Small business grows online

American Demographics, Feb, 1998 by Matthew Klein

Small businesses that have electronic links to the larger world are growing faster than their unwired counterparts, according to a survey by American City Business Journals and the Network of City Business Journals. Companies with fewer than 100 employees that have Internet or other online connections saw 10 percent annual growth in the past three years; small businesses without that link grew 7 percent per year in that period.

It's possible to infer that part of the discrepancy is due to a correlation--that companies in high-growth, high-tech industries are also likely to be media-savvy. Bill Madway, director of research for American City, thinks there is more to it. "The difference in growth cuts across industries," he says. "It's not just confined to high-tech areas."

As with the population as a whole, businesses are increasingly likely to be connected to the Internet, an online service, electronic bulletin board system, or other link. Nearly one in three small businesses report being connected to the Internet, up from one in ten in 1995.

The number of businesses that are moving up to an actual Web presence is on the rise, too. Ten percent of small businesses currently have a Web site, and 15 percent of those without a site expect to establish one in the next year. Small companies with a Web site grew 11 percent per year for the past three years, compared with 8 percent annually for those with no site.

The need for small businesses to add an online connection could snowball. "If your competitors have it, that could spur you to get connected," says Madway. "Plus, your customers will begin to demand it." For more information, call Bill Madway at (215) 238-5117.