How important is it for a Small Business in India to Adopt Technology?

Very important, I’d say. Unless small businesses get tech-savvy and begin using the latest technologies, they might soon find themselves out of business. Because technology covers almost every aspect of business nowadays- from inventory to customer care. Complex taxation laws of India also make imperative for small businesses in India to adopt the technology. Here we will examine how important is it for small businesses in India to adopt technology and why.

Importance of Technology for Small Businesses

People across India are easily and quickly adopting new technologies. This is evident from the fact that major online retailers such as Amazon and are looking for delivery agents to serve even the remotest parts of the country.

Almost everyone nowadays owns a Fourth Generation (4G) smartphone since they are available at prices starting from Rs 2,000 on wards. Most Indian households own a satellite TV connection while an increasing number of families own at least one computer. India is the fastest growing e-commerce market in the world. By 2021, Indians- both consumers and businesses will be spending over US$1.2 trillion on buying stuff- from the ordinary soap to complex machinery- online.

Also by 2021, around 80 per cent of all online purchases in India will be made through mobile devices including smartphones, tabs and laptops. After flash demonetization of Rs.500 and Rs.1,000 currency notes by the Indian government on November 8, 2016, millions of small businesses in India had to turn to digital payment systems such as mobile wallets and apps as well as introduce Point of Sale machines to enable customers to buy necessary goods.

The number of Smart Cities in India with excellent IT infrastructure is on the rise. The Indian government is also introducing smarter governance by providing various citizen related services online- through computers and smartphone apps. All these points make one fact clear: that if you are

then it is very important to adopt technology if you want to succeed.

Where Small Businesses Can Adopt Technology

This is a very good question in the sense, where should small businesses adopt the technology. Obviously, small businesses do not have large budgets like Multinational Companies (MNC) and other bigger counterparts. Hence, they need to adopt the technology within a small budget. Here are some areas where small businesses in India can adopt the technology.

Inventory Management

Inventory management is one of the key areas where small businesses in India can adopt the technology. Unless you know what you have in stock, it’s impossible to serve a customer properly. Inventory control also helps prevent losses due to unsold stuff expiring on shelves. It improves overall customer satisfaction because a small business can meet their needs swiftly by keeping something in stock. Inventory management also helps overcome the problem to stocking too much stuff that may not sell.


In recent years, the Indian government is conducting a massive consumer awareness campaign. As a result, consumers ask for invoices of stuff they buy regardless of the amount. Not providing a proper bill and invoice is punishable under the law. As a small business, it is also beneficial for you to maintain proper billing records. This is now possible through billing software. A classic example of small businesses using billing software can be seen at ‘dhabas’ that operate along highways in Maharashtra. These small restaurants use computers with billing software. Hence, they are able to keep proper track of food and drinks ordered by customers and charge accordingly. It also helps in their inventory control.


To deal with GST first we need to understand what GST is. Because Good & Services Tax or GST is almost applicable on everything in India. Calculating this variable tax and charging it to customers depends upon the invoice amount. There is State GST and there’s Central GST. And to add to problems of small businesses, the GST amount varies according to products. In such a scenario and to avoid GST default, it is best for a small business to adopt the technology. Use software that automatically calculates and adds GST to the invoice.


Another area where small businesses can adopt technology is bookkeeping. As any business owner will testify, bookkeeping is a vital part of operations. Bookkeeping, as you would know, is maintaining all financial records of the company- from investment to petty cash, daily cash flows, profits and losses, payroll and other overhead expenses. Any mistakes or errors that creep into bookkeeping can send a small business spiralling downwards towards losses. Hence, small businesses in India should eye bookkeeping as one more area to adopt the technology.


Day to day accounting is a process that small businesses can automate by using technology. There are various simple and complex accounting processes. And the good news is, software for accounting are easily available in the market. Good accounting practices are essential for a small business operation. And adopting technology in this vital sphere that involves money would prove to be a good investment.

In Conclusion

Unfortunately, small businesses in India are heavily dependent upon manpower. Especially when it comes to handling finances and monetary transactions. Usually, small business owners are busy trying to win new clients and with other routine functions of the organization. It is very important for small businesses in India to adopt technology to reduce dependence on manpower. Not because manpower costs. But skilled people might not be available in rural and semi-urban areas. In such cases, technology can help small businesses to grow

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