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Small Business News - 23rd June 2011

Average Online Sales of Small Businesses Revealed

A digital divide is emerging between small and medium businesses’ online revenues

Research by online advice site, knowthenet.org.uk, reveals the average sales revenue small businesses generated online last year. Micro businesses (fewer than 10 employees) generated £1,000 per year, compared with £175,000 for small businesses (11-49 employees). Meanwhile, medium businesses (50-249 employees) make, on average, £2.5m.

2010 average annual sales, current prices
Source: Cebr analytics; Office for National Statistics

Firm size

Value of sales via the Internet

Online revenue as % of total turnover

Micro (<10 employees)

£1,000

0.6%

Small (11 to 49 employees)

£175,000

4.6%

Medium (50 to 249 employees)

£2,500,000

13.1%

Large enterprises (250+ employees)

£69,000,000

18.7%

The research, from knowthenet and carried out by the Centre for Economic and Business Research (Cebr), was commissioned to understand how small businesses in Britain are using the Internet to grow their revenues.  Medium businesses make a significant proportion of their revenues online (13.1%), with small businesses on 4.6% and micro businesses generating less than one percent. 

“The real concern comes when you look at online revenue as a proportion of overall turnover for small businesses. These are only generating a third as much revenue online relative to turnover compared with their mid-sized counterparts. Whilst medium sized businesses may have more resources to build online revenue streams, the accessibility of innovative Internet services is increasing the number of opportunities for smaller businesses to grow their online revenue and bridge this digital divide.”

comments Phil Kingsland, site director, knowthenet.

Small businesses are missing out on potential revenues. Some may not view using the internet as an important method of winning new clients, however, even a basic online presence (a simple web site or even a facebook page) can help to build a reputation and assist in growing a business.  Kingsland continues:

“Of course, there will be a vast array of different business models employed by small businesses across the UK from those who do not use the internet at all through to those who drive nearly 100% of their revenues through an online portal.  However, it seems that overall small business are either not realising the opportunities that embracing the internet can offer, or they are not investing the required time and effort into developing an online presence, which is more important than ever in this increasingly connected world.”

In a drive to raise awareness of how small businesses can use the Internet more effectively and challenge this divide, knowthenet has launched NetCheck, a new free online tool which allows them to assess how well they’re using the Internet compared to other companies of their size and sector. For those wanting to do more online, knowthenet.org.uk offers advice, tips and best practice examples.

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