Why do small businesses distrust technology?
There are almost daily announcements from the technology sector announcing new products to help customers ‘innovate’, work more productively or manage resources more effectively. These are followed by digital advertising campaigns and other communications to reinforce that message: technology will take your business to the next level.
Despite the commercial motives of these messages, there is truth behind the rhetoric. According to research carried out by Xero and Cebr, technology adoption by Britain’s smallest businesses could add £77 billion to the UK economy and generate 885,000 jobs.
So why don’t small businesses pick up new technology as quickly as they can get their hands on it? The same survey also found that 40% of these companies do not see the relevance of technology to their organization. In fact, many owners are stuck in the “if it ain’t broke, don’t fix it” mentality, or can’t choose between the available options.
Understanding why this stigma exists and how to overcome it is critical for small business owners looking to grow their business and leverage technology to enable long-term success.
Senior Lecturer in Business Psychology at the University of East London.
The fear of change
Investing in any business takes time, effort and money. While a successful strategy can lead to consistent growth, many owners fear wasting their scarce resources on a strategy that fails.
For example, choosing the wrong sales platform could lead to higher costs, or a new system that requires more staff time to manage. These concerns explain why many small business owners struggle with the “hassle” of adopting new technology as much as any other barrier. At the same time, changes can give the feeling that you no longer have control over your company, because unknown processes are added.
These feelings can be magnified for small businesses. In contrast, large corporations have established structures and the luxury of group decision-making where multiple stakeholders feed their opinions and perspectives. But for the smallest companies, the burden of decision-making often falls on one person. At this stage, people can quickly adopt an “all or nothing” mentality, thinking they must fully commit to a system they may not be convinced of, but believe they must survive. Sometimes small business owners face cognitive biases, seeing only what they want to see or continuing to make the same (under)investment decisions just because they have already committed to a specific course of action.
Overcoming the barriers
Fortunately, there are several tricks available to ensure that psychology doesn’t hold your small business back from productive digital change. First, it is important to understand the consequences of underinvestment. A useful tool to overcome this is to imagine a scenario where you have not invested in technology. This makes it easier to visualize the benefits and opportunity costs of inertia and why change can be a good thing – especially as competitors are on the digital offensive.
Then start small. Only 27% of companies believe they are making the right choices in technology and software. That can help alleviate concerns about making significant upfront investments. By prioritizing the options expected to have the most impact, entrepreneurs can begin to tear down what can seem like an insurmountable mountain of digitalization. It can also bring other members of the company on board as they see the benefits that new technology can bring.
It is also essential to learn from others. Speaking to other small businesses that have gone through similar processes, or talking to advisors such as accountants who can draw on knowledge from working with many organizations of similar size, can help gain knowledge about what worked and what didn’t. Helps you make a more informed decision.
But it’s not just up to small business owners to change their mindset. Technology providers should examine how they communicate their technology offerings to them. When owners see that the majority of successful companies at their level have embraced a certain type of technology, they may feel like they are missing out and invest as a result. Unfortunately, most of the reporting currently focuses on larger SMBs and fails to understand the unique needs and priorities of truly small businesses, meaning many owners simply dismiss it as irrelevant.
Don’t forget the big picture
It can be easy for business owners to focus on day-to-day operations. In the current climate, they would be forgiven for putting survival first and losing sight of the long term. However, a narrow focus prevents entrepreneurs from thinking about how to run their business better, and despite the long hours, this will hinder business growth.
This makes working with trusted advisors even more important to help them overcome this mindset and provide perspective. For example, working with accountants to develop financial plans can help owners invest in technology at the right time.
Small business owners face countless challenges. However, by reframing their attitudes towards change – especially digital change – they can begin to trust the technology that can help them overcome these obstacles. Not only will it help them as individuals, but it will also provide a significant boost to the engine room of the UK economy.
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This article was produced as part of Ny BreakingPro’s Expert Insights channel, where we profile the best and brightest minds in today’s technology industry. The views expressed here are those of the author and are not necessarily those of Ny BreakingPro or Future plc. If you are interested in contributing, you can read more here: https://www.techradar.com/news/submit-your-story-to-techradar-pro