Going digital could provide £16.6bn boost for SMEs
Small businesses will benefit from a post-pandemic £16.6bn boost if they embrace customer loyalty and digital tools, research claims.
Analysis by accountancy platform Xero claims there is growing public goodwill towards small businesses as consumers seek to support them through the pandemic.
Half of consumers said they now feel greater loyalty towards local businesses over bigger firms, and 42 per cent plan to shop small more often after lockdown.
Xero said this gives small businesses an opportunity to connect with customers in a way large corporate will struggle to replicate and suggests using digital tools to run their business could free up time to interact personally with shoppers and clients.
Read more: Government urged to delay new insolvency rules to protect SMEs
Read more: SMEs set to be left £173,000 in debt from coronavirus loans
Using digital tools such as online receipts, paper payslips and cloud computing would provide an average £4,050 productivity boost for the 4.09m workers employed by micro businesses, equal to a £16.6bn, Xero said.
“The advantage small firms have is public affection and being better acquainted with their customers,” Gary Turner, managing director of Xero, said.
“The economic damage wrought by Covid-19 continues to be devastating, so it’s crucial small- and medium-sized enterprises (SMEs) know how to tap into this human aspect.
“After so long without social contact, we’ll see a resurgence in the lost art of loyalty. There may also be some old processes SMEs are happy to banish in favour of new technology to put them firmly in control of their business.”
Read more: Businesses seeking larger CBILS loans are opting for personal guarantee insurance
