More than a third of small businesses don’t use the internet, according to a study published today by Deloitte for search engine Google.
The Connected Small Businesses report found that only 16% of businesses are highly engaged with the internet, while 35% of businesses are not engaged with the internet at all.
This is despite the report finding businesses which use the internet as a key business tool are twice as likely to be growing as those that don’t.
In addition, they earn twice the revenue per employee compared to businesses that are not engaging with the online world.
Businesses which are engaged with the internet earn 20% more, or $350,000, than those that are not engaged with the net.
“For small businesses with very low digital engagement there is significant low hanging fruit, such as creating a simple informative website for customers, which can increase business performance,” the report found.
The report found there are three main things that set high digital engaged business apart from others.
Firstly, digital presence and having a presence on social networks; secondly, use of the internet and reaching new customers in local marketing; and, finally, the use of digital marketing through search engine marketing and search engine optimisation.
At first glance, the results of the Connected Small Business report appears to contrast with other studies, including the Sensis Business Index published in September last year which found the majority of SMEs were online.
The Sensis study found 95% of SMEs have a computer of some form, with around 92% of these firms connected to the internet.
However, the Connected Small Business report looks more in terms of using the internet for business rather than just having access to the internet.
Tim Mazzarol, the Winthrop Professor of Entrepreneurship, Innovation, Marketing and Strategy at University of Western Australia, told SmartCompany most businesses have an internet connection and probably a website but a majority don’t have an online strategy.
“You have relatively low level of proactive, strategic use in the business of the internet,” he says.
“These days if you don’t have a website you probably don’t exist, people have a tendency as consumers to do a lot of research using the web so businesses’ online presence is very important.”
Mazzarol says while most SMEs have access to the internet, the key is what they are doing with the technology.
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“You get one chance to make a lasting first impression,” he says.
“A lot of SMEs have quite poor online marketing strategies with websites as an after-thought.”