Embracing technology and the power of digital have been crucial for small businesses in weathering the storm of the Covid-19 pandemic and cost of living crisis, according to new research.
Over one in ten (11%) small businesses have increased their income by 50% or more, thanks to their willingness to welcome digital solutions over the last two years, while half of firms have boosted their income by more than five per cent.
That’s according to the new ‘Unlocking Digital Potential’ report from Small Business Britain and BT, which explores how to maximise online opportunities for the nation’s six million small businesses.
Michelle Ovens, founder of Small Business Britain, said: “The pandemic has created a remarkably different small business landscape.
“Digital technologies have been a lifeline and an important enabler for small firms as they battled to do business during the pandemic.
“But these insights and learnings show what is needed to really supercharge things, and ensure the smallest of businesses use digital to unlock the world of magic and opportunity that is within them.
“The imperative 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.”
The research, which saw over 1,000 UK small businesses surveyed, identified a positive trend for small firms to adopt revenue generating digital solutions since the pandemic, with over half (55%) of small businesses adding new social media channels like Instagram and TikTok, and 42% building a new website.
But despite encouraging signs that many more business owners are now using technology to manage their businesses better, the report also signalled a massive opportunity for more to save time and reduce costs in this way, particularly when facing rising expenditure elsewhere.
While almost half (48%) of businesses have brought in social media scheduling in the last two years and 41% have implemented video calling, only one fifth (21%) are investing in productivity tools to save time and streamline processes.
The report also identified a concerning gap in digital confidence levels amongst small businesses, and pointed to greater support needed for entrepreneurs to build digital skills.
While over a third of small businesses feel very or extremely confident with digital, there is a real need to help the 61% not yet at that comfort level.
When asked what is holding back their tech adoption, 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.
To ensure that all small businesses reap these digital rewards, the importance of developing new technologies that are tailored and valuable for small businesses is highlighted.
The need for wider accessibility of support and finance for the diverse spectrum of small businesses is also called out, with a need for more role models to encourage this.
Ovens added: “Small businesses need an entirely bespoke approach to digital that is right for them, which understands their situation, their needs, their customers, and their ambition.
“We especially need ‘on-ramps’ available to enable micro businesses to access the smartest technology.
“Language is vital too, while much has been said about the huge ‘digital transformation’ witnessed across the country in recent years, small businesses do not necessarily think in these terms, or refer to the leaps they are making in this way.”
Business owners like Ada Obioha, founder of Ada Virtual, has found digital solutions have opened up opportunities for her business, but she is keen to ground this in support for real people and real-world activities.
She said: “We gained several new clients through new technologies, such as video and email marketing.
“But even though we talk about digitisation, we use it to remind people there are still humans working behind the scenes.”
Chris Sims, Managing Director SoHo and Marketing at BT said: “This new research shows the true scale of digital opportunity out there for small businesses, but also the big hurdles that remain to realising these benefits for all.
“By making digital advice more open and accessible to all small firms, we can help unlock their digital potential to help them grow. This is vital as the future of our high streets, communities, and the economy is dependent upon their success.
“We’re excited about taking our support for small businesses to the next level – whether that’s by helping them to stay better connected; helping them reach more customers through the power of digital advertising; or by boosting their digital skills through free training and mentoring accessed through our BT Skills for Tomorrow Programme.
“I’d urge all businesses to get curious about how going digital can help their business by accessing a wealth of digital skills resources out there.”
A free copy of ‘Unlocking Digital Potential’ is available to download here – https://smallbusinessbritain.uk/unlocking-digital-potential