By Colin Timmis, SA Head of Accounting, Xero
South Africa’s small businesses make a significant contribution to the country’s growth and development, accounting for over a third of GDP. Right now, there’s a huge opportunity for small businesses to take centre stage and demonstrate their worth in providing services on a truly global scale .
However, to compete on this global stage, the infrastructure in place for small businesses needs to be up to the challenge. Today, infrastructure isn’t just defined by the building you sit in or the water supply (although those in Cape Town can be forgiven for prioritising this). It also includes technology: your devices, software and internet connection can determine your efficiency, productivity, and profitability.
The majority of small business success stories have a common thread – they are digitised, agile, connected companies that use the best tools available.
Xero, in partnership with World Wide Worx, conducted a survey to find out if South Africa’s entrepreneurs are utilising the latest technology – and if not, whether they intend to do so. The results were both surprising and promising in equal measure.
Good intentions
Over half (52%) of respondents admitted that they’re barely keeping up with pace of change, which was confirmed by the number of small businesses that admitted to relying on outdated tools. A staggering 83% of respondents use Excel spreadsheets, 73% work with printed invoices and 56% use flash drives to transfer documents.
Nearly all respondents (68%) use Excel for accounting purposes, over half (56%) use it for office management needs, and just under half (49%) use it for financial planning. This is inefficient for several reasons: manual data entry requires human effort, it’s slow, and is liable to result in avoidable errors.
On a more encouraging note, for most, this is a problem they are at least aware of. Almost half of small businesses (45%) acknowledge that they need to adopt more business-relevant tools and almost two-thirds (63%) of businesses admit that reviewing their existing technology setup is a high or medium priority.
The benefits of new business technologies
The upheaval involved in the transition of implementing new technology can seem daunting, but the benefits will certainly outweigh the effort. By using the right technology in your small business, you will be able to do more with less and become more efficient and versatile.
For entrepreneurs with young families or a hectic social life, time is arguably their most precious resource. Cloud technology can make more of it available. By enabling flexible working, you can fit your professional commitments around your family and social commitments – not the other way around. It can also be a huge cost-saver for a small business that is starting out, and can’t afford office space.
Of the respondents who have adopted new technologies, most reported that it had made the business more efficient and had reduced administrative workloads. Most (52%) use cloud technology to save money, whilst nearly half (49%) of respondents benefit from improved efficiency. Others said that it has improved their business continuity, and a third (33%) highlighted the way it has enabled remote working.
Businesses that embrace new ways of working, and harness the right technologies to support their objectives, are more likely to enjoy increased efficiency across the board.
Moving from theory to practice
Smaller businesses get more bang for their buck by adopting new technology, as it can leverage limited capital in smarter and more effective ways. However, 42% of respondents haven’t included cloud technology features in their business plans for 2018.
Whether you’re just starting out with your business or you’re looking to take it to the next level, technology can help you by saving you time and money, which will in turn make you more productive. It’s hard to start and run your own business, so let technology take some of the burden off your shoulders.
