a problem they would pay you $500/month to solve. Find this, make it a replicable product or service, and you have a gold mine of a business.
Web.com is now offering forums designed to support small businesses in cities throughout the US. Learn more about these forums here: http://Businessforum.web.com/
Tags: Erica Douglass, Innovation, Marketing, millenial, retire, SBSI
Posted in Entrepreneurs, Interviews, small business | 4 Comments »
