March 31, 1998

A SMALL BIZ EXPLOSION IN CYBERSPACE

The nation's small businesses, traditionally slow to adopt new technologies, are becoming increasingly sophisticated Netizens, using the Internet to run E-commerce sites, provide customer service, and do extensive online research. So says a survey of 1,000 small companies' Net habits taken earlier this year by research firms Cyberdialogue/findsvp and C+C Data Inc.

The study paints a business environment in transition, one in which E-mail has become a preferred form of communication and the Web site a quick and cheap way of reaching out to customers.

The survey found that 37% of all U.S. small businesses conduct business online. One million more are likely to come online in 1998, which would bring total Net usage to half the small businesses nationwide. Of small companies already accessing the Net, 65% use electronic mail daily, 53% use the Web daily, and another 38% purchase business products or services online.

More than a quarter of the Net-savvy businesses attribute increased sales to the computer network. Twenty-three percent characterized the Net as being "very essential" to business. "We weren't surprised more small businesses were using the Net," says Stuart Gibbel, Cyberdialogue's marketing director. "But when we did the study, we didn't expect to find 26% reporting sales increases."

Some small companies also credited the Net with providing cost savings on more traditional communications services. Over the next year, 38% of surveyed companies expect their online use to decrease spending on long-distance, while another 18% said electronic mail will help cut overnight courier bills.

Building Web sites also came in as a top small-business priority. Of small companies planning to put out an electronic shingle, 40% expect increased sales leads, 42% anticipate increased revenues, and 15% expect to have better recruiting.

Not everything is perfect in cyberspace, however. The survey found that a third of companies viewed unsolicited E-mail, or "spam," as being a "very serious" problem.

By Dennis Berman, Business Week Online