Online Small Business Orders Up

The US Small Business Internet Survey from Cyber Dialogue found that 427,000 small businesses went online between the first quarter of 1998 and the first quarter of 1999.

The study found that 56 percent of small businesses online today regard the Internet as “essential” to the success of their businesses. Among small businesses that accept online orders, 71 percent say the Internet is essential to their success.

“Online small businesses have greatly increased their dependence on the Internet in the past six months,” said Cyber Dialogue VP Thomas Miller. “In addition to selling online, entrepreneurs are comparison shopping for business suppliers online just like consumers, and nearly half of all online small businesses expect to save costs by using the Internet.”

At a time when many large companies struggle to make a profit online, about half of US small businesses that sell online say online sales have met or exceeded their expectations. Sixty percent of those that accept orders on their Web sites report sales gains due to their online presence amounting to about 23 percent of total company sales.

Despite the promise of selling more online, most small businesses have turned to the Net for business shopping. According to Cyber Dialogue, nearly every business with less than 100 employees that currently goes online now shops online for business goods and services, while the number that placed online orders jumped over 95 percent during the past 12 months.

Cyber Dialogue says the total value of small business orders online over the past 12 months is $19 billion, up 67 percent from $11.4 billion early in 1998.

Online financial services are among the prime beneficiaries of the boom in online small businesses. Nearly one in five online small businesses say they use the Net to help manage business investments, while 13 percent are involved in online business banking. Indeed, the survey found that about twice these ratios of online businesses search the Net for investing and banking information, suggesting even more growth in this area.

“The next era of the Internet will involve use of business services of all kinds as small entrepreneurs grow increasingly comfortable with online business relationships,” Miller said.

The survey found that some of the services that are currently gaining the most from small business customers include travel services, education and training, shipping, real estate, and a variety of employee-related services.