The UK is home to more than 5.4 million SMEs. To look at it another way, 99% of all UK business are SMEs, employing 60% of employees and, as of the start of 2016, generating over £1.8 trillion in turnover. Their survival (just four in ten small businesses will be trading after five years) and growth are central to the UK’s economic success, and as such, many are actively looking to find better ways to manage their businesses.
Cloud technology has been an important game changer for SMEs, providing access to a wide variety of specialist services and software and providing efficient, cost effective and convenient tools for all business functions from accounting, to people management, to marketing. SMEs’ ability to navigate the complexities of business management has been significantly enhanced as they embrace the use of tools and technologies not previously available and there are some unique and specific benefits they enjoy from accessing Cloud services.
The two most obvious benefits for SMEs are in accounting and marketing. Technology and social media have transformed the way in which SMEs can engage with their stakeholders, particularly customers, and the ability to link accounts and data provide astonishing insight, in real time, for business owners. Using mail distribution services such as Mail Chimp automates and smooths the process of direct marketing and success can be measured directly via click-through tracked by services such as Google Analytics. Feedback is almost instantaneous and can be incorporated into future activities with minimal effort.
Accounting packages, now widely available and reasonably priced, have also had a huge impact on SMEs. 9 Spokes’ research suggests that 67% of SMEs have at least looked at an accounting package at some point. The reason for this is clear – accounting apps such as Sage One, QuickBooks Online or FreeAgent all provide an easy-to-use, cost-effective way to simplify daily accounting, ensuring SMEs can make better finance decisions. It also takes a lot of heavy manual processing away from business owners and managers, reducing the time and effort required for regular business processes such as checking invoices have been paid, or expenses met.
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What’s essential is that power is put in the hands of the business owner and the accountant becomes a partner to the process, rather than the doorkeeper.
The low cost of most cloud technology also has an impact on SMEs. In the past, SMEs have struggled to keep up-to-date as software develops and is updated. Today, best-in-breed technology can be available for smaller businesses without large procurement costs. SMEs can now benefit from innovative new business services that might previously only have been accessible to large corporates, leading to profound effects on productivity and making them more competitive. SMEs can level the playing field much more easily, without significant capital expenditure to remain current and cutting edge, They also have the option to experiment with services and products, without the large upfront investments that can lock them in.
The lost cost also translates to scalability. As a business grows, Cloud technologies can easily be scaled up without significant new investment, keeping costs and investments in line with the size and success of the business.
For sophisticated businesses, the importance of top-level cybersecurity is already high on their agendas. For SMEs, this can be harder to understand or to access. Again, Cloud technology solves this problem for them with the best apps including high-end security that encrypts and backs up data on the Cloud, ensuring it is protected from theft or accident.
Communication is another area in which SMEs gain an advantage through using Cloud technologies. Social media allows them to connect with their customers in real time, while apps designed to work within firms can have a significant impact on internal communications. Cloud-based apps routinely offer multiple user logons, all in real time, allowing managers and employees to update information such as staff rosters or sales information. This can be particularly helpful when teams are spread out across multiple locations.
9 Spokes research done in conjunction with Bryter found that over 80% of SMEs said they need better ways to monitor customer feedback, sales activity, cash flow and people issues. 60% agree they need constant access to information. Taking this into account, here is a selection of the types of apps we think are most useful for SMEs right now. The list is in no way exhaustive (check out www.9spokes.com to see other apps we recommend), but we think it’s a good start for any SME thinking about how cloud-based services can support their business.
- Accounting – Hedgebook, Sage One, Quickbooks, etc. These apps can be integrated with the SMEs business account, generate and send invoices and track payments made and received. Data is available at all times, on any device, allowing for instant decision making.
- Marketing and analytics – Google Analytics, Mailchimp, Facebook, Campaign Monitor. All of these do different things, but at their most basic they provide tools for quick and easy communication with customers and ways to review and analyse the response. If using electronic marketing and communication tools, one or more of these are essential, especially when it comes to business promotion.
- HR and people management – Deputy, GeoOp. These tools allow SMEs to manage staff, duty rosters, workflow and internal communication.
- eCommerce/Inventory – Shopify, Vend, etc. These apps track inventory, provide sales information and offer convenient access to e-commerce solutions. For SMEs selling products online, they are invaluable
- Productivity – Office 365, SuiteBox, Box. Available anytime, on any device, these apps store data in the Cloud, provide access for multiple users, create virtual meeting spaces and more. The list of tools is long and benefits SMEs as they move between offices, customers, staff and suppliers.
The impact on the use of new technologies, particularly Cloud technology, on the sustainability and growth potential for SMEs cannot be underestimated. Their ability to compete and to use these tools to accelerate growth will continue as they familiarise themselves with the opportunities. The potential impact for the entire market, and economy is massive.