Studies show that more than half of small and medium-sized businesses don't think now is a good time to invest in their businesses. Given the economic uncertainty and fluctuating market conditions, it's not surprising. But, is it smart?
When we take a look at the current economic climate, it's understandable why SMBs are cautious about making new financial commitments. Limited financial resources and unpredictable revenue streams have them wanting to hold onto their cash, not spend it.
However, if we take a closer look at both the current market and the recent history of economic downturns, it shows that investing right now might be one of the best decisions businesses can make.
What does history say?
The Global Financial Crisis (GFC) of 2008 provides valuable insights into how businesses can navigate economic downturns.
The huge drop in spending led businesses to experience more quiet time than ever before. While debilitating for many, some businesses were able to use that to their advantage. They saw it as an opportunity to reinvest in processes that had been long overdue for a recalibration and focus on things that they had previously been too busy for.
While our current situation is nowhere near as dire as the GFC, many businesses are finding themselves with time that could be used to look at long-untouched areas of the business but could be improved.
Those who chose to invest wisely in technology and innovation during the GFC emerged stronger and more competitive - and the same can be said for the present day. Downturns can feel scary, but they also present unique opportunities for businesses to recalibrate, innovate, and gain a competitive edge.
If you play it safe, you could be sorry
In modern markets, things move so fast that standing still is tantamount to falling behind. It is understandable that businesses would want to stick with 'the devil you know'. But we've seen firsthand (again and again) the consequences of staying put in fast-moving markets, including:
- Missed growth opportunities due to decreased competitiveness and market share
- Inefficiencies, reduced productivity and increased operational costs due to outdated processes
- Inability to meet evolving customer needs and preferences
- Erosion of market position and long-term sustainability
When it comes down to it, the biggest potential consequences of not innovating are twofold. The customer base will move to someone who is changing or miss out on an opportunity to increase their customer base and get a bigger share of the market.
Is the world is moving and those that don't move with it will discover that they're being either left behind or severely disadvantaged when this thing becomes mainstream.
On the other hand, willingness to invest early and look at parts of your business that could be optimised puts you ahead of the pack and with more information to secure the sale and grow the business.
By prioritising action over inaction and flexibility over rigidity, companies can avoid the fate of those who have failed by underestimating the pace of change.
What should businesses be investing in now?
One of the best ways is to look to industry leaders and what they are doing. While they might be bigger and more well-resourced, they are also well-researched. You can learn a lot about the most valuable places to invest by looking at those at the top of their game.
Right now, two areas of technology that are gaining more attention and investment dollars are Enterprise Resource Planning (ERP) systems and Artificial Intelligence (AI) technologies.
ERP systems
As an SAP Business One user, we don't need to tell you that ERP is a strategic necessity for small businesses poised for growth. Platforms like SAP Business One are designed for smaller businesses, giving them the same automation and integration benefits as bigger systems, but with a smaller footprint and cost.
By investing in SAP Business One, you're already ahead of many other SMBs and are in a better position to adapt more swiftly to market changes - something that is particularly important in the current uncertain economic landscape.
AI technologies
AI has been a big talking point for a couple of years, and we are now entering an era where those that have embraced AI automation and efficiencies are getting ahead of those that aren't.
Until now, the biggest problem for small businesses accessing and using AI is the fact that you can't always trust it - even AI gets things wrong. This is why early adopters are investing in augmented AI, which enables the use of an orchestration tool to put parameters and guardrails across requests to ensure there are no errors.
This not only supports immediate operational improvements but also positions businesses for long-term growth and adaptability.
Investments to secure tomorrow
Deciding where and when to invest in your business is not easy or quick - nor should it be. But simply deciding not to invest because of uncertainty is also not a smart business move.
Taking the time to take a look at your business, your market and your customer expectations and uncovering any potential improvements is vital before you make any decisions on whether to invest or not - and in what.
You might find now is the perfect time for your business to improve capabilities and optimise operations with technology like ERP and AI.
Some ERP platforms and providers have recognised the possibilities of AI and are starting to invest in AI integrations. So, it's now easier than ever to get the most of your SAP Business One investment. We are one provider partnering with AI organisations to bring capabilities of much bigger and more powerful systems to our SAP Business One users - keeping you ahead of the pack.
To learn more about how you can optimise your SAP Business One platform to its full potential, you can contact us here.
