E-commerce...

by Raymond Minkus

...and its impact on business

Initial conversations occurring during the review and analysis of raw research data usually follow the same pattern.

“So,” says the chief strategy officer (CSO) to the chief information officer (CIO), “What do you make of these results? Can this really be?”

“The numbers are what the numbers are,” responds the CIO.

There is no scratching of heads nor contorted frowns. There is nary a rolling of the eyes. There is just one more question that is chimed in unison.

“How do we make this information work for us?”

The CSO and the CIO use research reports as management tools in the same manner that a CFO uses an audit report. The data helps to either reinforce existing decisions or prepare the foundation for a new route.

Large companies are fortunate to have squadrons of professionals trained at deciphering this intelligence and making recommendations for attacks on the marketplace. Entrepreneurs generally have fewer internal resources, but most often need to rely on trusted external professionals and nonproprietary research to turn this info into a management tool. Otherwise, entrepreneurs mostly find they are talking to themselves and with little hope for turning the available data into real action.

Business Today Magazine is dedicated to serving the information needs of owners and managers of small businesses. More importantly, the content is designed to aid owners and managers, providing real time suggestions and tools to move businesses forward. The quest to help readers contend with the daily demands of running their businesses as well as provide insight on achieving long term growth prompted Business Today to dig deeper and embark on a series of studies.

The first study on the commitment to and effect of eCommerce on small business was conducted in July. The Small Business Research Board (SBRB) conducted the study specifically for Business Today. The amount of information that was returned was both voluminous and detailed. The value of the data is even more impressive. There are nuggets that can be gleaned, actions reinforced and strategies established for small businesses in general or by region and even by size of small business. There are gems for businesses within one of a number of key industries. Additionally, there is data useful to those companies that have eCommerce programs . . . and those that don’t.

Following are some of the key findings, by category and selected data reports. This is not a comprehensive regurgitation of the entire report. However, if you are interested in the complete report, you can contact IPA’s Business Today magazine.

When reviewing this information, consider where your business has been, where it is today and where it is headed. Consider, too, how your realities compare to the overall results. See how your business compares to your peers within the industry in which you operate.

There is much more data available than the selected information which appears here. Cumulatively, you can use the results to see how you compare and to envision where your business could be 12 to 24 months or more down the path. If you haven’t made an investment in eCommerce, then the results can help determine if you should. If you have a site, the results can help determine if you should be getting more productivity.

This may, indeed, be the most comprehensive and authoritative study that you will have read to date about eCommerce and its impact on small businesses. The information is before you. Furthermore, it has been synthesized into bite sized morsels applicable to your industry and like-sized businesses with which you compete. You may thus choose to analyze, plan and act upon the data alone or jointly with other internal or external resources. Or, you may merely take a glance and decide to do nothing at all.

The study will be repeated. When that occurs, it will be expanded upon and refined. Ideally, Business Today readers utilizing these first results will have positive stories to report. We look forward to hearing about your eCommerce accomplishments as we move ahead.

THE STUDY PARAMETERS

Owners and managers of more than 550 small businesses representing numerous industries responded to the nationwide SBRB poll co-sponsored by Business Today Magazine.

The SBRB / Business Today Small Business eCommerce Study is believed to be among the most comprehensive efforts recently undertaken to understand eCommerce and the reality of its impact on small businesses. The resulting information thus provides both a snapshot on current attitudes and realizations among small business owners as well as establishes benchmarks. Among the questions asked were:

• How many websites does your company own?
• On how many of these websites do you sell products / conduct transactions?
• What percentage of your product line can be purchased on your Internet site?
• How much of your sales were transacted on your Internet site(s) last year?
• Over the next 12 to 24 months do you expect your Internet sales to increase, decrease or remain the same?

Poll participants also were asked to provide information on the percentage of products and services that could be purchased on their websites five years ago as well as the correlating percentage of sales that were derived. This data contributed to helping establish trends and historical benchmarks.

The study provides data for all the participants and also delineates data pertaining to only those businesses which have Internet sites.

Consistent with the comprehensive nature of the SBRB / Business Today Study, the data is further delineated by size of business, U.S. region (and several larger states) as well as by industry. Results are broken into revenue size categories ranging from $0 - $500,000; $500,000 to $1 million; $1 million to $2.5 million; $2.5 million to $5 million; $5 million to $10 million; $10 million to $25 million; and more than $25 million.

Data is included for such industries as manufacturing, construction and contracting, retail, food and beverage, distribution and wholesaling, transportation and automotive.

The Small Business Research Board. which performed the study, ascertains and reports the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations. The SBRB conducts these studies for the benefit of small business owners and managers. The SBRB also provides opportunities for third parties to gain real time insight into the attitudes of small businesses nationwide through the independently conducted research.