The news that small businesses in the UK are among the world’s heaviest users of cloud-based software suggests, on the face of it, that our SME sector is embracing technology for the benefit of its businesses. But then you see a different statistic – that around 60 per cent of the UK’s smallest businesses – around a fifth of Britain’s total small business population – currently doesn’t have its own website and you struggle to make sense of the situation.
As always, the devil is in the detail. The ‘Exact 2015 SME Cloud Barometer’ is an independent research study of just under 3,000 SME leaders across the UK, the USA, France, Germany, the Netherlands and Belgium. It found that those who made most use of cloud-based software (defined as having three or more different cloud products in place) achieved far higher revenue growth and more than double the profit of those using fewer cloud products. The UK has the second highest number of ‘heavy’ cloud software users (27%), just behind the USA (29%) but ahead of SMEs in the Netherlands (25%), Belgium and France (both 24%) and Germany (10%).
The report identified that those using cloud products most showed on average 26% growth in revenue in 2015, compared to 14% among those using one or two online solutions, and 10% among those who don’t use any cloud solutions at all. 63% of the SMEs who took part said they felt that technology would have a strong impact on the competitive landscape in their market over the next three years. Of course, technology as an enabler is undeniable but we need to be careful to see it as a panacea for all evils, especially when there seems to be only a presumed connection at this stage between use of the cloud and improved revenue growth. More work, I suspect, needs to be done in this area to make the connection incontrovertible.
The GoDaddy survey on website usage is potentially more important for the small business sector in the short term. It revealed that 54% of those without a website fear their business will not grow within the next five years, whereas 60% of businesses with a website believe they could grow by anything up to 50% over the same period. Indeed, more than half experienced increased growth in the two years after their website launched.
More than a third (35 per cent) told the survey that they felt their business was simply too small to warrant a website, a fifth cited a lack of time preventing them from creating a website, and a further fifth felt the cost was prohibitive. It is these stats that should be of more immediate concern to the UK small business sector.
Less than a year ago, as part of its Do More Online campaign, the Government announced £2 million of funding to 22 projects through Local Enterprise Partnerships to help small businesses increase their digital presence. Projects include the development of a digital TV channel in Manchester which provides easily-accessible and cost-effective advice to businesses, supported by events, advice and networking sessions. For whatever reason, the campaign doesn’t appear to have achieved the cut-through that would have been hoped for.
The cost of creating a web presence has come down significantly in recent years but more work still needs to be done to persuade many small businesses that an online presence should be a fundamental part of their business’s DNA. With around half a million start-ups a year, more practical advice and support needs to be available to show small business owners how an effective social media presence on platforms most appropriate to their offering together with a web site as a digital shop window should be as central to their business as their bank account or their stock control.