Written By Ronald Clancy, UK Country Manager for Vimcar
As the UK economy emerges from one of its most trying times, many business owners will be in no rush to dwell upon the past 16 months, but there is a real opportunity to learn from the challenges and curveballs that the coronavirus pandemic has thrown at us.
Making up 99% of the country’s businesses, SMEs are the bedrock of our economy – and it has been made crystal clear throughout the pandemic just how crucial the collective success of SMEs across the UK is. Small businesses proved that they could adapt and diversify in order to survive and, without the grit and resilience they have displayed, the country’s economic outlook would not be so positive. Yet the storm of uncertainty has not passed, and many SMEs may now be finding themselves in a state of flux.
As we look forward to greater economic stability, studies are beginning to reveal the extent to which SME businesses adapted their operations and how they see their future roadmap to recovery panning out. All businesses will have a unique set of obstacles to overcome, but research reveals a common trend when it comes to business recovery: digitisation is propelling SMEs forward and enabling them to come back stronger with a competitive edge.
A hybrid approach to ensure survival
In a Vimcar study of over 1000 SMEs which operate company car vehicles, over 80% of businesses said they have had to significantly adapt their operations since March 2020. Whilst a third of those surveyed adapted to stay afloat and 38% adapted to protect profitability, 37% of businesses were focussed on protecting their employees’ mental and physical wellbeing. Businesses, throughout the pandemic, found that not only did they need to ensure the survival of their business, but they needed to protect their employees and provide a level of care never expected from an employer before.
In order to support these new priorities, it is apparent that a large proportion of SMEs turned to technology. Streamlining processes and becoming more efficient as a business operation enabled businesses to save costs and ease the pressure on staff members, with 41% of businesses taking this hybrid approach. SMEs with company vehicles used fleet management technology to cut costs, help their workforce become more efficient, and keep customers up to date with deliveries. Office-based teams reverted to fully remote working and adopted new internal comms platforms and HR software overnight to keep staff engaged. Independent brick-and-mortar retailers launched ecommerce offerings to avoid a complete loss in revenue.
A long-awaited digital shift
Considered a key component of business growth and success, digitisation has often benefitted larger corporations. Those with the resources and funds to undertake digital transformation projects with minimal disruption to day-to-day processes, leaving SMEs lagging behind.
However, in a report on small businesses’ digital transformation by Cisco, it was found that SMEs who are more technologically advanced enjoy 8x more benefits (revenue) than those who are ‘digitally indifferent’. Looking at the data gathered in our own survey of UK SMEs, the majority of those who adapted using technology said the impact of that technology has been positive. What the pandemic has proved therefore, is how crucial it is to digitise and how vulnerable and fragile SMEs are without technology to support their business operations.
Adopting more technology was a vital move for SMEs throughout the past 16 months but far from being a temporary measure, it is a decision that businesses will reap the benefits from in the long-term. Consider the fact that, post-pandemic, SMEs’ customers have become more digitally reliant and savvy themselves, and small businesses must keep pace with this digital shift or risk falling out of favour. Take the acceleration of ecommerce for example: online sales rose by almost 50% during the pandemic and consumers who were once indifferent to a business’ website will now demand an exceptional online customer experience – regardless of whether it is a small local business or high street brand. SMEs’ customers are going to have less and less patience for digitally outdated businesses and so technology adoption is as much about protecting profit and people during the pandemic as much as it is about gaining a long-term competitive edge.
Roadmap to recovery
By taking this hybrid approach of investing in people as well as technology, many SMEs have proven themselves to be agile and resilient over the course of the pandemic. However, despite much talk about the economic outlook looking promising, less than a third of small businesses are optimistic about business growth over the next 12 months – indicating that many believe they will continue to operate in survival mode for the foreseeable future.
What is the way forward: how can SMEs move beyond simply surviving and into a state of growth and optimism? Brexit regulations (23%), financial challenges (25%) and high standards of customer expectation (24%) were the main reasons for concern by those SMEs surveyed – concerns which cannot be quelled overnight.
In short, there is no simple answer but what we do know is that the roadmap to recovery for UK SMEs is being driven by the digital shift that occurred during lockdown. Of the SMEs surveyed by Vimcar, 2 in 5 respondents confirmed they will be committing to technology in the next 12 months to overcome any challenges that come their way and support future growth.
And the pace of digital change and innovation we’ve seen throughout the pandemic shows no signs of slowing down. Therefore, those SMEs who explore and implement new technologies – whether that be to save costs, create efficiencies, support staff, or all of the above – will be the ones to thrive in a post-pandemic world.
About the author
Ronald Clancy is an industry expert and UK Country Manager for Vimcar, the leading provider of fleet management software for UK SMEs. Join Ronald and Vimcar for a free webinar focussed on teaching SMEs how they can easily digitalise their fleets and support them on their road to recovery: https://vimcar.co.uk/resources/fleet-digitalisation-webinar/