Businesses Embrace Technology
The case for teching up
Technology for Small Business Trends
“Every industry is becoming a tech industry and the rate of change is increasing.” –Michael Dell
Today’s businesses and consumers expect to interact with technology for small businesses. The benefits of digital technology are real and significant. Businesses using digital technology get greater insight into what their customers want. As a result, they are able to strengthen relationships with them. Plus, they get access to new markets and can target new customers…all at a relatively reasonable cost.
But according to the Connected Small Businesses in the United States study, most small businesses were not accessing tools available to them. 20% were not even using the basic tools, according to this study commissioned by Google a few years ago. Not surprising, the top 20% of businesses using digital technology realized significant benefits over the bottom 20%. For starters, they:
- Earned 2X as much revenue per employee
- Experienced 4X the revenue growth over the previous year
- Were almost 3X as likely to be creating jobs over the previous year
- Had more than 6X the average employment growth rate
- Were 3X as likely to have exported over the previous year
So why do some embrace this technology for small business while others don’t, despite the benefits?
Deloitte’s Connected Business study included more than 2,000 small business leaders. The objective was to assess how US small businesses used digital tools and to quantify its impact on performance.
When asked about the key factors driving digital engagement, owners and managers revealed –
- Increased sales and revenue – 38% of small businesses said they experienced increased sales and revenue as a benefit of using digital tools. Women-owned businesses said increased sales was the #1 benefit of using digital tools.
- Increased market reach and brand promotion – 30% of small businesses said promoting brand awareness and accessing new customers was their top benefit.
- Enhanced customer engagement and communication – another 30% said the ability to connect 24/7 with customers and improved external communications were their key drivers.
Level of digital engagement resulted in a normal distribution of 20%-30%-30%-20%, breaking down to basic, intermediate, high and advanced levels, respectively. Not surprising, the different engagement levels used a broad range of digital tools. Businesses used specific digital tools depending on their customers, operations and other business-specific requirements. Click here for the infographic depicting the breakdown.
Barriers to Adoption
Finally, the study also addressed what’s holding small businesses back. With so many not accessing digital technology for small business, potential barriers were thought to include inability to access broadband, a lack of technological skills, or high financial costs. But, this, was not the case. The actual barriers were –
- Not aware of the benefits to their business – Among the least engaged, 40% believed that digital tools were not relevant to their business. 38% thought they were not effective for their business.
- Concerned about privacy and security – 34% of the least digitally engaged identified ‘privacy and security concerns’ among the top three barriers.
- Lack of personal experience in technology – However, the technologies used in their personal lives were often similar to the technologies for their businesses.
The research presented in the report shows there can be huge payoffs when small businesses use digital technology. So what’s needed to increase the rate of adoption among small businesses?
- Increase awareness of the benefits – One of the significant barriers cited was a general lack of knowledge of the benefits of digital tools.
- Improve training – Once they understand the benefits, they will need to acquire the skills necessary to utilize the technologies.
- Understand that it’s a personal journey for their business – There is no “one size fits all” for these businesses. It’s different for everyone, so it’s important to just get started and proceed at your own pace.
Ready to get started on your digital technology journey?