What is the Impact of Technology on Small Business?

Technology is changing the world around us in unexpected ways. While there have certainly been a number of things that we could do without, technology has also brought about plenty of good. The powerful, transformative impact is clearly seen in the world of business, with small businesses enjoying the good and the bad effects of technology.

According to a recent Chamber of Commerce study in the US, small businesses use technology and, specifically, social media rather widely. Around 75% are using tech platforms for sale while 84% use at least one major digital platform to inform their customers. Technology is part of the business fabric and in order to succeed, a small business can’t overlook technology and the digital world.

But how is this widening use of technology changing the way small businesses operate?What are the tangible areas of impact? Here is a look at how technology can transform a small business and the way it operates.

Small businesses used to have a real resource deficit compared to the big players. But technology has transformed the playing field and made it a much more equal experience. It is not to say that big business still doesn’t have a competitive advantage in terms of resources but small businesses do have more opportunities at their disposal. Technology has made it possible for small business to collaborate better with other businesses as well as their customers.

It all started humbly with the e-mail and instant messenger revolution. This allowed businesses to stay in touch – sharing information and collaborating with different people more widely. The technology has since expanded to collaborative project management platforms such as Basecamp that allow the small business to operate from anywhere in the world.

Small businesses have also felt the impact of technology in the workplace. Small businesses, due to their obvious nature, have often had trouble managing the small but inflexible workforce. The resources are often not there to attract the best talent and business owners have had to rely on commissions or part-time work.

But technology has made talent acquisition and retention slightly easier. One big part has been the improved collaboration. Due to instant messaging and cloud-based project platforms, small businesses have been able to provide flexible work conditions. The employees don’t have to work in the office and they don’t have to be local – small businesses have the same opportunity to attract talent around the world as many big companies.

But the management of this workforce has also changed. HR software for small business has helped ease the administrative burden. Many software solutions in the field use artificial intelligence and machine learning. This helps automate many mundane tasks, freeing the HR to focus on more important things than filing forms or monitoring payroll information. The old days of filing and filling cabinets with paper have been replaced with digital solutions that can save time and money.

In terms of the workplace and the workforce, technology has also had an impact on how small businesses can train talent. The traditional means of placing employees on courses or daily training events have been replaced by virtual learning. This is a lot more cost-effective, as it doesn’t have to interfere with the person’s ability to perform the usual tasks.

Not all the impact has been positive, however. The implementation of any technology in the workplace requires a learning curve and this can pose problems for small businesses. Existing staff that might not be as tech savvy as the younger generation and they might find it troublesome to get used to the new ways of doing things. This has resulted in slower adaptation and leaving behind, as well as disruptions in normal business.

Of course, technology has also influenced how and when small businesses can interact with customers, both in terms of providing the service or product and engaging them afterwards. Technology has opened a lot more avenues for small businesses from opening up online stores to offering 24/7 customer service.

The reach has widened. Social media allows small businesses to run marketing campaigns that can reach people across the world. Having an online store means you don’t just reach these people but you can actually sell your products to them as well. Small businesses have essentially increased their opportunity for growth via websites, online stores, social media platforms and the like.

Customer interaction has also changed, allowing the small businesses to gather information and feedback more efficiently. For good and for bad, small businesses might not have heard about negative or positive feedback in the pre-technology world. But nowadays, it will all be on Twitter or Facebook sooner rather than later. While the impact can be devastating, it also has the positive opportunity to transform the business and how it conducts business.

But technology has not been just sunshine to small business. The digitisation of the world has imposed a completely new world of threats that small business must overcome. When traditional threats included break-ins and theft, the modern world is full of cybercrime – and all loss of data is not always even intentional or malicious.

The unfortunate truth is that many are not yet doing as well as they could. According to the Ponemon Institute study, 61% of small businesses experienced a cyber attack in 2017. Globally, this costs an average of $2,235,000 to small and medium-sized businesses. To put it simply, the dangers of cybercrime are enormous and they are challenging how a business operates.

Overall, the impact of technology on small business has been felt widely from marketing to human resources. While the impact has brought about some difficulties, technology has also opened plenty of doors. It’s a challenge for the small business to find a balance.