In an age where digitalisation is revolutionising how businesses are operating, a new study has revealed that these firms are alarming unprepared for internet outages. What’s the problem and how can these businesses solve it?

How unprepared are small firms for internet outages?

Internet connectivity rarely makes the headlines but it is absolutely essential to business operations, in particular with digital tech adoption and AI integration becoming an increasingly prominent part of the small business landscape.

This is what makes figures from a new study by Zen on internet connectivity, outages and service backup plans quite astonishing. According to the research, a staggering 94% of small businesses have to put with poor internet connection and 91% experience internet outages, while less than a quarter have a backup plan in place to maintain business operations in the event of a dropout in service.

The reading gets even grimmer for micro businesses, with almost 40% of these firms operating without an internet outage backup plan in place. The financial impact of internet outages is far from trifling – according to the study, firms lose up to three hours of productivity a month as a result of dropouts or poor connectivity.

Why are small firms reluctant to spend on connectivity backups?

While investment in new infrastructure is intrinsic to improving conditions for small businesses – with stakeholders such as the government and service providers on the hook for this spending – firms can take steps to safeguard operational continuity and productivity. This is where the importance of backup plans – such as the use of multi-network SIM cards – comes in.

However, setting up systems that protect against loss of connectivity and against operational, financial and reputational damage, and integrating them into business operating infrastructure, comes at a cost. And it is this cost that is one of the key barriers for smaller firms.

Investing in uptime safeguards and how alternative finance can help

It is hard surprisingly that cost is holding back small business investment in internet connectivity backup systems. At a time when firms continue to bear the weight of prolonged austerity and unrelenting pressure on margins, finding capital to spend on such development is highly challenging.

So, how can businesses invest while ensuring that cash flow is safeguarded? Alternative finance can help.

Services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses in the current funding climate (with 65% more SMEs experiencing difficulty in accessing finance from high-street banks). These alternative finance facilities, which offer a more easily accessible, affordable and personalised approach to lending, are helping small businesses survive and target recovery, stability and growth.

This profile has helped cement the reputation of alternative finance in the business sector. Notably, the new Growth Guarantee Scheme will provide a wide range of finance facilities to smaller firms, including asset finance, invoice finance and asset-based lending. This is further proof that alternative lenders are increasing filling the small business funding gap.

Small firm finance options for internet connection backup planning

While small business have good reason to be careful how and where they invest, ensuring that internet connectivity is uninterrupted, even during infrastructure-related outages, is critical in an era where the level of online functionality is already high and is only going to get higher.

Firms have to find a way to finance investment and this is why it is important that decision-makers are aware of all the finance options available to them, including the services of alternative lenders.

To find out more about A&T Business Associates services, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.