The rise of social media has changed the way that entrepreneurs engage in their day-to-day activities, representing a marked shift in how business owners carry out key tasks. By exploiting social media functionalities, entrepreneurs can improve the management of their business activities such as marketing, networking with other business and engaging with clients. Over 50 million businesses use Facebook business pages, including 2 million who use it for direct advertising. This can also be seen in other dominant social media platforms such as Instagram, where half of users follow a business page.
Recent research has shown that entrepreneurs use social media for several reasons and purposes which is vital to their business activities.
A key reason is of course to market products and services, with research agreeing that social media marketing can be vital to the survival and growth of an entrepreneur’s business. Social media can be a powerful tool in the marketing arsenal of any entrepreneur, providing much needed access to things such as customer relationship management, advertisement, visibility and sales. The prevalence of negative comments on social media have been shown as an essential reason to be on these platforms, as it gives business owners a chance to respond to and manage this feedback.
However there a lots of others ways they showed that social media can provide benefits to entrepreneurs, such as for crowdfunding, networking, information search and knowledge management. For example, the openness and connectivity that social media offers can help to overcome the difficulty entrepreneurs experience in identifying and reaching out for expert advice. This is particularly crucial in the early stages of entrepreneurship where there is a need for information and support on setting up and running a business which is essential to its survival.
Similarly, the ability to interact and network with co-entrepreneurs is another powerful way in which social media can benefit a budding entrepreneur. By allowing entrepreneurs to connect and establish relationships based on similar interests, they can establish partnerships that drive co-creation and innovation, resulting in better businesses with better long term prospects.
The researchers noted that the uptake of social media by entrepreneurs has been influenced by several factors. They broadly categorise these under the headings of technological, organizational, individual and environmental factors. Of these technological and organizational factors were often seen to be the biggest influencers of social media uptake. However, they noted the important role of all factors, particularly when thinking about sole or small businesses (<20 employees), which are seeing a big rise in social media use. In Australia for example, there was 73% increase in small businesses on social media between 2011 and 2018 compared to 57% of medium and 41% of large businesses in the same period.
Social media can therefore enormous value to entrepreneurial business processes such as business creation, survival and growth.