When the pandemic started, many businesses had to close shop, and those that stayed on and survived were the ones that immediately pivoted to online platforms. These businesses even went on to succeed despite the ongoing health crisis.
The Street’s Small Business Insights survey conducted in November 2021 shows that the digital pivot has become the norm after almost two years. Three-fourths of small companies significantly changed their business methods, increasing their use of digital technology, increasing income from online sales, and cutting costs. Up to 74 percent of brick-and-mortar stores relied heavily on their online sales, while 12 percent of small businesses relied entirely on online sales.
For 2022, 88 percent of small businesses stated that they need more income from online sales. In order to achieve this, 97 percent stated that digital technology would be a primary tool, and 52 percent said that they would increase their reliance on digital technology. For 80 percent, investing in digital technology will increase their likelihood of success.
Investing in Digital Protection
With heavier use of digital technology comes higher risks of falling victim to cybercrime. While cybercriminals hit governments and multinational companies, they do not spare smaller businesses. According to the University of Cincinnati, a study by the Ponemon Institute shows that cybercriminals target small and medium-sized companies because they have lower resources and, therefore, more security weaknesses.
It is wrong to scrimp on cybersecurity measures. In fact, it would be reckless to invest heavily in digital technology without the corresponding cybersecurity. A company must protect itself fully with the best cybersecurity measures and continuous cloud-based data backup. The latter will ensure that a business can go on without any data losses in the event of a breach or a crash.
A small business cannot afford a cyber breach. Hours offline will result in large financial losses. When its customers’ data is compromised, the company faces up to millions in regulatory fines. The damage to the company’s reputation will also affect revenue long after the incident.
In addition to having a strong cybersecurity framework, Forbes Advisor states that every company must invest in data breach insurance or cyber liability insurance, also called cyber risk insurance and cyber security insurance. When a company experiences a cyber-attack, it can face numerous lawsuits afterward. The company must also hire an insurance lawyer who specializes in cyber liability.
NerdWallet clarifies that data breach insurance is a type of first-party insurance coverage. It will cover the costs of investigating the attack, customer notifications, data recovery, identity recovery, ransom payments, risk assessment for the future, anti-fraud services, and lost income due to the attack. Cyber liability insurance has a more extensive scope and will cover the costs of legal fees for lawsuits, settlement costs, and regulatory fines.
Back-office tasks, such as bookkeeping, accounting, bills payment, time tracking, payroll, and expense management, can be automated and integrated with tools such as QuickBooks and the like. This will minimize human error, hasten the tasks, and provide financial data that can easily be analyzed in charts and graphs. Business decisions will then be based on real-time data. This is one of the most basic technological tools that every business must use.
Various types of business software are now upgraded with the use of artificial intelligence (AI). Companies will benefit much from upgrading to such versions because AI gathers huge amounts of data, provides better data analysis, identifies trends based on any number of categories, and makes more reliable forecasts. It can customize the company’s engagement with individual customers based on their previous purchases and other online activities. This is a valuable means of building customer loyalty.
Virtual reality and augmented reality are becoming more mainstream this year. Virtual reality allows customers to tour virtual stores, virtual galleries, and properties for sale, among other uses. Augmented reality allows the superimposition of digital data on a photo or video of reality. This is now used to superimpose hair shades, makeup shades, and clothes on people and wall paint or furniture on pictures or videos of actual home interiors. Consumers have quickly embraced these technologies, and businesses that can benefit from them must not lose the opportunity to do so.
The metaverse is the next version of the internet. Some sites already have micro-versions of it. Users show up as avatars based on their own design in the metaverse. Avatars interact with each other and can work or play online. They can purchase outfits and other items, as well as tickets to watch exclusive online performances such as concerts. Businesses will do well to establish themselves early in the metaverse.
The Cutting Edge
Small businesses have the advantage of being more flexible and can test and adopt new technologies more easily than larger companies. This is an edge in a very competitive market. However, each small business must strive to stay ahead of other small businesses in trying out and implementing the technologies that are of the greatest benefit.