Small Firms Use Net, Doubt Impact
Source: The Arizona Republic
Small businesses' use of the Internet is growing, according to some new surveys, though
whether the Web has been effective in building business is another matter.
The percentage of small firms on the Net nearly doubled between 1996 and 1998, to 41.2
percent of firms from 21.5 percent, according to an e-commerce research report compiled by
the U.S. Small Business Administration's Office of Advocacy. Another survey by Bank One
Corp.'s Small Business Banking Group put the share even higher, at 49 percent.
And while e-mail and research are popular uses, having a Web site is no longer an
oddity. The share of small businesses with Web sites range anywhere from 19 percent, per
the Bank One survey, to 35 percent, per the SBA report. Sage Software Inc. of Irvine,
Calif., says the share pushes as high as 69 percent when one combines the small firms that
have a Web site with the ones that are building one.
The benefits, small firms say, are mainly promotional.
About 78 percent say the main reason to have a Web site is the ability to reach new and
potential customers. Only 29 percent with sites are buying or selling online, Sage says,
although the share is expected to rise to 80 percent within a year.
The drawbacks of the Internet come in a variety of forms for small businesses.
About 79 percent of small businesses say they have felt little or no impact of the Net
on their business, according to the Sage survey. About 24 percent called the Internet
ineffective in promoting their business, and 43 percent rated it as somewhat effective.
Bank One survey respondents, however, called it more effective than direct mail, radio, TV
Most small firms said the obstacles to greater use of Web sites were the start-up
costs, the difficulty of attracting and keeping skilled employees to service the sites,
and security issues.
As costs go down and confidence in the security of transactions rises, so will Internet
use among small firms, the SBA report says.
BOSSES' GIFT GIVING
Only about a third of small-business owners will buy gifts for clients, employees and
vendors this season, but those who do will spend more on their employees than their
A recent survey of 800 business owners by [American Express Co.] showed that 38 percent
plan on giving gifts, and will spend an average $1,800 each.
A hefty 84 percent of the givers said it improves employee morale, while slightly fewer
(78 percent) say it has helped improve their business. Givers will spend an average $207
per employee, compared to an average $120 for clients, the survey showed.
Gifts were slightly more "in" than holiday office parties. Only 32 percent
said they had them, with the rest saying either they just didn't hold them, or that the
expense or the potential liability was a concern.
VISA SEEKING START-UPS
Credit-card giant Visa has launched a national search for three start-up companies to
take part in a new business incubation program.
The Visa Startup 2000 program will provide the lucky three with $25,000 each for
business-related expenses, up to $10,000 in products and services from companies like
Compaq and [Office Depot], and a year's worth of personal counseling from the Kauffman
Center for Entrepreneurial Leadership and the Service Corps of Retired Executives.
Entrants must be U.S. citizens age 18 or older. Companies must have 20 or fewer
employees, have been in business less than two years, and be able to submit a business
Deadline is Dec. 31. Information and applications: 1-800-209-7611 or
The Arizona Small Business Association will present "Record Keeping for the Small
Business Owner" Dec. 8.
CPA Gloria Shelton will discuss several simple ways to determine and keep important
records. The free workshop runs 8 to 10 a.m. at association offices, 1500 E. Bethany Home
Road, Suite 140, Phoenix.
Information and registration: (602) 265-4563.