What Small Businesses May Lose By Using Online Tools

Digital tools make starting a small business easier than ever. There are apps and websites to incorporate, find lawyers, make payroll, manage HR and marketing. Convenience can come at a price, however, if it means entrepreneurs aren't making personal connections as they establish their businesses.

Copyright © 2013 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

DAVID GREENE, HOST:

And let's hear about people who get to choose where they commute: small business owners. There are actually websites and apps that can help entrepreneurs pick the best location for their businesses - and that's only the beginning. Here's NPR's Sonari Glinton.

SONARI GLINTON, BYLINE: We've been reporting on small businesses for weeks and I figured might as well get some ice cream out of it. I found a brand new ice cream shop, less than a year old, just off of famous Rodeo Drive in Beverly Hills along with its young co-owner.

JOSEPH LIFSCHUTZ: My name is Joseph Lifschutz and I am the founder of the Ice Cream Lab.

GLINTON: Because ice cream needed some, what, reinventing?

LIFSCHUTZ: Well, exactly. We are reinventing ice cream and the way we make ice cream. We use liquid nitrogen to freeze ice cream on the spot. So, essentially we create every single cup of ice cream in front of you.

GLINTON: And in that L.A. way, the 26-year-old Lifschutz shows no sign of actually eating his product, and he proceeded to make me a cup of ice cream.

LIFSCHUTZ: What I'm doing here is I'm adding our ice cream base: eggs, milk, whipping cream and organic sugar cane and that's it. And here I pull the lever, which will release the liquid nitrogen into the bowl. The liquid nitrogen is essentially an instant freezer. So within about 20, 30 seconds, open it up - fresh-made ice cream.

GLINTON: As you might expect from a couple of tech-savvy millennials who are using liquid nitrogen to make ice cream, Lifschutz and his partner made full use of the Internet - apps, cloud computing - to get started. They used a networking site to find a lawyer to incorporate and get permits. Their payroll, ordering, HR, accounting, marketing and advertising are all done using online services. They have 15 employees, and how many of them are back office?

LIFSCHUTZ: Just myself and my partner, Tommy. We do all the sort of admin and upkeep.

GLINTON: And so how much of that would you say are you putting pen to paper, you know?

LIFSCHUTZ: Very, very minimal, if at all.

GLINTON: So even that they're using computers is almost a stretch. Most of the tools that they use to run their businesses are on their phones, even the security cam.

LIFSCHUTZ: It's called Micro Cam. So for instance, I can tap into it. Pulls up all of our cameras.

GLINTON: So you could just be sitting...

LIFSCHUTZ: At a coffee shop. There's one on right now. Let's see if we can see us. There's us right there.

GLINTON: And all these technologies are available to the average kid who wants to start an ice cream stand. And it helps to clear up the red tape. Waverly Deutsch teaches entrepreneurship at the University of Chicago's Booth School of Business. She says hours, days, even months have been shaved off of getting a small business started.

WAVERLY DEUTSCH: But you're also getting less help. So, when you would show up at City Hall to try to figure out all the permits you needed, there was somebody there answering questions. Now you've got to figure out all of that on what are typically not the world's most intuitive websites.

GLINTON: Deutsch says instead of going to the one lawyer or accountant in your town, entrepreneurs have almost infinite choices.

DEUTSCH: Small businesses are being absolutely hammered by technology people who are all offering more access to their customers, more new leads, but wanting a little piece of the pie.

GLINTON: Deutsch says a new businessperson has to become an expert at make ice-cream and navigating technology. Don Weiss, another entrepreneurship professor - he's at Columbia - says even so it's still easier to start a business to today. But the hardest part of business remains making and maintaining relationships.

DON WEISS: There's only one way to do it, and that is by pressing the flesh, by doing things face-to-face and by forming relationships and listening to what your customer or your partner or for that matter your employee has to say.

GLINTON: Weiss says the key to a successful entrepreneur is the ability to listen. And there's no app for that - not yet at least. Sonari Glinton, NPR News, Culver City.

Copyright © 2013 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.