Tech Divide (Cliff?) – More Small Businesses Are Using the Internet: But Not Enough. I’ll Tell You Why

Technology research firm AMI Partners has research which indicates that e-commerce revenues generated by SBs have doubled from $107 billion to in 2006 to $213 billion. At the same time, the number of SBs that have embraced e-commerce has crossed the 1 million mark this year, up 13% for the same period. Among SBs that are currently selling online, 63% of them expect their online revenues to continue to grow in the next 12 months.
However, more than two-thirds of SBs with a Web site have yet to deploy e-commerce solutions, and many have no plans to do, despite the fact that the pre-requisites for e-commerce, such as high-speed Internet access and PC ownership are now pervasive.

Why is it that MORE small businesses are not selling online or even having web sites.
Although technology vendors are spending BILLIONS in advertising their products and educating customers on the need to build web sites and sell online, small businesses are still not embracing these tools as their “large business” counter parts are.
It can’t be for lack of money as selling online via Paypal costs nothing more than a percentage of sales. Selling via a web host can be a bit difficult to set up and does cost money but the costs are negligible.
It could be because selling online can be a bit complex. For most small businesses owners it’s not hard at all. If you can BUY online you can sell online. However, if you have a hard time going through your telephone menus you’ll have a bit of trouble setting up e-commerce. But guess what – you can hire someone to help you do this.
What about creating a web site?
Microsoft Office Live and Homestead offer VERY easy and feature rich web site building tools. I wonder why more small businesses are NOT building web sites then?
The reason why more small businesses are NOT building web sites and selling online is because their is a technology chasm of small businesses.
First of all, how small businesses are being counted in their use of technology needs to change.
There are “true small businesses”, as Ridgely Evers of NetBooks calls them who are growing, successful and embrace technology solutions.
The true small business he defines as having two to 25 – occasionally as many as 50 – employees. It’s managed by the owner with no professional management layer or capital. It’s profitable, growing organically, and it’s one of 5.1 million such businesses in the U.S.
“Over half the workers in America work at true small businesses,” he said.

These are NOT mom and pop businesses or solo businesses. They have maybe 5 – 50 employees and/or combination of consultants. These small businesses have wireless networks, web sites, sell online and know the value of using technology as an asset.
The other type of small businesses are those who due to their their lack of vitality and complacency do not have a web site, do not sell online and are NOT harnessing more and more technology.
These businesses are quite fine staying where they are at in business. Maybe they’ve had the same 20 clients for the past 10 years and they’re quite happy. These small businesses will hardly ever grow and/or harness technology.
My guess is that if you ONLY research “true small businesses” the technology adoption graph will go way up. But counting 23 million SBA defined small businesses and not 5 million “true small businesses” skews the picture somewhat.
Another thing, although the “stats” show that there’s still a small percentage of business with web sites and not using ecommerce, the number of PayPal subscribers, the number of Constant Contact customers (100,000+) gives indication that there ARE large numbers of small businesses who ARE using technology.

One thought on “Tech Divide (Cliff?) – More Small Businesses Are Using the Internet: But Not Enough. I’ll Tell You Why

  1. clate

    There’s no doubt a certain segment of the small business market is looking to adopt technology to help them grow. The Constant Contact and PayPal cites are indicative.
    Additionally, there is a clear distinction between small businesses that want to grow and mom and pops that are content to run things the same ol’ way.
    At our company, we focus on those small businesses with 2 – 100 employees (and especially 5 – 25 employees) that want to adopt technology to help them turbo-charge their sales and marketing. That’s where the growth comes.
    I think we’ll see more and more vendors recognizing what our company and Netbooks regognize: that “true small businesses” (which is exactly what we’ve called them for the past three years) are craving web-based technologies that help them grow and manage their businesses more effeciently.

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