Small businesses facing constrained budgets are displaying a remarkable ability to adapt and thrive. Economic pressures and labor shortages are real, and so is small business resilience when it comes to facing such forces.


As Jordan Crenshaw, vice president of the U.S. Chamber of Commerce Technology Engagement Center, remarked, “Despite historic inflation and two quarters of negative economic growth, small business owners have proven themselves resilient time and time again, aided in part by technology platforms like digital advertising, business software, and delivery apps that power operational efficiencies and provide increased access to customers.” As more small businesses turn to technology, practical strategies to help navigate this evolving landscape are key.


The Rise of Technological Adoption


The COVID-19 pandemic accelerated the adoption of new technologies by small businesses. From online ordering to seamless delivery, businesses had to identify ways to be competitive both online and offline in order to attract and retain customers while tackling rising labor costs, global supply chain disruptions, and worldwide economic uncertainty.


Businesses that were able to adjust and survive are now expanding their use of technology throughout their operations post-pandemic. A 2022 survey revealed that “74% of businesses who don’t already have a mobile app plan to build one in the next couple of years.”


Weighing the Pros and Cons


Through technology, small businesses are able to achieve higher productivity in less time. These businesses are able to grow without linearly increasing their workforce. Additionally, with intelligent business applications and software, they’re able to tap into key financial and operational metrics, as well as supply chain analytics, to make data-driven decisions for their business transactions.


As the Association for Advancing Automation pointed out, automation helps both large and small companies reduce the risk of workers doing repetitive and dangerous tasks while optimizing their operations amidst production labor shortages. For example, Chipotle partnered with a technology company to create a machine that can peel, core, and slice avocados. Employees can load up 25 pounds of ripe avocado, and the machine does all the work with significantly more efficiency and limited monitoring. This machine drastically reduces the amount of time it takes to prep meals while lowering the risk of injury and staff turnover. This provides a preview of existing technology and a glimpse into what’s coming on the horizon. As larger companies invest in new automation tools, such tools will eventually become accessible to smaller businesses, allowing them to also retain talent, be more efficient in their operations, and improve their bottom line.


Most small businesses are excited about such possibilities and look forward to incorporating them into their operations. The U.S. Chamber of Commerce released a study on the digital side, revealing that 69% of small business owners said automation and technology allowed them to cope better with supply chain challenges and other hurdles.


But what are the risks? The main concern for many business owners is losing the human touch, the personal customer interactions often expected from smaller organizations. Is it possible that the actual and perceived level of customer care being provided may deteriorate with the adoption of too much automation?


Another concern is making the right investment in both technology and the personnel who will be using it, so that the efforts are worthwhile. Indeed, initial financing, ongoing maintenance, and reskilling or upskilling existing employees effectively are all crucial to ensuring success when it comes to new technologies. This is where implementing the appropriate strategy becomes essential.


Challenges in the Labor-Technology Transition


Given the constraints of limited resources, a prudent approach involves commencing with free trials or more cost-effective iterations of technological tools before venturing into more substantial investments. It’s also advisable to access ancillary features such as accessible IT support and online instructional materials as complementary facets that can enhance workforce capabilities without imposing the challenges of a steep learning curve.


Furthermore, existing employees may experience feelings of exclusion, redundancy, frustration, and hesitancy when confronted with new technological implementations. Therefore, it’s imperative to introduce changes at a suitable pace, ensuring employees’ inclusion in the transformative process. Actively address their apprehensions and explore available resources such as online courses, local workshops, or community college programs to assist in skill development and adaptation.


To mitigate the risk of over-automation, small business owners should first make a decision plan on which aspects of operations would remain staffed. For example, they may prefer using technology predominately for back-office processes while retaining staff for customer-facing positions.


Another way to approach this is by having manual processes and appropriate employee training for possible system issues, as well as developed disaster recovery plans. Having backup manual processes in place for essential tasks is paramount to avoid potential business interruptions.


Maintaining an element of the human touch is important for both customers and employees. As such, making an effort to preserve company culture and camaraderie in an automated environment should be top of mind rather than an afterthought.


In the world of constrained budgets and labor markets, small businesses worldwide are demonstrating their resilience by innovating, adopting, and automating their operations. Such tools are no longer solely for well-funded Fortune companies. Through the planned selection and expert deployment of technologies, businesses can enhance their operational efficiencies, thereby preserving their capacity for sustained growth and continued success.

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