Why SMEs require a digital focus

Digital skills are needed in the vast majority of modern workplaces but new figures suggest many businesses are not up to speed.


Some 98% of the UK’s SMEs use the internet for business purposes according to the Department for Business, Innovation and Skills, yet only 64% of them have a website.


Not only does this make it harder for customers to find them, thus limiting their potential sales, but it also suggests a lack of current market knowledge.


A quarter of small business owners even said they lacked basic digital skills despite being aware that technology could help boost their turnover.


The majority of internet usage was for emails and online banking – two essential aspects of business management for many start-ups.


The Digital Capabilities in SMEs report also revealed that only one fifth of small business turnover came from e-commerce sales in 2013, although it is likely that figure increased last year.


Of the firms without a website, 77% said they thought it was ‘not necessary’ with 18% suggesting that running costs were too high.


A further 17% revealed that they simply did not have the time needed to set up a website, despite being aware of the potential benefits of having one.


Firms in the primary sector were least likely to have a website, followed by those in transport, food service and accommodation sectors.


A lack of awareness and understanding relating to security and the benefits of using the internet was also highlighted by the report.


These reasons may provide a further barrier to small businesses that are considering implementing technology.


Firms looking to implement technology are encouraged to increase staff training in digital skills due to the many benefits that having a skilled workforce can bring.


Despite the initial outlay, moving aspects of a business online could help boost sales and the potential reach of a firm – enabling access to previously untouched markets.


Good financial management remains an essential part of the growth process though, as firms can easily overspend and could even end up requiring business insolvency procedures if they are not watchful.


By Phil Smith


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