People running small businesses are still to be convinced of the relevance of using the internet for trade, even when they rely on it for personal use, according to a report by BT Tradespace
The Voice of SME report found that the smaller the business the more likely it was to use the internet to advertise and sell its services or products, but bigger firms, particularly outside London and the southeast are not investing much in internet for their business.
While 80% of SMEs have their own website – up by 20% on last year’s figures – only 3% believe it is important to interact with their customers through it with no financial sector company seeing this as important. The smaller the company the more likely it is to have a website. Manufacturing companies are the most likely to have their own website, but up to a third of retail, distribution and transport firms don’t, even though a third of them make over a quarter of their sales online and 97% of their owner shop on the web.
The majority of SMEs communicate by traditional methods, with 56% preferring face to face communication and only 3% communicating through their website.
In terms of advertising, 60% do not advertise online and 67% don’t think they can find customers online.
Word of mouth
There are, however signs of change. Although traditional new business techniques, such as word-of-mouth marketing and advertising, continue to dominate with 70% using this as a way of reaching out to new customers, 40% promote themselves through their company website.
A fifth of small businesses use social networking to win new business, particularly those in London and the southeast where 37% use this, compared with 9% in northern England. Nevertheless, 80% of small business owners said they used social networking sites like Facebook for their own personal use.
The report noted: “The inconsistency between personal and business social network use could be a result of a lack of awareness of how online communities can benefit business.”
Those companies that do have websites update them fairly reguarly, with 65% updating at least once a month. However, over a third update their sites less than once every half year.
Small businesses are becoming increasingly interested in using Web 2.0 platforms: 18% use blogs for business purposes and a further 22% take advantage of online business communities, even though a large number of small business owners used social networking sites.
The report states: “What is most noteworthy is the fact that the smallest companies we surveyed seemed to be the most web-savvy, perhaps because many start out (or remain) entirely web-based.”