Small Businesses and Charities Lack Basic Digital Skills

38% of small businesses and 49% of charities in the UK lack basic digital skills, according to the findings from Lloyds Bank UK’s Business Digital Index.

In the survey of 2,000 small businesses, small businesses that are the most digital are twice as likely to report an increase in turnover. At the same time, 69% of respondents admitted they need to develop their digital skills.

Developed in partnership with Doteveryone, the report has its own definition of key basic digital skills for small businesses; managing information, communicating, transacting, creating and problem solving. 62% of small businesses were found to have all five skills.

The report found that 50% of sole traders did not possess these digital skills, while the number of sole traders investing in digital skills has dropped from 10% to 78%.

15% of small business owners named a lack of digital skills as the main obstacle to doing more business online. This was closely followed by issues surrounding cyber security, with 14% citing this as the reason they weren’t actively seeking online business.

The report showed that the biggest increase in areas of digital use are advertising (28% increase), making payments (28% increase) and making sales or taking orders (27% increase). Other popular uses for digital within small businesses include email communication, searching for information and internet banking.

45% of small businesses and 44% of charities have created social media communities

Of the small businesses using digital, 65% use it to reduce their costs, proving it to be an effective method of bootstrapping for start ups and small businesses.

The cost-effective qualities of digital are further backed by the fact that social media usage is up by 45% among all respondents. 66% of small businesses still don’t invest in digital skills, suggesting they’re looking for low cost or free resources as an alternative.

45% of small businesses and 44% of charities have created social media communities, proving this to be an effective method of connecting with other businesses and customers.

Nick Williams, consumer digital director of the Lloyds Banking Group, said: “It’s very encouraging that the Business Digital Index shows an even stronger link between the digital maturity and organisational success of businesses and charities, with the small businesses most digitally capable being twice as likely to increase turnover.”

Williams went on to express the importance of helping small business owners gain basic digital skills:  “However, there are still too many without the basic digital skills which allow them to make the most of the internet. We need to motivate by raising awareness of the benefits of digital, including saving cost and time.”

Williams added: “Just as important is to remove the barriers and for some, concerns around online security are holding them back from adopting digital technology. We need to do more to reassure and support them to develop their cyber security skills.”

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