Small firms overlooking value of Web marketing

By Jim Hopkins
USA Today

Millions of small companies continue to snub the Web — potentially limiting their growth and that of e-commerce and the economy.

Nearly 70 percent of small businesses don't have Web sites, says an annual survey by Verizon Communications. That's on par with 1999 — the first year the telecom company did its survey.

Many companies, hobbled by the economic downturn, are wary of investing in e-commerce projects that might not boost revenue. And a Web presence isn't always seen as a marketing must-have.

The nation's 5.6 million small employers are the nation's economic engine, producing a majority of new jobs and often leading the nation into economic recovery.

Yet, their growth could be pinched if they fall behind in adopting technology such as Web sites, especially in an increasingly global economy where foreign competitors can more easily dip into U.S. markets through the Internet, says Bruce Phillips, senior economist at the NFIB Education Foundation.

Skepticism might be warranted. Verizon, while mostly bullish on the value of Web sites, says fewer than half the companies in its survey had revenue gains after launching a site. The figure was even smaller, 24.4 percent, in an NFIB survey last year.

Verizon surveyed companies with fewer than 50 employees; NFIB surveyed those with fewer than 250.

Just 30 percent of small firms surveyed by the NFIB plan any kind of capital investments soon.

"Profits, an important driver of capital spending, are still in the tank," says NFIB chief economist William Dunkelberg.