UK SMEs failing to take advantage of ecommerce says Federation of Small Businesses

Written 25.03.06 by: Jonathan Briggs

The Federation of Small Businesses has published its annual Lifting the Barriers to Growth 2006 report, detailing the state of UK small and medium sized enterprises, and it makes interesting reading with respect to online trading and ecommerce.

Almost 70% of the businesses surveyed said that online sales had had no impact on their customer base and only 18% of the nearly 200,000 members surveyed were actually selling online.

Of particular interest to those of us who design and build ecommerce web sites were the reasons given for the low uptake of these technologies. An amazing 37% believed that it was not relevant to their business while almost 25% stated that the costs of developing and maintaining a site put them off. 19% saw credit card fraud as their main barrier.

While it is true that serious ecommerce will cost 10's or even 100's of 1000's of pounds, the returns can also be significant and we certainly advise companies to spend sufficient to be convincing with their customers, efficient to run and secure in their processes to minimise fraud.

We suggest that SME business owners consider the following:

1. Look at what competitors are doing in the same sectors at home and abroad. How are these activities going to impact on their businesses in the next few years?
2. Find a company that can really help you understand what is possible in your market sector.
3. Carefully define your success criteria so that you can see how you are performing against these targets. This does not have to be sales but could be brochures downloaded, supplier enquiries or telephone calls generated.
4. Consider highly polished but simple sites that encourage and maintain contact with customers as a stepping stone to full ecommerce. Note that the OTHER media is itself an SME and derives almost half of its new business directly from the web. Let us convince you that you can take similar steps without trading online.
5. Don't be half hearted about taking the step. A poor quality site made with a low investment will not be effective. Those companies that see the web as being irrelevant are missing the opportunities.
6. Talk to a company that understands web marketing and PPC advertising as these can be key to effective results.

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