Playing catch up - digitising tradesperson-run SMEs for efficiency and growth

Despite the undisputed value of digital transformation, the concept remains largely unrecognised amongst SMEs. ToolTime research shows that UK tradespeople, for example, are still mostly dependent on pen, paper and basic computer software such as Word and Excel when it comes to running their businesses, leaving them 10 years behind when it comes to digitalisation.

However, by digitising back office processes, tradespeople can achieve huge gains in efficiency, costs, speed and transparency to achieve growth and build resilience in the face of skilled workers shortages, inflation and supply chain issues. Not only that, but by ensuring that external-facing assets such as websites and social media channels are up to date, businesses have a better chance of standing out from competitors and appealing to young talent.

So, why have tradespeople in the SME space fallen behind their larger peers in the surge towards digitisation - and how can this be overcome in order to help them reap the rewards? This question has become critically important to small business owners who are not only looking for ways to increase operational efficiency, but to improve their competitiveness and create greater opportunities for scalability and growth potential.

In this article, we’ll explore what digital tools are out there and demonstrate that the untapped potential for small businesses to digitise supersedes that of their larger counterparts - meaning they have far more to gain.

Explaining the slow uptake in digital tools

For many, the failure to take on new digital tools has not been a conscious decision, but rather a case of an ‘if it ain’t broke, don’t fix it’ mentality. In other words, they were getting by just fine. SMEs more commonly have small, loyal customer bases, and expansion came down to the ‘old-reliable’ of the marketing world - word-of-mouth.

But times have changed. Client liaison has moved to email, tax returns have gone digital, and to access the most competitive prices, materials need to be ordered online. These changes have been inevitable as our personal lives have become more digitised - with everyone carrying a smartphone in their pocket, enabling them to make purchases, access information, and even work from anywhere.

However, developers have been hard at work innovating to improve operational efficiency, and the time is ripe for SMEs to take the plunge. It’s never been easier for small businesses to centralise all their paperwork, speed up invoice generation, quotations, and receipts, or to get a holistic view of all their operations in one digital dashboard. Moreover, mass integration of these tools and the fact that they can now be hosted in the cloud has brought costs down, making them available to businesses of smaller sizes.

Rapid acceleration

2024 is set to be another busy year for tradespeople, with recent research indicating that younger generations rely more heavily on tradespeople than their parents, and more than a third of UK homeowners planning home improvements in 2024.

In order to keep up with demand, businesses will need to make the most of digital tools that help them gain independence from their administration. For example, by utilising automated invoice generation that relies on existing data, not on information being accurately relayed from one person to another via phone, email or messenger, or manual input. This not only speeds up the process, but means that filing tax returns can be done in half the time when April rolls around.

Time savings are not limited to manual data entry - appointments can be scheduled by the office to automatically appear in the right team member’s schedule, and team members won't need to physically drive to the office to drop off paperwork - meaning workflows can be streamlined, while customer communications become easier and more transparent. This is of particular importance at a time where the cost of living has skyrocketed, meaning consumers are more diligent in their selection of best-value products and services.

Not only this, but creating a more efficient and optimised business will also help plug existing skills shortages by allowing more time to be spent on the job rather than on paperwork.

The future for digital tradesperson-run SMEs

Ultimately, the digitisation of SMEs in the traditional home service industries creates massive opportunities for growth. Employers will have more time on their hands to scope out new projects, whilst also being able to offer their staff a better work-life balance, removing many of the tedious time consuming tasks of the past. Meanwhile, modernising company websites and user interfaces helps companies demonstrate their unique offerings in a way that engages customers, bringing more in.

Digital tools have developed quickly - cloud based platforms give access to everyone who needs it, digital diaries make it easier to track and optimise workflows, and standardising and centralising paperwork makes reporting and day-to-day operations far easier.

Ultimately, digitisation empowers SMEs to take a step back and look at their business model, evaluate what is working well and where the areas for improvement are, when previously there has been little time for reflection. This is great for growth, and gives smaller businesses access to the same aggressive strategies as their larger counterparts.

2024 is going to be pivotal in the digital transformation of smaller businesses, and particularly those in the traditional industries. They will benefit from having more room to improve, and acceleration of their business models is going to see them reap massive rewards.