21 per cent of SMEs have launched a new online service or product as a direct result of the pandemic, with 34 per cent having done so during the strictest lockdown months of March-July 2020
36 per cent of SMEs moved their business operations online from a partial or absent online presence
75 per cent of SMEs will sustain their new services over the long-term, but 57 per cent do not have cyber insurance in place to protect them
More than one in five small businesses (21 per cent) have launched a new online service or product offering as a direct result of the pandemic, according to new research from Direct Line.
They’ve made bold decisions to diversify. Over a third of SMEs (36 per cent) moved their business operations online from a partial or absent online presence.
In order to rapidly adapt to the transformed landscape, a quarter of small businesses spent between £1,000-£5,000 on launching the new digital service or product offering.
SMEs are confident these decisions will pay off. Nearly two thirds (65 per cent) feel optimistic about the success of their small business in the “new normal” – one in ten had not yet formulated an opinion on the matter. Three quarters are also going to sustain the new digital service or product over the long term.
The pandemic has dramatically accelerated the pace of digitisation for small businesses. Over one in five (22 per cent) SME leaders said that in normal circumstances it would have taken them at least 4-6 months to achieve the same level of digital progress.
When asked about ramping up their online presence, small businesses said that they had achieved the following since the beginning of the lockdown in March:
- Increased or started a social media presence (19 per cent)
- Enabled remote working for employees (18 per cent)
- Enabled online ordering systems and deliveries (11 per cent)
- Improved company website (10 per cent)
- Shifted marketing online (9 per cent)
But these rapid transitions were not without difficulty. In launching new digital services and products to adapt to the new landscape, small businesses encountered the following issues:
- Making customers aware of the new offering (21 per cent)
- Lack of time due to pandemic-related upheaval (20 per cent)
- Lack of equipment and software (20 per cent)
- Funding issues (20 per cent)
- Lack of skills (18 per cent)
Worryingly, despite small businesses transitioning towards online services, nearly six in ten (57 per cent) have no plans to invest in cyber insurance to protect their business. Almost one in three (30 per cent) said it isn’t a priority, a quarter (25 per cent) believe that running their operations online doesn’t require insurance, and 24 per cent weren’t even aware that they needed cyber insurance.
Karneet Chowdhury, Business Manager at Direct Line – Business, said:
“Small businesses have responded admirably to the challenges of COVID-19 – diversifying services, rapidly shifting online and launching new products to survive and thrive. But now they need to take the next step and ensure their new services are fully protected. Cyber-attacks have the potential to devastate a business and completely derail digital progress they have made since the pandemic struck."