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What Purposes do Small Business Owners use the Internet for?

Last Updated: 20-Aug-2013

The Internet has not only been useful for running small businesses but has also helped them to succeed. A survey conducted by emarketer found that 86% of small businesses have company website in the year 2011. According to the same source, websites were the primary tool used by 86.6% of small businesses for digital marketing.

Internet strategy needs to be different for small businesses compared to big business. It is generally thought that small businesses begin with small investments in IT then go on to become ecommerce giants with Backoffice and eCRM. However, this concept is misleading and can lead to failure of small businesses. Not every small business owner wants to be another Amazon providing everything from online catalogs with credit card transactions, maintaining interactive databases about customer visits and choices and reengineering their backroom processes.

Small businesses prefer to include a part of their marketing budget to include promotion using Internet. These small and medium businesses are prepared to benefit from the Internet and spend substantially for it, in ways that suit their methods of conducting business and are promising for their growth. Several small businesses are ready to invest substantial amounts to build customer relationships through the Internet. Big businesses use Internet for operational efficiency not just for marketing.

Bigger businesses make use of the internet for several purposes including bidding, inventory management and to communicate with customers. It is wrong to assume that they have transformed into complete "eBusinesses" as a lot of their business operations are not online. A big business also benefits from the fact that it handles several thousands of transactions a day, leading to improved efficiency and reduced overhead.

On the other hand, a small business manages lesser transactions and devoting the resources time and costs necessary to make major changes in its existing system may not be justified from either financial or competitive advantage point of view.

A large number of small businesses are in favor of the Internet which offers them an easy platform to conduct business with 24/7 connectivity to their businesses. Only a small minority of people said that they wouldn’t want to incorporate the Internet into their business as they are in favor of face-to-face transactions or feel that searching the Internet consumes too much of their time.

In addition to being viewed as being much cheaper than other methods of promotion such as yellow pages, newspapers or magazines or direct mail the Internet is seen as a means to add credibility and communicate with customers making it the most sought after promotion tool by small businesses.

Benefits of Internet to small businesses:
  • Small businesses can announce their presence to the world through the web.
  • The Internet helps these businesses to provide the buyer with information that helps in buying.
  • An aesthetically and functionally designed website that is easy to use will help in customer retention by making it easy to do business with that SMB and make customers come to the website again and again.
  • Small businesses can make sales online through the Internet.
  • An increasing number of small business owners are using the Internet as a tool for customer service and communications. About 45% of small businesses having a website communicate with their customers through email.
  • Small businesses are also using the Internet to create websites for promotion and as a method of communication with their customers. About 80% of small businesses that have a website used it to provide general information while 30% used it to sell their products online.
  • About 67% of total income is earned with the help of websites by small businesses having annual revenue of $2.5 million-$4.5million.
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