Small Business Increasingly Going Social

There are three times as many businesses using social networking as there were three years ago, according to a new survey, with use jumping 23 percent in the past six months alone. But less than a third (29 percent) of them said they had ever used social networking websites to promote their businesses.

Polls conducted in April and October this year by Discover Financial Services found that more than half of all small business owners were members of an online social networking community . Nearly half (48 percent) of those using social networking sites to promote their businesses said the biggest benefit was “getting new business leads,” ranking that as more important than getting business tips, finding new suppliers or benefiting in some other way.

Now that social networking has caught on with small businesses and they have seen the opportunity to reach specific web audiences, it’s conceivable that skilled entrepreneurs are already using social networking as a very surgical marketing tool, said Ryan Scully, director of Discover’s business credit card.

“Small business owners don’t have a lot of time to waste, so if they’re online they have a specific reason to be there, and they want to get something out of it,” Scully said. “Because it is a virtual word-of-mouth marketplace, social networking would appear to be a natural extension of what small business owners do every day. The issue is how to make it pay off.”

More than three-quarters (76 percent) of small business owners said they were spending more than an hour online every week related to their business, up from 66 percent in 2007 when Discover first polled small businesses about their social networking activities.

In 2010, 31 percent of small business owners said that social networking has had an impact on their bottom line, up from 19 percent in 2007.

Consumers are also gradually warming to the idea of social networking as a way to hear about small businesses: 36 percent of approximately 3,000 consumers told Discover researchers this year that they would consider using a small business that they heard about through a social or business networking site, inching up from 31 percent in 2007.

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Reach BusinessNewsDaily senior writer Ned Smith at nsmith@techmedianetwork.com. Follow him on Twitter @nedbsmith.