Technology has improved efficiency for three in four UK small businesses, new research by Hitachi Capital Business Finance has revealed.
The study shows that three quarters (76%) of UK small businesses have used tech to boost their business operations and operate more effectively in the last year. This grows to 84%of small companies that have expected modest growth – and 91% for those that forecast significant expansion.
Despite the disruption experienced worldwide over the last 18 months, Hitachi Capital’s Business Barometer study suggests small business owners have gained confidence in using technology, becoming more comfortable with using it to support growth and give them a competitive edge. This differs greatly to the consensus pre-pandemic, when almost a third (30%) of small businesses felt their tech capabilities were limiting their potential.
Lockdown has been a catalyst for digital transformation within small UK enterprises, but the research suggests a North-South divide may be opening up when it comes to technology usage. Small companies operating from London were the most likely to have enhanced their digital capabilities in the past 12 months (86%), followed by firms based in the South East(80%) and South West (79%); compared to just 64% in the North West, with business owners in Wales also trailing behind on tech updates (68%).
Hitachi Capital asked a sample of 1,232 small business decision-makers how, if at all, new technology had impacted their business in the last year; to which they replied streamlining customer service, boosting productivity and cutting costs were major areas where new tech had been beneficial.
Additionally, new tech has helped over two-fifths (43%) of small businesses introduce flexible work options for staff, and 38% said they are now able to provide faster and better customer service as a result.
Improved tech proficiency also helped 37% of business owners reduce commute time, boosted productivity for 32%, and provided a smarter and safer way to store and manage sensitive information (24%).
“Whilst the pandemic era has been painful for some, many small businesses re-emerge from lockdown as more digitised and efficient enterprises” – Joanna Morris, Hitachi Capital Business Finance
Almost one in four (23%) respondents claimed that updated tech has made their firm more environmentally-conscious, while one-fifth (20%) of decision-makers believe tech has reduced time spent in meetings.
Tech has also proved to be a boon in supporting small businesses with cashflow and financial management. Overall, 27% of respondents had used tech to reduce overheads, 19% had saved money on the cost of new business, and 17% have been able to cut staff costs. The introduction of new tech also better enabled small businesses to compete with other organisations on price (13%).
Joanna Morris, head of insight at Hitachi Capital Business Finance, commented: “Before the pandemic, many smaller companies said their technology maturity held them back but 18 months on, technology is now at the heart of operations and business planning. Our research also shows that embracing tech innovations also correlates with small business owners predicting growth for the months ahead.
“Whilst the pandemic era has been painful for some,” she added, “many small businesses re-emerge from lockdown as more digitised and efficient enterprises.”