How Small Businesses Can Benefit by Going Online

According to a recent survey conducted by GoDaddy and RedShift of 500 very small business owners on their Internet readiness, 40% of the respondents felt that they didn’t need a website because their business was too small to warrant one. Another 19% felt that it was too complex to setup their own website.

What was encouraging however, was that 75% of the respondents were aware of the Internet and its benefits and did plan to go for a website in the next 2 years. They felt they would lose out if they didn’t.

We interacted with Rajiv Sodhi, MD, GoDaddy India and Australia, to explore this trend and other survey findings further and understand how Indian SMEs stand to benefit by going online.

It was a global survey, out of which 500 respondents were from India, mostly very small businesses with 5 employees or less and having less than 100 customers. Here are some more findings, on which SMEs are going online first, what they plan to do, and the benefits gained.

At Least 10% More Business for SMEs That Go Online

Some SMEs who went online saw an increase in their business by more than 10%. We wondered how much of this was contributed by the Internet, and how much was organic. Rajiv felt that the business came not simply by going online, but also by the marketing done to draw search engine traffic. The Internet opens a new sales channel to get discovered much faster and start showing in more conversations. In fact, Rajiv felt that with online presence, the customer has already seen your product/offerings and compared them against competition.

“This takes the discussion away from the price, and toward your product’s value proposition”, he added.

GoDaddy-RedShift Research’s SMB Survey: Key Findings

• 63% of India’s small businesses don’t have a website
• 40% believed their business was too small to warrant a website
• 19% perceive website creation complex and technical
• 17% believe website creation to be expensive
• Of those already having a website, 63% say their business grew once their website was up and running, with nearly a third witnessing growth in excess of 10 percent. A sweeping majority of small business owners in India affirm that creating a website will increase their visibility online and customers will be able to find them easily.
• Newer small businesses just as likely to create a website in the next two years as their older counterparts (79 percent have been in business for three or less years compared to 72 percent of those in business four or more years).
• One-person shops (70 percent) are marginally less likely to build a website in the next two years than firms of 2-5 people (79 percent).
• A majority of small businesses feel that having their own distinctive online presence will significantly boost growth by making their businesses visible.
• More than half of those who plan to build a website within the next two years expect their business to grow by anything from 10 to 50 percent within a short 3 to 5 years of building their website.
• Businesses with no plans to build a website (in the next two years) have lower growth expectations with just 45 percent saying they will grow 10 to 50 percent in a similar timeframe.
• A marginal 12 percent state that a website will not have much impact on their customer base.
• Increased propensity to use email marketing tools among small businesses.
• 77% of the small business owners who plan to create a website aspire to have either eCommerce functionality or an online store front soon after they have a live website.
• 91% think that having a mobile friendly website is important to their business success.
• Only 15% of business owners with plans to create a website within the next two years actually own a domain name.
• 30% are looking for an internet company to build and manage their website for them. 24% of respondents are looking for help from a professional web designer.
• Only 20% plan to build their website on their own.

 *Survey based on a poll of 500 very small businesses (defined as five workers or less).

Professional Services Companies are Going Online First

Not all SMEs are moving quickly to the Internet. According to Rajiv, financial services, pharma, healthcare, hospitality, an education, are some segments that are very IT favorable. They’re also exports centric, so IT and Internet penetration is faster. Hence they’re the first to go online.

Sectors like agrarian, manufacturing, Artesian, locals, are trailing behind. Among the fast adopting SMEs also, it’s primarily the professional services businesses that are the fastest.

30% SMEs Likely to Adopt E-Com After Going Online

Out of the SMEs going online, over 30% felt that they will get into e-com. This is interesting considering that most of them are very small businesses, with 5 people or less. They’re at the first stage and saying that if they build a website in a year’s time, then they’ll also get into E-com in two years.

“Keeping this trend in mind, we launched our e-commerce online store in India. It’s very simple, user-friendly, allows unlimited products to be put up, and comes at an affordable price of just Rs. 999/month”, added Sodhi.

The store allows SMEs to offer various payment options to their customers—credit card, debit card, net banking, and even wallets. “SMBs are used to making payments online by cash, cheque, etc. and are not used to taking cuts in it. Every Rupee matters to them, which is why we partnered with CCAVenue to provide the lowest cost to come online. There’s zero setup fee, zero signup fee, and the transaction rates are lowest in the industry, to the tune of 1.8%”, said Sodhi. Moreover, Sodhi also said that they’re seeing a big surge in the use of mobile wallets, as more and more people are getting used to paying from their mobiles. “There are in fact, more mobile wallet users than credit card users”, he added.

Considering that a majority of online transactions today follow the CoD (cash on delivery) model, we did wonder whether GoDaddy’s new e-com platform facilitated this as well. To this, Rajiv said that their approach in India has been to go with partners, hence the CCAvenue partnership. In case of CoD, while it’s possible for SMEs to offer the service, but for now, they’ll have to setup their own infrastructure for it.

Do it for Me Please!

Another interesting survey finding, is that 54% of the SMEs are looking for somebody to help them build their website. “India’s a ‘do-it-for-me’ economy and our company has care centers and a partner network in every nook and corner of the country to tackle this concern. We started our care centers with 3000 calls per month, and now handle the same number of calls per day! Moreover, we provide support in the local language spoken in each region”, said Rajiv.

Next Steps to Going Online

Setting up a website is not enough. In fact, it’s the first step. Here’s some advice from Rajiv on what SMEs need to do after going online in order to succeed:

Get Discovered on Search Engines: Most SMEs would know their products and value proposition well, so they have to get their content right and make themselves visible on search engines. Getting discovered on the Internet is extremely important, considering that there’s so much competition. SMEs also need professional help to start Internet based marketing, and do things like send out email offers, etc.

Attract Buyers on Social Media: It’s not possible to build web presence without social media presence today. They work hand in hand. You have to identify the keywords that attract business for you, and then throw some money at them. It’s not an easy job to find your attracters, but the good thing about the Internet is that you don’t have to have big budgets. You can run an ad campaign for thousands of Rupees and then monitor and measure it.

Use the Right Tools for Discovery: SMEs will also need tools for search engine discovery, email marketing, etc. where you can setup your customers, contact list, templates, content and you can start sending your offers. As small businesses may not have a marketing resource to do all this, they’ll need a partner’s help. In fact, tie-ups can be performance based, where you can pay based on the outcome.

Hire Marketing Resources and Professionals: Manpower is the biggest challenge for any business in their core area. Trying to hire somebody for Internet can become overwhelming very quickly for small businesses. The eco-system however, is maturing very rapidly to offer the right manpower to outsource to.

Find the Right Partners: Most people in this trade understand that they’re working with a customer very young, and some of the partners themselves would be very small. So they’ll actually go hand-in-hand and grow with their SME customers. They understand that the moment they deliver good performance, they can unlock more investments. “The increment-ality of this is an advantage, so SMBs don’t have to do a huge outlay of budgets to test Internet marketing”, added Rajiv.