How to improve small business adoption of digital tools

How to improve small business adoption of digital tools
Daniel Woolf
Daniel WoolfOfficial

Posted: Fri 19th Apr 2024

On 17 April, Enterprise Nation ran a policy dinner, in partnership with email and digital marketing platform Constant Contact, to discuss the topic of small business digital adoption. The session was hosted by the Institute of Chartered Accountants for England and Wales (ICAEW).

We were joined by senior-level attendees from major tech companies including Vodafone Business, local government representatives, and small business owners leading in the digital advisory and marketing space.


small business digital adoption dinner


Small business digital purchasing sentiment

Attendees noted that more brands are gravitating towards specialists rather than generalists when it comes to adopting technology. They seek deep expertise to feel secure in their technological purchases.

However, uncertainty surrounding external political events like elections often lead businesses to delay capital expenditure projects. No-one wants to invest significantly in technology and infrastructure until the uncertainty subsides. In addition, small businesses may postpone making critical hires by a few months during such periods.

Interestingly, it was noted that marketing budgets are often the first casualties when companies face uncertainty. The prospect of minimal barriers to entry, such as upfront fees, can deter smaller firms from investing in digital products like customer relationship management (CRM) systems, opting instead to maintain their traditional spreadsheets.

Attendees emphasised that to persuade small businesses to purchase digital products, it is crucial to highlight the value addition they offer, as most will naturally gravitate towards free options.

Many small businesses underestimate their marketing expenditure until asked about their website and online presence. While they traditionally rely on social media, attendees stated that without paid advertising, the era of organic social media reach is over. Consequently, small business owners must build contacts and invest in promoting their brand.

It was also suggested that some small businesses may wish to use email marketing but assume they can get by with free platforms. However, without paying, they gain little in terms of functionality to aid their growth.

The true magic lies in the automations offered by paid email marketing platforms, which allow for personalised communication rather than mass messaging – a feature unavailable on free platforms.

The role of the private sector in providing advice

As more brands seek to build authentic communities, having been disenchanted by major social media platforms that yielded little return, they want platforms that provide honest data insights into their customer base.

Online resources are the way forward, but regional businesses inherently prefer local solutions and may be sceptical of digital offerings. Fostering business communities based on shared interests or profiles could help overcome the loneliness hurdle and build trust.

Community building exercises via platforms like WhatsApp groups or Facebook channels have proven successful in fostering collaboration.

For some businesses, the challenge lies in fully using existing platforms they own but do not understand. Creating communities can help small and medium-sized enterprises overcome such barriers. The most successful businesses know their strengths, weaknesses, and where to seek support.

The role of government and industry bodies

In the accounting sector, large firms like the 'Big Four' are well equipped with the resources and budgets to adopt technology. However, smaller and micro-firms face challenges like lack of awareness about available tech products and where to start.

Even after being presented with options, selecting the right solution is daunting. These firms must first engage in self-assessment to understand their true business needs before exploring the market.

Industry bodies like the Institute of Chartered Accountants in England and Wales (ICAEW) are conducting webinars with tech providers to educate accountants on practical strategies for going digital.

Attendees suggested that the prize on offer if the UK were to adopt digital tools more widely is substantial, with potential productive benefits of up to £8.6 billion for small businesses.

However, a nationwide 5G rollout and improved broadband infrastructure, particularly in rural areas, are prerequisites for successful digital adoption.

Attendees noted that the UK needs a coherent, co-ordinated effort and incentives like broadband vouchers to encourage businesses to embrace technology, as the country risks falling behind international competitors in this regard.

Relevant resources

Daniel Woolf
Daniel WoolfOfficial
With 10 years' experience working in politics, developing policy and leading strategic campaigns, Daniel Woolf leads on policy and government relations for Enterprise Nation. Daniel began his career leading on health and policing and crime policy at the Greater London Authority while advising London's Deputy Mayor. He then moved to the CBI to lead its work on infrastructure finance. Most recently, Daniel played a leading role in AECOM's Advisory Unit, providing political and strategic policy advice to government bodies.

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