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State of the eNation survey predicts up to 25% increase in SME online revenues in 2005
15 December 2004, London
Small and medium sized enterprises (SMEs) expect to increase revenue generated from their online activities by up to 25% in 2005, according to findings by NetBenefit, the UK’s leading provider of managed hosting. The State of the eNation Survey 2004, examining UK attitudes towards e-business reveals that SMEs are becoming more dependent on the Internet, although significantly, one third still feel that the UK is not an environment which encourages small businesses to get online. eBusiness trends The research, commissioned by NetBenefit and conducted by independent market research firm Vanson Bourne polled the owners of 150 SMEs across the UK and found that 66% currently receive as much as 25% of their business revenue through their website, and 62% predict that this will increase in 2005. Over the next 12 months, SMEs plan to invest further in their existing online capabilities in order to achieve greater value from this channel. The study found that over the next 12 months the major online objective for SMEs is to ramp up their activity, with 18% planning to add e-commerce capabilities to their websites. Other areas of planned investment include online marketing (25%) and search engine optimisation (23%). According to Jonathan Robinson, director of business development at NetBenefit, “These findings would suggest that SMEs are going through an important evolutionary stage in their attitude towards e-business, moving away from the traditional ‘me too’ approach to one that delivers greater value to their business moving forward. This positive outlook is very encouraging and it is therefore essential that both the Government and industry chiefs seek to remedy the perception that the UK is not an environment that encourages small businesses to get online.¿ Online concerns The research indicates that SMEs are most concerned about the rise in IT fraud and security, with 35% feeling that this may have a negative impact on their online business over the next 12 months. Rising IT infrastructure costs are also a worry, with 18% believing this to be an area for concern. Keeping pace with the competition continues to be an area of importance, and a quarter of respondents see rising online competition as a threat to their business over the next 12 months. Despite high profile campaigns by both the Government and industry bodies, one third of SMEs still do not think that the UK does enough to encourage small business to get online. This is perhaps supported by the fact that more than 10% of respondents still do not have a website for their business. This is a concerning statistic when taking into account recent research from the Small Business Service (SBS) which found there to be more than one million businesses with between 2 and 50 employees in the UK in 2003. Based on this as many as 100,000 SMEs in the UK may still be without an online presence. Service over price The survey also examined attitudes towards web hosting, an essential service for all organisations with a web presence and one which 10% of respondents planned to invest in over the next 12 months. When choosing a web-hosting provider, 35% of respondents state that customer service and technical support are the most important decision-making factors after reliability and connection rates. Other factors being taken into consideration included price, reputation and financial stability of the company. However, the provision of a service level agreement was only considered the most important factor by five per cent of those surveyed.
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