Can small businesses benefit from digital communities?
Businesses with 1-20 employees might seem small in number, but as a collective, they make up 97% of NZ’s economy. Australia’s percentage is almost identical.
Running one of these businesses might feel like you’re doing it all by yourself. In truth, you’re part of an Australasian economy worth over NZD 1.5 trillion.
Consider then that each business is connected by people, platforms and business relationships. These connections cannot be quantified, but their value is unprecedented.
However, small businesses are vulnerable to changing economic, political and societal factors. Taxes, changing regulations and fluctuating currencies often hit small businesses the hardest.
Therefore, small business owners need to find new ways to connect, collaborate and work together to stay competitive.
To tap into a community of collective strength. Businesses used to have to specialize in everything. They owned all of their assets and outsourcing didn’t exist. Every function was carried out within a brick-and-mortar business with exorbitant overheads.
Then came outsourcing and strategic partnerships as businesses looked to save costs and focus on their core strengths.
Today, digital communities present the next big opportunity for small businesses to make the most of their limited resources.
What is a digital community?
Digital communities connect businesses, people and platforms in order to increase the sum of all parts. Essentially, businesses are able to increase their capabilities by being part of a community programme rather than operating as a lone entity.
Each entity within the community is connected via digital platforms to enable collaboration, efficiency, and flexibility. Finding relevant online communities where like-minded people are discussing relevant business issues can be worth getting involved in.
Joining a Linkedin community or Facebook group can help grow your business, an example of digital communities for small businesses can be found here.
Consider a retail store with its web of interdependencies. To sell the end product the store relies on a smooth transition between manufacturing, suppliers, distributors, logistics and potentially warehousing and wholesalers.
It’s a micro business community that’s connected by complimentary services that happen as a result of a lot of different moving parts. All of these parts need to work together to create a successful retail store.
Then consider the store’s digital platforms and how they interact with each other. The shop couldn’t trade without POS, inventory, accounting and payroll systems. There are also supporting systems including email, CRM, social media accounts, CMS and analytics software.
Working alone, these systems lack context and functionality. This is where native integrations and APIs can be used to connect platforms to improve accuracy, functionality, and insights by contextualizing data.
But how can small businesses benefit from being part of a digital community?
Just like with internal systems, business networks need to be connected to function effectively.
Connecting businesses and digital communities
Rather than being limited by internal capacity, businesses are able to utilize the collective resources within a digital community.
This is where businesses, people and platforms come together to form a digital community.
There are three key characteristics of a digital community:
1) Shared platforms
Imagine that an owner of a bakery works out that their busiest trading days tend to fluctuate on a weekly basis. Rather than paying for permanent staff on set rosters, the business owner can save costs by hiring staff on-demand using an app such as Sidekicker.
Sidekicker benefits from his continual business and the baker enjoys the flexibility of matching staff with consumer demand.
2) Strategic partnerships
The bakery owner also identifies that bread is bought the most while cakes generate the most revenue (but also cost the most to produce). He works out that by pre-selling cakes and outsourcing the production to a third party, he can produce double the number of loaves himself (and increase the profitability of cakes).
The third party can specialize in making cakes without having to worry about sales. Meanwhile, the baker can sell more bread and decrease his cost of cakes.
3) Dynamic relationships
If the baker notes that customer preferences have changed and he can’t keep up with supply, he can either relocate his internal resources to match demand or outsource to the wider business community – until customer preferences change again.
Both the baker and the wider community are able to reduce costs by maximizing the use of resources and limiting waste.
The purpose of a digital community is to use shared platforms to benefit every business in the community. In our example, the baker is able to increase internal capacity in an efficient and scalable manner.
On the other hand, the greater community benefits from the efficiencies created by specialization and sharing resources across the business community.
Digital communities require strategic partnerships where businesses have mutually beneficial relationships. It also requires integrated platforms where relationships can be fostered, and communications can be shared.
Partnerships should be assessed, and trust established. Platforms need to be connected and the digital community established.
By fostering greater connections with the wider business community, small businesses can increase capabilities and maximize the use of limited resources.
Working together, small businesses can take advantage of big business opportunities.
Here at Aider, we view digital communities as a critical component of small businesses. However, when done manually – centralizing and analyzing data that is then shared across communities is a tricky proposition. Our AI platform does all the hard work for you – analyzing and making sense of all of your data across both internal and partner platforms. Give Aider a try!