SMBs Will Spend More Money and Hire More People

Are you planning to increase your spending on new technology this year? Well, if you believe in the validity of market research, there’s a good chance your competition will be.

At this week’s National Small Business Administration Conference in Orlando, Fla., technology giant HP unveiled the results of a survey conducted earlier this month by research firm Penn, Schoen and Berland Associates.

In general, small businesses see a brighter future and report that both technology spending and new-employee hiring will increase over the next year.

The results of the HP-commissioned blind survey (i.e., respondents didn’t know who sponsored the study) are based on 500 telephone interviews conducted with senior decision makers at small and medium-size companies during the week of May 3-7. HP defines small businesses as those with fewer than 50 employees and mid-size businesses as those with between 50 and 999 employees.

Help and New Technology Wanted
Mike Pinckert, SMB general manager for HP’s central region, said it’s particularly positive that nearly half (49 percent) of SMBs say they expect to hire new employees in the next year. “Anytime a company is willing to hire new employees it’s a good sign because it’s a long-term commitment,” Pinckert said. Businesses with more than 50 employees were a bit more optimistic with 66 percent indicating they will be looking help (46 percent of companies with fewer than 50 employees say they are likely to add to their payroll).

With the economy seen as improving, SMBs indicate that they will be opening their wallets for new computer equipment with 44 percent saying they will spend least 10 percent more on new technology this year. An additional 17 percent will spend up to 20 percent more than last year. “We see particular interest in wireless technology, disaster recovery and storage,” Pinckert said.

The survey results support those trends as 77 percent of those interviewed said it’s important for staff members to stay connected while working outside the office. On the security front, 49 percent report that their computer system has been exposed to threats such viruses over the last year. Interestingly, companies with fewer than 50 employees reported fewer security-related incidents than mid-size companies (44 percent vs. 63 percent).

Decision makers also say that technology is not just important, it is a key to survival. Nearly 80 percent of SMBs said that to survive in today’s economy, they need to be technologically on a par with, if not superior to, larger corporations.

Who You Gonna Call?
A whopping 85 percent of SMBs say they depend on locally based technology experts to minimize downtown and ensure productivity. Citing a lack of in-house staff, most (57 percent) prefer to use outside experts to conduct regular maintenance on computer equipment. One area where small businesses differ from mid-size companies is in their preference for installing and configuring new computers and peripherals. Businesses with 50 or more employees were almost twice as likely to use outside service providers to research, purchase, install and configure new technology.

So where will SMBs buy all this stuff? Pinckert said businesses tend to use all available methods at different times. The survey results indicate no one channel dominates when it come to purchasing preferences for computers, printers and other information technologies products:

• 33 percent buy from a retail outlet or office supply store
• 22 percent make online purchases direct from the manufacturer
• 21 percent purchase at the recommendation of local service providers
• 16 percent make through online purchases through a retailer and discounter
• 16 percent order over telephone from the manufacturer
• 4 percent buy through eBay and similar sites.

Strategy Is Key
While small businesses and mid-size companies tend to have similar views on technology, one difference, Pinckert noted, is in planning. “Companies with 100 or more employees tend to have a more formal IT strategy. One hundred employees seems to be the critical mass needed to have an IT person.”

“It’s important for all companies to have a strategy,” Pinckert said. For small companies, there are consultants and value-added resellers who will them develop one, he said.

(For tips on finding outside help, see Hiring a Consultant? Factor In The Intangibles. You can also visit HP’s U.S. Partner Locator.)

Dan Muse is executive editor of internet.com’s Small Business Channel and EarthWeb’s Networking & Communications Channel.