Trends in Tech Buying: SMBs Pinpoint Technology for Return to Strategy
More than 99% of all US businesses are small- and medium-sized, and these businesses have been evolving. Find out how SMBs are reviving their offensive strategy and returning to a strategic mindset. This is a fun fact. According to the U.S. Small Business Administration, more than 99% of all US businesses are small, meaning they employ fewer than 500 employees. This adds up to 32.5 million businesses, which employ 48% of the nation’s workforce by 2021.
For a moment, just think about those numbers. Unless you work for a large corporation like IBM, Microsoft, Ford, or Procter & Gamble each week, chances are you will spend your professional hours at a small to medium-sized company. Although these companies are not as well-known as the big corporations, they are the backbone of America’s economy.
They have evolved. Small businesses, from the family-owned pizza shop with 10 employees, to the sheet-metal manufacturing plant employing 400 people, have improved their efficiency, innovation, sales footprint, and overall effectiveness over the years. How did they do it? The short answer is technology. The democratization of IT and its widespread acceptance has had the greatest impact on the SMB market. Technology is no longer a luxury, but a competitive necessity for all businesses, even the smallest.
Many of these companies know this. Take the following as an example: 62% of respondents to CompTIA’s SMB Technology Buying Trends research found that technology is a key factor in achieving their business goals. Only 5% consider tech a non-factor, while 31% consider it a secondary factor. This comes after another difficult and unprecedented year of restrictions and pandemic fallout, which has harmed small businesses especially hard. (Note: CompTIA defined SMB companies as those that have fewer than 250 employees in its sample for this study.
SMBs that have been primarily defensive for the past two-plus decades are now starting to rethink their offensive strategy. SMBs have been largely on their heels during the pandemic, trying to keep their businesses afloat, avoid laying off employees, and keeping their customers. Now, however, business goals that were important in 2021 such as defending against competitors and renewing or keeping existing customers are being put aside to make way for activities like hiring skilled workers and developing new ideas.
It is notable that this shift to a strategic mindset recognizes technology as the enabler or fuel to achieve these goals. Technology initiatives were mainly focused on infrastructure last year, which was largely driven in part by the rapid remote work migration many companies experienced overnight. Device purchases such as laptops, printers, and phones for staff became paramount, as well as collaboration, video, and communications/telecom solutions to better enable virtual work environments. Respondents shifted their preference from infrastructure spending to investing in innovation and human resource development this year. 28% of SMBs would prefer to spend on technology that promotes innovation, compared to 19% in 2021. The human side of things is also up. This year, 28% of SMBs stated they would like to hire more tech staff and invest in training and certifications. This is a significant increase over 2021. These aims are a sign that SMBs are moving out of the bunker and looking to evade the effects of the pandemic.
These more ambitious business goals are associated with more positive attitudes about their current business state. Three out of 10 SMBs agree that their company is thriving in 2022 due to increasing revenue and profitability. This compares to 22% who said so last year. The majority of firms report that their firm’s health is stable in terms of revenue or profit levels. This is similar to last years (51% in 2022 and 48% in 2021). This year’s net 19% of respondents are reporting that they are struggling, a decrease from the 29% who reported it in 2021.
It sounds like good news, right! It is, but it is also a bit curious considering the global economic doom and gloom of the summer 2022. The study found that SMBs cite macroeconomic worries as ongoing threats to their business, including continued inflation, potential recession, and supply chain woes. Despite their optimism, they seem to be more optimistic due to the pandemic’s diminishing impact on their day-to-day business operations.
This optimism extends to their opinions about their current tech budgets. Surprisingly, 22% believe that spending levels are right.