Historically, advances in technology have led to major changes in the way businesses operate -- the ways technology has recently impacted entrepreneurship and small businesses is a prime example of this.
Here's a look at how entrepreneurship and small businesses have changed this year:
The Power of Social Media
2010 has been a busy year for social media. Facebook launched its Deals section to help local businesses target specific audiences, Groupon became the largest coupon-sharing site, and Twitter received investments from Kleiner Perkins and other venture capitalists, turning it into a $3.7 billion company.
As social media becomes more entrenched in our daily lives, small businesses are using it to reach out to potential customers in greater numbers, reported MerchantCircle, a social network for small businesses with more than 1.3 million members.
More than half of MerchantCircle’s members have created a social networking profile versus 48 percent in Q2 and Q1 of 2010, reported the site. When asked about the services they use to promote their businesses in Q3, 33 of the respondents used Bing (versus 23 percent in Q2), 55 percent used LinkedIn (versus 43 percent in Q2) and 32 percent used Yelp (versus 22 percent in Q2). Additionally, Facebook usage among small businesses jumped from 60 percent to 69 percent over the last quarter.
Online advertising has also grown significantly over the past year. U.S. online publisher sites delivered more than 417 billion ad impressions in September 2010, an increase of 26 percent versus a year ago, according to comScore.
Whether or not these efforts are translating into real profits is still debatable, however. More than 75 percent of small business owners said they have not found sites such as Facebook, Twitter and LinkedIn useful for generating business leads or expanding business, according to a survey conducted for Citibank Small Business last year.
A Rise in Virtual Offices
The idea of working from home is not new. What is new is that technology is enabling more companies to shed their physical offices and set up virtual offices, complete with receptionists and a brick and mortar address.
Statistics about the number of people who work from virtual offices were not available, however, self-employed workers were three times more likely than other workers to work at home, according to a survey by the Bureau of Labor Statistics.
Self-employed workers can maintain the appearance of heading a larger enterprise thanks to cloud computing services and web-based tools like voice-over-Internet protocol. With VOIP, clients can call a number that is answered by a receptionist who will then transfer the caller to you even if all three parties are in different states.
As for having a physical address, you can “rent” an address from highly sought after locations, while paying only a fraction of the cost. A 27-year-old entrepreneur, Scott Gerber, rented an address in New York City for $300 a month through ManhattanVirtualOffice.com, reported The New York Times in a recent article.
"He says it saved him $100,000 in rent and gave Sizzle It the credibility it needed to start attracting clients that now include Proctor & Gamble and the Gap. He does most of his actual work at home and in coffee shops and shared work spaces," wrote Hannah Seligson.
Cloud computing is another cost-saving innovation, which allows businesses to operate online without having to maintain their own servers, routers and other expensive hardware.
Innovations that make communication between businesses and their customers easier and more affordable are clearly here to stay. Networking sites and location-based services are likely to continue growing as virtual marketplaces where merchants hawk their wares and people shop and share information about their purchases. As we move further into another decade, who knows what new innovations are coming next.