Posted: Wed 25th Jan 2023
Almost three quarters of the founders behind businesses started in the past two years say their company would not exist without technology, but there are several barriers preventing many from further embracing digital tools.
That's the findings of a report by Mastercard's Strive UK initiative, which is supported by Enterprise Nation.
It showed that 77% of all small businesses believe technology helps save time, 62% think it allows them to retain and grow their customer base, and 31% say technology and tools they've introduced over the past 12 months have cut their costs.
However, a significant proportion of respondents said there are barriers they need to overcome to further embrace the benefits of technology.
More than a third admitted to feeling overwhelmed by the amount of choice when it comes to choosing digital tools, and 15% said they don't feel they have enough digital literacy to make the right choice.
Another 54% said the cost of technology is an issue, with 38% referencing the costs associated with implementing it, and 26% citing the rapid pace of change.
The report said:
"Whether it's a lack of digital skills, the need for education or mentoring on what's available or the prohibitive costs associated with new technology, these are all problems that can be solved.
"Small businesses need technology-focused support and alongside the government, larger businesses like Mastercard must, and will, provide that support. We must learn from our experience during the pandemic, looking at what helped businesses."
Mastercard launched Strive UK, with partners including Enterprise Nation, to offer free guidance, tools and mentoring to help small businesses thrive in the digital economy.
On Enterprise Nation, the Make a Plan tool helps founders build an action plan to accelerate their business growth.
Support for small businesses to tackle rising costs
The report also looked at the impact of rising costs on businesses.
Seven in 10 small business owners said there is a cost of doing business crisis, with rising bills having a severe impact. More than a third reported that their turnover has decreased since the start of 2022, with the number of businesses expecting to potentially reduce their operations doubling from 10% in June 2022 to two in 10 in 2022.
When asked about government support, 40% of founders said they feel less supported now than they were during the coronavirus pandemic, with 32% calling on the government to launch another furlough scheme to allow businesses to keep running whilst saving costs.
The findings also showed that female founders and those from minority backgrounds are more likely be suffering from the effects of the economic slowdown.
Two in five women and 40% of mothers said the stress of running their business through the cost of living crisis is impacting their mental health, compared to 22% of men and the same proportion of fathers.