At QuickBooks we passionately believe in the power of the UK’s small businesses and are focused on helping unlock their potential. That’s why we commissioned renowned economists Volterra to help us build a greater understanding of digital’s role in making small businesses stronger and more resilient.
Named ‘The Productivity Payout: UK Small Businesses and the Digital Economy’ I revealed the industry first research and economic model at QuickBooks Connect London. This report shows we are fast approaching a significant productivity opportunity, one that will give small businesses a better shot at success.
Let me set some context.
Without doubt small businesses are the lifeblood of the UK’s economy. They are the backbone of industry. In real terms small businesses employ three in five people working in the private sector. That’s an annual turnover of £2 trillion.
There is an entrepreneurial spirit here in the UK that is part of our national psyche. Yet, it’s never been harder for small businesses to succeed and we see 50% of them fail within the first five years. That’s not only shocking, but in my view unacceptable.
Too much time and effort is wasted by businesses chasing payment, categorising expenses or accessing capital, when they should be focused on what really matters to them – whether that’s business growth or better work-life balance.
But it doesn’t have to be this way. For this vital part of our economy, adopting a digital-led mindset has the potential to open up a world of opportunity and deliver a significant productivity boost.
That’s why the results of this report are so important. Volterra found that embracing just one form of digital technology can break down the fear barrier, increasing the chance of further adoption – a digital snowball. Embracing one digital behaviour increases the chance of adopting other digital tools - tools for better cash flow, human resources, or freeing time for more productive activities such as sales, marketing or training.
This can save a business valuable time, increase efficiency, help generate sales: all key factors that can dramatically increase productivity and propel growth. And this all starts with MTD.
The report demonstrates that MTD can be this first digital move for over 1 million UK small businesses this April. It found MTD plus three simple additional catalysts could unlock a productivity payout of £57 billion for UK businesses over five years.
In addition to MTD, catalysts such as Open Banking will put automation at the heart of small businesses, further streamlining operations and driving efficiencies.
I speak to hundreds of small businesses every year. I know their fears. I know their struggles. But most of all I know their successes. I know that when digital and automation meet, we can supercharge productivity and usher small businesses into a new era of prosperity with the greatest chance of success.
Together we can seize this opportunity. I hope you enjoy the report.
The Productivity Payout: UK Small Businesses and the Digital Economy report is free to download.