technology-small-business

How Can Technology Help Small Businesses?

The speed of business is changing & technology is giving small businesses the tools they need to level the playing field with their bigger competitors.

You don’t have to be a meteorologist to know that at some point bad weather will hit your startup. As with most things in life, preparation is essential, and entrepreneurship is no different. Kabbage recently polled 500 successful entrepreneurs across various industries, from restaurant owners to professional services, about one of the biggest obstacles that loom for all businesses — cash flow. We review just how implementing technology can help with this very issue.

Yet survival doesn’t come without a price. Here are the common challenges cash-flow issues create:

Putting off your own paycheck

Some 51% of small business owners surveyed in the study said they forgo paying themselves for multiple months to control cash flow. 26% responded that at some point they had gone two to six months without paying themselves, while another 25% said they’d gone more than six months without a paycheck.

Some entrepreneurs said they had sidestepped this undesirable solution by running everyday expenses through their business. This could include their phone bill, car payment or, in fringe cases, even their mortgage, if their business operated out of their home. Yet, all of the respondents in the survey had run successful companies for an average of 10.5 years.

Investing extra time

Time is everyone’s most precious resource, especially when you’re running a company and are responsible for every facet of its operation.

The reality is, however, that many entrepreneurs invest large quantities of time in bookkeeping. Case in point: Our data showed that 91 percent of small business owners polled spent as much as 20 hours per week on cash-flow management, from handling payroll to invoicing and purchasing. If all cash-flow tasks were eliminated, respondents said, they would repurpose their time investing in other important business developments. Specifically:

  • 51% would invest more time in sales and marketing to drive new business.
  • 35% would further develop their products and services; they said they had new ideas but no time to focus on them.
  • 32% would spend more time with family, friends, and community.
  • 30% would focus more time on customer service.
  • 22% would hire and mentor their employees.
  • 22% would investigate new technologies and business systems to make their company more efficient.

These are telling numbers. If only business owners could lift their heads out of their money matters, and effectively minimize the stress associated with them, they could focus on what makes an impact — on their community, family life, and bottom line.

You need to first evaluate your business.

So, how can you reclaim your time? All businesses are different, and that fact will require your evaluating your individual company’s operations. But the first step is to pay close attention to how much time you spend on various cash-flow tasks, from invoicing and payroll to accounting, taxes and more.

Determine which task is taking up the lion’s share of your time, and the research solutions that could help you solve that particular time sink. Can you make it a goal to reclaim for one hour every week?

If so, implement that strategy, but be mindful that you’re repurposing the new time available in a way that supports you or the business better than before, be it spending more time with family or with customers.

You need to learn how technology can help.

The speed of business is changing, and today’s technologies and services are giving small businesses the tools they need to level the playing field with their bigger competitors.

Academic research suggests this is the future. Former SBA administrator and senior fellow at Harvard, Karen Mills, wrote in her new book, Fintech, Small Business & the American Dream, about the concept of a “small business utopia.”

This suggests, she said, that technology is paving the road to a future when siloed systems and disparate data will elegantly flow together to give small business owners insights traditionally reserved for big business.  Here are four ways technology is evolving to help you reclaim your time:

Invoicing: New technologies are providing entrepreneurs easier and faster ways to manage customer invoicing so they can get paid faster without the constant chase to do just that. Bill.com claims that it lets small businesses get paid up to three times faster through automation. Research solutions are also making the payment experience seamless and simple for customers, thereby saving companies time, too.

Checkout financing: Machine learning and predictive analytics are the driving forces revolutionizing funding options to help resolve cash-flow issues for small businesses. This means that eventually, all entrepreneurs will be able to access capital in minutes rather than weeks or months, thanks to automated underwriting. Alibaba.com (with whom Kabbage has a relationship) launched its Pay Later checkout-financing service, allowing small businesses to access capital without leaving the site.

Accounting software: The majority of every accounting process can be automated, and accounting software can provide greater detail in the event of an audit. Solutions like Xero and Quickbooks also make it simple to connect to other third-party services companies might use to simplify cash-flow management.

“As-a-service” offerings: Businesses continue to migrate entire operations to cloud technologies and monthly services. These solutions help save time and trim unnecessary overhead costs. Systems like Zenefits for payroll or Expensify for managing expenses take care of the tedious minutiae of a portion of cash-flow activities, especially the non-revenue generating ones.

The good news for small businesses, then, is the fact that the cash-flow dilemma is continually being leveled, thanks to technology, and over time these advancements will only ease the challenges small businesses face.

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The V-Accelerator Partnership Model

V-Accelerator recognizes that not every business is the same and we offer various ways for successful applicants to partner with us and create a technology space that can truly impact lives and businesses. This could be as simple as having a meeting in our labs and giving advice, marketing the product, signing a collaboration agreement to solve a big problem, or connecting the Partner with investment funding. Interested? Why not get in touch with us today to learn more.

 

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