SMB Technology Purchase Plan: How Does Your Business Compare?

Author: Rieva Lesonsky | December 11, 2018

When it comes to adopting new technology, where does your business lie — and how does that compare to what your peers are doing?

A recent report by Bredin Insight, SMB’s Tech Purchase Plan: What, Why, and When, polled small and medium-sized businesses (SMBs) to learn how they use technology to grow.

Here’s a closer look at the results and what they mean for your business.

Who is buying technology?

The survey polled 600 US SMB businesses, categorized as follows:

• Very small business (VSB, up to 19 employees) 58%
• Small business (SB, 20-99 employees) 25%
• Medium businesses (MB, 100-500 employees) 17%

Businesses are fairly evenly split between professional services, manufacturing and retail/wholesale businesses (about 30% each), with the remainder in personal services and education/training sectors. create.

As the chart below illustrates, the majority of respondents have been in business for a while.

Image source: Bredin . Report

Here’s how businesses divide their revenue:

• Under $500K – 50%
• $500K- $999k – 15%
• $1 million- $4 million – 21%
• 5 million dollars + – 15%

The majority expected revenue growth for 2018. Some projects grew 37% from 10% to 100% (the study named these “fast-growing” companies), while 9% projected report growth above 100% (so-called “fast-growing” companies).

“Slow-growing” businesses (25% of respondents) forecast growth below 10%. Less than a quarter (23%) of projects did not grow in revenue.

Younger business owners, owners of larger companies, and owners of younger businesses are likely to be the most optimistic about their 2018 revenue growth.

Why do SMEs buy technology?

There are a number of reasons why people surveyed choose to buy new technology.

• A third (33%) of survey respondents are early adopters of technology, who see technology as essential to their success.
• A quarter are late adopters, who see technology as an expense that needs to be minimized; they only apply new technology when it is absolutely necessary.
• Most respondents (42%) fall somewhere in the middle: They know technology is important, but they’re not the first in line to buy the latest shiny gadgets. Instead, they wait until the new technology has been proven before investing in it.

Is there a link between business growth and early technology adoption? Which depends.

Companies classified as fast-growing or super-fast-growing are more likely than businesses forecasting slow-growth or no-growth to consider technology “essential” and to be active adopters of technology. In contrast, slow or no-growth businesses are more likely to wait until a purchase is “really needed”.

It may be that rapid business growth requires greater adoption of technology — but it is also possible that technology drives rapid growth.

Younger business owners are more likely to be early adopters than older ones, as are owners of larger businesses.

Here are the top reasons all SMEs buy technology:

Image source: Bredin . Report

Much of the reason is reactive — just 39% actively embracing technology to take advantage of the opportunity. Generation X (35 – 49 years old) business owners are the most likely to do this. More than half (59%) of Generation X entrepreneurs buy technology to take advantage of opportunities, compared with 42% of millennials and 31% of startups.

What hardware are small business owners buying?

Here are the top 10 pieces of hardware that small businesses bought or will buy in 2018-2019.

Image source: Bredin . Report

Businesses under the age of 10 are more likely to have an active plan to adopt all 10 of these technologies by the end of 2018.

What software are small business owners buying?

The top software categories that small businesses bought or will buy in 2018-2019 are:

More than half of small business owners already have these tools or will buy them this year.

However, there are some areas where small business owners lack software adoption, as you can see from the chart below:

Image source: Bredin . Report

• Only 11% have CRM/salesforce automation tools; 15% additional plan to add them by the end of 2019.
• Only 13% have marketing automation software in place. Nine percent will get it this year and 10 percent in 2019.
• Surprisingly less than a third of companies have file sharing software, and only 14% will add it by the end of 2019.
• Another tool that is not widely adopted is social media management software: 24% currently use it, and an additional 17% plan to buy it by the end of 2019.
• Only 19% have web analytics software and only 15% will have it by the end of 2019.

It’s a reasonable bet that the software tools above can provide some significant and immediate benefits to your business. Sales, marketing, and social media management are a big concern for most entrepreneurs, and automating as much as possible in these areas can save you time, marketing more efficient and save you money.

Also of note: Non-growth companies are more likely to “haven’t planned” to buy new software by the end of 2019. That seems to tell us something about the link between technology adoption. technology and business growth.

When technology has so much potential to help your business grow, scripting in this area is often not the best option in the long run. If you don’t want to adopt new technology because it’s out of budget, it might be time to explore innovative technology. Financial Solutions to meet the challenges ahead.