Study co-sponsored by Business Today Magazine reveals differing commitments among small businesses to initiate captive websites and embrace eCommerce

Second of a series

NORTHFIELD, IL (August 31, 2007) –  The largest and smallest of small businesses are most bullish about the impact the Internet will have on their businesses during the next 12 to 24 months, according to the latest Small Business Research Board (SBRB) study released here today.

Of the small businesses generating revenues of $25 million or more, 48.1%  expect revenues emanating from websites they control to grow during the next one to two years, according to the latest SBRB study co-sponsored by Business Today Magazine. Similarly, the smallest of small businesses, those with revenues of $500,000 or less, are the second most optimistic, with 36.2% saying they expect eCommerce revenue to grow. 

Owners and managers of more than 550 small businesses representing numerous industries responded to the nationwide SBRB / Business Today study.   The respondents representing five other categories sandwiched between the smallest and largest --  as measured by annual revenue volume --  were more modest about their expectations. 

The category of small businesses ranging from $1 million to $2.5 million in annual revenues  -- where 30.2% of the owners and managers said they believe their eCommerce sales will climb over the next 12 to 24 months  --  was the only other segment to exceed the national average.  

Overall, nearly 97% of the respondents said they expect revenue generated from web-based sales to stay the same or increase during the next one to two years, with 29.2% of those responding to the nationwide poll indicated that they expect revenue generated from web-based sales to increase and 67.5% believing they will stay the same.

Of the remaining four sectors, of the owners and managers operating businesses ranging in annual revenues from $500,000 to $1 million, 21.6% expect Internet driven sales to increase while 27.2% those with annual revenue from $2.5 million to $5 million and 22.1% of those with annual revenue of  $5 million to $10 million project increases.  Finally, of the businesses in the $10 million to $25 million range, 24.5% believe their eCommerce revenues will grow.

By contrast, the businesses in the $2.5 million to $5 million and $5 million to $10 million ranges were the most apt to say they expect revenues to decline.  Of those in the $2.5 million to  $5 million range, 4.8% said they are projecting decreasing while 4.6% in the $5 million to $10 million range said the same.  Both exceeded the overall national average of 3.3% of the small businesses participating in the poll who said they anticipate a decrease in eCommerce revenue.

“This SBRB / Business Today Study provides contemporary insight about small business and the attitudes, realizations and expectations they have as it relates to the Internet and revenue generation,” said Gregg M. Steinberg, President of Business Today.  “The data demonstrates that there are still many businesses of all sizes which either do not have a website or, if they do have a site, are unable to conduct transactions that would benefit their business.   The detailed study also shows that success on the Internet is not dependent on the size of the business.”

The SBRB / Business Today report provides specific detail by size of business, by industry, by region (and in some instances by state) the various experiences each segment has had with the Internet and their commitment to offer products and services through eCommerce transactions.

The study, for instance, breaks out information by size of business and industry  on the number of firms with websites, the number of websites they have, the percentage of their product line available on their sites and percentage of business revenue derived from eCommerce.    

Overall, the study also found that:

• 42.7% of the respondents do not have websites. 
• 47.3% of the companies had one web site while 7% of the businesses had between two and five websites, 2.1% had six to ten websites and .9% had more than 10 sites.
• 67.8% of the total respondents don’t sell products or services on the web.  Of the remaining group, 25.7% sell products on one of their sites, 5.1% generate revenue from two to five sites, .4% from six to ten sites and 1% from more than ten sites.
• Among only those businesses with websites, 43.9% do not sell products or services.  However, 44.8%, have one site in which they conduct eCommerce while 8.9% have two to five sites in which they conduct eCommerce.
• The number of businesses generating revenue from their Internet sites increased 2.5% for the total population of participants from 2001 to 2006 and 4.3% for only those respondents which had Internet sites. 
• 17.5% of the respondents had Internet sites in 2006 which generated up to 10% of their company’s total revenue.  ECommerce contributed 100% to the revenue of 3.1% of the respondents.

The SBRB / Business Today Small Business eCommerce Study is believed to be among the most comprehensive efforts recently undertaken to understand eCommerce and the reality of its impact on small businesses.   The resulting information thus provides both a snapshot on current attitudes and realizations among small business owners as well as establishes benchmarks.
Among the questions asked were:

• How many websites does your company own?
• On how many of these websites do you sell products / conduct transactions?
• What percentage of your product line can be purchased on your Internet site?
• How much of your sales were transacted on your Internet site(s) last year?
• Over the next 12 to 24 months do you expect your Internet sales to increase, decrease or remain the same?

Poll participants also were asked to provide information on the percentage of products and services that could be purchased on their websites five years ago as well as the correlating percentage of sales that were derived.   This data contributed to helping establish trends and historical benchmarks.

The study provides data for the all participants and also delineates data pertaining to only those businesses which have Internet sites. 

Data is included for such industries as manufacturing, construction and contracting, retail, food and beverage, distribution and wholesaling, transportation and automotive.

Business Today Magazine is dedicated to serving the information needs of owners and managers of small businesses.  The primary goals of the quarterly publication based in Buffalo Grove, Il.  are to inform and educate its readers by providing timely, useful information that will help readers both contend with the daily demands of running their businesses as well as provide insight on achieving long term growth.

The Small Business Research Board ascertains and reports the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations.   The SBRB conducts these studies for the benefit of small business owners and managers.   The SBRB also provides opportunities for third parties to gain real time insight into the attitudes of small businesses nationwide through the independently conducted research. 
The latest information about the Small Business Research Board can be found at www.biznus.net.

Small Business Research Board / Business Today eCommerce Selected Results
© 2008 Small Business Research Board

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NOTE TO EDITORS:  This article is the second of a series on the study of small business, the Internet and eCommerce. 

Additional stories will be released regarding the findings by region, several states (including New York and California) and by industry, among them manufacturing, construction and contracting, retailing, food and beverage, distribution and wholesaling, automotive and transportation.

For more information about this poll, copies of the complete study and the results of  previous studies or other matters related to the Small Business Research Board, please contact Raymond D. Minkus, (847) 441-4192.