Small business owners are feeling confident about their futures—and putting their money where their mouths are. Over three-fourths (77%) of business owners are making investments to help grow their companies this year, compared to 63% last year, according to data from B2B software review site G2 Crowd.
Where exactly are small business owners spending? Investments in marketing/advertising, new equipment, and IT systems top the list.
The report, Crowd Views: Edition 3, differentiates between businesses that are focusing on growth this year and those that are in “maintenance” mode, and uncovers some important differences in how the two types of businesses invest their money.
- Businesses in growth mode are more than twice as likely to be planning investments in software, cloud services, and other IT systems than businesses in maintenance mode (20% vs. 8%). What’s more, 47% of growth businesses compared to 17% of maintenance-stage businesses are spending more on IT this year than in 2016.
- Growth businesses are also more likely to be investing in new employees (23% vs. 8%), especially salespeople.
- Growth companies are more likely than maintenance-stage companies to outsource business processes such as payroll, accounting, and website design.
- Growth companies also use a wider range of sales channels than companies in the maintenance stage. Some 57% of growth companies use e-commerce (vs. 43% of those in the maintenance stage) and 52% use direct sales (vs. 37% of those in the maintenance stage). Growth companies are also more likely to sell via value-added resellers (VARs), affiliates, and online marketplaces such as Amazon.
Benefits of cloud computing, SaaS, and outsourcing
Cloud services, software as a service (SaaS), and outsourcing have many benefits for business owners, according to the survey. They reduce the amount of investment the company has to make in services outside the core business, so that more money can be invested in business growth. By offloading these non-core services, employees can spend their time focusing on what differentiates the business from the competition.
Overall, 51% of survey respondents say outsourcing is an important part of their business plan. The processes that are most often outsourced are legal services (36%), payroll (36%), and bookkeeping (31%).
Most businesses are already using IT systems to handle operational functions systems such as accounting, payroll, CRM, customer support, email marketing, HR management, and marketing automation. Less popular, but growing in adoption, are IT tools to help with collaboration. These include business content management solutions; cloud-based information storage; and sharing tools, project management tools, and team collaboration/messaging software. Growth companies are almost twice as likely as companies in the maintenance stage to have IT collaboration systems already in place.
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Getting over the technology adoption hurdle
No matter how helpful new IT systems will be to your employees and your business in the long run, convincing your team to adopt new technology can be a struggle. To smooth the bumps along the road and encourage your team to embrace new technology tools, the report suggests these steps: