Social media impacts the way businesses start and grow. It changes the way businesses communicate with current and potential customers. If you are starting a new business right now, you are certainly including social media into your marketing plan. As you should. But it is important to understand the impact social media can have on your business as you move forward.
What is the impact of social media on business?
Social media impacts the business world in both negative and positive ways. It makes it easier for someone to start and grow a business. New businesses are no longer limited to their local communities for customers. But social media also makes it more difficult for businesses to succeed due to an atmosphere of increased competition. New businesses often struggle with ways to stand out against competitors with larger budgets and more experienced staff.
Social media impacts how we start and grow a business
Starting and growing a business in the age of social media is easier in many ways than ever before. A new business owner can send out targeted ads to their ideal customer fairly inexpensively through social media channels. It is also possible to broadcast your new product or service to potential customers for free, with a high-quality organic marketing plan. Gone are the days when a new business owner had to spend hundreds of dollars on an ad that may not reach their target market.
Social media and the internet have also created a situation where new businesses are not limited to their local communities for sales anymore. This drastically increases the number of potential customers that businesses have access to, which increases potential revenue. A business idea that is more niche, and would not have been financially viable before, can become wildly successful now.
Social media negatively impacts business too
The ability to market your product or service on a national or international scale is exciting. What a lot of new business owners fail to realize, however, is that it also means increased competition. Previously, a new business competed within its community for customers and sales. If you were the only company selling a product or service in your community, then everyone in your community came to you.
Now people in your community can buy from you or someone on the other side of the country. The winner of that business is the company that does the best job of marketing their product or service. If your competition has a bigger budget and a more experienced team, it is going to be difficult for your message to reach the customer over theirs.
For example, let’s say you are selling handmade cloth diapers and clothing for baby dolls. The market for your product is pretty small. But with proper use of SEO and social media, you are confident that you can sell enough product to create a viable business model.
You do some research and identify your biggest competitors. After digging a little, you see that one of your competitors has been selling cloth diapers and clothing for baby dolls for ten years. They have a beautiful website, a solid following of fans on social media, and much more experience with marketing than you do. In fact, this competitor even has a part-time marketing professional on their team. And they own the bulk of the current market for your product.
An impossible situation?
While it may seem at first glance that a new business owner with a product like this could never compete in this situation, it is not true. But it will be an uphill battle. A small business owner who competes against someone with more marketing knowledge and experience is always going to struggle to be heard.
The best way to get ahead is to do an in-depth analysis of what your competitor is doing. This allows you to see where the competition is falling short, which will identify an opportunity. For example, the business owner in the scenario above may realize that the competition isn’t utilizing a vibrant community of cloth diapering moms on Facebook. A strategy that incorporates this group will help the business gain a foothold in the market and without analysis, it is an opportunity that would not have been identified.
Social media has had an impact on business in a number of ways. As platforms evolve, businesses will have to continue to evolve along with them. At The Social Expansion Project, we are dedicated to staying on top of the trends. Our clients get the benefits of having trained social media staff at affordable prices. Learn more about our packages for small businesses today!