Microbusinesses are a growing element within the economy, as more people decide to set up as a company with just a handful of employees, providing a range of products or services.
From microbreweries producing craft ale and companies producing bespoke products, to personal assistants providing admin services or experienced professionals offering their expertise to a range of clients, they are becoming increasingly important.
Microbusinesses (employing up to nine people) are the fastest growing type of business in London. According to the London mayor’s office, there are one million microbusinesses across the UK capital. These businesses account for 96 per cent of companies in London, generated £277.3 billion in turnover in 2017 and have created at least 282,000 jobs over the last five years.
One challenge microbusinesses face is dealing with traditional banking and financial transactions, which can incur additional costs, lack flexibility and require time to be taken away from running the business. Virtual banking can help with these different aspects but let’s focus on the benefits of mobile and digital payments technology.
Microbusinesses may not initially have the funds to buy laptops and tablets for every employee but the ubiquity of smartphones means they are likely to be the main work devices for the business, even if they are the personal phones of employees.
The ability to use mobile devices to make digital payments is therefore a major advantage. It means physical cash no longer needs to be handled and payments can be made instantly, rather than having to access a computer or visit a branch when it’s not easy or convenient. This makes it easier for the business owner and any employees to work around other responsibilities, such as childcare.
Another feature of many microbusinesses is that they don’t have an office where people work together each day. Instead, they are likely to use a mix of working from home, coworking offices or using space in client offices.
Managing company finances via a mobile device means tasks can be completed without the need for employees to be in the office. If an invoice suddenly needs to be paid, the business owner or employee that looks after finances can make the payment regardless of their location.
The use of banking apps to keep track of business finances, particularly in conjunction with a virtual bank account, can also help microbusinesses that are unlikely to have got to the stage of investing in accounting software.
Although using physical receipts for expenses may be the preferred option to start with, using mobile apps to log expenses and provide the receipts in digital form, also has clear benefits in terms of keeping track of the businesses outgoings.
In terms of security, mobile phones support two-factor authentication and modern devices also feature biometrics technology such as fingerprint, facial or voice recognition. For a microbusiness to have these types of security tools at their disposal would have been unthinkable five years ago.
Increasingly, mobile devices provide different options for accessing customer services if there is an issue. As well as the obvious route of making a phone call, smartphones also support chat functionality if a phone call is inconvenient.
Time is another resource that microbusinesses may be short of. The ability to use a smartphone to make payments and complete other finance-related tasks will clearly save time, which can then be devoted to other aspects of the business, such as developing a product or service, exploring a new revenue channel, marketing or scoping a new role to grow the team.
As in many other aspects of modern life, mobile and digital payments help reduce the hassle, complexity and cost of running a microbusiness. And with these types of businesses contributing significantly to the economy, this can only be a good thing.