Home Business How Going Digital Can Help SMEs Compete
Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

How Going Digital Can Help SMEs Compete

by maria

By: Lauri Haav, Managing Director at e-Residency

In 2020 there were 5.9 million small businesses in Britain with 0-49 employees, making up 99.99% of all private businesses (up by 1.9% in 2019) according to FSB. This means that SMEs are a vital part of the UK economy, accounting for 61% of all private sector jobs. Large proportions of these businesses are in the construction, retail, science and technology sectors, and most people come into contact with them on a daily basis.

Since SMEs are such an instrumental part of what keeps the UK afloat, they have a critical role to play when it comes to digital transformation. Digitising services and making use of data and analytics is by now well established as a key driver of new revenue streams for large corporations, as well as an enhancer of existing ones. However, take up had been slower than expected for businesses on the smaller side before the pandemic became a catalyst for change, although many are still being left behind.

Despite the perceptions held by many, the benefits of going digital are not reserved for the business elite; in the last 18 months, it has been an important survival skill for businesses to offer online services, and doing so has resulted in a multitude of ‘success’ stories where entrepreneurs have been able to pivot their business models. So what needs to be done to bring Britain’s SMEs up to speed?

Change is… good?

Trends in the numbers of transactions taking place online have been on an upward incline since the turn of the century, and the way we use data has come on leaps and bounds, becoming a critical asset for driving insights and ultimately profits for many large businesses.

However, the role of SMEs in Britain’s digital transformation journey has not received the attention it deserves; many business owners simply don’t understand what tools are out there or how to use them. Many more think they can’t afford it.

When taking a closer look at the state of SMEs in the UK, we see that just 2 years ago, 8% of SMEs in the construction sector (representing over 270,000 businesses) were not planning to implement a digital transformation project at all. Though the pandemic changed this for many, resistance often stems from one core problem: knowledge.

Successful businesses often start as side projects, and almost always get off the ground because someone is passionate about what they do. For many, this makes risk-taking incredibly hard, and dispelling misconceptions about IT even harder. Let’s look at a few:

  • ‘I don’t need IT to run a successful business’
    • Putting aside your pride is never easy, but many SMEs face a critical juncture where the market is becoming more competitive, and going digital can provide bureaucratic respite and give you more time to focus on getting creative. Without IT, the most brilliant business in the world will not be able to keep up with its more tech-savvy competitors.
  • ‘Going digital is too expensive’
    • Entrepreneurs are some of the most money-savvy on the planet – they wouldn’t be running companies otherwise. But understanding the return on investment for upgrading your IT systems, introducing new tech, or hiring someone to analyse your data can seem a little abstract. Finding someone who ‘speaks your language’ is essential if you’re ever going to part with your hard-earned cash.
  • ‘I can’t do everything at once’
    • Digital transformation can be overwhelming. There’s a world of possibilities for every business, but it’s actually better to do one thing at a time. Make sure you’re getting the best out of your IT systems before adding anything else. This will make sure every move you make is the right one.

Unlocking Value
Britain needs to focus on digitising from the ground up, starting with SMEs. If it wants to continue to foster a healthy and competitive business environment, then educating smaller businesses on how digitisation can be both affordable and manageable is essential. By following the lead of its European neighbours, the UK can engrain digitisation in its very DNA.

The government of Estonia launched digital services back in 2000, and now 99.9% government services are done online. This means it’s easier to start a business, scale up, scale down, file taxes, apply for subsidies – you name it. Over 6,000 companies in Estonia are also run by e-Residents – a network of 84,000 digital nomads and entrepreneurs from around the globe that run Estonian EU-based businesses completely remotely (100% online) from abroad.

By utilising digital platforms such as online invoicing, digital signatures, government e-Services and more, Estonia has managed to cultivate a community of small businesses that are stronger together with the use of digital platforms. Rethinking what is possible opens up a world of opportunity for SMEs.

By flipping the conversation on its head, we can see that SMEs actually stand to gain the most from digitisation, whether that is taking their business overseas, scaling up and down during economic turbulence, or hiring the best talent from further afield.

You may also like