Can social media spell big business for the smallest of companies? The US television personality and business adviser Carol Roth certainly thinks so. The author of the bestselling book The Entrepreneur Equation says what she calls "social selling" can be key for small and medium-sized businesses (SMEs). Ms Roth identified four main areas in which businesses should approach digital: by consuming social media – looking at what customers and competitors are saying online – by creating and curating content, as well as communicating with potential customers. Here she explains how companies in the UAE and beyond can use digital and when entrepreneurs should, and shouldn't, give up the day job.
Why is social media important for companies? Isn’t it becoming too crowded?
Social is not going away. I liken it to the new neighbourhood cafe: it’s where people are spending their time, it’s how they are connecting with each other. The challenge is that there are a lot of companies that are doing it quite poorly. So as a business you have to make sure that you do it well, and you implement the kind of strategies that are going to make you stand apart.
Why is creating online content important?
It gives you the ability to put out your messaging and thought leadership in a number of different ways, to try to create that connection and loyalty with the customer. If you ask many people what McDonald’s sold, they would tell you that they sell burgers, fries and soft drinks. And I would argue that they sell things like value, convenience and consistency. Or if I’m buying lipstick, I’m not buying lipstick – I’m buying self-esteem. So being able to frame your messaging in that way is just one of the ways that I talk about creating content.
What insights do you have on how companies in the UAE and wider Arabian Gulf are using social selling?
I would say the Gulf region is, in general, a little bit behind the curve when it comes to social-media adoption. I would say that LinkedIn and Facebook tend to be much more active in the Gulf region than something like Twitter, which is just starting to be used more widely, especially in the business context. Whereas in the United States Twitter is very important. This creates a great opportunity for those businesses.
You recently spoke at an SME event in Dubai. What’s your impression of that space in the UAE?
The level of commitment to small business in Dubai and the UAE is tremendous. From a government standpoint, I was incredibly impressed, just learning about some of the programmes and support that the government is giving the small business owners. I find in the United States there is a lot of discussion about it, but that the resources are often pulling in different directions and not really collaborating.
The Entrepreneur Equation attempts to help readers answer the question of whether they should launch their own business. What are the most common reasons for the answer being "no"?
One of the most common reasons from my perspective is that the opportunity is not big enough. A lot of aspiring small-business owners do not do extensive business plans, do not do financial projections, or do not interpret their financial projections. I’ve had people who make $50,000 or $70,000 a year show me a business plan where they project that, in five years, they’ll be making maybe $200,000 in revenue – but the profit is $20,000. So they’re going to trade in a $50,000 or $70,000 salary for the chance to maybe, if they hit their projections, make $20,000. And that doesn’t make any sense.
What advice would you offer entrepreneurs hoping to give up their day job to pursue their own business full time?
First of all you have to be in a financial position to be able to give up your salary. If you’ve worked for a few years and saved up enough money to give yourself a good couple of years to try something out, that’s really important. If you’re counting on your new entrepreneurial endeavour to pay your rent or mortgage every month, you’re going to put yourself into a bad position.
You describe yourself as a “recovering investment banker”. How’s that going?
It's like a 13-step programme and I'm stuck perpetually on step 12. I'll never fully be recovered. It was actually my investment banking experience that made me want to work with small-business owners and entrepreneurs. Because you have a lot of the same issues on a different scale. A lot of small-business owners were getting really poor advice. And so that's why I thought I could use media to put out advice to small-business owners and entrepreneurs that was really solid, at scale.
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