Small businesses depending more on their Web sites

October 7, 2005

According to a new study done by Interland, not only are small and medium-sized businesses going online, they are increasingly depending on it for sales and marketing, and they are finding its a good source of profits.

The Summer 2005 Small and Medium-sized Business Barometer, a nationwide survey of 780 leaders of small US businesses from Interland, found that 96% of them had Internet access, and most had broadband connections.

Of the 72% of respondents with a business Web site, more than half are using or interested in using e-mail marketing (60%) and search engine optimization (54%).

Additionally, 78% report their business is healthier — has a competitive advantage or stronger economic footing — because they have a Web site, and 76% say their Web site generates leads for their business.

The strongest indicator of how businesses have taken to the Internet, however, is the fact that they are making money online.

Of the 32% of the respondents who sell products or services online, 82% reported receiving monthly revenue from their Web sites.

"These results demonstrate that business leaders understand the importance of the Internet, Web sites and online marketing tools and are acting on that knowledge," said Jeffrey Stibel, CEO of Interland.

"Since first introducing the Interland Small and Medium-sized Business Barometer in 2003, we have seen significant growth of businesses using online tools and offerings to attract, service and satisfy customers."

With 53% of small businesses with Web sites saying their sites are primarily to provide company credibility, and 29% saying the sites provide a critical building block for developing the products and services, the Barometer revealed how central Web sites are becoming for businesses.

When asked how Web site success is evaluated, 54% said through customer and prospect comments, 48% site activity, traffic and number of visitors, 36% sales leads, 24% online sales and 21% said efficiencies of internal processes such as faster payment processing or fewer phone calls.

Surprisingly, despite today's ongoing battle with computer viruses, worms and spam, 42% of the small business leaders said they have experienced no computer-performance issues over the past year. Slightly more (44%) say their computers have slowed down, and 30% reported instances of freezing or crashing that require the computer to be shut down or restarted.

One possible reason why these numbers are lower than one might expect could be that a whopping 97% of the businesses surveyed said they have virus software installed on office computers, and 70% they update that software weekly.

Source: eMarketer

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