What is a small business digital transformation?

The term digital transformation refers to a shift in how an organization operates — a transformation of people, processes and technology. Digital transformations range in size and scale, as every business undergoes them, from Fortune 500 to a family-owned small business. 

When the concept of digital transformation is applied to a small business, it involves a change in the business operations. Oftentimes this means incorporating digital technology and automation into legacy processes that have been managed using outdated and manual, resource-heavy methods. 

Digital transformation for small businesses

According to Forbes, “Digital transformation is critical for small and medium enterprises looking to thrive in today’s fast-changing business landscape.” The digital landscape changes daily with technological innovations impacting how customers shop, whether the audience is business-to-business or business-to-consumer. To remain relevant and successful in this changing landscape, small businesses must keep up by creating digital plans that meet customer expectations and increase process efficiencies. 

What prompts a digital transformation? 

There are many factors that may prompt a small business to begin a digital transformation — from ownership succession or acquisition, changing industry standards, to the need to remain competitive and meet customer expectations. The fact is, if small businesses are not willing to adapt and implement digital operations into their processes, whether backend or customer-facing, they will not remain in business. 

Let’s walk through a couple small business scenarios that would be catalysts for a digital transformation.

Examples of small business digital transformations 

Many small businesses are family-owned and either have succession plans within the family, or will be acquired by an external party or entrepreneur. Whether or not the term is recognized, digital transformation almost always occurs as this ownership transition occurs.

Small business ownership succession

The owner of a 30-year-old family-owned business is planning their retirement and their son will take over as the owner/operator. As the son dives into the business, they work to understand processes and realize many rely on employee historical knowledge, are manual tasks and require in-person presence due to the company still conducting operational tasks on pen and paper. 

While the son must understand these processes and requirements of the business to be successful as he takes over, he also realizes the huge limitations and inefficiencies that currently exist. A digital transformation must occur within the company — with both their operations and marketing activities — to remain competitive and reach the customer in the ways they require. 

Business sale and acquisition 

You’re an entrepreneur acquiring a service-based small business that has had the same owner for the past 20 years. The previous owner stays on for a transition period in which you will be learning the current operations. Throughout the transition period, you see several bottlenecks in the process, inefficiencies and potential to introduce digital solutions. 

You focus your first 90-days post-transition to continuing to understand the processes and ensuring the employees feel valued and heard. However, during this time, you’ve identified several process gaps that create risks. You understand that to grow the company to meet your goals, you must transform the technology and processes that power the business. 

How to lead a digital transformation

Going through a digital transformation is a major event. Most business professionals have not gone through such a transformation, and if they have, it’s likely they’ll only go through it one time. However, when you’re a small business owner, you cannot risk making uninformed decisions about your livelihood. You know your business in and out, but you are not a business operations or marketing expert. 

As a small business owner navigating a digital transformation, it is highly recommended to bring in a small business consulting service, specifically with operations management and digital marketing expertise. Implementing new digital processes is a huge undertaking — and you must do it all while maintaining current business commitments and contracts.

LSX Studio specializes in navigating small businesses through digital transformations, allowing you to continue to do what you do best — run your business. As an extension of your team, we partner to understand your current processes,and make recommendations for operations and marketing  activities that will allow your business to operate more efficiently in today’s digital world. 

Read more about our services, or fill out a contact form to set up a consultation with our digital transformation experts.