Over the last two years, a lot has been made of the trend amongst small businesses for “digital transformation”.
Embracing the power of digital was crucial for small firms to weather the pandemic, (even though they themselves would never describe it in these terms, it was just about grabbing onto whatever options they could for survival).
Due to this herculean effort the nation’s small businesses are now largely more resilient, more agile, and more open to change and all things new. But how do we ensure this momentum grows, as firms face fresh challenges?
The new ‘Unlocking Digital Potential’ report from Small Business Britain and BT found over half of firms have grown their income by at least 5 per cent through using tech since 2020, and one in ten have raised their revenues by 50% this way.
This is a huge step forward and will undoubtedly be the basis for economic recovery. Encouragingly, we’ve also seen the rise of new entrepreneurs and start-ups, with 800,000 businesses set up during the pandemic, largely enabled by an increasingly ‘digital first’ world.
However, the report – which explores how to maximise online opportunities for the nation’s 5.5 million small businesses – found some big hurdles remain for all small businesses to realise all the benefits of digital. Some firms are simply not reaping all the benefits.
While many firms have adopted revenue generating digital solutions – over half (55%) have added new social media channels and 42% have built a new website over the last two years – we do need to ask, why not all firms? What is it that means some business has benefited significantly, while others have yet to realise their potential?
For example, while 48% of businesses have brought in social media scheduling in the last two years, and 41% have implemented video calling, only 21% are investing in productivity tools to help save time and streamline processes. There is clearly a massive opportunity for more businesses to save time and reduce costs in this way, particularly when facing rising expenditure elsewhere.
So, what is holding them back with digital? When asked, businesses point overwhelmingly to cost (64%), skills (44%) and complexity (26%) as the key barriers. And 83% of small businesses say they do not have enough support with digital skills.
Confidence is also a massive block. With 39% of small businesses feeling very or extremely confident with digital, there is a clear gap to help the 61% who are not at that comfort level yet. The drive to do so is clear: without confidence and an openness to new things, businesses stay in their comfort zone, and miss out on great new opportunities.
These problems can absolutely be overcome with support from the wider small business ecosystem. Small businesses need an entirely bespoke approach to digital that understands their situation, their needs, their customers, and their ambition.
In many cases digital solutions are built for the large end of small business (at best) and for large enterprises in the main. Many digital solutions are truly phenomenal, but understanding how to unlock that functionality and potential is way beyond the digital skills of most businesses and leaders.
We need an on-ramp for small business to help them move forwards and upwards. We need a way for the smallest of businesses to access the world of magic and opportunity currently locked away from them.
That on-ramp might be freemium services accessible in bite sizes; it might be scaled down tech that is built specifically for the tiniest of enterprises; it may indeed be that the human element is the on-ramp that makes all the difference: a mentor, peer support or inspiration that takes away the risk, builds confidence and creates an access point to something incredible.
And by every business, we must mean every business. There are stark inequalities in
access to business support for ethnic minority entrepreneurs, disabled entrepreneurs and,
in particular, those from lower education backgrounds or who perhaps come from economic deprivation. There needs to be a targeted, concerted effort towards balancing up this field, focused on those who need the support the most and ensuring that, regardless of background, you have the opportunity to shine.
Lowering the barriers to digital will have to include financial support; it will have to include greater visibility and access; and it will have to include the right “on-ramps” for each business.
With this in place, there is no limit to the potential that could be opened up for small businesses. So much progress has been made over the pandemic, in the worst of all circumstances. Now that good work needs to continue and grow and ensure that every person and business can thrive.
A free copy of ‘Unlocking Digital Potential’ is available to download here – https://smallbusinessbritain.uk/unlocking-digital-potential