Small businesses need to think about faster bandwidth and the rise of social networking when setting up online, says a business lecturer.

Michael Lee, a senior lecturer in the University of Auckland Business School's department of marketing, says Facebook and Twitter have provided another channel by which companies can engage with customers. "For most businesses, a website is essential and a social media presence is recommended."

Duncan Shand, of digital marketing consultancy company Young and Shand, agrees. "Social media forces businesses that have been muddling along to think about how they're different from the competition and what they stand for," he said.

Social media was not about being "chatty and friendly" but about interacting with customers. "It's about showing your expertise, putting your opinion out there and answering questions."

"If you tweet two or three times a day, people will retweet you and you'll be introduced to their followers. It costs nothing to use and small businesses could get a lot out of it."

A Department of Corrections wages clerk by day, former pole fitness dancer Paula Dockrill has started Hoopnotica, a business selling hoola hoops.

The Christchurch woman imports the hoops from the US and has distribution rights for Australasia.

Web design company Hairy Lemon created the company's online presence, including a web page, Facebook page, Twitter page and search engine optimisation.

"People don't want things shoved down their throat. If you capture their imagination or sense of humour, it's more likely they'll buy your product," Dockrill said.

John Sumner, managing director of Aegility Performance Based eLearning, said social networking had changed the relationship with the customer from being transactional to a more intimate objective.

"It raises the expectations of the customer. If companies don't know who their customers are and aren't able to track their business and preferences, then it's catch-up time."

Another change was the growth in online video. Businesses are limited to a 30-second TV commercial but faster broadband speeds means it is now possible to watch a two-minute video online and learn about the company.

"A builder could upload multiple videos to a YouTube channel explaining how to get a resource consent or how to detect a leaky building and embed them on his website," Shand said.

Lee suggests Google Adwords or Adsense to boost search engine optimisation, but people often ignore ads.

"The best way of boosting search engine rankings is when other more influential websites link to your website."

Sumner says cloud-based services also enable SME markets.

"Smaller companies can avoid the huge investment in databases and the personnel to run them and harness database services, sales tracking, accounting and pre-press services at a fraction of previous costs ... They no longer need to buy the technology to progress, just subscribe and use it."

SMEs can reach a wider audience at less cost than at any other time, he says.

"While this provides great opportunity, it also creates great responsibility. As quickly as a company and its product become successful, the transparency of the internet can rapidly reverse that success." It is also essential a SME knows its strengths and weaknesses.

Top tips
* Keep your site content fresh and regularly updated. A blog is helpful.
* Incorporate social media sharing into your website.
* Submit an XML sitemap using webmaster tools.
* Be aware of the search phrases people use to get to yours and competing sites and incorporate those phrases in a natural way.
* If you don't "get" social media, seek advice from people who use it daily.
* Think about how user friendly your website is - can people easily find the most important things on your site? Keep it simple.
* Don't be seduced into using Flash - search engines can't read Flash sites, and anyone on a mobile device like an iPhone can't see them either.

Source: Hairy Lemon.