Are There Secret Tools for Small Business Growth?

Small businesses play a crucial role in our economy. They drive new ideas, provide jobs, and help our communities grow. However, because of the complicated financial and economic situation and the fact that going digital is now a necessity, it’s no wonder that small businesses face a lot of difficulties when pursuing growth, resiliency, and profitability.

The Challenges of Small Businesses

Small businesses face revenue issues, losses, and rising operational costs, making it challenging to sustain their operations. Fierce competition in saturated markets hampers customer attraction and retention, impeding business growth. Moreover, small business owners grapple with escalating overhead and labour costs, adding to the strain on their financial resources.

Small businesses deal with these challenges by focusing on several key objectives. It includes developing effective strategies to attract new customers and build connections in highly competitive markets, implementing sound budgeting and cash flow management practices for financial stability, and embracing digital transformation to enhance efficiency and reduce operational inefficiencies.

The Need for Cost-Effective Tools for Small Business Owners

Using cost-effective digital tools and making tasks easier can really make a difference. These tools not only help with the problems small businesses deal with but also give them a quick and valuable return on their investment. It’s like a winning move that helps them overcome challenges and keeps them on the path to success.

Top 5 Digital Tools for Businesses Generating Immediate ROI

Digital transformation is changing the way your organization works by deploying technologies into all aspects of its operations to deliver more value. With the COVID-19 pandemic as one of the driving factors for the digital transformation (DX) initiative, global DX spending was expected to reach 3.4 trillion U.S. dollars by 2026, with the largest organizations as the frontrunners (Statista).

But what about the small businesses? According to BDC, Canadian SMEs invest an average of  $118,000 in technology, but it all depends on the size and unique needs of a business. Thankfully, digital transformation can be dealt with one step at a time. We compiled the top 5 cost-effective business tools with immediate ROI you can integrate into your business.

1. Fast Banking Reconciliation and Accounting Tools 

Hiring a person to manage financial records and business finances can cost anywhere from $40 to $100 per hour for a bookkeeper and $150 to $500 per hour for a CPA (WTC Chartered Professional Accountant). The total monthly cost for bookkeeping services might be around $2,450, while small business accountants could easily charge $1,000 and up per month for an active business depending on their needs and complexity (Kinden). These figures vary based on the size of the business, the number of transactions, and how complicated the accounting tasks are.

Organizing your financials using automated cloud-based accounting software, specifically those with bank reconciliation and transaction categorization, reduces your bookkeeping or accounting services’ billable hours. For instance, some accounting software can help businesses save up to 46 hours a year (Hubspot). Assuming a split between bookkeeping and accounting hours at the average charge out rate, this could equal labour savings of $9,085 per year. 

Accounting software is a relatively inexpensive investment for small business owners, with an average of $50 to $150 monthly subscription costs, depending on the added add-on features and the business size (Investopedia). It is one of the most important tools to leverage when running a small business.

Minimum Solution

• Automated bank/credit card transaction import

• Automated transaction classification

These two automated functions are usually bundled with other essential accounting and bookkeeping issues, such as invoice and payments and receipt capture, in the basic plans of most common accounting software, including FreshBooks, Quickbooks, and Xero. The starting plans of these accounting tools range between $5 to $20 a month.  Tip: you can take advantage of the free plan offered by some accounting software.

2. Automated Data Backup

In the recent 2023 Travelers Canada Risk Index, it was found that 2 in 5 small businesses in Canada had data breaches in the last two years, and over half experienced multiple cyber attacks (Travelers). What’s even more worrisome is that 70% of Canadian companies hit by cyber attacks paid ransom, with 22% of them shelling out up to $100,000, according to the Canadian Internet Registration Authority (CIRA). 

Automated data backup is like having an intelligent system that duplicates and stores essential files without you doing it manually. It ensures your business data is safe from hardware failures, cyber-attacks, or human error. Automated data backup ensures business continuity, saving businesses from massive losses due to the mentioned circumstances. Most importantly, it gives entrepreneurs, as well as their clients, peace of mind.

The cost of automated data backup is way less than what you might spend on things like insurance, dealing with ransomware attacks, or the money you lose when your business has to stop because of a problem. For example, instead of shelling out around $197 every month for cyber insurance (Insureon), you could spend about $3 to $5 per GB monthly for a cloud-based backup system, which is more affordable and efficient (Optimal Networks).

If you prefer old-school methods like using external hard drives or network-attached storage devices, those can range from $40 to $500, depending on how much space you need and the brand you choose. The key is that automated data backup not only protects your important stuff but also saves you money in the long run

Minimum Solution:

• 3-2-1 backup system (3 copies, 2 different mediums, 1 offsite)

The 3-2-1 backup system basically means having three copies of your data, with two copies saved on two different media on-site and one copy kept in another media off-site. You can use a combination of cloud-based storage and physical media, including disks and removable drives.

• Regular testing of backups

Small business owners need to routinely inspect their backup systems to ensure that their data is being stored correctly. If your business handles sensitive information, such as financial or healthcare data, it’s advisable to perform backup and data recovery tests every month. For businesses with less critical data, conducting these tests once a year should be enough. Nevertheless, running these tests monthly offers an extra layer of confidence, because at the end of the day, an untested backup is nothing more than wishful thinking.

3. Lead Capture and Retargeting Tools 

Not everyone who checks out your business is ready to buy your products right away. In fact, 56% of the people your business is targeting aren’t ready to make a purchase (Hubspot). Only a tiny 3% of the leads are really set on buying something. This is causing a big problem, especially for online stores, as they lose a whopping $24 billion every year because people abandoned their shopping carts without buying anything (Dynamic Yield).

That’s where retargeting tools come into play. They’re like virtual reminders to bring back that 56% and turn them into customers. Retargeting tools are a clever way to make sure people who are interested actually end up buying your product or service. On average, it takes about eight reminders or “touches” to convince someone to make a purchase. But if you’re trying to win back leads who weren’t too warm to your business at first, you might need to send them messages about 50 times to get them on board.

Businesses can create these multiple touchpoints across all platforms by using various retargeting tools. For instance, Facebook ads, the preferred platform of 77% of marketers for retargeted ads, have a conversion rate of 14.29%. Meanwhile, email retargeting, another method of increasing your touchpoints, has a whopping 41% conversion rate. Of course, conversion rates vary depending on the industry.

With the question of how soon you should retarget your leads, the answer is as soon as they leave your business, but make sure not to overdo it to the point that your leads find it annoying. Special occasions like holidays are also a good opportunity to launch retargeted ads. Generally, it usually takes up to three months to see the retargeting results. Hence, it is suggested that this campaign be run for at least 90 days (Mailchimp).

Minimum Solution

• Retargeting ads to website visitors – 7 days

Tracking pixels is one of the most common retargeting tools used by marketers today. Fortunately, major platforms like Facebook, LinkedIn, and Google have retargeting pixels. What’s left to do is to identify the websites or platforms your buyers spend the most and tailor your message according to your specific audience and their current buyer’s journey phase before launching your retargeting campaign.

• Maintain customer database and email list with regular communications

Getting your message right is crucial for retargeting campaigns that really work. It’s not a good idea to send everyone the same message. Remember, your leads are a diverse group with different backgrounds, locations, and stages in their shopping journey.

To make sure you’re hitting the mark, segment your audience into groups based on specific traits or actions. You can use tools like CRM software, data management platforms (DMPs), social media analytics, and email marketing platforms to organize your leads. This way, you can segment your leads and tailor your messages to each group and increase your chances of grabbing their attention.

4. Post-purchase digital marketing tools 

Post-purchase marketing is a set of strategies that secure repeat purchases using simple yet effective methods, including thank-you emails, loyalty programs, surveys and feedback, rewards and programs, and personalized messages. It is targeted to clients who have already done business with you.

Remarketing is way cheaper by looking at the customer acquisition cost (CAC) and customer lifetime value (CLV). The cost of acquiring new customers is five to seven times higher than retaining those who have already done business with you (Forbes).

Besides the fact that remarketing costs less, it also has a higher conversion rate than selling to new prospects. Effective remarketing and retention campaigns can increase your profit by 25% to 95% as the probability of selling to an existing customer is at 60% to 70%. Far higher compared to new prospects at 5% to 20%.

A small business in Canada spends an average of $30,000 a year to attract customers, it is suggested to allot 5% to 10% of your marketing budget to remarketing. But it all depends on the audience size you are retargeting.

Minimum Solution:

• Automatic purchase follow up – Thank You for your business

In a Google/Ipsos US poll, it is found that 2 in 5 Americans regretted their purchase (post-purchase dissonance). 

Thank-you emails are sent to clients or customers after closing a sale. Most businesses use transactional emails (receipt emails and confirmation emails), given its high open rate of 80% to 85%. 

You can take advantage of this opportunity by sprucing it up with a Thank You message. This not only makes customers feel good about their purchase, which reduces any second thoughts or regret they might have, but it also shows there’s a real person on the other side of the computer, not just some corporate entity.

• Automated feedback solicitation to all customers

Feedback helps you improve your business. When customers share their thoughts, you learn what they love, what they don’t, and what bothers them. This info helps you tweak your advertising, make your services better, boost your product quality, and even create a new product that fits what your customers want.

• Review/referral requests to all or select customers (depends on your volume)

The referral program is one of the most effective lead-generation strategies. When prospects hear about your business from someone they trust, they’re more likely to become paying customers. In fact, 90% of people trust referrals compared to any form of advertising. 

It is cost-effective as earning recommendations from your loyal clients is usually free and builds credibility with your prospects. You can ask for referrals after closing a purchase, especially when the client is satisfied with the service. However, pushing too hard will only get you a negative response. 

5. Missed call marketing

Business phones remain one of the most essential assets businesses use to serve their clients. In fact, 65% of consumers prefer doing business over the phone, whether it is texting, calling, and mobile shopping (Invoca).

The 2019 study by BrightLocal revealed that 64% of consumers chose to reach a business via phone call after learning about it through search engines. However, small to medium-sized businesses could only answer 37% of the calls. The remaining 63% were either missed or directed to voicemail. 

It could be a huge problem as 85% of people whose calls were not answered will not call back. Much worse, 60% will very likely to call other businesses after experiencing poor phone experience from your service.

But what about those you were able to answer the call but put on hold? According to an AT&T study, 60% of callers who were placed on hold or queue eventually hung up. 

Smaller businesses struggle to answer calls for reasons like not enough staff, getting calls after closing time, or not having the right tech. Missing calls can cost a business a lot – around $325 per customer on average globally.

Minimum Solution:

• Automatic text back of all missed calls during business hours

“Sorry we couldn’t respond to your call in time. How can we help you?”

One may think that hiring more staff to answer calls may be the solution, but it is more cost-effective to implement missed call auto-response. The starting price for this software falls around $18 per month and it is often bundled with other CRM options to add even more functionality. This rate is way cheaper than getting a phone answering service with an average cost between $260 to $560, whereas hiring a receptionist costs $3,250 monthly. You can also get bonus, such as a free version or free trial of some of these auto-response tools.

Missed call auto-response tools let businesses automatically text back, and customers can schedule appointments, tell the reason for their call, and leave their contact details through SMS.

Investing in the right tool for small business matters

Small businesses face many problems like financial struggles, operational complexities, and tough competition. These challenges highlight the critical need for adaptation and resilience. Fortunately, digital tools have transformative power in overcoming these challenges.

Embracing digital transformation is not just an option but a necessity for small businesses aiming for growth and sustainability. The recent economic downturns revealed how tough it can be for small businesses in Canada, but those leveraging technology showed greater resilience.

Specific digital tools – from efficient banking reconciliation and data backup systems to lead capture and retargeting tools – offer an immediate return on investment. By adopting these tools, small businesses can enhance efficiency, cut costs, and secure their digital presence, contributing to their overall growth.

Many businesses worldwide are changing and improving by using new technologies. They are getting smarter and faster. This is super important during recovery from economic challenges.

Technology plays a crucial role in helping small businesses grow faster by providing practical solutions to everyday problems. If small businesses use digital tools, they won’t just survive but do well in a business world that’s constantly changing and can be unpredictable. The key to the future success of small businesses is how well they can adjust to new things, come up with fresh ideas, and make the most of technology to keep growing and staying strong.

If you have more questions about digital tools and solutions, we at The Digital Firm are happy to give you answers. Just call at (587) 850-5510