The recent pandemic presented challenges most businesses and individuals struggled to overcome. Small businesses suffered significant losses during this period as they dealt with forced closures, a displaced workforce, and uncertainty about when things would return to normal. Businesses worldwide were already dealing with various challenges before the pandemic, such as staffing shortages and rising prices. However, restrictions caused by the worldwide lockdown only exacerbated the issue, taking a toll on the economy and bringing about a mini-recession. In the face of this dilemma, small businesses turned to innovative technology solutions to remain afloat and generate revenue wherever possible. Considering this, the U.S. Chamber of Commerce conducted a study measuring the impact of various technology platforms on small businesses and the economy.
The Power of Technology Amidst Economic Trials
The Impact of Technology on U.S. Small Business, a recent study conducted by the U.S. Chamber of Commerce, identifies the impact of technology on the economy and how it helps small businesses thrive today. The study, done in conjunction with Teneo Research, a global CEO advisory firm, found that technology provided significant value to small businesses as they continued to operate despite many challenges.
Per the study, small businesses leveraging technology realize tangible economic benefits. Furthermore, small businesses using technology directly support or employ over 99 million jobs in the U.S. alone and contributes more than $17 trillion to the annual economy.
The study details the impact technology has had on small businesses. Based on the findings, 93% of small businesses utilize at least one technology platform to help manage their business. In addition, these findings also specify technology’s specific role in these companies’ systems. The study also concludes that 85% of business owners claim that technology plays a critical role in launching and running their business. In comparison, 94% of respondents reported that they mainly use technology to enhance and improve their business operations, making it more efficient rather than using it to simply stay in business.
The Future of Technology for Small Businesses
Based on the real-world outcomes and the research data, small businesses are encouraged by their use of technology. The study also showed that 84% of companies that use more than six technology platforms, referred to as power adopters, have experienced a boost in profit. In addition, 82% report that they’ve gained more sales, while 74% claim that their employment rates have increased significantly compared to other small businesses that only utilize a single technology platform, referred to as low adopters.
With these promising results, small business owners are committed to using technology to gain customers, generate more revenue, and create greater efficiencies as they navigate an uncertain economic landscape. Eighty-nine percent of small businesses are optimistic about the future, enhanced by their use of technology. Most business owners are planning to continue their investment in technology, with 83% indicating they will increase their use of technology in the next two to three years ad 63% planning to invest in advanced technology, such as artificial intelligence and virtual reality.
The most common use of technology among small businesses is social media platforms such as Twitter, Facebook, and Instagram. Other technology solutions small businesses use are ERP tools such as Netsuite and SAP. Electronic invoicing platforms such as Tungsten Network, Tradeshift, and SAP Ariba are also utilized by small businesses to submit invoices to clients. Accounts receivable automation solutions such as HighRadius, Billtrust, and Sidetrade offer small companies innovative ways to better manage invoicing and payment. Small businesses use CRM solutions frequently, such as Salesforce and Zoho CRM, and marketing automation platforms such as Marketo and HubSpot.
Leverage Technology or Risk Being Left Behind
I have long been a proponent of businesses leveraging technology and incorporating digital transformation to ensure growth, competitiveness, and relevance in the near and long term. The U.S. Chamber of Commerce study confirms much of what I have written about over the last several years: that businesses must leverage technology or risk being left behind, whether its social media platforms and the benefits they provide, or digital solutions around invoicing, payments, finance, marketing, and more.
Based on the study findings, it’s highly beneficial for small businesses to use technology to foster change where needed and aid in their growth.
Ernie Martin is Founder and Managing Director of Receivable Savvy. He brings over 25 years of experience in financial supply chain management, marketing and communications and draws upon his extensive experience to share knowledge and best practices with AR professionals. He previously chaired the Vendor Forum of the Federal Reserve Bank of Minneapolis and his resume includes time at several well-known brands and companies such as Tungsten Network, The Centers for Disease Control, Kimberly-Clark, Delta Airlines, CIGNA Healthcare and Georgia-Pacific as well as a number of years as an independent consultant.
