From the fax machine to the personal computer, from word processing and spreadsheet programs to the many apps that run on our smart phones, these new machines and the software that runs them have reshaped the business landscape, increasing productivity and innovation.
At the same time, with the internet connecting all of these varied devices, the increase in productivity and innovation was compounded as people have been able to collaborate with others from around the world.
While the claim that technology’s impact on how business is done “levels” the playing field and makes it “easier” for anyone to succeed in business, there’s one critical aspect of business that technology has not changed. And this calls into question the claim that the playing field is any more level now than it was years ago.
It’s true that technology lets a small business project a much larger image of itself while giving it access to global talent pools and markets. And technology definitely lowers costs by letting business owners automate back office functions.
These benefits alone enhance a business’s overall competitive profile. A larger image, even if it’s just “projected”, opens additional doors providing entrée to new business opportunities. And being able to collaborate with anyone connected to the internet means you can source the best talent from around the world at the most competitive costs. And “being there” is no longer an impediment to doing business since you can be almost anywhere in the world at least virtually.
But sadly enough, the benefits of technology outlined above would not have made a difference in the success or failure of the various business enterprises I’ve been associated with over the past twenty or more years. While they may have improved overall productivity, lowered costs, and maybe even helped with product or service innovation, they would not have influenced overall success.
You see, it still takes money to make money!
There’s no getting around it. You need capital to succeed in business. And the sad truth is that most businesses, to even start, have to start under-capitalized.
And while some business owners are able to juggle the cash flow to get to a point where it seems business is okay, the inability to take advantage of the opportunities that present themselves “on-the-margin” keeps the business just on the cusp of serious growth.
A record shop I owned operated with limited inventory because my partner and I didn’t have more cash to invest in the business. As a result, we had to limit our inventory to the top 20 albums.
A coffee company I owned couldn’t take advantage of a no-bid government RFP to provide coffee to troops during Operation Desert Storm because we didn’t the working capital required to purchase the packaging materials and green bean inventory needed to fulfill the order. This was the second time we had to walk away from a no-bid government RFP, the first time was when DOD needed to provide peace keepers in Eastern Europe with coffee. In both cases, the volume under these bids would have doubled our sales, and because they were no-bid, would have allowed us to make as much as $3.00 per pound of coffee roasted.
More than anything, access to capital determines whether a business is successful. So while technology may lower the cost to do business, provide easier access to global markets, and expand access to the universe of potential talent and customers, it won’t matter to most small business owners since limited access to capital will prevent them from taking advantage of the market opportunities that exist “on-the-margin” – the opportunities that push the business to the next level.
