While the shift towards digitisation has been ongoing for a decade, COVID-19 has accelerated the pace of transformation by several years. From customer interactions to internal operations and processes, technology is reimagining the way businesses operate across industries. This accelerating focus on digital is no longer restricted to large conglomerates with unlimited capital reserves but is percolating all the way to small businesses at the tail end of supply chains. Technology is levelling the playing field for small businesses by providing equal access and growth opportunities.
Here’s why accelerating focus on digital is a boon for small businesses:
#1: Enhanced reach to markets worldwide
One undeniable positive impact of digitisation is the reach. Gone are the days when businesses had to start out small and grow organically over the decades. Today, armed with the internet and social media, small businesses can have a tremendous reach and connect with prospective customers worldwide at the touch of a button.
Techniques such as SEO (Search Engine Optimisation) and SMO (Social Media Optimisation), if leveraged well, can multiply revenues and open up growth opportunities that were unimaginable a few years ago. Setting up a small business through e-commerce platforms has become streamlined and straightforward, helping small businesses gain access to a broader set of potential customers without requiring substantial upfront investments.
Additional Read: Everything You Need to Know about a Term Loan
#2: Improved access to financing
One of the most significant factors limiting small business growth is the lack of access to capital at affordable interest rates. Almost 80% of small businesses in India remain outside the purview of formal banking channels for several reasons, including lack of data. Conventionally, lenders have little or no visibility on small business performance and trade history, making risk assessment difficult.
With the increased focus on digitisation, lenders today have more access to verified data on small businesses by accessing databases like GST, CIBIL, MCA, and more. Additionally, automation makes such assessment faster and more accurate, allowing lenders to efficiently service a higher volume of customers. Digitisation of these processes will go a long way in helping creditworthy small businesses access funds at competitive pricing to invest in their growth and success.
At Tata Capital, we leverage technology to offer end-to-end digital loans to partner with small businesses in their growth. With minimal paperwork, companies can apply online to access a diverse range of loan offerings at nominal rates of financing.
Additional Read: Grow your business with a Term loan in 2021
#3: Nuanced understanding of customer preferences
Over the past few years, data science and machine learning have been the buzz within the technological domain. Data analytics makes it very simple to assess sales and understand evolving customer expectations in a dynamic market. Data science and machine learning algorithms have made it simpler to segment the market according to their behaviour and spending patterns. Observing consumer behaviour patterns and pivoting in line with changing customer preferences can help keep the brand offerings relevant while improving the user experience.
Accelerating focus on digital and adopting the right technology can help small businesses keep a pulse on the customer preferences and seek continuous user feedback to tailor offerings and stay ahead of the competition.
Besides, the digitisation of small businesses has also made it easier to converse with customers directly. With the advent of social media platforms, brands today have become much more approachable and can interact directly with the users and seek feedback.
Gone are the days where brands broadcasted their communications on mainstream media and waited for customer reactions to reflect in the sales numbers. Today, brands can receive instant feedback and dialogue with prospective customers by leveraging such platforms and building an engaging presence on social media. By tapping into the collective voice of customers, small businesses can sharpen their positioning and offerings, optimising time, effort, and capital.
Accelerating focus on digital has been a boon for small businesses and has opened up immense opportunities to grow and scale seamlessly. Small businesses can leverage limited resources for maximum results and make sharper decisions by automating mundane operations and accessing data-backed insights. Reach out to experts at Tata Capital to know more about our digital financing offerings to scale your business to the next level.