SMBs getting better at digital engagement - Deloitte

Australia's small business sector continues to adopt, and reap the benefits of, digital technologies.

Engagement is higher than ever and accelerating.

New analysis on digital uptake has been conducted by Deloitte Access Economics for the Federal Government and its Small Business Digital Champions Project.

The research findings have been compared to previous editions of Connected Small Business research conducted for Google in 2013, 2016 and 2017, which utilised similar methodologies.

Business digital engagement was classified into basic, intermediate, high and advanced levels based on business' reported the use of varying social media, websites, marketing and data analytics tools.

Key findings include:

• For the first time, over half of small businesses (55%) have achieved 'high' or 'advanced' levels of digital engagement in 2019, up from 39% estimated in similar research in 2017
• Small businesses moving from basic to advanced digital engagement see a 60% increase in revenue per employee and on average earned 28% higher revenue growth in the last 12 months
• The most commonly cited barrier to small business digital engagement is cost
• 51% of businesses with basic levels of digital engagement don't understand the potential benefits of digital engagement
• More businesses are using social media for their online presence before establishing a business website.

Minister for Employment, Skills, Small and Family Business Senator Michaelia Cash says the Digital Champions project is one of many initiatives that demonstrate the Morrison Government's commitment to help small businesses grow, prosper and create jobs for Australians.

"By sharing the experiences of our 15 Digital Champions, we are putting digital transformation on the agenda of every small business and helping them to learn the skills and build confidence to embrace digital opportunities," Cash says.

"We want to help more small business owners utilise technology to grow their business because we know that when our small businesses prosper, the economy thrives and every Australian benefits.

Deloitte Access Economics partner John O'Mahony says, "Small businesses with less than 20 employees make up 94% of all businesses, with over 2.2 million small businesses across Australia in June 2018.

"Digital offers so many benefits for our small business sector, and the national economy, from revenue growth and job creation, to innovation and export potential.

"Different businesses will engage with digital in different ways, but to do so only a basic or intermediate level, risks lost opportunity, stagnation and even failure in the face of competition.

O'Mahony says that compared with similar research conducted in 2017, the latest survey revealed an acceleration in the growth of digital uptake among small businesses with less than 20 employees.

"This year, 55% of businesses have 'high' or 'advanced' levels of digital engagement across the likes of web presence, use of online marketing methods and using data analytics to inform decision-making.

"Small businesses mostly understand the benefits of digital, and it's the movement from basic to advanced digital engagement that can really deliver revenue and growth benefits.

"One measure of this is revenue per employee, and advanced digital uptake results in a 60% increase on this front, and relative to businesses with basic levels of digital engagement, those with advanced levels on average earned 28% higher revenue growth in the last 12 months.

"It's concerning that over half of the businesses with basic levels of digital engagement don't fully understand the benefits of digital engagement," says O'Mahony.

"Further investment required to move to a more advanced level would be an issue for some, and not being able to see benefits beyond the short term could also be seen as a disincentive," he adds.

"But the evidence is clear that even small, incremental steps can deliver real and enduring returns.