Small firms miss out on £193 billion online sales

Small firms miss out on £193 billion online sales

Government support to help small businesses connect with online opportunities

Research released today shows that more than half of the public (55%) find it difficult to support local small firms because often these businesses aren’t online. In fact, figures show that as many as 2 million (39%) sole traders and small companies are missing out on business because they have no online presence.

In addition, over half of customers (52%) go straight to search engines when looking to buy from local businesses, nearly double the number that ask for word-of-mouth recommendations. With total website sales in the UK worth £193 billion, small businesses and sole traders could be missing out without a digital presence.

Measures to help businesses become more digitally active include:

  • £2 million of funding to 22 Local Enterprise Partnerships to help small local businesses increase their digital presence. Projects include the development of a digital TV channel in Manchester which provides easily-accessible and cost-effective advice to businesses, supported by events, advice and networking sessions.
  • Launching a campaign to bring small business owners to the new resources and advice on how to do more with their business online by calling the business support helpline on 0300 456 3565

Business and Enterprise Minister Matthew Hancock said: “Thousands of potential customers are searching online for local small businesses and without an online profile businesses will lose out. To make sure consumers get the best deal and small businesses spread their nets far and wide, the Government is investing in expert advice to help them do more online. I am committed to making the UK the best place in the world to start up and grow, and this is integral to achieving that”.

Government Entrepreneur-in-Residence, Simon Devonshire, said: "British Businesses should consider having a presence online as more important than having an office landline telephone number. Online is the new landline. A landline number used to be a mark of authenticity for businesses. The move to a digital economy has meant consumers are more likely to trust a business with a website and consider a business more credible if they offer the ability to transact seamlessly online. Government research suggests that nearly two million UK Businesses are not online, and of those that do have an online presence; over two thirds are not transactional. I cannot think of a business to whom being online is not now vital to their trade, irrespective of their ambition to grow. I think those businesses that embrace the digital opportunity are improving their opportunity to reduce costs; to scale-up; and possibly even export – giving a further boost to the UK economy."

CEO of digital skills charity Go ON UK, Rachel Neaman, said: “31% of small businesses in the UK lack Basic Digital Skills, making them less competitive than many of their peers. The UK is embracing technology more and more with new jobs and new businesses being ‘born on the web’; yet just half of small businesses and charities have a website. Go ON UK welcomes the Government’s investment in addressing the digital skills gap for small businesses. We are delighted to support the Business is Great initiative by partnering with BIS to enable small businesses and sole traders across the UK to realise the impact that developing Basic Digital Skills can have on their business prospects.”

Eileen Naughton, Managing Director, Google UK: “The internet is playing a key role in helping companies of all sizes across the UK reach new customers, manage marketing expenses and use data-driven consumer insights to help their business grow. We believe that it is crucial that companies like Google and the government invest in programs that show small businesses how easy it is to get online and start reaping the rewards of the digital economy."

The new research, based on a sample of 2,191 people, showed that consumers are looking to the Internet more than ever to find small local businesses and sole traders.

  • 73% say it’s very important that they are able to find a company online if they are going to give it their custom.
  • 57% agree that if they can’t find any evidence of a business online they are reluctant to give it any business at all.
  • 39% have brought goods and services outside of their local areas because they can’t find local companies on the Internet.

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