Updated: March 4, 2024
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You have been around for a while and you are a savvy business person. You don’t want to do something simply because everyone is doing it. You know what technology is but why is it important anyway?
It has been a buzzword throughout the 20th and 21st century. Every decade, since the 1900s, has brought some new form of it. Some died off. Others like electric cars came and went and came back again, you didn’t know that did you? Now here we are with the tech industry producing over 9% of the U.S. GDP over the past 5 years. There are constant media mentions of technology and how it is a game changer. An article on Forbes talks about technology leveling the playing field for small businesses. If you are a small business owner, or planning to start one, you will find out the reasons to use technology in your business. In this article, we will look at why technology is important from a small business owner’s perspective . Let’s dive into it.
Everybody’s doing it!
Peer pressure has never been a good reason to do anything but in business, it is a good reason to look into something. A survey done by the U.S. Chamber of Commerce found that there are over 70 million small businesses using Facebook for business. The results of the survey show over 84% of businesses are using at least one digital platform to engage their customers. What about users? There are over 4.5 billion social media users as of 2022. All of them are accessible because of technology. These are just social media users. Streaming platform users are another category. I am curious to know if there is a non-tech way to reach all these people. I’ll wait. When the majority of the people are accessible online, there is a great opportunity to scale your business.
Your survival depends on it.
Let me take you through a little history. There have been three great revolutions so far. The agricultural, industrial, and the digital revolution. They each brought great changes with them and enabled civilization as it currently is. The agricultural revolution was basically when we started farming and stopped being hunters and gatherers. Farming enabled one person to produce more than they could consume. As a result, we did not all need to be farmers, thank goodness. Other crafts were born. Then came the industrial revolution that allowed mass production of commodities. With mass production, products become cheaper for everyone. I have over-simplified it but bear with me. Recently, we have had the digital revolution. A key component of this stage is the internet.
When each revolution happened, old methods died. There was a drastic reduction in the horse population as soon as we began mass producing cars. If there are better methods brought about by technology, your business needs to adopt them ASAP. Innovation will help you serve your customers better. You can lower your costs and make a better profit in the process. It will be impossible to compete in a world where your competitors are doing all this but you are not.
Leverage
‘Give me a lever long enough, and a fulcrum on which to place it, and I shall move the world’ - Archimedes.
By the way, Archimedes was the guy who ran around naked screaming ‘Eureka!’. Leverage basically means using a tool to have more force. Machines, like tractors, give you leverage. They are able to do a lot more than you could on your own. Using a machine saves you a lot of energy. As we move toward the future, we find different ways of getting leverage. In the past, the main sources of leverage were physical machines. They were technology but the term moves as we advance. We rarely think of a spoon as technology but it was at one point in time.
Media is one way through which most people have leverage today. You can type a tweet on your phone and the message will potentially reach millions of people. The energy you used for those millions would just be the same as if you texted one person. That is a power only technology can give you. Over time, while the power has been going up, the price has been going down. Today you can have the analytical and technological capabilities of big corporations . You can be much more than the mad man at the town square. You can target your message to the people who find it the most useful and decide when you want them to see it. Not a penny lost.
Show me the money
The bottom line of business is to make money. Yes, you would love to make an impact and help your community but that is only possible if your business is healthy. For your business to make money, you have to deliver value that people are willing to pay for. It goes beyond a simple transaction. Competition has made customers look at other factors like your service and the convenience you offer. Customer experience, for example, is crucial for the longevity of your business. If your customer service is bad, it is only a matter of time until your customers leave you for your competitor. Technology that helps improve customer experience becomes a necessity in the long run. It can be implementing free methods and business practices like setting autoresponders. Facebook users reported a higher satisfaction with a business that gave feedback including on mundane issues such as closing for the weekend. You can guess who they buy from if autoresponders are a factor.
There has been an increase in demand for digital services since the beginning of the pandemic moving forward. Your users not only want you to use digital services, they expect it. The pandemic showed users it was possible to have a large number of services rendered online and what’s more, they liked the taste of it. Users are more likely to opt for an online product or service. There are lots of missed opportunities with this OECD report emphasizing the slow technology adoption among SMEs.
Waste not, want not
Technology allows precision in all business operations and precision allows efficiency. Small businesses will feel the impact of saving or wasting every cent. There is a great story of John D. Rockefeller and how he once saved hundreds of thousands of dollars through a single drop of solder. He was once down at the factory when he observed a machine soldering the lids of kerosene cans. The machine normally used 40 drops of solder. He asked what would happen if the machine used 38 drops instead. It turned out a small percentage of cans would be leaky. They then tried 39 drops which turned out to be perfect. That one drop eventually saved them hundreds of thousands of dollars which in today’s value is in the millions.
A small business may be saving a lot less than that, but the little amount could help your business turn a larger profit if properly invested. When a business uses technology, there are plenty of low hanging fruits in what could be potential savings. Technology helps to measure and what gets measured gets improved. There are many analytics softwares available that would help you understand your market and your customer behavior. Within the business, technology helps replicate good performance consistently and weed out the bad.
Conclusion
A business owner has an immense amount of power because of technology. Every business, big or small, has a fighting chance because of technology. If used well, it can be a competitive advantage. It can all seem overwhelming but the good thing is you don’t have to adopt everything at once. We walk you through the process of what to look for in technologies and how to choose them. Check out our article on the challenges to expect when adopting any technology for a small business.
