T H E B A S E K I T S M A L L B U S I N E S S R E P O R T :

H O W U K S M A L L B U S I N E S S E S A R E G R A P P L I N G W I T H N E W T E C H N O L O G Y

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Content

1 Foreword

2 Small Businesses Failing To Impress Online

3 Facebook Now Top Source For New Business

4 Enterprises Crashing Out Rather Than Cashing In Online

5 Small Businesses Falling Behind On Mobile Custom

6 Methodology and Sources

Here at BaseKit, we believe even the smallest business needs to be online which is why we try and make it as easy as possible for every new start-up and small enterprise to create an effective online presence.

Somewhat surprisingly however there are still 60% of UK small businesses that have yet to get online despite the Internet being an all pervasive presence in our lives. And, the businesses that do have an online presence sometimes struggle to keep pace with, yet alone embrace the possibilities that the web can offer them.

Perhaps it’s not so remarkable when you put yourself in the shoes of a small business for a moment. It’s not easy out there. The pace at which technology is changing is just extraordinary and consumer’s expectations of what they want a website to do, or not do, has changed with it – along with the devices they use to access the internet.

We spoke to just over 500 small business owners, from one-man bands up to small partnerships, to find out just how well they are faring with the technological advances and whether they are harnessing them to their full advantage.

Digital Dinosaurs 1

This report outlines the key findings from speaking to a cross section of businesses, which between them, form the backbone of the UK economy. It looks at how firms are embracing social media to market themselves through to the impact poor web hosting – and subsequent website crashes - can have on their bottom line.

One trend that emerges strongly is a fear amongst small businesses that, if they don’t harness the web more effectively, they are in danger of becoming “digital dinosaurs.”

We have used these insights and the findings to help us establish The BaseKit Learning Centre - an online academy for small businesses to find out all they need to know about running and growing their business online. We’ve created a series of online guides written by professionals to help firms get the most from the internet from SEO optimisation through to social media and online marketing.

We hope you enjoy reading the report.

Simon BestSimon BestFounder, Basekit

Foreword

2 Digital Dinosaurs

They say you never get a second chance to make a first impression and it’s a phrase that rings true for hundreds of thousands of small businesses nationwide, according to our research.

Despite being the equivalent to a “shop window”, just one in six small businesses (16%) believes they have a website they can be very proud about.

One in ten small business owners (11%) say their websites use out of date technology and a further 11% describe their company’s online presence as either “poor” or “embarrassing,” according to our figures.

A quarter of small businesses (25%) say they are envious of their competitor’s websites as they struggle to keep pace with technology change and maintain a site that is customer-friendly.

Keeping up with changing technology is a real issue for half of the small businesses we polled as they admit to grappling with ecommerce functionality, mobile friendliness and search-engine optimisation. Only a quarter of businesses (25%) are able to process transactions online currently and only 9% have a site that is compatible with mobile phones or tablets.

The changes that businesses would like to make include better design and cheaper hosting as well as better analytics and the opportunity to change and refresh content themselves.

Changes functionality %

Able to update their own sites 67%Online payments accepted 25%It can host a blog 22%It can host video 22%Integration with social media 19%SEO optimised 18%Process online bookings 18%Optimised for mobile devices 9%No additional functionality 18%

Small Businesses Failing To Impress Online

“Three quarter of the small businesses we spoke to admit having a well-designed and functioning site is important for their reputation - as well as critical to drumming-up new leads. Yet they are really struggling to know how to keep up with the latest developments and are scared of becoming so-called Digital Dinosaurs.” Simon Best

“For many small enterprises, their website is their window to the world, yet so many feel poorly served by what they’ve created for themselves online.”Simon Best

64% It’s “adequate”23% It’s up to date11% It’s out of date11% It’s poor and embarrassing5% It’s perfect

32% Better design

16% Cheaper hosting17% Ability to change content oneself

14% Better analytics7% Better technical support

The ways that small businesses currently describe their website:

Small businesses are in danger of seriously lagging behind when it comes to their web functionality:

The aspects business’s would change about their website:

Digital Dinosaurs 3

Facebook Now Top Source Of New Customers For Small BusinessesOver one third of UK small businesses say that they now use Facebook to drum up new customers – more than local directories such as Yellow Pages and Thomson and substantially more than print or online advertising.

We found that 36% of small businesses in Britain use the social network to market themselves, where just a quarter say they rely on local directories (27%) as a source of new customers.

Twitter has also become popular with small businesses and their owners – over one-in-six (17%) use the site to scout for new customers and to market their services and the micro-blogging site is fast catching up with those who say they use print (21%) or online (20%) advertising for their marketing.

Our research also found that, while vast numbers of the UK’s 1.1 million small businesses are online and are using sites such as Facebook successfully, there are still 660,000 that have yet to get themselves online at all. This is despite the fact that three quarters (74%) of those that do have a site say it has become critical to drumming-up new leads and to their reputation as a company.

“Small businesses are shifting their marketing to lower-cost media like Facebook and Twitter and away from legacy media like the directories. They tell us that one-to-one marketing is their most efficient and most successful way of generating new business – the fact that Facebook has become the number one source of new business within just a few years of its creation is remarkable.”Simon Best

The research shows that while a lot of small businesses are forward-thinking when it comes to the web, there are a lot of others that have yet to get on board.

Channels that businesses use to market their business

36% Facebook27% Local business directories21% Print advertising20% Online advertising17% Twitter14% Trade publications

“The simple truth is that, for a small business with customers who may be under 40, if you’re not on the web then you are more-or-less invisible. We believe that every small business in the UK should be able to take advantage of the power of the internet as a tool to grow – and should be able to create a professional website cost-effectively.”Simon Best

4 Digital Dinosaurs

Small Businesses Crashing Out Rather Than Cashing In OnlineA quarter of UK small enterprises – or nearly 290,000 individual businesses - has seen their websites crash or become inaccessible to customers due to poor web hosting, our research shows.

One in ten small businesses impacted by web crashes believes the unscheduled down-time has significantly impacted their trading.

Three quarters (74%) of small businesses say being online is important to drumming up new leads and to their company reputation. Yet website crashes are hampering business success, as is trying to keep pace with changes in technology and customer behaviour says the BaseKit Small Business Report.

“Small businesses invest a lot of time and resource in creating their websites so it’s understandable they get frustrated when poor web hosting means that their sites crash resulting in lost customers and revenues.”Simon Best

10% Crash had an impact7% Crash didn’t impact much6% Crash didn’t impact at all65% Never experienced a crash11% Can’t remember

38% Extremely important36% Slightly important17% Neither important or unimportant6% Not very important3% Not important at all

Impact of website crashes on small businesses:

Importance of a website to business reputation:

“Start-ups and enterprise companies aren’t always helping themselves to make the most of what the web has to offer. We were surprised by how little functionality some websites have – meaning companies aren’t cashing in on the growing ecommerce trend.” Simon Best

Digital Dinosaurs 5

Small Businesses Falling Behind As They Miss Out On Mobile CustomUK small businesses are missing out on vital sales and a source of new customers as just one-in-ten (9%) say their websites can be used with mobile phones and tablets in mind.

However, our research found that 45% of internet users use a mobile device to access the web and that 6% of internet users have shopped online from their mobile phone and that they are spending up to £1.3 billion on “on the move” purchases.

The risk is that small businesses will miss out in the belief that creating a mobile-friendly site is too costly or too complicated. And with reports predicting that purchases made using smartphones could make up 12% of the value of all ecommerce, it’s an area that smaller companies can’t afford to miss out on.

The “Digital Dinosaurs” research found that falling behind the pace of technology change was something that preoccupies small business – with half saying they are “concerned” or “very concerned” that they are being overtaken by changes including the advance of mobile internet usage.

“Access to the internet is the fastest-growing technology trend. The number of British consumers with smartphones has almost doubled in the past couple of years and is now nearing 50%. Simon Best

“Being online is good, but having a site that isn’t built with this generation of mobile internet users in mind means small businesses are missing out on a major source of new customers and sales.”Simon Best

11% Very concerned40% Slightly concerned38% Neither concerned or unconcerned10% Very unconcerned2% Don’t know

Levels of concern about keeping pace with technology change:

6 Digital Dinosaurs

About the research

BaseKit.com commissioned Opinium Research LLP to conduct a research poll amongst 510 small businesses in April 2012.

All the business owners polled ran enterprises that employed between 1 and 49 staff.

According to latest figures (2011) from the Department for Business, Innovation and Skills, there are 1,141,950 private enterprises with between 1-49 employees in the UK, responsible for 7 million people and turning over £864 million a year.

The fieldwork took place between the 20-27 April 2012 and was conducted online. According to BaseKit Insight Data, 60% of SMEs are yet to get online.

For more information, contact the BaseKit press office on 020 7566 9747 or email basekit@hopeandglorypr.com.

About BaseKit

BaseKit.com was founded in 2009 and our success has made us one of Europe’s most exciting tech start-ups. We now sign up 40,000 new paying customers every single month. BaseKit’s technology makes it easy for small businesses to create an effective online presence and is localised in 10 languages globally.

BaseKit offers a range of sites – all designed to be compatible with mobile access, as well as traditional PCs – with a full ecommerce site costing just £100 a year and a service that enables a business to get started with a site for free. Visit www.basekit.com to find out more.

The BaseKit Learning Centre is an online academy for small businesses to find out all they need to know about running and growing their business online. We’ve created a series of online guides written by professionals to help firms get the most from the internet from SEO optimisation through to social media and online marketing. Visit www.basekit.com/learning-centre to find out more.

Methodology and sources