Mark Cleaver

While small and medium sized businesses (SMEs) are turning to social media to help grow their brands, many are reluctant to invest in technology generally, according to the latest SME survey from small business finance specialist Bibby Financial Services.

Conducted by CoreData in February, the Bibby Financial Services Small Business Barometer revealed Facebook is the most popular social media tool for SMEs – with more than two in five respondents (43%) using it for their business.  Other common social media channels include LinkedIn (23%), Twitter (19%) and Google+ (16%).

Moreover, 22% of SMEs expect sales growth to come from social media, highlighting its potential to boost revenues.

The survey also revealed close to two in five (38%) small businesses believe websites are the most valuable type of technology. Other technology mediums seen as advantageous include social media (35%), high-speed broadband (31%) and smart phones (31%).

However, despite the perceived benefits of technology, the majority of SMEs do not currently have plans for increasing their technology investment. Fewer than one in three respondents (31%) expect to increase or significantly increase their investment on technology in the next year. A small proportion (5%) intend to reduce their technology spend while a further 12% are unsure.

Mark Cleaver, Managing Director, Australia and New Zealand, said: “Technology can equalise the playing field between big and small business. Whether this involves spending more on faster computers, social media or on software that makes a business’ operations more efficient, technology investment is crucial for keeping up with competitors and the needs of customers.

“Despite this, our survey revealed three in 10 SMEs (29%) don’t believe that technology will offer any advantage over bigger businesses. Moreover, two in five SMEs (40%) don’t currently use mainstream social media tools to promote their business.

“SMEs need to use all the tools that they have available to build their businesses and brands in a highly competitive landscape. Social media is an effective and low-cost marketing tool that can help SMEs keep up with the efforts of bigger businesses,” Mr Cleaver said.

The survey found that more than 62% or three in five small businesses have a website. Of these, 45% use it mainly to share information and promote their brand. Close to three in 10 SMEs (28%) use their websites to funnel potential clients to call, email or visit in person in order to make a sale.  Just one in four SMEs (27%) take it one step further and use their websites to sell products and services.

“E-commerce is becoming more important in the economy. SMEs can score goals against big business by making sure they have online transaction facilities to sell products or services rather than relying on physical transactions,” Mr Cleaver said.

In terms of social media usage, the survey found Facebook is most popular with respondents who have businesses in the accommodation and food services industries, with 77% using it for their businesses. It is also popular with those from arts and recreational services (70%) and the retail trade sector (56%).

The industries where businesses are least likely to utilise any social media are household and personal services (73%), construction (62%), and agriculture forestry and fishing (60%).

The Bibby Barometer SME survey is conducted bi-annually on over 850 small and medium sized businesses, Australia-wide, on business sentiment towards economic conditions, cash flow management, financing and key business challenges. Each year, SMEs are asked about their hopes for the Federal Budget.

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