Why small businesses are falling at the finish line
Would a business handwrite and mail a letter today?
Well, probably not unless it’s a part of a deliberate marketing manoeuvre. It’s strange to imagine such an old-fashioned approach still in daily use.
After all, it was more than 30 years ago that computers and fax machines appeared in offices. Email followed within a few years, and the 1990s saw the birth of digital platforms for customer relationship management, human resources, and resource planning. The last decade or so has seen those platforms refined, as well as better integration of digital processes throughout organisations and a focus on digital strategy.
Digitisation is one of the main ways small businesses are making their lives easier, but too many are still falling at the finish line.
Almost two-thirds of Australian small businesses close up shop within the first three years, with many pointing to cash flow. They are struggling to grow.
A common frustration for small business owners is being kept away from their core business and passion by administration and cumbersome business processes.
Many have unintentionally taken a piecemeal approach to digitisation, adopting new technologies as they have come along, but at the end of the day, they each work individually instead of being integrated.
This makes daily operations disconnected, requiring double handling, making the business inefficient, slowing down productivity, and even making the company hard to do business with.
CRM makes it easier for businesses to engage with customers, while social media is helping them connect with new audiences. However, there’s one area of business that’s escaped the growth of digitisation, and it’s hurting efficiency and ultimately profits.
The business process stuck in the dark ages
Surprisingly, the processes for preparing, signing, acting on and managing agreements – known collectively as your System of Agreement – are still largely paper-based, especially within small businesses. In our digitised business world, that’s about as outrageous as communicating with suppliers and clients via handwritten and mailed letters (as well-mannered and elegant as that may seem).
Agreements are the vehicles that drive businesses. They could be sales contracts, employment offers, loan documents and supplier contracts, to name a few.
Using pen and paper to create these critical documents leads to a list of problems that’s headed by wasted time and money. Paper-based agreements can take days or weeks to turn around, compared to minutes or hours if they were completed in a digital form. That delay is a cost in itself but other costs mount up, with extra employee handling time, as well as storage and printing requirements. You may also run into legal or compliance issues through mishandling of documents.
Worse, if your competitor has a new digital process for example sales agreements, that is far more efficient and convenient, you run the risk of losing revenue by losing a client.
Doing business with the modern customer
Meanwhile, when you use old-fashioned processes, there’s a chance of alienating customers and employees. Thanks to the efforts of pioneering companies like Amazon, Netflix, and Uber, we all increasingly expect speed and simplicity in our interactions with businesses.
Digital engagement has “clear and significant” financial benefits for small and medium businesses, according to a report by Deloitte Access Economics.
“In recent years, digital engagement has become a critical ingredient to SMB success. Digital tools can help improve operational processes and assist development and implementation of a business strategy, and are strongly correlated with revenue growth, innovation and expanded market reach,” the report says.
The research shows that small to medium businesses with higher levels of digital engagement are 50 percent more likely to be increasing revenue, and they earn 60 percent more revenue per employee compared to businesses with basic digital engagement.
It’s tough enough running a small business and keeping it afloat when so many fails. But, that’s even more reason to modernise your System of Agreement, so it’s an end-to-end digital solution that not only protects your business from the risks of a paper-based system but also helps to stimulate growth.