Small Business Owners, Not having a Website Can spell Doom to your Business

More than one-third of small and medium enterprises (SMEs) are in danger of making themselves irrelevant to their customers. With an ever-increasing number of people searching online for products and services, the 37% of SMEs in South Africa with no Web presence are losing out on a major channel of communication.
This is perhaps the most important statistic to come out of the annual SME Survey, a unique study which assesses the competitiveness of this sector of the economy. According to Arthur Goldstuck, principal researcher of the survey, other results from the survey have shown conclusively how having a Web site correlates with increased profitability.

 

Example of a website, www.inqabaqhooa.co.za

Goldstuck indicates that some 79% of SMEs with a Web site report profitability, with 30% of these claiming to be strongly profitable. This is a massive difference compared to those without a Web site, where only 59% report profitability and just 14% of these claim to be strongly profitable.

“The popular argument made by these businesses is that there are not enough people online to justify a Web presence. However, they fail to take into account the enormous uptake in smart phones. With more smartphones expected to be sold next year than any other type of phone, it could be fatal for an SME to adopt this viewpoint,” he says.
“Thanks to smartphones, South Africa is witnessing the greatest acceleration of Internet use the country has ever experienced. This translates directly into more people going online to find services. I have no doubt that we are reaching the point where an SME’s website will become the glue that holds together all of its other marketing efforts and activities.”
He points out that when studying individual vertical markets, the great irony highlighted by the survey is the financial services sector – supposedly one of the most high-end areas of business – has one of the lowest percentages of Web site use.
“Less than half (41%) of all auditors, accountants and insurance brokers can be found online. This is particularly troubling given that the major banks all have a significant presence online and a vast array of Internet-based tools available for their customers. More and more people who are familiar with the banks’ Web site will, when looking for an auditor or accountant, expect to find them online.”
Goldstuck suggests that many of these professionals are not yet online because 78% currently maintain a fairly high level of profitability. Therefore, they don’t feel the need to stay with the times. However, he believes that as the Internet becomes the single most important means of searching for a service provider, these SMEs will find themselves increasingly disadvantaged.
“In fact, the only sector with a lower percentage (36%) of Web site is that of education. I think this is because many of these training institutions and specialist schools and colleges are targeting the mass market. Their failure to develop a Web site is an extreme example of the perception that not enough people in SA use the Web. These institutions clearly need to get online, and fast, as only 19% of respondents to the survey claimed to be profitable.”
As far as those SMEs with the highest percentage of Web sites, Goldstuck adds that he is not surprised to find that in the IT and telecoms sector a massive 89% of companies are online. “These are companies that are fully aware of the importance of a Web site. After all, this is the space in which they do business, so one would expect them to comprehend the value of being online.”
He points out that the tourism sector is also well developed from this perspective, with some 77% of tourism SMEs having Web sites. This, he says, is an industry that recognises that their customer base is likely to search for them online. They also understand how important it is to utilise every available channel to attract customers.
“One finding from previous surveys that has been borne out by the latest results is that the larger an organisation, or the longer it has been around for, the more likely it is to have a Web site. Thus a newly formed SME that immediately creates an online presence can give potential customers the impression that it has been established for much longer, or that it is a much bigger business.”
“Regardless of the vertical market you play in, or the size of your business, the survey clearly shows that the growing ubiquity of connectivity means that a website is fast becoming a must-have. After all, when your customers come looking for you, you’d better be there,” Goldstuck adds.

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