How The Technology Sector Can Help SMBs Fuel Growth And Innovation

CEO of Acumatica, a fast-growing cloud ERP company. John has nearly 30 years of industry leadership in cloud services.

Small- and mid-sized businesses (SMBs) are the lifeblood of today’s digital economy—providing jobs, powering economic growth and driving innovation that improves our daily lives. This indispensable segment of the economy, however, can be overlooked by the latest business technology, which is generally designed to optimize for broad scale in large organizations.

Smaller firms often don’t have the tools and resources they need to grow on their terms and overcome broader economic and business challenges. Providing the right support requires truly understanding the value SMBs bring to the economy and the unique challenges they face.

The Value Of Small- And Mid-Sized Businesses

SMBs provide a high volume of job opportunities. In the U.S. alone, small businesses create two-thirds of new jobs and deliver 43.5% of the country’s gross domestic product (GDP), accounting for 44% of U.S. economic activity, according to an SBA report. Between 1995 and 2020, small businesses accounted for 66% of the new jobs created, which means they generated 12.9 million jobs compared to the 6.7 million jobs created by large enterprises.

Likewise, as they work to survive in an increasingly competitive landscape, small businesses have become an innovation engine, producing nearly as many patents per 1,000 employees as larger firms. We too quickly equate innovation with big research budgets in governments and large corporations—because new ways to work and live are often developed by small businesses.

New SMBs are also coming online every day. The pandemic spawned a “creator economy” of small businesses. Locked down at home, creative minds became incubators for innovative new products, and consumers, forced to shop at only essential brick-and-mortar businesses, made e-commerce evolve lightyears into the future—seemingly overnight. With more than 33.2 million small businesses operating in the U.S. today, SMBs are expected to remain significant contributors to the nation’s economy in the future.

But several challenges pose a threat to the SMB landscape.

Challenges SMBs Face

As the bread-and-butter of the U.S. economy, small business success is vital, but 2022 has been volatile for SMBs. Hurdles that became prominent during the Covid-19 pandemic—such as supply chain disruptions, staffing challenges and the rapid shift to hybrid/remote workforces—continue to be pervasive. Meanwhile, new concerns, including inflation and a global recession, loom large for SMB leaders. Statistics already show that only about half of small businesses make it past their fifth year. With these added complications, SMBs have a tough road ahead of them.

To remain competitive, SMBs are focusing on top operational challenges, such as:

• Controlling costs.

• Attracting new customers.

• Improving customer satisfaction and retention.

• Keeping up with changing customer demands.

• Improving employee productivity and collaboration.

To accomplish these goals, many SMBs are (and should be) actively seeking customized technological solutions that will help them solve such top-level issues while enabling integration and providing greater security for their digital resources.

How The Technology Sector Can Support SMBs

To help small businesses survive in today’s economic landscape, technology vendors and service providers must clearly understand what SMBs want and need. While tech budgets may tighten due to financial constraints, small firms are interested in making investments that will support key business priorities—attracting new customers, expanding supply chains and improving employee productivity.

Here are a few suggestions to help guide tech providers who serve SMBs.

• Design customizable solutions. Keep SMBs’ top concerns and challenges in mind. They have unique needs that may not be served with a “one-size-fits-most” approach. So, make customizable products or services that can be tailored to address their specific pain points.

• Focus on streamlining business processes. To reduce operating costs, small companies want tools that can streamline business management processes, increase real-time data visibility and encourage proactive, strategic decision making. Design agile, adaptive, user-friendly solutions that will give SMBs these benefits without over-complication.

• Enable data-driven decision making. Small-business leaders don’t have the luxury of making decisions without supporting evidence. Bigger companies might be able to take some risks, but one false move could mean a massive setback for an SMB. With that in mind, SMBs are eager for technology that allows them to forecast and adapt to changes more efficiently and make data-informed decisions.

As the business world becomes more crowded and competitive, small- and mid-sized businesses are hungry for tools that empower them to innovate, collaborate and anticipate what’s next. By understanding what SMBs need, noting the challenges they face and offering solutions that truly support them, technology providers can play a role in propelling the global economy forward into a better, stronger, post-pandemic future.

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