Rick Telberg's Insider: Small Business Starts Embracing Internet
June 14, 2000 (SmartPros) — It's been said that the business of America is business. In fact, the business of America is small business. And it's the nation's local accountants who keep them humming.
"We are seeing a shift toward B2B e-comm in small business of all sizes." -- IDC analyst
Now there's new research from the data hounds at IDC in Framingham, Mass., which suggests that the nation's small business owners are jumping into e-commerce as a critical part of their survival success formula.
IDC says the number of U.S. small businesses engaged in e-commerce will increase from 400,000 in 1998 to almost 2.8 million in 2003. Small businesses embracing e-commerce may be well positioned to succeed, IDC says. Laggards could fail.
Most small businesses garner less than $5 million a year. But IDC found that companies adopting the Internet are raking in revenues "significantly higher" than those that rated it as less important.
"The Internet is a key component to success for small businesses," said Merle Sandler, senior analyst for IDC's small business program. "Consumers have been the focus of small business e-commerce activity, but we are seeing a shift toward business-to-business e-commerce in small businesses of all sizes."
Other key findings
Of 7.5 million small businesses, 11 percent were engaged in e-commerce in 1999.
One-third of Internet-enabled small businesses have a home page.
Small businesses profiting from the Internet are more involved in business and other services, manufacturing, and real estate than their e-enabled counterparts.
Small businesses that regard Internet-related revenue as important tend to have been in business for a shorter period of time than other small businesses.
20 percent of small businesses are selling online, by taking orders over the Internet or by phone or fax.
Among the smallest of the small, technology can provide the critical difference. Ray Boggs, vice- president of IDC's small office/home office research, reports there are currently 25.5 million SOHOs in the U.S., equaling one in every four households. IDC projects an increase of more than 6 percent annually, projecting 32.3 million SOHOs by 2003. IDC surveys also find 25 percent of SOHOs want to conduct online selling and 21.5 percent of them have a Web home page.
Boggs says that while the number of startups is increasing each year, the number of businesses folding is also increasing. "But," he says, "broadband and new technology will help the SOHO community compete effectively."
Clearly, this is an opportunity too big for smart accountants to pass up.
