Moving online is not a myth and it is changing the face of business
Prolonged and disjointed trading restrictions have forced many bricks-and-mortar businesses to close while the government works out how to slow the spread of COVID-19.
The SME Compass* report states that 72% of small and medium businesses (SMBs) had their operating capabilities restricted as a result of the COVID-19 pandemic. Accordingly, many businesses have had to make material changes to their operations.
E-commerce is one such phenomenon that is flourishing as more consumers make the switch to ordering goods online and businesses are innovating to accommodate that, with 27% moving part or all of their business online and 25% launching new products to market.
As stay and work-from-home economies geared up and shoppers turned mostly online around the globe in 2020, demand for lifestyle goods in particular boomed.
Surging online orders for items from wellness products to pet accessories contributed to a 25% uplift in outbound freight volumes handled by DHL’s Australian eCommerce division by the 2020 year-end.**
It’s not going away. If you’ve been considering having a digital presence, but haven’t yet made the move online, don’t panic. Many of us hoped that COVID-19 would be well behind us by now. However, with lockdown waves continuing to roll, business owners can take advantage of the affordable ways to set up an online store during the lagtime and get the till ringing again.
In our experience there are three key steps business owners should consider before going digital:
1. Decide which products to sell online
If you sell a diverse range of items, first decide which ones lend themselves to being sold online. Take time to estimate return on investment (ROI): after factoring in extra costs for packaging, postage, handling and GST, how many units will you need to shift to cover the extra expenses?
If your business model allows, you might also consider drop shipping. This is when the supplier sends the product directly to your customer, thus allowing you to focus on selling product, while someone else handles storage and delivery.
2. Selecting an e-commerce platform
It’s becoming easier to create a responsive, professional e-commerce website without having to learn how to code. Providers like WordPress, Wix, Mail Chimp, GoDaddy and SquareSpace offer user-friendly e-commerce features, allowing novices to build a functioning online presence relatively quickly.
Important factors to consider before you start:
- Design and customisation
- Mobile responsivity
- E-commerce functionality
- Features pricing that is flexible and works with your budget
- Marketing optimisation tools for the website and ongoing incentive to keep buying (‘sales funnel’)
3. Real-time financial transparency
The SME Compass report identifies the top five growth drivers for SMBs in 2021 as being:
- Significantly improving existing products
- Purchasing significant assets or equipment
- Increased marketing investment
- Investment in new technology, and
- Launching new products to market
Being in business is a constant battle of decision making. Decisions like, “Should I or shouldn’t I?” or “Do I commit or not?” are regular occurrences.
Running your business on a cloud-based accounting platform means you can do the bulk of your bookwork on a single, up-to-date general ledger. Streamlining in this way means less time spent on admin which, in turn, frees you up to make important decisions such as how to improve your offerings and develop new products to launch to market.
Having real-time connection to customer or business information allows you to shift from being reactive to proactive, providing the ability to identify data-led insights or anticipate issues before they arise.
With the back-end automation of cloud accounting, you can rely less on scarce headcount for getting the job done and focus on helping the workforce you do have to thrive, whether they be in the office or working remotely.
So, what does it take to be a successful business in the digital age?
You have to be good at managing change in order to thrive in the modern workplace. Without a doubt, the biggest change of our time is the acceleration of digital in our everyday lives and business.
According to the SME Compass report, to date, only 28% of SMB revenue is generated online. For 14% of SMBs, 2021 marks the first time they begin to generate revenue online noting that businesses with larger proportions of revenue generated through online channels were significantly more likely to exceed their revenue targets.
In order to keep evolving and thriving, business owners need to continually embrace technology and the changes that come with it. While the pandemic continues to accelerate digitisation and shifting to the cloud, the writing was on the wall long before COVID-19 and will endure well into the future.
Throughout all of this, it’s also important to remember that becoming a digital business — e-commerce, cloud accounting, etc — is an investment in your future efficiency so always weigh up the long-term benefits against the initial outlays.
A business becomes self-sustainable when it has a repeat customer base, attracting new business regularly through sales and marketing or referrals. Reaching this stage represents a huge shift for business owners. It is probably the most important stage in transitioning from being an SMB into a sophisticated business.
Talk with the team at Salisburys about the feasibility of your business moving online. We can help you determine your digital strategy and formulate an approach.
* Banjo SME Compass, Insights into SME business growth in 2021/21 (April 2021)
** SMEs must remain agile and transparent with customers to keep goods moving – Dynamic Business. (2021). Retrieved from https://dynamicbusiness.com/topics/news/smes-must-remain-agile-and-transparent-with-customers-to-keep-goods-moving.html