All businesses, regardless of size, have faced a huge number of challenges during the current pandemic. However, compared to some larger businesses that may have deeper cash reserves, more robust business continuity plans and a bigger market share, SMEs have been hit hardest.
Our recent research shows that almost half (48%) of UK SMEs have seen a decrease in customers during the pandemic and over three-quarters (76%) have had to make operational changes. That said, it’s so encouraging to see such positivity and resilience from so many businesses. Of the operational changes, one of the biggest transitions has been to digitise, with a quarter (25%) of SMEs believing new online models will make them more profitable post-pandemic.
Although there are signs that we may be coming out of the worst of the crisis, the impact of these testing times is likely to last for years to come. Digital-first looks set to be the new normal, as businesses turn to technology to help them thrive. With this in mind, businesses need to make sure they have the right processes in place and set themselves up with adequate business insurance to remain protected.
Immediate changes, long term cultural shifts
The UK’s lockdown forced businesses to adapt operations overnight. For many, this meant quickly digitising their operations to meet the needs of a remote world. Lots of businesses have seen the benefits that a digital-first operation can bring. According to our research, just 16% of the small business owners interviewed say they plan to go back to a physical-only presence post-pandemic, while over a third (38%) are set to move some, if not all, of their operations online.
As with any great migration, there have of course been teething issues. Technological understanding appears to be a barrier to achieving full digital transformation. Almost one in three (29%) businesses report issues in being able to access the right technology, or have been unable to upskill employees to use it.
Access to the right insurance also remains a challenge, with just under one in five (16%) reporting difficulties in accessing or adapting their business insurance to their modified operation. These are minor issues. They can easily be ironed out by forming the right partnerships and investing in the right technological support and protection.
With businesses having to digitise overnight, naturally there will have been lapses in general due diligence – such as cyber security best practice and regulatory compliance. As we begin transitioning out of the worst of the crisis, now is the time to take stock of operations to ensure businesses are fully protected.
Cyber security is one of the biggest threats facing small businesses operating in an online environment. Especially those that have never had a digital presence before. Sensitive information saved online can be a goldmine for hackers – such as customer data, contracts and financial information. In ecommerce, there’s also a multitude of online payment options that can be abused to commit fraud that would not exist in an in store environment.
It’s crucial that all businesses have the right digital protection and insurance in place to protect themselves, as well as an effective response plan to contain the situation as quickly as possible if the worst does occur. A threat may emerge, and it may feel like it’s crucial to act instantly and cave into hackers’ demands. However, if businesses have undertaken adequate risk assessment, and have a comprehensive cyber insurance policy in place, this can put a stop-gap in the middle.
The threat of cyber security breaches should absolutely not put businesses off from transitioning online. An effective cyber policy will mitigate the impact by providing access to outside support such as legal advice, cyber forensics teams and public relations experts to help minimise reputational damage.
Embrace the change
The current climate is reshaping the way every industry does business. With change also comes opportunity.
To reference a common example, the closure of high street shops has led to a significant increase in online shopping. With that comes the opportunity for niche, local brands and larger more established businesses alike to dramatically enhance their exposure online.
Small businesses now have an opportunity to open up new channels to market, increase customer touchpoints and generate greater profitability. In these testing times, anything that ensures continued customer interaction is a step forward.
Organisations looking to make this jump towards an online future must ensure they have the comprehensive insurance cover fit for this digital-first operation.