Research conducted by Xero and CEBR found two-fifths (40%) of the UK’s smallest firms fail to see or understand the relevance of technology to their business. Many owners are stuck in the ‘if it ain’t broke, don’t fix it’ mentality, or don’t understand what the best options for them are.
Unfortunately, this has a big impact on the UK economy. Increasing tech adoption among the UK’s smallest businesses (those with 1-9 employees) could add £77 billion to the UK economy and generate 885,000 jobs. Which is why it is crucial technology firms and those supporting small businesses communicate clearly the relevance of new technology and ensure it’s accessible to small firms. This means cutting the jargon.
It is time to start speaking the same language
Every company, including Xero, can fall into the trap of jargon. However, for small businesses – where owners wear multiple hats – this can become unnecessarily confusing. For instance, 57% of small firms don’t actually understand what digital transformation actually means.
This confusion is creating an unnecessary barrier for many businesses at a time when they are already stressed about investing in new processes. For example, choosing the wrong sales platform could lead to increased costs, or a new system that requires more time from staff to manage. If they must ‘translate’ sales materials or struggle to understand the benefits of new tech on top of these worries, many won’t adopt new tools.
By removing the jargon and speaking in simple language, tech suppliers can help cut through the noise and help entrepreneurs find the solution that is best for them. For instance, including examples of how other small businesses have used the technology can help owners see how it could benefit them.
Small and SME are not the same
Small businesses, those that employ up to 9 employees, make up 94.8% of UK companies, and provide £935bn of total UK turnover. It is also estimated that for every £1 a small business makes in turnover, it creates 59p more in the wider economy. However, policy makers and technology companies often view small businesses as the same as all SMEs. Yet, there is a big difference between a company with 9 workers and one that has 249 employees.
As such, it is time regulators, the government, and technology companies start recognising small businesses as their own unique category, and provide support tailored for them. For example, the government could scale short online mentoring schemes and provide greater access to digital, finance and business training to help small businesses acquire the skills necessary to make the most of technology.
It is also vital the government makes it as attractive as possible for small businesses to invest in new technology. For example, they could allow small businesses to write off digital technology investments, reducing the amount of bureaucracy owners face during the process.
The benefits could be huge
Helping to close the gap when it comes to digital adoption and supporting small businesses to better understand the role digital tools can play in their business could have huge benefits.
Our research shows that those that digitalised most in the last four years grew their revenue by 8.1%. The slowest digital adopters saw a 4.7% decline. 38% of small businesses said that digitalisation made their business run more smoothly, 28% said it helped them get paid faster and 38% said it helped them improve customer experience.
Those are just a few of the benefits. But all of us in the technology sector, policy makers and other organisations supporting small businesses need to break down the barriers.
We need to work together
Many small businesses are struggling, but continue to overlook tools that could help due to lack of understanding. While working with trusted advisors – like accountants – can help guide small firms when it comes to technology investments, we all need to understand that these smallest businesses have unique needs and priorities. Recognising this will help speed up digitalisation and unleash the potential of the small business economy.
