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Andrea Peiro — A Passion for Small Business

The founder and CEO of the Small Business Technology Institute talks about the ongoing quest small and medium businesses have to obtain a complete picture of business performance and to have the right information to make the right decision available at all times.

We recently talked with Andrea Peiro, founder and CEO of the Small Business Technology Institute (SBTI), to find out about how technology can help with some of the biggest challenges facing small businesses today. Mr. Peiro is a recognized authority on Small Business technology, a fervid advocate of the values of the Small Business community and international speaker.

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Q: In your work, what do you find are the biggest challenges facing small businesses right now?

A: The biggest challenge for any small business in our fast-paced economy is to find stability and balance. Small businesses are organizations that can grow fast and shrink fast, and each one needs to find a stable niche, to find its own identity and structure. A common misconception is that most small businesses want to grow and need to grow, but this is not necessarily the case. There are some small businesses that are suitable for growth and expansion, but the majority of small businesses are structured in such a way that they will want to remain small. Entrepreneurs are in business to make money through doing what they like, and growth often requires them to spend more time outside of their “core competency” than they would like.

Small businesses are also exposed to a more concrete set of challenges related to their day-to-day operations. These challenges can be considered according to the primary five domains that small businesses work and operate through: Marketing, Operations, Financial Management, Productivity and General Management.

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On top of the list often are the marketing challenges. The majority of small business owners wake up in the morning thinking about how they will get to their next customer, and go to bed at night thinking about it. Then there are Financial challenges: being able to pay their bills on time, and ensuring that their clients pay their invoices when they’re supposed to are always important issues for any small company. In the realm of Operations, the challenges usually depend on whether or not the business deals with inventory. If the business has inventory, the primary challenge is always related to managing it. If the business has no inventory, for example in a service company, then the biggest challenge tends to be achieving effective collaboration at the human level in terms of sharing ideas and work and making things happen quickly and well. Collaborative environments tend to be conducive to much higher performance than non-collaborative environments.

When it comes to Productivity, small businesses, like large businesses, often have to deal with large amounts of bureaucracy: proposal writing, presentation development, and similar tasks that can be extremely time-consuming. It is vital to ensure that the key people in any small organization aren’t completely consumed with this kind of chores, so they can focus their energy on strategically critical duties.

The key set of practical challenges, with the deepest strategic implications and the most impact on long-term success always occur, though, at a General Management level, with the ongoing quest to obtain a really complete picture of business performance and to have the right information to make the right decision available at all times. Who are the best customers and who are the worst customers? How did we get the best ones, and what type of marketing activities can we do to reach them? How can we replicate the tactics that succeeded? What are the products or services with the best margins and who is buying them?

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This type of cross-operational intelligence is critical to small business owners, but unattainable unless they can rely on a well thought-out and integrated way of using technology.

If you have to open your books, look at all your papers, and look at all your customer records to see who is a good customer and where the money really comes from, it can take an unreasonably long amount of time. On the other hand, if you have a good yet simple baseline of technology in place, these are simple questions to answer. You could set up a Customer Relationship Management database, integrate it with your Accounting System and, if applicable, your Point of Sale and Inventory Management software and print out targeted reports based on the answers you need. Very quickly, you’ll know where your good customers come from, how much they spend, what they buy, and so on.

Small businesses tend to overlook the strategic value of this type of information, and in the future, the value of this knowledge is going to grow rapidly. The only viable way to obtain it, manage it, render it and make sense of it is with the help of technology. Technology is the only cost-effective option to solve key management challenges in most small business environments. At a strategic level, owners and managers are already beginning to understand the critical value of technology in aiding decision-making, and in the next four or five years, we are going to see the market moving from a generally heuristic to a much more analytical, data-driven management paradigm. Even in the smallest businesses, there is a critical need to move from the shooting-from-the-hip style of management to a more quantitative management style. This doesn’t mean that small businesses should abandon the value provided by the gut feelings and intuition that they bring to their decision-making every day. It simply means that they are going to have to start pairing it with more quantitative information that only the right technology that can make available.

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Q: What in your experience are small business owner’s or managers’ greatest concerns when they implement new technology and how do you address those concerns?

A: The biggest category of concerns is always related to how the technology itself will positively affect the overall business, and these concerns are on the rise. Business owners need to know how technology is going to help, how it works and how it doesn’t work, and how it will affect their people and their business.

A close second are the economic concerns related to how quickly and substantially the technology will impact the bottom line.

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Q: You would say that in many cases it may be a financial stretch to invest in technology, so business owners want to have no doubt that it’s going to get used and that there will be a direct payback?

A: Absolutely. Small businesses need to know that there will be a tangible payback both economically and at a life-style level. Small business owners’ work and private lives are tightly interconnected. Everything is a “family affair,” and the progress of the business directly affects family life in a very strong and direct way.

Technology investments appealing to small businesses always lead to both economic benefits and lifestyle improvement: more time with the kids, going home earlier, being more relaxed. These are all things that deeply affect an owner’s quality of life without necessarily being too easy to quantify economically, but these are the fundamental considerations that drive the decision-making process of any small business.

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Small businesses look at the world in colors; there are no black and white choices. They would even have more than two colors on the balance sheets, if they could. Everything is about subtle differences and changes.

Because of the unique conditions, needs and desires of every small business, technology in the highly fragmented small business market should aim at making a difference almost on a philosophical level. Entrepreneurs should always chose technology that works with their uniqueness. Technology should be and can be a great source of empowerment, allowing them to focus on what matters, allowing their passions to drive their trades, freeing their emotions to enrich their lives.

About Mr. Peiro
Andrea Peiro holds a Masters in Management from the Italian Navy Graduate School, an Advanced Bachelors degree in Information and Computer Science from the University of Milan, and a Bachelors of Science in Information Management from the Naval Academy. After nearly a decade in military intelligence, he served in executive roles in business development, marketing and general management at various technology companies, start-up ventures and consulting firms. Today, he leads the Small Business Technology Institute’s mission to foster the adoption of information technology within the thriving small business market.

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About the Small Business Technology Institute
The Small Business Technology Institute (SBTI) is a non-profit, public benefit corporation created to foster the adoption of information technologies among small businesses by providing information technology awareness, education, counseling and support services. SBTI also provides technology developers and vendors with market intelligence and insight to encourage the development of products that more closely meet the needs of small businesses.

Headquartered in Silicon Valley, California, SBTI delivers specialized counseling services to over 150 small businesses each year, trains more than 2,000 owners and managers annually, and has helped more than 100,000 small business owners and technology decision makers understand and adopt technology.

For more information on SBTI, go to www.sbtechnologyinstitute.org.

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