5 min read

Jobs to be Done: Helping US SMBs make smart and proactive decisions based on their finances

11:FS Customer Strategy and Research Team

This is the final instalment of a 6 part series that explores the Jobs to be Done (JTBD) for US SMBs that we identified in our recent research. Each blog post dives into one of the jobs and how we examined it with a JTBD canvas. If you missed the first post that explains JTBD and the canvas, check it out before reading this.

JTBD #5 | Make smart and proactive business decisions based on my finances

Business ownership involves a lot of decision-making, from day-to-day considerations about dealing with customers or buying stock, to bigger decisions about supplier contracts or future business expansion.

It can often feel overwhelming, particularly for owners of smaller businesses or sole traders who regularly make major decisions by themselves.

Our research found that for many SMBs, decision-making is an art, not a science. Business owners frequently admit to relying on their gut instinct, rather than the numbers, to help them make a call on what to do next. In a fast-paced business environment, making decisions often comes down to what feels right and not necessarily what makes the most sense on paper.

Part of this comes down to the fact that SMB owners often lack the skills and experience required to be fully comfortable with the financial side of the business. Many find it the least rewarding part of running their company, and would much rather focus on product development or customer experience. This is compounded by the fact that most financial providers do not offer the right tools to help SMBs to easily and efficiently manage their finances — highlighting a gap in the market for intuitive financial services built around SMBs’ JTBD.

This isn’t to say that SMBs don’t want to take a more finance-led approach to doing business. Making smart and proactive business decisions based on the business’ finances is one of the most important jobs for SMBs according to our research. It’s also closely linked with tracking and managing cash flow - another of SMBs’ most important jobs. Financial services providers have an opportunity to tap into this need, by providing tools that are built around the customer and enable them to easily understand and manage their finances, without it taking over their life.

For many SMBs, decision-making is an art, not a science.

How did we draw up the canvas?

  • Current state

Many SMBs struggle to think about the bigger picture when analysing their financial data, instead focusing on the day-to-day cash flow. Often this is because they lack the experience or the necessary tools to analyse their finances.

Instead, the business bases decisions on intuition or gut instinct alone, without the extra insight that robust cash flow data would give into what is and isn't likely to work based on previous experience. The end result is a current state which sees the business oscillating between periods of feast and famine.

  • Contextual triggers

Key financial milestones or seasonal events often trigger business owners to recognise that they need help unpicking their finances. A lack of understanding as to why the numbers are fluctuating or a planning meeting with a co-founder or colleague can highlight the need for the business to be more strategic in its decision-making.

  • Barriers to behavioural change

The main barrier for most SMB owners when it comes to making decisions based on their finances is that they have no experience with data, even if it's accurate. Many will also find learning about the subject pretty daunting, and are too busy running their business to upskill themselves.

Finding the right financial tools is also a challenge. They are either too basic and fall short in helping owners to predict the impact of income or cost fluctuations on their bottom line. Or, they’re too complicated for an SMB without an accounting department to use effectively.

  • Desired state

Ultimately, SMBs want to be able to understand the business’ finances and be able to proactively plan for the future based on the facts, rather than instinct. Having access to consistent, real-time data will enable them to strategically target customers, manage stock and better predict returns to help grow their business.

Download our canvas pack here.

How is the job evolving?

The COVID-19 pandemic has left many SMBs’ finances in a tangle. Unpredictable supply and demand has led to unusual fluctuations in revenues and costs — significantly impacting business owners’ ability to manage cash flow effectively.

Making smart decisions based on the variable financial data of the last few months will be difficult for businesses. Many will have to make sense of a whole host of finance-related complexities they’re unlikely to have come across before, particularly if they’ve taken on emergency government financing or had to furlough staff.

Not to mention, making predictions about the future will be constrained by the continued uncertainty around the pandemic situation.

But while it’s become more difficult, this job has also become even more important for SMBs since the pandemic. In an environment where business revenues in many industry sectors are falling fast, accurate, finance-focused decision-making could ultimately mean the difference between survival and failure.

SMBs will be looking for providers that can help them to navigate their complex financial situation, with intuitive and automated tools that enable smarter data-driven decision-making.

Fast, accurate finance-focused decision-making could mean the difference between survival and failure.

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