SMB confidence booms as digital transformation projects gather pace
SMBs in the UK are feeling confident about their business over the next 12 months, and see digital transformation as vital for growth.
Research by fintech firm SumUp finds that 18% of small businesses have already invested in digital transformation initiatives to support and grow their business.
Three-in-ten said that investing in digital transformation and technology is very important to their business, with examples including purchasing on-the-go card machines, modernizing IT infrastructure, or improving customer accessibility by opening an e-commerce store.
Meanwhile, 41% said that digital transformation is moderately important, and that while they may not feel the need to invest in the technology right now, they do believe they will do so in the near future.
One-in-seven said that digital transformation holds slight importance, and that it will be addressed only after more urgent challenges are handled; and only 14% said they didn’t think investing in digital transformation was important to support their business growth.
In terms of general confidence, business owners and decision makers say they’re optimistic about the next 12 months, especially as the UK exits the technical recession it entered in 2023.
Over a third said that they were feeling confident that their business will overcome challenges, and that they expect to perform well over the next year. Another quarter said they were very confident and believe that their business will grow significantly.
Only one-in-12 said that they were concerned about the future of their business and expected challenges, with 21.5% saying they were uncertain and expected their business to neither grow nor decline significantly.
“Overall, confidence levels of small business owners and decision makers across the UK are high,” said Corin Camenisch, SumUp product marketing lead.
“This positive outlook suggests that small merchants are prepared to navigate potential uncertainties and continue to thrive.”
In terms of their key challenges, the wider economy topped the list, with more than two-fifths of respondents citing inflation and rising costs, including raw materials and stock.
Four-in-ten said they were struggling with the cost of bills and necessary investments such as rental costs, energy and new machinery. And one in five said that competitors offering cheaper alternatives was one of the main factors influencing their business confidence.
Only 7% of small business owners and decision makers said that they were not facing any challenges.
The report is just the latest to highlight the rise in tech investment amongst UK small businesses, with a recent survey from American Express showing that three-in-ten small business owners plan to introduce new technology this year.
The study also found they’re extremely confident about their growth prospects in 2024, with 89% expecting to grow over the next 12 months. More than nine-in-ten said they felt confident about the future of their business.
Meanwhile, a study by small business platform Xero and economics consultancy, Cebr concluded that UK small businesses could generate £77.3 billion in extra revenue and create 885,000 new jobs if they digitized at the rate of the top 20% of tech adopters.
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