Small Business Research Board eCommerce Study: Small Businesses in Northeast, Midwest Most Optimistic About Revenue Growth Generated From eCommerce Sales Next 12 - 24 Months

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Small businesses in the Northeast and Midwest are far more optimistic than those elsewhere in the country about the prospects for generating more sales through Internet driven transactions during the next 12 to 24 months, according to the latest Small Business Research Board (SBRB) study released here today.

Nearly 30% of Small Businesses Expect Internet Sales to Increase Next 12 - 24 Months According to Latest SBRB Study

    More than 98% of the small businesses in the Northeast and Midwest expect revenues generated from websites they control to remain even or grow during the next one to two years, according to the latest SBRB study co-sponsored by Business Today Magazine. Furthermore, 41.4% of the respondents from firms in the Northeast believe their Internet driven revenues will grow during this period while 32.7% of those in the Midwest predict revenue growth.

By contrast, 20.6% of the small businesses in the South participating in the nationwide poll indicate they expect Internet revenues to increase while 21.5% in the Western states are projecting increases.

Owners and managers of small businesses in the South that participated in the study were the most pessimistic, with 7.8% expecting a decline in revenues generated from eCommerce transactions on their Internet sites.

Owners and managers of more than 550 small businesses representing numerous industries responded to the nationwide SBRB / Business Today study.

The SBRB / Business Today report provides specific detail by size of business, by industry, by region (and in some instances by state) the various experiences each segment has had with the Internet and their commitment to offer products and services through eCommerce transactions.

The study, for instance, breaks out information by size of business and industry on the number of firms with websites, the number of websites they have, the percentage of their product line available on their sites and percentage of business revenue derived from eCommerce.

Overall, the study also found that:

-- Small businesses in the Northeast were most likely to have at least one website (69%) but least likely to have more than one website (6.7%)

-- Companies in the Midwest were most likely to have more than one website (18.2%)

-- Small business in the South were the least likely to have at least one website (45.2%).

-- The majority of those responding on behalf of companies in the South (54.8%) and West (50.5%) said their businesses did not have a website.

-- Among only those businesses with websites, 48.3% of those in the Northeast offer more than 10% of their product or services on line to top the list while 26.1% of those in the South offer more than 10% of their products and services on their captive Internet site(s).

-- In the Western states, 15.2% of the respondents said they offer 100% of their products and services on line, making it the leader among all four regions.

-- Of those companies with Internet sites, 61.7% of the respondents in the Northeast said they generated revenue from their sites to lead all regions.

-- Again, relating to companies with Internet sites, 20.2% of those in the Western states and 10.8% of those in the South said Internet sales were responsible for contributing more than 50% of their total revenue in 2006.

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

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

Business Today Magazine is dedicated to serving the information needs of owners and managers of small businesses. The primary goals of the quarterly publication based in Buffalo Grove, Il. are to inform and educate its readers by providing timely, useful information that will help readers both contend with the daily demands of running their businesses as well as provide insight on achieving long term growth.

The Small Business Research Board 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.

The latest information about the Small Business Research Board can be found at http://www.biznus.net.

Small Business Research Board / Business Today eCommerce Selected Results

(C) 2007 Small Business Research Board

NOTE TO EDITORS: This article is the third of a series on the study of small business, the Internet and eCommerce by the Small Business Research Board. The first two in the series, "Nearly 30% of Small Businesses Expect Internet Sales to Increase Next 12 - 24 Months According to Latest SBRB Study" and "Largest of Small Businesses , Smallest of Small Businesses Most Optimistic About Revenue Growth Generated from eCommerce; Owners, Managers Project 12 - 24 Month Sales Increases" were released on August 31, 2007.

The first release describes the overall findings of the nationwide poll of small businesses in which nearly 97% of the respondents expect revenue generated from web-based sales to stay the same or increase during the next one to two years -- with 29.2% of those expecting revenue to increase, 67.5% believing Internet sales will remain the same and 3.3% predicting Internet sales will decrease. The second breaks out the results categorically by size of business. In this release, it is reported that 48.1% of the small businesses generating revenues of $25 million or greater expect revenues emanating from websites they control to grow during the next one to two years. Similarly, the smallest of small businesses, those with revenues of $500,000 or less, are the second most optimistic, with 36.2% saying they expect eCommerce revenue to grow.

In addition to the findings by region , future releases will detail the States of New York and California. Those will be followed by releases by industry, among them manufacturing, construction and contracting, retailing, food and beverage, distribution and wholesaling, automotive and transportation.

(1) some totals may not equal 100% as a result of rounding.

For more information about this poll, copies of the complete study and the results of previous studies or other matters related to the Small Business Research Board, please contact Raymond D. Minkus, (847) 441-4192.

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