Going digital: Overcoming small business barriers

More than ever, the last year has highlighted the importance and urgency for SMBs to get online. Not only does going digital come with many real time benefits, but it can also help SMBs manage the impact of disruptions on their business.

That being said, there are a surprising number of small businesses who are still resistant to the idea of taking their business online. To better understand this and help businesses “jump on the digital bandwagon”, we conducted a study in collaboration with Zoe Stern to pinpoint some of the reasons SMBs are reluctant to get online and identify solutions to help them overcome these barriers. Here’s what we found.

Common barriers to going digital

“My customers aren’t online”

Some small business owners believe that they don’t need to get online because their customers simply aren’t there. However, this is a common misconception that comes from:

  1. Business owners failing to see beyond what they are selling. Many business owners view their business as selling products, rather than meeting customer needs. This can cause them to have an overly narrow view of who their customers are and what they really need. (For example, studies claim that railroads failed because they viewed themselves as being in the business of railroads rather than the business of transportation.)
  2. Business owners being reluctant to step out of their comfort zone. Some business owners can be resistant to change simply because they don’t see the need to “fix something that isn’t broken”. They get stuck in their same old ways of conducting business and don’t see the benefit of changing what has appeared to work for years.

The combination of these two factors has led many business owners to not realize the importance of going digital. Creating customer profiles is a great way of combating this issue. Although they likely have a strong grasp on their current customers, looking at customer demographics (age, gender, income, etc.) and behaviors can refresh business owners’ understanding of their customers’ needs, which are constantly evolving in the digital age. Not to mention, this can help them identify a potential new customer base! By doing this exercise, business owners will recognize that nearly all customers are online in some way and there is opportunity for them in this fast-growing online market. 

“I don’t know how to get online”

Many small business owners feel like they’re not tech savvy enough to digitize their business. They shy away from getting online because they don’t know where to start and think they simply don’t have the skills to do it. This is unfortunate because it’s untrue and is causing them to miss out on opportunities.

Businesses could hire a consultant to develop their digital literacy, but this isn’t necessary. Going digital doesn’t necessarily mean creating a fully serviced website. It can be as simple as creating a social media account for your business on popular online platforms like Facebook or Instagram. Plus, there are a ton of online resources available to help small businesses get started online, all they need is a little willingness to learn. Here are a few that could be useful:

“I can’t afford to go digital”

Many small business owners are concerned with the costs of digitization. They believe going digital is expensive and they want to avoid the financial risk or think their small business can’t afford it. However, they’re overestimating these costs.

The cost of building a website these days is not in the thousands of dollars as some might think and does not necessarily require hiring a dedicated team. There are many simple website building services that can cost as little as a few hundred dollars per year. And as we’ve mentioned, digitization can also mean utilizing existing social media platforms, like Facebook, Twitter or Instagram which all offer free business profiles.

Besides, the gains from an online presence generally outweigh the cost. Social media is one of the most cost-effective ways for a business to promote their brand, demonstrate the quality of their services and engage their customers. 

By overcoming these barriers, small businesses have a higher chance of remaining competitive. Although digitization is not going to miraculously resolve the economic problems COVID-19 has created, it can help businesses manage the impacts of disruptions on their business and will only benefit them in the long run.