Yes, some business owners are still chasing down to-dos and passwords on little slips of paper, and you may be one of them. You may know that digitization can help small business owners reach new markets, improve their operations, increase their innovation, empower their teams, and reduce their costs and risks. However, digitization also requires owners to overcome challenges, such as digital skills gaps, cyber threats, customer expectations, and competition. So is digitization worth it for the small business owner? Read on to find out!
Strategic Digitization for Productivity: Embrace digitization to automate processes, optimize workflows, and save time, enhancing overall productivity for small businesses.
Digital Transformation for Growth: Leverage cloud-based solutions and scalable systems to fuel business growth, reducing dependency on individual knowledge and streamlining operations.
Customer-Centric Digitization for Success: Prioritize customer experience by simplifying digital processes, utilizing data analytics to understand customer behavior, and embracing tools that facilitate seamless interactions with your business.
What is digitization?
Digitization is the process of putting information and processes into digital formats that can be accessed, shared, and analyzed online.
Common Mistakes Small Business Owners Make with Digitization
Buying the new shiny toy
I tend to fall for the shiny object syndrome, and it doesn’t serve my own productivity (but it helps me review the tools for you!!!). You can absolutely have too many toys. When you keep buying tools, you forget what you have and are not using them to enhance your productivity. Try to focus on having the fewest tools to get your work done effectively.
Don’t buy digital products which aren’t suited to your industry.
Sometimes you hear of a great tool someone else is using and get lured to use it, but it isn’t suited for you at all. Instead, take time to do some research and consider your needs and what you want to do with the tool so that you are intentional in your choices. Just because something is the ‘best’ or most used by the big boys does not mean it is right for your business.
Don’t buy digital products without learning them.
Although it takes time to learn the tools, you lose time when you don’t learn them. Think of the hours you spend trying to figure out how to do something or how to fix something gone wrong. There is also the lost time by not knowing how the tool works. For example, using the space bar instead of tabs and rulers means you spend more clicks and probably more time fixing formatting later on.
Take advantage of onboarding with the tool company and any tutorials or videos.
Dedicate some time each week to learn the tool.
Take time for team members to share their knowledge with the tool.
Take the time to learn how to use it when you have a specific use case instead of
Don’t keep tools you aren’t using
Now most software is offered on a subscription basis, so it can become quite pricey to buy tools and then keep them if you are not using them. I have a spreadsheet where I track every tool I use, how much I am paying for it and when it renews, with a reminder to review the tool at least 1 week before that. If I decide I am not using a tool or it is no longer worth it for me, I make every effort to transition to a new one and shut it down before the renewal or before 2 more monthly payments go buy.
Don’t spend too long researching the perfect tool
First of all, no tool is perfect. Set yourself a timeline to research. Decide on the best option based on the information you have at the end of that time. Then, either try it for a month or go all in with an annual subscription (which usually offers substantial savings). Once you commit to the year, then take the time to use it fully and learn the more advanced features so you can make it work for you.
Don’t avoid digitization
Some business owners decide they are small enough that they don’t need digitization or that the security risks are too great, or maybe that they can better respond to their customers if they remain analog. However, none of those excuses ring true for today’s small businesses, and if you want to stay competitive or grow your business, the sooner you start to digitize, the more benefits you will see.
To stay competitive, companies must stop experimenting with digital and commit to transforming themselves into full digital businesses. (“The Seven Traits of Effective Digital Enterprises | McKinsey”)
How digitization increases small business productivity
Despite the mistakes many business owners make when digitizing, there are many compelling risks to digitizing as much as possible.
For most businesses, the prime purpose of digitization should be to automate processes so you can deliver services faster and more efficiently. (Farooq)
Increases productivity and quality. Productivity is usually the top reason businesses adopt digitization, and most small businesses use some digital tool to automate, streamline, and optimize their business processes and workflows. However, chances are you could save hours in your week by investing in new tools or learning to use the tools you have more effectively. For example, Brainscape found that Americans could save 8 days a year by learning shortcut keys. Additionally, businesses can set up automations such as emails that go out when clients book a call, buy a product, have a failed payment, sign up for an email list, etc., etc.
Allows for growth. For businesses to grow, they need to have systems that scale which means it isn’t all in the CEO’s head, notebook, or laptop. By using cloud-based documentation, calendars, and task management systems, the business is enabled to run more smoothly when the boss is tied up, and it allows you as the CEO to focus where you need to and for others to take care of tasks. It can also cut down on the meeting time when you use tools such as Loom or productivity tools where you can give explicit directions and track progress with other people without needing to each be present.
Enhances the Customer Experience. There are an incredible number of competing opportunities, so the one who makes it easier for the customer is going to close the deal. This means that when you digitize, don’t make a fancy digital product that is so complicated you confuse and lose people. Instead, make it convenient, fast, and easy for your customers. Think about how nice it is for you to pull out your app and put in your Starbucks or Panera order so you can have your order waiting for you when you get there. What tech can you use to make your processes easier for your customers? Can they book appointments and buy products online? How many clicks does it take? (best practice is to keep it under 3 and ask for as little information as possible). Are they able to access you with their phones?
An April 2020 Oxford Economics study uncovered a sense of unpreparedness among 2,000 small and midsize businesses surveyed across 19 countries. … Fewer than 40% said they have all the data needed to support analytics-based decision making. …67% of those surveyed said that this data deficit is giving larger organizations a stronger competitive advantage due to the more sophisticated analytics capabilities they have in place. (Conway and Codkind)
Analyzing data. When you digitize, you have data available that tells stories about where your customers come from, what products sell when, what ads and posts drive sales, etc. You can serve your customers better and decrease your costs by analyzing data that is available when you digitize. The best practice is to pick a few metrics that make a difference for you and check them every week. Make a spreadsheet so you can compare over time to see what is making a difference for your business.
Reducing costs and risks. Cloud-based services and security systems can usually provide more security for your information. For example, files are more likely to be backed up. It is easier to encrypt your files and offer multi-factor authentication (do it on everything you can!!), and many services are available to automatically provide the appropriate data protection for your web users and customers. I also recommend a secure password manager. Their servers are usually under much higher protection levels than your computer files. Furthermore, it allows the generation of highly secure passwords.
What steps to take to properly digitize your small business
Conduct an audit of your current digitization. Make a spreadsheet of everything you are using with columns for how much it costs per year, when it renews, and how often you are using it. Decide if each one is worth keeping, and get rid of anything you do not feel is worth the ROI (return on investment).
Research and select the “best” digital tools that suit your business model and budget. Again, there is no true best, but consider what processes could be improved with digitization, and set a timeline of max one month to research and choose a tool that will help improve those processes.
Learn the tools! Schedule time to learn how to fully utilize the software- either a weekly or daily time, but put it in your calendar! Make sure your team is sharing what they learn and that everyone on the team is up to speed.
Ready to Digitize?
My favorite productivity tool for small businesses is Notion. It allows you to track all your documents, meetings, projects, tasks, etc. in one place. Use my affiliate link to try it out for free!
If you help setting up your office for productivity, set up a free consultation with me to see what is possible.
Conway, Cynthia A., and Mitch Codkind. “Where Digital Transformations Go Wrong in Small and Midsize Companies.” Harvard Business Review, 24 Aug. 2021, hbr.org/2021/08/where-digital-transformations-go-wrong-in-small-and-midsize-companies.
“Digitizing Isn’t the Same as Digital Transformation.” Harvard Business Review, 26 Mar. 2021, hbr.org/2021/03/digitizing-isnt-the-same-as-digital-transformation.
Farooq, Jawad. “Council Post: Digitization for Small to Medium-Sized Enterprises: Follow the Money.” Forbes, www.forbes.com/sites/forbesbusinesscouncil/2022/08/10/digitization-for-small-to-medium-sized-enterprises-follow-the-money/?sh=61593385433a. Accessed 30 Nov. 2023.
“The Seven Traits of Effective Digital Enterprises | McKinsey.” Www.mckinsey.com, www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-seven-traits-of-effective-digital-enterprises.
“How Keyboard Shortcuts Could Revive America’s Economy.” Brainscape Academy, 29 Oct. 2020, www.brainscape.com/academy/keyboard-shortcuts-revive-economy/.
OpenAI. (2023). ChatGPT [Large language model]. https://chat.openai.com