The majority of Australian small businesses prefer to postpone adopting new technology into their day-to-day operations because the benefits are not immediately realised, new Commonwealth Bank research reveals.
The research examines three priorities through the eyes of Australian small businesses: technology, finance and work-life balance.
It reveals 80 per cent of small businesses delay the adoption of technology offering long-term benefits, despite more than half (58 per cent) claiming to have a good personal knowledge and understanding of technology.
At the same time, a knowledge gap still exists. The research found almost half (48 per cent) are reluctant to adopt new digital technology due to a lack of understanding of how it works and the potential benefits.
While more than one in two (55 per cent) have access to customer information that can feed into digital technology, the research also found small businesses are unsure about how data can enhance their business performance. Almost two-thirds (62 per cent) are not looking to use it at all.
Karen Last, General Manager Small Business, Commonwealth Bank said: “With more than half of small businesses having ready access to customer data, it is imperative small business owners understand how data analytics can help them make better informed decisions.
“A significant number of small businesses are reluctant to implement data analytics due to cost, or they believe it has limited value, or belongs in the ‘too-hard’ basket. These are all preconceptions which must be addressed so the benefits for small businesses can be realised.”
Managing cash flow a real pain
Cash flow remains another stress factor for small business owners, with half of the respondents opting to not pay themselves a wage one or more times in the past year as a result of cash flow issues.
To mitigate the strain of cash flow management, most small businesses rely on sending invoices to customers on time (37 per cent) or dipping into personal funds (32 per cent). Small business owners also use credit cards (44 per cent) as their primary tool to manage cash flow, working capital and business investment.
“Understanding and using funding options such as car and equipment finance, lines of credit, overdrafts, and loans can take a lot of pressure off small businesses and provide greater certainty. Relying on credit cards isn’t always the most cost effective option for the short or longer term. Overdraft facilities can be set up online within 10 minutes and don’t have to be used until necessary.
“Small business customers should also take advantage of real-time alerts through CommBank app notifications, SMS and email to inform them of incoming payment or when their balance drops below or exceeds a pre-set amount,” said Ms Last.
Wellbeing loses out to business needs
The research indicates the personal wellbeing of small business owners is being compromised for the sake of their business. According to the research, 44 per cent think they do not spend enough time on personal wellbeing and development – an interesting statistic considering one in two claim looking after themselves is crucial to ensuring productivity.
According to behavioural scientist, Dr Johann Ponnampalam, “Compromised wellbeing and stress often leads to poor decision making, inhibits creativity and increases status quo thinking. Given these consequences, it is unsurprising that stressed out small business owners are failing to recognise the benefits offered by new digital and analytic technologies.
“The unfortunate irony is that when implemented effectively, these technologies can enable individuals to gain back precious time to invest in their wellbeing; which in-turn fuels improved performance, productivity and creativity. These results suggest that small business owners need a nudge to adopt these time saving technologies,” said Dr Ponnampalam.
Interestingly, the percentage of those satisfied with their work-life balance decreases as annual turnover increases, with 55 per cent satisfied when they’re earning less than $100k, 51 per cent when earning $100-$250k, and bottoming out at 47 per cent for those earning between $250k-$1 million.