Small businesses with better digital skills are boosting turnover by over £250K
76 per cent of the UK’s SMEs could be missing out on profiting from online business by not making their websites mobile-friendly, a new report has found.
The latest Lloyds Bank Business Digital Index revealed that in the past 12 months, while there has been an 18 per cent increase in the number of small businesses that can make payments via smartphones, 65 per cent of small business websites are still not ‘mobile-friendly’ and therefore potentially missing out on the growing numbers of ‘mobile-first’ spenders.
The report highlights the benefits linked to greater technology skills, with a third (33 per cent) of firms – around 1.3m small businesses – reporting increased turnover and time-saving as a result of being more tech-savvy.
The findings show that businesses without essential digital skills are almost two and a half times more likely to be shutting down their business within the next two years, compared to those with full digital skills.
Meanwhile, businesses with more advanced digital skills are seeing a return on their investment, with an average turnover of £754,000, which is £260,000 higher than the average business polled. They have also seen a 21 per cent increase in turnover in the last two years, saving one day per week by adopting more technology-based processes.
In 2018, small businesses with cloud-based systems, online accounting software and digital training tools had an annual turnover of £103,000 more than those without. This year, the difference more than doubled in 12 months to £262,000.
Tony Danker, CEO at Be the Business, said: “As the 2019 Business Digital Index shows, tech adoption can be transformative for small businesses and the broader UK economy.
“Combining the right skills with the right technology will unlock huge productivity gains for small businesses. The benefits can’t be ignored. Every business leader should embrace these six essential digital skills as part of their path to growth.”
The Digital Index found that SMEs younger than three years old have better digital skills, with 63 per cent of this group having the highest level of capability – 18 per cent more than those SMEs older than ten years in the same group.
Nick Williams, deputy group transformation director at Lloyds Bank, said: “As more small businesses adopt an increasingly digital mind-set and step up their game on staying safe online, they are seeing improved skills translating into increased turnover and productivity.
“Using social media as an opportunity for growth is firmly on the radar, catapulting greater skills in these channels up the most-wanted list. In a world where more people are doing more in their everyday work and personal lives with mobile devices, small businesses are putting increasing energy into keeping pace, with more than double the proportion now having mobile-optimised sites. However, those failing to adapt have been left behind in a competitive marketplace.”
The use of social media for business continues to grow. More than half of small businesses use social media to communicate with suppliers and customers. Facebook is the most popular, with 58 per cent of businesses using the networking site, while Twitter use is up from 39 per cent to 48 per cent over the last year.