Accountants and bookkeepers know all too well that small business owners who embrace technology enjoy more efficiency, flexibility and even profitability than those who don’t. Despite knowing the benefits, many small businesses are still slow to adopt technology.
At Xero, we sought to dive deeper into what’s truly holding them back. We’ve conducted a behavioural insights study that uncovers the human factors stopping small businesses from adopting more technology. The One step report surveyed more than 4,200 small business owners across Australia, New Zealand, the UK, the United States, Canada, and Singapore.
While the results differ across countries, industries and sizes – one thing is clear. Small businesses have a set of deeply ingrained beliefs about technology that influence their decision making. Our motivations are influenced by emotions, past experiences, and perception of the world. Behavioural science seeks to understand these factors so that we can start to address and overcome them with the right tools.
The three mindsets of small business
The research surfaced three mindsets of small business owners when thinking about adopting new technology. As accountants and bookkeepers, you’ve likely heard one or all of these before when discussing new technology with clients.
- What I am doing is good enough, so I’d rather just stick with it
- All I can see is risk and short-term losses
- It’s too hard to compare, understand and choose between all the options
It’s clear that the biggest hurdles to harnessing the benefits of technology for small businesses aren’t a lack of information or choice, but deeper anxiety and concern about how complex and costly the change process might be. The idea of adopting new technology feels deeply uncomfortable and even threatening.
That’s where accountants and bookkeepers come in. This research presents an opportunity for you as trusted advisors to influence more rational decisions amongst your small business clients. Pair these brand new insights with your industry knowledge and expertise to help your clients take small steps towards embracing technology. You’ll both reap the benefits – from saving time, to having more engaged clients, leading to more informed decisions that drive their business forward.
I’m sure you’re familiar with the benefits of having clients who choose to digitalise their business. Your team spends less time cleaning up data and searching for information in different places, and more time having meaningful conversations with your clients. They become more engaged and curious about how to improve their business. This can lead to an incredible feeling of satisfaction seeing your clients have those ‘light bulb’ moments.
What’s your technology adoption mindset?
The research categorised those who actively sought out and invested in new technology solutions as Adopters, and those who consistently fell behind on the technology adoption curve as Delayers. Adopters enjoyed on average 120% higher revenue and 106% higher productivity than Delayers – and were substantially more likely to find excitement and purpose in their work. Yet Adopters only make up one in every five small businesses, while Delayers account for almost one in every three.
Using these brand new insights, we’ve created an interactive quiz for small businesses to understand what mindset they have towards technology adoption. This is a fun way to learn more about your clients’ mindsets, and can help start conversations on how they can overcome a fear of change and start using more technology.
How can these insights help you as an advisor?
The One step report makes five key recommendations to help nudge your clients towards a more open mindset when it comes to technology adoption.
1. Encourage small steps, not giant leaps
To take away fears of difficulty and uncertainty, reframe the technology adoption process as a series of small, incremental steps rather than large-scale projects. Break it down into simple, manageable steps to help your clients rethink their uncertainty about the risks.
2. Celebrate small business peers
Small business owners tend to be more willing to try something new if they see others benefiting from it. Share stories of your clients who’ve reaped the rewards from embracing technology. You could create a community where clients can share their experiences – both positive and challenging.
3. Don’t get left behind
Encourage your clients to look at technology adoption through the same long-term lens that they would with financial or business goals. It becomes clear that what they have in place that’s ‘good enough’ today is usually ‘not enough’ to achieve what they want long-term. When looking at a current solution and a new technology, quantifying and comparing the performance of both options can help dispel illusions about the safety of a ‘good enough’ approach to technology.
4. Measure benefits in a relatable way
Any information you provide on technology should be relevant to their business. Using measures that small businesses already deal with (like revenue gains or user-friendliness) can help, as can a transparent view of possible challenges and practical ways to overcome them.
5. Narrow and simplify choices
To help your clients feel more confident about making decisions on technology, keep it simple. That might mean limiting the number of choices on offer, using direct ‘like for like’ comparisons between options, and focusing language around processes and outcomes rather than statistics and features.
We hope that these insights help you as advisors to support your clients, and have flow-on benefits to not just small business owners, but also to their employees, families and the wider communities.