Posted: Tue 8th May 2018
The importance of small businesses having a strong online presence in the modern economy is made clear by a new survey commissioned by Amazon and Enterprise Nation.
According to the latest SME Growth Tracker, conducted by Capital Economics, over half of the 1,000 small firms surveyed are using their own company website to sell online, a trend that is expected to reach 65% in the next 12 months.
The use of social media platforms for marketing also continues to grow with 37% of SMEs taking advantage of sites like Twitter, Facebook and LinkedIn.
Around a quarter of firms are using online marketplaces like Amazon for sales and 13% use their own company mobile app to reach customers.
Researchers found that the confidence of entrepreneurs is directly related to ecommerce activity.
SMEs selling via the web forecast stronger growth in profit than all other SMEs, the study found, even when they were less optimistic about business conditions.
Businesses with an online strategy predicted a revenue increase of 1.6% over the next 12 months, compared to 1.3% of those businesses that do not.
"It's clear that British SMEs are open for business, and those taking advantage of the opportunities presented by e-commerce can grow at a faster rate," said Doug Gurr, UK country manager at Amazon.
"The commercial benefits to be found by the adoption of digital technology can be enjoyed by all businesses.
"In fact, last month we published findings showing that more digital adoption in rural areas could add over £26bn to the economy's gross value added, so the more SMEs we can support and help adopt digital, the better for the UK economy."
Emma Jones, founder of Enterprise Nation, added: "The results suggest that businesses are feeling the benefits of digital technology, helping them to connect to a wider customer base.
"As global economic uncertainty continues to pose a threat to stable business conditions, it is essential that SMEs adopt agile and innovative ways of working to stay competitive."
Overall, the report found that individual company performance rose one point to -6 on the tracker's scale, with confidence in the broader economy increasing by six points to -18.
This continues the recovery in quarterly confidence following the lowest levels reported after the snap general election in June 2017.
Challenges remain however as manufacturing bosses were the only sector expecting business conditions faced by their company to improve, although researchers said: "the retail industry shows promising signs of improvement and increasing confidence".
Interestingly, confidence levels were higher among businesses in areas which voted primarily for Brexit.
For example, in the East and West Midlands, which had the highest share of the electorate vote leave in the EU referendum, small business owners reported greater confidence than SMEs in Scotland and London where the majority voted to remain.
Mark Pragnell, chief project economist at Capital Economics, said: "Since launching the SME Growth Tracker soon after the EU referendum in 2016, we've seen a pattern emerge showing SMEs in the majority of regions which primarily voted to leave the EU, consistently more optimistic than SMEs in regions that voted remain.
"But confidence does not appear to correlate with revenue growth expectations, with London and Scottish SMEs forecasting higher revenue growth than SMEs in the East and West Midlands."
Get tips for boosting your business' digital presence at the free Amazon Academy in Newcastle on 5 June.