Number of Small Businesses Online Nearly Doubles

The number of small businesses with a Web presence has nearly doubled since 1998, and the coming years will see an even more dramatic increase, according to a nationwide survey of companies with fewer than 100 employees by International Communications Research commissioned by Prodigy Biz Corp., a subsidiary of Prodigy Communications Corp.

The research found that approximately one-third of small businesses currently has a Web presence. Research by International Data Corp. (IDC) found that 19 percent of small businesses were online one year ago. The Prodigy study also found that 40 percent more small businesses (approximately 2.1 million) without Web sites expect to be on the Internet within an average of the next eight months.

While an increasing number of small business owners recognize the global benefits of the Internet, the study found that 66 percent do not believe the Web offers significant opportunities to fuel their growth because they are local businesses.

“Small businesses can market to more than just Main Street. Even their local presence can be expanded,” said Prodigy Biz president Gary Remy. “A toy maker in Peoria can sell more dolls in her hometown, her home state, or clear across the country. The Internet shatters geographical boundaries, giving all small businesses a virtual local and national sales force with just a few clicks.”

Despite perceived geographical barriers, 90 percent of small businesses anticipate benefiting from the Internet. When asked how the Internet would be used, small business respondents said their primary uses would be promoting to prospects (69 percent), followed by e-commerce (57 percent) and providing better customer service (48 percent). Other top responses included competing with other businesses (46 percent) and communicating with employees (11 percent). Nearly 75 percent of small business owners claim cost is not a barrier to setting up a Web site.

Forty-four percent of small business owners claim they do not have enough staff for, and 41 percent report they do not have time to, maintain a Web site. Overall, the study showed the likelihood of having an Internet presence declines significantly with the overall size of the company. Only 25 percent of companies with fewer than 10 employees has an Internet presence. By contrast, half of those with 10 or more employees have taken advantage of this opportunity.

“Small businesses no longer have to spend hours toiling over their site design and updates,” said Rick Miller, senior analyst of Internet strategies at Cahners In-Stat. “A Web site will be mandatory for any business in the 21st century, no matter what their size.”

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