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The Importance Of The Cloud For Small Businesses

Unless you’ve been living under a rock for the past several years, you’ve probably heard the term “cloud” thrown around business circles with increasing fervor, along with all of the accompanying cheesy metaphors. (“Watching the cloud go by,” “Taking shade beneath the cloud,” “Will the cloud bring rain?”, etc.).

But if you’re like 51% of people surveyed in this Citrix poll, you may not have a solid understanding of just what the cloud is and how it might apply to your small business. If you fall into that category, you may be missing out on a number of benefits in terms of cost savings and productivity. We break down the basics of cloud computing below, though we recommend also reading a good cloud computing guide for an even deeper look.

Image credit: Cloud computing photo by Shutterstock

Just what is the cloud?

The concept of the cloud has been around in different forms for quite some time now. In its most basic sense, cloud computing simply means that users connect to applications and data run on shared or pooled servers as opposed to, say, a single server owned by their business. In practical terms, for individual consumers, this means accessing stored data through the internet rather than working and storing data directly on their hard drives. There are three main kinds of cloud computing, but small businesses will benefit most from business productivity apps, which are what’s called Software as a Service (SaaS).

The benefits of using the cloud for small businesses are numerous, though there are a few caveats along the way.

Flexibility and Collaborative Working Platforms

Chances are if you work in a small business, you wear many hats and you’re always looking to sneak in a few extra tasks at odd moments, like, say, when you’re waiting for your daughter to come out of her dentist’s appointment. Working on the cloud allows you to operate just about anywhere there’s an internet connection, and it powers collaboration to boot.

One of the best examples of this is the Google suite of products, from Google Docs to Google Plus to Google Calendar and everything in between. When using Google Docs, employees can edit their documents and files anywhere, share them easily with colleagues, comment and send emails directly from the documents, and even edit at the same time as other colleagues to whom access has been granted. This greatly reduces the amount of time any one person has to spend unifying comments and edits across a number of files. Goodbye redundancy! And with Google Calendar and Google Plus nearby, scheduling or orchestrating face to face time is just as easy to do, making collaboration a seamless, one click affair.


One thing it might be difficult for small businesses to get used to is the concept of storing their private data online. However, this hurdle should be easy to overcome when you give Google Drive or Dropbox a whirl. Both enable access to files big and small no matter where you are, so you’re not tethered to a laptop and can access your data even after your device has been lost or stolen. Even better, it all syncs automatically. Rest assured that both services enact more sophisticated security measures than you’ll ever be able to achieve on your personal computer, and they back their servers up multiple times. In other words, your data is likely safer in the cloud than not. While most cloud storage services do charge for a certain amount of data, these prices are far beneath what businesses have to pay to run their own servers and keep up the surrounding infrastructure.

The only real downside to cloud storage is that, as this networking guide shows, it can be a little bit of a bandwidth hog, especially if you’re syncing large files. The same goes for working with large files in the cloud while video or photo editing. To mitigate these concerns, make sure you have an enterprise level internet connection, and that you’ve got an AC router for your office.


When it comes to keeping track of finances, the cloud is actually a security upgrade. Where, after all, do you think that sensitive financial data will be more secure: on an encrypted, remote server, or hauled around on your easy to misplace or damage laptop?

Software like Quickbooks Online has everything you know from the hardcopy version – invoicing, payments, reports, etc. – but with the added benefit of being able to access it from anywhere at any time. What’s more, hourly employees can directly enter their time into the system, rather than sending it to one person to enter manually.

Xero is another effective invoicing tool – one that takes the cloud and collaboration to heart. Everything you do in the system is easily shared with an accountant or colleague, and it connects directly with internet payment services like PayPal. That makes Xero an easy and efficient way to get all of your financial data entered, processed, and out to customers without any hitches.

Sales and Marketing

When it comes to sales and marketing, instant access to customer tracking data and communication is crucial, as is the ability to share exchanges with colleagues. In this Salesforce is the software to beat, enabling small businesses to analyze buying habits and track the impact of sales and marketing campaigns. And it does so in one easy to use dashboard that makes it simple for relevant employees across the company to access and follow up on. What’s more, as with cloud-based accounting software, diverse data from projects is instantly synced and integrated, so there aren’t any bottlenecks as a single employee updates data.

Project Management

One of the areas in which the cloud can have the greatest impact is in project management. With tools like Basecamp, users create different project boards, each with their own tasks that can be assigned to team members with due dates, increasing transparency and accountability along the way. For consultants, contractors and hourly employees, Basecamp is great to use in conjunction with Toggl, a down to the second time tracker that also works with cloud-based accounting software for easy invoicing. Toggl is great for evaluating just how employees are using time and how they might do so more efficiently. Overall, cloud-based project management tools increase visibility in organizations so that it’s easy to see who is doing what, and so that it’s also easy to offer a helping hand to a fellow employee who has taken on too much.

Downsides to the Cloud

All of that said, there are a few downsides to the cloud, which is still in its childhood, if not its infancy. One issue is that you can’t access your data when you don’t have access to the internet. In the future, it’s likely that cloud-based services will address this problem by providing more hybrid offline-online services. There are also lingering (and mostly unfounded) concerns about security as well as questions about who truly owns the data.

However, overall, cloud-based services level the playing field for small businesses, which can now gain access to formerly expensive applications only available to large businesses. Additionally, there are more and more service providers who offer basic framework for cloud-based apps that can be customized for an individual small business’ needs – an option that used to be solely the domain of corporate IT departments. Add in mobility, flexibility, a high level of data integrity and integration, and a centralized way of working, and the cloud is one winning combination.