SME's generating £36bn online annually
British small businesses are now generating online revenues in excess of £36bn a year, according to new independent research However, this only makes up 2.4% of small business turnover, where larger enterprises attribute up to 18.7% of their turnover to online channels.
The study, published by online advice site knowthenet.org.uk, looked at how small businesses in Britain are using the Internet to save money and grow their revenues.
An online poll of senior decision makers of small businesses supports this figure, with over half of British small businesses (51%) report they are making money online, but a significant percentage (46%) don’t make any revenue online and over a third (38%) don’t invest in any Internet tools to help them do so.
In both cases, small businesses are defined as companies with 0-49 employees, representing 99.3% of the UK’s enterprises.
The knowthenet NetCheck research 2011 has two elements: an economic analysis on the value of the online market to small businesses, carried out by the Centre for Economic and Business Research (Cebr), and an online poll of 501 British senior decision makers from small businesses carried out by YouGov. It was commissioned by online advice site, knowthenet.org.uk, in an effort to understand to establish how small businesses in Britain are using the Internet to save money and grow their revenues.
The YouGov poll further established that the top reasons small businesses invest in Internet tools are to win new business (58%), keep customers informed (55%) and grow their business (50%). The top three ways in which small businesses achieve this are through investing in search engine marketing (29%), email marketing (25%) and use of social media (24%).
Conversely, those that don’t invest more feel that they can’t see the business case (46%) or their company isn’t big enough to warrant an online presence (35%).
The research comes as broadband penetration and speeds continue to increase in the UK, with nearly seven in ten households on the web via a high-speed connection. As consumers continue to head online for their commercial needs, Britain’s small businesses should be exploring ways to grab their share, argues Phil Kingsland, site director of knowthenet.org.uk: “Our research shows that whilst small businesses are beginning to make considerable amounts of money online, many don’t yet see its full potential. There are limitless possibilities for small businesses to profit here – either by selling goods and services directly, or by marketing themselves to customers. There remains a job to be done to help every small business understand the opportunities at hand and make the most of the net.”
In a drive to help raise awareness of how small businesses can use the Internet more effectively, knowthenet.org.uk has launched the ‘NetCheck’, a new free online tool www.knowthenet.org.uk/netcheck which allows them to assess how well they’re using the Internet compared to other companies of their size and sector. For those wanting to do more online, knowthenet.org.uk offers advice, tips and best practice examples.
Kingsland explains: “Whether you’re a start-up or have fifty staff, the Internet has the potential to help you listen to customers, increase sales, or simply run your business more efficiently. The NetCheck tool offers a quick and easy way for small businesses to see how they’re doing online, compare their performance against comparable businesses and get practical advice on using online tools and services they might not have considered before.”