The COVID-19 pandemic wreaked havoc on the business world. Hundreds of thousands of businesses globally had to shut their doors as the virus spread across the globe. Out of the chaos came thousands of new small businesses as people lost their jobs to the pandemic and looked for new ways to generate income. All enterprises, big or small, had to quickly adapt to a world that relied more than ever on technology. However, whilst the pandemic smothered opportunity for some, it created opportunity for others.
Traditional brick and mortar businesses that rely on physical customers struggled, while companies with a robust online presence thrived. Digitally savvy business services companies continue to benefit from the renewed reliance on technology caused by the pandemic.
The Small Business Boom
Despite the economic devastation caused by the pandemic, thousands of small businesses were formed over the last year and a half. In the UK, a record number of start-ups launched. Data from the Office of National Statistics revealed that 407,510 new businesses were formed. The situation is similar in the European Union. In France, between June 2020 and June 2021, the number of enterprise births increased by 30.2 per cent. In the first half of 2021, 13.1% more businesses were formed than in the first six months of 2020.
Similarly, in the United States, approximately 500,000 new businesses were born. A working paper by the National Bureau of Economic Research found that “the COVID-19 Recession has induced a change in the structure of the US economy towards more remote activity” and this provides incentives for new businesses to explore a range of opportunities that may not have been available to them pre-pandemic. With more small businesses being born comes more opportunities for virtual business services.
Our data reveals that the pandemic boosted worldwide demand for various business services such as online accounting, online assistants, online solicitors and online HR services. Out of these four business services, online accounting saw the most significant growth in demand.
Global demand for online accounting services began to grow steeply before the pandemic started in March 2020. Between July 2019 and June 2020, worldwide generic search demand for online accounting grew by 57%.
The accounting software market has been driving much of this growth. Our data reveals that accounting software companies such as QuickBooks, Xero and Zoho Books saw gradual growth when the pandemic began, with QuickBooks in the lead in terms of its market share.
Accounting software providers such as QuickBooks and Xero have been gradually positioning themselves as the solution for small businesses for several years. The conditions of the last year and a half acted as a catalyst for steady growth for these online businesses. For example, QuickBooks is actively positioning itself as a solution for small businesses. We found that 19% of paid traffic for the search term “accounting software for small business” led to the QuickBooks website. Evidently, the company is actively pursuing small business owners in need of online accounting services.
Pre-pandemic, accounting software provider Xero experienced significant growth. In their 2018/19 financial results, the company revealed that subscribers had increased by 31% over the year to 1.82 million. Post-pandemic, the company’s subscribers increased by 20% to 2.74 million and their subscriber base has almost doubled during this period.
The company attributes its success to ten years of investing in cloud accounting. Gary Turner, MD of UK & EMEA at Xero, explained that “in addition to our own efforts, the recent macro trends and legislation such as Open Banking, fintech and, of course, Making Tax Digital, also served to accelerate a broader shift towards adoption of cloud tech like Xero”.
The Future of Online Accounting
The future is bright for online accounting and involves even more technological advancement. Most agree that artificial intelligence and increased data analytics will dictate the online accounting market and that the future of accounting is in the cloud.
Online Solicitors and Virtual Legal Services
Virtual legal services have been viewed as a threat to traditional law firms for some time. The pandemic acted as a wake-up call for firms not considering cloud-first approaches. Clio, a legal practice management software provider, found that technology will have an increasingly vital role in client experiences.
In their 2020 Legal Trends Report, Clio found that a growing number of consumers were getting comfortable with using technology. As a result, they are increasingly looking to engage with legal services online. The Report reveals key areas that legal firms need to focus on if they are to continue to offer positive client experiences. To meet the needs of online client interactions, firms need to provide video conferencing, electronic payments, and electronic document management.
Many legal services firms are looking to improve their digital offering, but are unsure where to begin. Onefourzero recently used digital data to assess the commercial performance and market share of a legal services asset. We compared their offering with their competitors and recommended value creation and optimisation strategies.
Our analysts also investigated the marketing mix of all brands in the sector to model how investment should be divided between digital channels. Finally, we demonstrated the platform’s online growth by evaluating website visits and brand searches, which revealed significant increases year on year. Our insights enabled the legal services asset to highlight marketing opportunities, which will enable them to grow and attract new customers, thus increasing their market share.
The Future of Online Solicitors and Virtual Legal Services
As individuals become even more confident with technology, demand for virtual legal services will only increase as small businesses seek cost-cutting measures to remain competitive. Artificial intelligence is in its infancy in legal services. However, it is currently used for practice management automation, predictive coding, document assembly, legal research and chatbots in some firms. While some legal commentators do not see a clear future for artificial intelligence in the sector, as its capabilities increase, it is sure to find more willing users.
As the world embraces all things digital, virtual assistants are making their way into the limelight. Our data shows that popular virtual assistant platforms such as Ruby, MoneyPenny and MyOutDesk increased their website traffic throughout 2020 and 2021.
The companies employ individuals to act as virtual assistants, customer service staff, or operate live chat services for a range of businesses, big and small. With many companies having to move their operations online during the worst of the pandemic, hiring virtual assistants to manage customer calls or help executives manage their diaries was ideal. It allowed businesses to reduce hiring costs and interact with individuals trained to work efficiently virtually.
The Future of Virtual Assistants
While many virtual assistants today are people, artificial intelligence is hot on their trail. In terms of basic customer service work, companies are increasingly turning to chatbots. Thanks to natural language processing, chatbots simulate human conversations to address needs without a human operator. Popular AI chatbots include ZenDesk Chat, Drift, Salesforce Einstein, Ada and Intercom. As AI becomes increasingly sophisticated, will it be able to take on more complex tasks?
The Transformation of Business Services
Business leaders are dealing with unprecedented change, and business services providers have responded with digital solutions. The digitisation of business services has matured to such an extent that quality services are now available to small businesses at an affordable price in a way that they were not pre-pandemic.
This article features multi-source, triangulated data insights generated by onefourzero’s expert consultants. To learn more about how we can assist your business by providing data with commercial value please click here.