In today’s digital age, data-driven insights have become the cornerstone of business success – from better understanding customer needs for a greater competitive edge or diving deeper into financial data to help businesses plot their business growth and fulfil their full potential: the benefits of data to make sense of the world of business are endless.
And Xero’s latest State of Small Business report has revealed three key opportunities that SMEs can harness for their growth and success.
The report underscores the critical role of digital transformation in the success of SMEs, revealing that over 41% of small businesses attribute their success to technology. With a steady YoY rise in cloud adoption, 68% of small business owners surveyed say cloud adoption helped them manage their finances better. Today, the adoption of hybrid workspaces and online operations is not just a luxury, but makes digitisation a necessity.
“It’s promising to see tech adoption growing YoY, but there is still room for growth,” says Colin Timmis, country manager of Xero South Africa. “Our research points to a skills gap, cost, and not knowing how to get started as the main barriers for many SMEs.
“SMEs can leverage digital tools to automate manual processes, operate online, and reach new customers which all contribute to business growth and resilience,” Timmis adds. “This is particularly relevant in the current global climate where digital readiness can make the difference between business continuity and stagnation. Using a cloud accounting platform to manage your finances makes it easy to see your numbers in realtime and collaborate with your accountant throughout the year.”
The report reveals that 81% of small businesses said their accountant is their most trusted advisor – and 83% said their accountant has been crucial in helping their business survive or grow. This trend highlights the important role of accountants in helping SMEs navigate challenges within the business such as complex tax requirements and regulations.
SMEs can tap into the wealth of knowledge and expertise that working with an advisor can bring. Xero has seen a shift in accountants going above and beyond the balance sheet, providing valuable insights and guidance to their clients. These professionals bring years of industry experience and a deep understanding of the unique challenges and opportunities within the South African market.
The SME sector is a vital part of South Africa’s economy.
According to Xero’s 2024 State of Small Business Report, 87% of South African small businesses were optimistic about their outlook for 2024 – a 6% increase from the previous year. Additionally, nearly three-quarters (73%) of these businesses had experienced growth during the 12 months prior. It also found that SMEs were eager to invest in specific areas such as upskilling current staff and moving into new markets.
By leveraging technology and working with accountants, business owners can free up time to explore advancements such as automating routine tasks, improving communication, and providing realtime data insights. For example, accounting software can automate invoicing, payroll, and expense tracking – reducing the time spent on manual data entry. Furthermore, cloud-based collaboration tools enable teams to work more efficiently, regardless of their location.
By upskilling staff through online training programmes, SMEs can enhance their workforce’s capabilities leading to improved productivity and innovation and enabling them to thrive in a competitive landscape.
While 2024 has been a year of challenge and change, South Africa’s SME’s have embraced innovation and shown remarkable resilience. Amid economic uncertainties and tough operating environments across various sectors, robust digital solutions continue to empower SMEs and help them successfully navigate hurdles.
“With the continued advancement of digital technologies and the increasing accessibility of expert business advice, SMEs are well-positioned to seize new opportunities and drive economic growth in South Africa,” says Timmis. “But we must work together to help support the SME ecosystem.”