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 DETROIT, Aug. 25 /PRNewswire/ -- Many small businesses -- confronted with alarmingly high failure rates -- could improve their chances for success by using basic business planning and state-of-the-art technology, concludes a new comprehensive study.
 The study, conducted by an independent research firm for AT&T, found that small companies with revenues of less than $20 million that make more use of business planning and technology are more successful than those that don't. More than 500 businesses nationwide participated in the study.
 The most successful of these small businesses, those that have grown over the past two years, have a business plan emphasizing the importance of the customer. These companies often make customer contact a priority and employ the use of advertising and promotion, direct mail, and office technology such as fax machines, PC's, long distance calls and toll-free service.
 "A comprehensive and complete business plan is crucial to the success of any business," said Wendell Dunn, associate director of the Sol C. Snider Entrepreneurial Center, The Wharton School, University of Pennsylvania, who noted that only 42 percent of small businesses surveyed actually use a plan. "Businesses have to consider a plan as the blueprint for what they'll be building -- a successful, thriving enterprise."
 "The things we know that work, such as targeted customer contact, work better when they're part of an overall plan," said Dunn.
 Few Businesses Recognize Importance of Planning
 When asked to identify what contributes most to their overall business success, the companies surveyed provided the following top five responses:
 1) personal computers
 2) employee training
 3) advertising and promotion
 4) 800 number telephone service
 5) cash flow analysis
 "These tactics are clearly important and contribute to success. However, the study found that the most successful companies are more strategic and focus more on business planning. In fact, findings show 69 percent of growing companies agreed their formal business plan was the major factor in helping them meet their business goals," said Dunn.
 You're Only As Successful As Your Plan
 Only four in 10 small businesses surveyed (42 percent) use a formal business plan and, often, those plans are incomplete.
 The study found that key elements of a business plan, such as sales plans, advertising and promotion, products and services, use of technology and office automation, are often missing. Businesses that have grown (increased employees) during the past two years have placed particular emphasis on marketing and sales within their business plan in comparison to businesses that have declined.
 Topics Included In Business Plans
 More than half of all companies surveyed do not adequately account for sales and marketing within their business plans.
 Growing Companies Declining Companies
Advertising & Promotion 61 percent 49 percent
Products & Services 70 percent 49 percent
Sales Plan 68 percent 44 percent
 "It is likely that this lack of emphasis on the financial and marketing bottom line is one factor that accounts for the failures these declining businesses face in today's competitive markets," Dunn noted.
 Significantly, only half (52 percent) of small business owners or managers have taken formal courses in business or business administration and only a few of them identify long-term planning as one of the strengths they bring to their company.
 Services And Equipment: Keys to Success
 Growing companies tend to use technology and services to a greater degree than declining firms, the study showed. Of the growing companies, the study found that 80 percent use personal computers (versus 73 percent for declining); 42 percent use toll-free 800 service (versus 21 percent for declining); 80 percent use overnight delivery services (versus 64 percent for declining) and 72 percent use fax machines (versus 58 percent declining).
 One specific example, the use of toll-free long distance service, shows how companies benefit from these services. Overall, companies using 800 numbers attribute an almost 8-percent increase in business to this technology. Smaller businesses, those with less than $50,000 in annual revenues, attributed a more than 10-percent increase in business to the use of 800 service.
 Despite the advantages of applying certain technology and office automation, the survey showed that only 32 percent of companies include technology and office automation into their plans. However, 45 percent of companies with revenues of more than $1 million annually do account for technology and office automation.
 "It is safe to assume that those companies with more impressive revenues realize the value of modern technology and the importance of utilizing the services available to them," said Dunn. "They also recognize that for a formal business plan to work effectively, it must be a complete plan that covers all the components of day-to-day operations from sales to office equipment to services."
 The AT&T Small Business Study is available free by calling 1-800-321-4001.
 -0- 8/25/93
 /CONTACT: Eileen Dixon of AT&T, 313-262-4962/

CO: AT&T ST: Michigan IN: TLS SU:

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Publication:PR Newswire
Date:Aug 25, 1993

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