Small businesses power the U.S. economy. They employ the majority of the nation’s workforce and contribute more than half of the private non-farming GDP.
Despite the fact that consumers prefer small businesses over larger ones, eight in 10 small businesses expect flat or negative growth in 2014. Small business failures now outpace the number of new small businesses by 30 percent.
What’s driving small business failure? In a recent survey of 265 independent small businesses, more than 83 percent told us that increasing time constraints are one of the biggest obstacles to success.
As one owner comments, “There is not enough time to do everything -- so some things suffer, like online support, marketing and social media.”
Another tells us, “I spend time working in the business instead of on the business.”
The same group valued having extra time to reinvest in their business at $154 per hour, or about $322,000 per year.
Our research suggests that a lack of time is in part to blame for flat or negative growth. Today’s complex demands of running a business combined with the rapid proliferation of technology -- from the social web to smartphones to other connected devices -- increasingly overwhelms small-business owners and leads to ineffective and inefficient business operations.
Continuous innovations in consumer technology have greatly impacted small businesses. Widespread mobile adoption is transforming the way people find, interact with and make payments to businesses.
But every update to Google’s algorithm, Facebook’s page settings or Apple’s operating system adds more complexity. These constant changes create significant anxiety for business owners trying to keep up with technology, platforms and consumers.
As small business time constraints increase, so will the need for cloud-based software designed to increase small-business efficiency. Because cloud-based software is easy to set up, manage and update without hardware or other capital expenses, they naturally facilitate a more productive and efficient workflow.
Ninety four percent of respondents indicated that they’ve already adopted technology to simplify various business processes, a majority of which focus on automation of “back-office” tasks ranging from accounting to payroll to data storage. Here are some examples of cloud-based technology utilized by small businesses:
The next wave of small-business automation will likely come in the “front office,” automating essential customer interactions across different buying-decision stages and channels. Customer relationships are the lifeblood of business, but as their complexity increases they become harder to manage. The simplicity of cloud-based software can help business owners instantly adapt to advances in consumer technology.
We’ve only scratched the surface of meeting the needs of small businesses in an increasingly tech-driven economy. American small businesses represent a huge addressable market and there’s an equally large opportunity to create technology designed to improve their success.