By Matthew Campbell – Small businesses make up 98.5% of all formal businesses in South Africa. They also employ between 50% and 60% of the country’s workforce and contribute to around 34% of our GDP.
For our economy to grow, we need to create an environment that enables more small businesses to thrive – and high-quality connectivity has a crucial role to play in this. The pandemic has taught us the value of being able to run a business online, and businesses that could operate remotely and connect with their customers even after their physical doors had to close were at an advantage.
Connectivity has not only enabled this, it has become the driving force behind modern business – for organisations big or small.
The modern business environment
Large enterprises are usually more productive than smaller businesses, and this productivity gap is even wider in developing countries. By improving the productivity of small businesses, we would see more job creation through business growth, as well as better paying jobs across the low-income sectors of our economy. But what exactly is holding small businesses back from being more productive?
Some people may point to a lack of skills, but this only paints one part of the picture. Many small businesses simply do not have adequate digital infrastructure to enable their staff to work more effectively. In a survey by Deloitte of over 1500 small and medium businesses in Australia, businesses with advanced levels of digital engagement were 50% more likely to be growing revenue, and earned an impressive 60% more revenue per employee.
Solving business problems
High-speed connectivity, like that provided by fibre, can solve many common business problems. One of the most obvious is productivity losses caused by long loading times or unresponsive systems. Connectivity also enables all the tools and platforms that empower modern and more efficient ways of doing business.
Digital tools can help businesses improve their operational processes and enable them to develop and implement innovative, disruptive, digital-first business strategies. There are cloud-based digital tools for nearly every small business requirement, from communication, collaboration, and document sharing, to customer relationship management, marketing, and accounting.
These tools give small businesses access to services that were previously reserved for big businesses which could afford to develop and build systems themselves. But without fast and reliable connectivity, small businesses can neither access game-changing tools nor use them to boost productivity.
Serving today’s customers
Today’s customers want to interact with businesses on their preferred communication channels, and have access to online payment capabilities, technical support, and other digital services. Businesses that don’t have such systems in place are missing out on a world of online customers, and those that do, need to ensure that those systems are supported by reliable connectivity.
Small businesses may have a significant advantage over larger enterprises: with the right tools, they can connect with their local customers on an individual level and offer truly personalised interactions. Digital platforms democratise the ability to reach customers, so small businesses should use them to their advantage.
Read the fine print
When it comes to the connectivity that enables this productivity, it may seem that the quality of a connection is roughly the same across a variety of Internet service providers (ISPs). But this is not the case, and the difference shows when the connection slows down or stops working completely. Businesses need to make sure they understand their service level agreements (SLAs) with their ISPs, or run the risk of being held back by an onerous contract and an unreliable connection.
Saving costs is especially important for small businesses, but they shouldn’t let it be the only thing that determines their connectivity solution. For example, the contention ratio of a network, which is the number of users sharing the data capacity on a provider’s line, can be hidden in the fine print and have a significant impact on network performance.
Uncapped, unshaped, unthrottled, and symmetrical connectivity should be the common standard for future-facing small businesses. A trusted connectivity provider will enable all of this, as well as dependable support when a connection fails. When network downtime costs your business time and money, you can’t afford to wait days or weeks for a solution. Read the fine print very carefully, and find a reputable partner in connectivity to enable business growth.
Paving the digital way forward
The more small businesses start leveraging high-speed connectivity and all of the innovation it empowers, the more we will see businesses participate in a growing digital economy. Connectivity enables businesses to connect, compete, and uncover new avenues for income. And yet, too many small businesses still do not have access to reliable and cost-effective fibre connectivity.
National fibre coverage remains a challenge in South Africa and will require more government and private sector partnerships to prioritise connectivity. Large enterprises are constantly improving their digital capabilities to stay competitive; small businesses should have the opportunity to do so too.
Matthew Campbell is the head of SME and FTTH at Seacom