RingCentral (News - Alert), a virtual phone system and online fax service provider, published results of a new survey that demonstrate that savvy business owners facing rising energy costs and an economic downturn are implementing creative cost-cutting measures.
Completed by small business owners and entrepreneurs across the U.S., the survey reveals that the majority of small businesses, or 59 percent, are cutting overhead costs or otherwise changing business practices in response to the economic downturn and rising energy costs while also remaining productive.
In response to job losses, some former employees have become employers by starting their own small business, adding to the growth of the small business sector.
The survey also found that rising gas prices have impacted the cost of doing business for 70 percent of the responding small businesses, prompting changes in business practices. Another 40 percent of responding small businesses are cutting back on office space and allowing employees to work from home.
Also included in the findings were the statistics that 24 percent of small business owners are telecommuting rather than driving to work. Another third or more of responding small businesses are reducing business travel due to the economic downturn.
Small businesses are finding creative ways to reduce expenses and work more efficiently in response to the economy and rising prices of gas and energy. For many, this means employing remote work solutions.
As 40 percent of small businesses are encouraging employees to work from home to reduce travel and office-related expenses, and another 24 percent are opting for telecommuting rather than driving to work, the results of this survey underscore the rising trend of the distributed workforce.
Ramona Ramsey-Pinedo’s company, QSED Consulting, specializes in resource management for corporations.
“With ever increasing gas prices, I have cut the frequency
of in-person client visits. I visit clients quarterly rather than monthly and use the phone to stay connected,” said Ramsey-Pinedo, in a Monday statement. “Even though our employees work from home, RingCentral gives clients the impression that we are all working out of the same office.”
The results of this survey indicate that the ripple effect of the economy has given rise to increased business start-ups. Nearly a quarter of survey respondents indicated that they started their business after being downsized.
Chad Whitermore started his company, ChairsForYou.com, when he was laid off from his construction job.
“I started this company on a shoestring budget during a recession and business is growing. RingCentral helps me look like a large company, even though I’m a one-man show,” said Whitermore, in Monday’s statement.
With these changes within the market, phone communications remain a cornerstone that makes businesses work. The majority, or 66 percent, of small businesses ranked the telephone as the most important business tool, followed closely by e-mail at 63 percent. In these tight economic times, 50 percent of small businesses are conducting more meetings virtually versus in person.
“This survey demonstrates that the workplace is changing, as many former employees become business owners and many employees in small businesses begin to work remotely. The ability to work independently and remotely offers new efficiency opportunities, but it also means working without the established infrastructure of a large organization,” said Vlad Shmunis, CEO of RingCentral, in Monday’s statement.
Shmunis continued: “While small businesses continue to rank the phone as their most important tool, traditional, office-based phone systems don't meet the needs of this new working environment. Our hosted solution connects proprietors, their employees, partners and prospects regardless of location and, more importantly, gives businesses the services they need at a small fraction of the cost of old solutions.”
The economy of today, filled with innovative businesses that deliver products and solutions that we use every day, is the result of small businesses, led by entrepreneurs with big ideas. These companies will continue to be a key sector of the economy, whether they grow in individual size or not.
As these businesses continue to look for innovative solutions to drive efficiency and control costs, opportunities for those companies that can deliver solutions to support these strategies will continue to enjoy strong growth.
Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.
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