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The Groupon logo is engraved in a glass office partition in the company's international headquarters on June 10, 2011 in Chicago, Illinois. (Scott Olson/2011 Getty Images)
The Groupon logo is engraved in a glass office partition in the company's international headquarters on June 10, 2011 in Chicago, Illinois. (Scott Olson/2011 Getty Images)

Small Business Briefing

Think twice before daily dealing Add to ...

The latest news and information for entrepreneurs from across the web universe, brought to you by the Report on Small Business team. Follow us on Twitter @GlobeSmallBiz

Will a 'daily deal' give your biz a bad rap?

Groupon, WagJag, LivingSocial. The proliferation of daily deal sites shows no sign of slowing, but a new study reveals that deep discounts may do more harm than good to a small business' reputation.

According to research conducted by Boston University and Harvard University, businesses that run 'daily deal' promotions on Groupon are likely to see their ratings on Yelp plummet soon afterward.

In total, the dataset included 56,048 reviews for 2,332 merchants who ran 2,496 deals on Groupon. The results of their analysis seemed to show the double-edged nature of the deal-of-the-day website: on one hand, the number of reviews for the business on Yelp increases significantly due to daily deals, which for some small businesses could be seen as a good thing. However, average rating scores from reviewers who mention daily deals are 10 per cent lower than scores of their peers on average.

The WSJ small business blog points out that the study offers no explanation for why the customers using Groupon gave less flattering reviews on Yelp, and that the conclusions of the report leave business owners dangling with the question: is it worth running daily deals, which are expensive but can bring in new customers, if it's at the expense of lower ratings on user review sites like Yelp?

For more information on daily deals, check out our web strategy series on the topic.

How to start a business in 48 hours

Connecting with like-minded entrepreneurs and securing venture capital for your business may seem impossible, but events such as Garage48 are making the process a little bit smoother, according to Businessweek.

Founded in Estonia in April 2010, Garage48 is a series of workshops that bring 100 participants together to spend the weekend building teams, brainstorming business ideas and developing viable applications. By Sunday evening, some of the teams even have working demos ready to pitch to venture capitalists.

The concept behind Garage48 is analagous to speed dating, where aspiring entrepreneurs are screened and brought together by common interests and goals. Examples of this movement in the tech industry include FounderDating and Startup Weekend, which both operate out of Silicon Valley.

Time for an upgrade?

With its promise of an upgraded camera, faster processing system and the hot spot options, the much-hyped imminent iPhone 5 (due next month) may be a game-changer for your small business. Find out why.

EVENTS AND KEY DATES

Attention: innovative business

On September 22 between 8:00 a.m. to 4:30 p.m. in Toronto, you'll get the opportunity to engage government officials, participate in various workshops, be informed about the Canadian Innovation Commercialization Program and learn about services available to support your business. Learn more about the event here.

Shop and support Smallbiz Days

Smallbiz Days is a movement dedicated to making a positive impact on local communities. From October 15th to the 23rd, the campaign is raising awareness of the importance of small businesses by encouraging consumers to shop local.

EDITOR'S PICKS FROM REPORT ON SMALL BUSINESS

In this month's Talking to Entrepreneurs, Toronto-based techpreneur Andrew Sider talks about starting and marketing his new app UrbanOrca and the startup culture in Canada versus Silicon Valley.

FROM THE ROSB ARCHIVES

Spying on competitors can be road to ruin

You have to live with the decisions you make, and your firm’s reputation depends on them

Got a tip on news, events or other timely information related to the small-business community? E-mail us at yourbusiness@globeandmail.com

Join The Globe’s Small Business LinkedIn group to network with other entrepreneurs and to discuss topical issues: http://linkd.in/jWWdzT

Follow on Twitter: @scarrowk

 

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