Small Talk: Small businesses miss out on benefits of social media

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The Independent Online

Just a few years ago, people's contact details amounted to their phone number and, if they worked in an office, their email. Asking for someone's mobile number at work implied you were going to contact them at the weekend or in the evenings, and frankly, that just wasn't on.

Now it would take some people half an hour and a full side of A4 to list their assorted phone, BlackBerry, Skype, email and Twitter numbers and accounts, not to mention befriending people on Facebook, MySpace and Bebo. There are probably even more ways to get in touch with people, at any time of the day or night.

For some small-company bosses, all these things are of huge collective annoyance. There can be little worse than someone that should be working harder (usually they are agency temps) whittling the day away posting something of someone's wall. Of course, the manager will be wasting just as time updating their own LinkedIn profile.

But research out last week shows that the failure of small businesses to engage with the world of social networking is costing them dear. The figures, compiled by Insurantz.com, show that just 16 per cent of SMEs in the UK, of 1,000 surveyed, have Facebook or Twitter accounts, which, the researchers argue, means they are missing out.

"Millions of people visit social-networking sites each day at work or at home and yet just 16 per cent of small businesses see digital media as an essential means of marketing their products and services," says James Pickering, the managing director of Insurantz.com. "Our research revealed that SME owners under 30 are the most likely to embrace this type of customer engagement, so don't be surprised if online social marketing becomes increasingly important to the modern small business."

More than half of the companies that don't use social networking sites blame a lack of understanding, while of those that do Twitter away all day, 65 per cent say that they are yet to see any benefit from it.

Unsurprisingly, it is largely an age thing. Younger small business owners are far more likely to use social media to market their company than their older counterparts. Nearly a quarter of SME owners aged 18-21 see social media as an essential tool for any modern business, whereas fewer than one in ten over 40s shares the same opinion.

As for Mr Pickering, who is 42, says that he is a latecomer to Facebook, but appreciates that it is an "absorbing space".



Brainspark invests

Just a few months ago, this column reported that the Alternative Investment Market (Aim)-listed investment group, Brainspark, had put £1.5m into Italian second division football club, Ancona. We are still at something of a loss to understand why the group plumped for the club, whose biggest honour to date is losing the 1993 Italian cup final, but it is, as they say, a funny old game.

At the time, we were told that the group had raised plenty of money and we would hear more about its investment in the Italian media and entertainment sector. It would appear, however, that the group has decided to branch out.

Last week, the group said that it bought nearly 20 per cent of the Aim-listed financial services group, and Nomad, Daniel Stewart.

Last week's investment follows other departures form the media and entertainment script. Two months ago Brainspark announced that it had put £2.1m into Cogeme, an Italian automotive parts maker, giving it a 6 per cent stake in the company. The news is interesting in itself: Cogeme, which makes the likes of turbochargers and fuel injections systems, made a profit of €3m (£2.5m) last year, all with assets of €63m (£52m).



Delistings down

Depending on who you listen to, the public-spending cuts and VAT hike in the Budget will either lead us all to economic salvation, or into a much-feared double-dip recession.

Regardless of where we end up, it is undoubtedly true that life for companies on Aim has generally improved in recent months – earnings are generally improving, more investors are backing small caps and, perhaps most importantly of all, share prices are improving.

The improvement is also helping the state of the market. Research out today from accountants UHY Hacker Young, and their colleagues at the City law firm Trowers & Hamlins, reveals that the number of delistings dropped by 18 per cent in the second quarter, with only 36 companies leaving the market between April and June, compared with 44 in the first three months of the year.

This is the second-consecutive quarter of falling delistings from Aim. At the peak of the recession, Aim companies were delisting at the rate of 70 per quarter. However, the research shows that the number of delistings still outnumber new listings by three to one in the period, with just 12 new companies joining the market in the second quarter.

"This further fall in delistings is great news but everyone is going to be a lot happier when the number of IPOs overtakes the number of delistings", said Charles Wilson, a partner at Trowers & Hamlins. "Parity is still a little way away. Aim is a global market so it is bound to take a hit from the weakness in the global market for IPOs."

The research also shows a sudden decline in takeover activity on Aim, with the number of takeovers completed in the second quarter down 40 per cent to just 12 compared with 20 the previous quarter.

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