By Andy Bailey, Senior Product Manager, Exact
The Federation of Small Businesses found that 62% of SMEs started this year looking to grow. A similar number of SMEs set out to grow last year but worryingly only 13% succeeded. A recent report written by the Centre for Enterprise and Economic Development Research (CEEDR) looked at the barriers that prevented such a high number of SMEs reaching their growth targets, and what could be done to overcome them.
The report highlighted that technology is significantly related to better growth, with almost 7 in 10 SMEs using cloud solutions operating at above industry norms, leading to better sales growth and future growth prospects. However adopting technology can be a barrier in itself because of fears over the cost involved, lack of time to spend on improvements and a reluctance to change existing processes. Below, we address issues keeping SMEs from benefiting from new technology.
Fears over the cost of implementation
Nearly 4 in 10 SMEs were understandably worried about the cost of making improvements to their business. In reality, implementing new technology doesn’t need to cost a lot, and with cloud based subscription models, many of which are scalable, business owners pay one fee, which includes all upgrades so there are no hidden costs.
When it comes to choosing the right system, business owners aren’t alone. There are many places to turn to for help and advice. Fellow business owners in business networks may have a favourite system, or could be in the same boat. Third party advisors like accountants deal with business owners every day so can make recommendations based on their experiences. Failing these options, Google is full of reviews to find the system that will best suit your business.
Lack of time to consider improvements
40% of SMEs surveyed by CEEDR said they didn’t have enough time to spend considering how to improve their business, so this is clearly an issue affecting many SMEs. After all, to improve their business, business owners need to find which parts of their business need help and research the options that are available as well as implement the changes.
This leads to a repetitive cycle of business owners needing access to information to help them improve their business, but implementing a system to give them this access requires time they don’t have. Although adopting technology now will take up time, the research by CEEDR proves that the gains small businesses will see means it pays off in the long run. The right system can put all the information business owners need to run and improve their business at their fingertips.
Reluctance to change processes
13% of SMEs still use pen and paper to manage their business and finances, according to the research. Not only can this system lead to the dreaded shoebox of receipts scenario, manual inputting is also time consuming and open to human error. 29% of SMEs who took part in the survey use spreadsheets to manage their business and finances, which still makes it hard to extract the necessary insights business owners really need.
The traditional spreadsheets and pen and paper methods may have worked well in the past but SMEs are under increasing pressure to remain competitive and agile – often having to make quick decisions ‘on the hop’. Cloud based management systems give business owners real time insights to make informed decisions, whether they are in the office, at a client’s or out on the road. They can also be linked to webshop and banking apps so owners can see all parts of their business in one place, helping to speed up decision making, and making sure the right decisions are reached.
SMEs are understandably reluctant to adopt new technology because of the time it takes, the perceived costs and the comfort of knowing how to use existing systems. However, this reluctance could be preventing businesses from improving their efficiency and growing. What is clear, however, is that the long-term rewards of increased efficiency are greater than the short-term investment needed to implement technology.