Four-in-Ten Small Businesses are On-Line

At the end of 1997, 40% of the more than six million Small Businesses (one to 99 full-time employees) in the US used some form of electronic communication technology. 32% had internet access, 23% subscribed to some on-line service (such as America OnLine), 23% subscribed to to a BBS ("Bulletin Board Service"), 10% currently had a website, 8% had computers that permit remote access, 4% subscribed only to an e-mail service, 2% subscribed to database services, and 1% had an "extranet".

Small Business Internet Usage Triples in Two Years

In late 1995, only 10% of the Small Businesses had internet access. This number has tripled to 32% in just two years. And there is only a very small difference in internet access rates between micro-businesses with 1-5 full-time employees (31%) and small businesses with 6-99 employees (34%). The proportion of small businesses with Internet access is expected to rise to 42% by the end of 1998.

Venturing into Cyperspace for Marketing and Sales

A growing number of small businesses are using the Internet and on-line services for marketing and sales. 10% currently have websites, 6% advertise on the web, 5% advertise on-line, and 3% use electronic shopping malls. Among the executives of small businesses currently without a Web site, 5% state they will "definitely" have a website during 1998, and 8% claim they will "probably" have a Web site during 1998. The number of small businesses with Web sites can easily double during 1998.

Small Investments in Small Web Sites

The 6+ million small businesses in the US are really "small": 74% have only 1 to 5 full-time employees and 19% have 6 to 19 employees. The average annual sales of small businesses is just $139,000, with 47% with sales less than $150,000. Small companies of course have limited budgets. So, in the ACBJ survey, the "average company" spent $108 setting up its Web site (excluding Internet connection and site hosting costs). This is basically just the cost of a low-end Web publishing software. A week of learning the software, plus a week for developing your Web page(s) and bingo, you are on the Web! Of course, some small businesses spend as much as $5,000-10,000 for their initial website development, but they are a minority.
   Similarly, the "average" small business will spend another $283 on web site maintenance during 1998. The "larger" small businesses will spend $2,500-7,500 for Web site maintenance.

What Visitors Do at Small Business Web Sites

Web sites are becoming a vital communication tool - almost as valuable as the telephone, and much more flexible and economical than a printed brochure or flier. 57% of the visitors to a Small Business Web site request marketing information. 57% percent also link to other Web sites. 48% of the visitors place orders for products or services. 27% percent download files. 19% check the status of orders. 14% access account information about their account, and 10% learn about job openings.

Positive Managerial Impact of the Internet and On-Line Services

On-line services and the Internet of course improves access to news and information. In addition, among the small business executives using the Internet or on-line services long enough to evaluate the impact of their investments, 45% report a positive impact on or improvements in external business communications improvements, 36% report improvements in the overall image of the company, 32% in competitiveness against larger companies, 30% in broadening the customer base, 29% in their ability to work from home, 24% in customer service and support, 24% in company purchases, 23% in employee productivity, and 22% in overall sales volume. 20% of the executives report positive impacts on marketing and sales costs, and 6% note that it bacame easier for them to find qualified employees.

High-Growth Companies Tend to Be Linked

Fast growing small businesses are heavier users of information technology than small businesses experiencing slow or no growth. The average annual sales growth rate for small businesses is 11.1% for those with a Web site is 11.1% but only 7.8% for those without a Web site. High-growth companies appear to be early adopters of new technologies.