Less than two in ten small British firms are very satisfied with the quality of internet access from their business premises, according to a new survey by the Federation of Small Businesses (FSB).
Rural firms are particularly disadvantaged, according to the FSB research, with 63% being dissatisfied with the speed of their internet connection, compared to 48% for those operating from urban areas.
Despite what can be frustratingly slow internet connection speeds, 85% of rural businesses and 84% of urban businesses anticipate their reliance on the internet will increase. The potential offered through web-based marketing and sales seems to be overcoming the inconvenience and exasperation of slow or inconsistent internet access. Moreover, 71% said that a reliable internet connection was critical to the success of their business.
Based on their research, the FSB is asking the government to do more than create 10 super-connected cities by 2015. It wants to see a faster rollout of superfast broadband, and in particular to have it made available to 98% of rural businesses.
John Walker, FSB National Chairman, said: “With both rural and urban businesses clearly looking to the internet to expand, it is imperative the Government takes action to close the digital divide between urban and rural businesses.”
Businesses embrace the internet as their future
The value which small firms attach to the commercial possibilities offered by the internet is revealed by their move from paper to digital marketing. Research by technology services provider Basekit shows that 36% of small firms in the UK are using social media for marketing, while only 27% rely on printed local directories, such as Yellow Pages.
While Facebook is the most popular choice for social media marketing, 17% of firms are using Twitter, while 20% pay for various forms of online advertising.
The rapid pace of change, from traditional to digital commerce, is based on more than mere optimism, or the perceived lower costs of social media marketing. IMRG Capgemini figures show UK consumers spending more than £17 billion online in January-March 2012, a 13% year-on-year increase.
Simon Best, founder of Basekit, said of the organisation’s research: “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’.”
The cost of poor quality web access
The problem of slow or erratic internet access is more than just an annoyance for small businesses. The FSB survey shows that seven out of ten firms believed internet connection problems had hit them in the pocket, with 12% putting the value of that loss at over £2,000.
As an increasing number of banking and tax services become only available online, the problems for firms in areas where access is poor will only increase.
The FSB report, ‘The Missing Links - Revitalising our rural economy’, highlights the particular internet connectivity problems facing businesses outside urban centres. The report alerts government not only to the high levels of dissatisfaction with internet access generally, but also to the risk of a widening divide between rural and urban firms.
John Walker of the FSB said: “It shouldn't matter where a business is located. With the technology we have today all firms should be able to trade overseas, throughout the UK, and from town to village.”
FSB press release: http://www.fsb.org.uk/News.aspx?loc=pressroom&rec=7727
FSB survey: http://www.fsb.org.uk/fsb-survey-panel
Basekit report: http://www.basekit.com/digital-dinosaurs
This is a guest post by Jasper Martens from Simply Business who offer a range of Invoice Finance solutions.