Recent statistics from the British government have revealed that there were impressively more than 600,000 new start-ups registered with Companies House during the course of 2015. That represents a slight increase on the already notable 581,000 new firms launched in 2014 and a similar story in other developed economies around the world suggests that there is a veritable small business boom ongoing.
That is something which has not gone unnoticed and a significant study commissioned by tech giants Microsoft has discovered that the adoption of new and innovative technology is intrinsically linked to the growth of these start-ups and other small businesses. The research was carried out by the Boston Consulting Group (BCG) and encompassed five countries including the UK, USA and Australia.
Upon publication, the study definitively concluded that there was a strong correlations between ‘the adoption of advanced information technologies on the one hand and growth in revenue on the other’. What the research also identified were the three main areas in which technology most notably drives growth in small businesses, and these are areas which it is important for small business owners to understand and to consider applying to their own firms.
Improving general efficiency is one of the simplest, most obvious and yet still most important ways in which technology can drive growth in small business. It should be clear to most that the adoption of new hardware, software or other tech innovations can improve efficiency in areas as diverse as production, accounting, customer relations and many more.
The recent BCG research however, also identified some other less immediately apparent ways in which the fasting growing small business adopt technology to improve efficiency. Many for instance, utilise new administrative tools to manage staff and productivity and even analytics to build a better picture of their target market and tailor their products or services accordingly.
Technological solutions and innovations open new avenues for small and medium sized enterprises (SMEs) and make it easier for them to be more flexible in their approach to business as a result.
The BCG study which forms the main focus of this post identified cloud computing as being the most notable (relatively) recent innovation in this regard, and found that firms utilising cloud computing often reap significant rewards. Those rewards obviously also bleed into the areas of efficiency and productivity more often than not, but in terms of flexibility tend to allow companies to enjoy more flexible storage and infrastructure options without greater capital expenditure.
Redefining Business Models
As well as the more practical application of technological innovations as part and parcel of a business’s day to day operations, technology is increasingly helping new enterprises to more accurately and effectively tailor their business models at the outset of their existence.
Online services such as analytic tools are proving invaluable in allowing firms to better define their potential customer base and to adjust their business model in order to best target those individuals. In this area then, the adoption of technological innovations could be crucial in ensuring that a large percentage of the 600,000 new businesses registered in the UK last year survive, grow and even flourish.