Small business ideas: 5 steps on how to go digital with your business
It is an open secret that the COVID-19 pandemic and the ensuing lockdowns shifted consumer behaviour online. When the country went into lockdown in March 2020, consumers increasingly relied on digital platforms for their daily needs like groceries, education, and other essentials.
But what did this mean for over 60 million of India’s small and medium businesses (SMBs)?
Agile SMBs realised digitisation was a question of survival, and they adopted technology at a rapid pace. However, many others were not so lucky.
Small businesses have learned, the hard way, the importance of five key aspects of digital transformation.
Taken from SMBStory’s video series Digital Playbook for SMBs, here are the five key small business ideas and learnings on how to go digital.
Use digital payments to preserve cash flow
The shift to online buying taught all stakeholders in the small businesses ecosystem the importance of adopting digital, contactless payments for small businesses, kiranas, and merchants.
Arguably the most critical aspect of digital transformation, digital payments ensure that small merchants or kiranas can continue to accept or send money and preserve cash flow in an increasingly contactless world.
The technology for digitising purchases and payments has the potential to completely transform the way small businesses operate. The digitisation of payments is introducing much-needed simplicity, streamlining business processes, reducing timelines, and improving overall efficiency for SMBs.
Anand Kumar Bajaj, MD and CEO, PayNearby, said, “Kirana stores remained open during the lockdown. There was pressure from customers for kiranas to accept digital payments. Kiranas that were uncertain about GST earlier ended up adopting new methods of transacting online. This new behaviour of contactless transactions will become deep-rooted.”
Save money and prevent loss through digital accounting
Small businesses have traditionally followed the route of outsourcing to financial firms, hiring CAs for their account entries, or managing accounts on their own. They feel more confident when they have direct control of the operations, and often undermine or are sceptical of adopting digital accounting solutions.
With the burden of managing expenses, payment cycle, keeping a track of stock, tax, GST, and more, it poses a mental and financial challenge to manage everything manually. It often leads to wrong entries and recurring losses – something small businesses cannot afford in the current scenario.
During a video interaction, Tejas Goenka from Tally Solutions, one of India’s biggest Enterprise Resource Planning companies, and Sumit Agarwal from Vyapar talked about how small businesses can use digital accounting solutions and save money.
However, it is easier said than done. “Technology usually scares small business owners who need hand-holding to go the digital way,” said Sumit Agarwal, Founder of Vyapar. “They are afraid of handling their accounts digitally. They fear breaching confidential data, handling the software, and other things that require training and lessons,” he said.
Sell using Direct-to-Consumer (D2C) method
In a traditional business model, wholesalers, distributors and retailers are present between the buyer and the seller. In the D2C model, these middlemen are eliminated and the seller can directly sell to the buyer through their website, online stores or offline stores.
In the wake of the COVID-19 pandemic, this model poses a big opportunity for small businesses to reach customers directly, cut expenses arising from payments to middlemen and distributors, and pass on the cost-benefit to customers.
India has seen a boom in the number of D2C brands across categories such as FMCG, apparel, and consumer electronics, among others, with brands such as MamaEarth, Mom’s Co, The Souled Store, Wakefit, and many more.
Yashas Alur, Founder of Everpret, a women's-focused accessories brand, said, “Setting up a D2C business involves a lot of ease and comfort, compared to setting up an offline business. For an offline store, several aspects have to be taken care of — supply chain, logistics, distributors, vendors, etc.”
Migrate to cloud solutions to survive
SMBs are minimising expenses and staying afloat by adopting technologies such as cloud, digital payments, ecommerce, digital bookkeeping, CRM, automation, etc, rapidly.
The adoption of cloud technology, in particular, is expected to significantly impact cost-cutting, and play a role in determining the survival of small businesses.
Cloud technology allows solutions such as CRM, ERP, web servers, enterprise applications, IoT solutions etc, to be hosted online by a service provider.
In a video interaction, Harish Vellat, Country Head, Small, Medium, and Corporate Business, Microsoft India, said, “SMBs that adopted technology such as cloud solutions had it better off than SMBs that didn’t. Only a small segment of SMBs understood what it took to collaborate, connect, and communicate.”
“Small businesses that responded fast enough were able to migrate to remote working quickly, and resume business without too much disruption,” he added.
Small businesses that did not respond quickly saw their problems accentuate. These SMBs, which did not have cloud-based collaborative tools and systems to access common applications, and found it more difficult to work remotely, according to Harish.
Choose simple, easy-to-use digital solutions
Simplicity and cutting down on new features seems counterintuitive for a company trying to acquire small business users at scale. But Indian small businesses prefer simple and easy-to-use solutions.
Many small businesses are willing to consider using digital solutions but they can be overwhelmed with too many features or complex interfaces.
A simple, intuitive app that works on a basic smartphone is better for a small business than a heavy software application that requires a high-end desktop to run.
In a virtual interview, Hiren Shah, Founder and Chairman, Vertoz, and Logesh Velusamy, Founder and CEO, Effitrac explained how such simple solutions make more sense for small businesses and why they should adopt digital products that are easy to use.
Logesh said, “Usability and simplicity are important to help users understand a digital solution. Further, SMBs are generally not used to running their business digitally, and so, they won’t adopt a tech solution that offers little to no assistance and customer service at the ground level.”
Edited by Kanishk Singh