The UK’s smallest corporations (these using as much as 9 individuals) are answerable for 15 per cent of our company turnover and 9 million jobs*. Regardless of this big affect, they’re usually ignored and grouped along with all small and medium-sized companies (SMEs). That is what we prefer to name the ‘SME fallacy’; the damaging assumption that each one SMEs are the identical, have the identical challenges, and require the identical assist.
Our newest analysis reveals that the smallest companies want extra tailor-made assist to allow them to release time to concentrate on development. For instance, 93 per cent of bigger SMEs (50-250 staff) make use of a finance or accounting specialist, however simply 37 per cent of the smallest companies have invested in a single. They’re usually left juggling a number of roles. This hole in assets is costing the smallest companies twice the productiveness good points of bigger SMEs – 12.5 per cent additional turnover yearly in comparison with 6.39 per cent.
And the analysis reveals slower adoption of expertise among the many smallest corporations too: simply 58 per cent use finance and accounting software program, in contrast with 84 per cent in bigger SMEs (50-250 staff). We have to assist small companies perceive how tech may help free them up from non-core roles to allow them to concentrate on an important areas of their enterprise.
Time is cash, but it surely pays to take yours
Working a small enterprise takes up quite a lot of time. From managing inventory ranges to advertising, to hiring employees and admin, there are quite a lot of duties to juggle. Small companies spend lower than half of the working week (46 per cent) on their core jobs. However there are instruments that may assist.
As Mark Woodhall, founder and managing director at Facility and Sports activities Membership Growth says, “Whenever you work by yourself, one of many largest challenges you face is time administration.” However taking the time to grasp which expertise is best for you and what you are promoting can pay dividends in the long term.
To assist with choosing the suitable digital instruments, small companies ought to mirror the strategy to hiring individuals. This implies guaranteeing you’re taking on new property with the suitable match, somewhat than dashing or making additions for the sake of filling gaps shortly. This will arrange the enterprise for long-term success and scale back the quantity of turnover in expertise suppliers (one other expensive course of). Taking the time to analysis and perceive what tech is best for you will repay sooner or later.
It is a course of Sanjay Aggarwal, chief spice officer at Spice Kitchen understands effectively, “The sport changer for me has been investing in individuals and expertise, with out that I’m a one man band working round like a headless hen. My recommendation is to embrace tech and don’t underinvest in your self or what you are promoting.”
Begin small to develop massive
Simply 27 per cent of small enterprise house owners imagine they get their tech and software program selection proper. To assist keep away from making a mistake you must begin by taking small steps and prioritising the expertise choices which can have essentially the most affect and be the best to implement. It’s also essential to remember how the expertise will match inside your organization tradition.
This may be simpler stated than completed, as expertise advertising materials can usually be plagued by jargon making it laborious to grasp what its true advantages are. Nonetheless, there are steps you possibly can take to beat this barrier. As Alexandra Borthwick, founder at Made Scotland advises, “Once I first launched, it was an actual strategy of figuring out which apps have been going to work for me. For instance, it was the massive apps like Shopify, Canva and Xero which helped me really feel in command of my enterprise.”
It will also be worthwhile testing out concepts with free merchandise. For instance, social media apps are free, so you possibly can experiment with partaking content material with out spending any capital.
Unlocking long run development
The UK is sitting on a lot untapped potential. Xero’s Digital Drag analysis with Cebr discovered an additional £77 billion could possibly be added to the financial system if all small companies digitised on the identical charge as the highest 20 per cent of tech adopters.
For small companies seeking to take their first steps, we encourage you to succeed in out to individuals in your community to ask about their digital journeys, and what recommendation they may offer you. For instance, your accountant may have the ability to supply perception into how related companies have digitalised.
To seek out out extra concerning the ‘beating the digital drag’ in your small companies, check out Software program & Options for Small Companies | Xero.
* Xero’s ‘Beating the Digital Drag’ report
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