Why small is suddenly big on the internet

Small businesses are suddenly in fashion on the internet. From the government and ISPs to websites offering online services, everyone wants to give startups and long established small businesses a helping hand into the new digital age.

It's no wonder, as 99 per cent of existing businesses in the UK are classed by the Department of Trade and Industry (DTI) as small to medium-sized, meaning that they have 50 employees or less. But of these, as another survey showed, only three per cent have developed a web presence.

Most small businesses are recognising the need to at least set up a website with email addresses so that people can contact them. There may not be a direct need to sell goods over the internet, but being there is increasingly important.

A local cab company or restaurant won't necessarily want a fancy site. But people are increasingly making choices about who to deal with based on information they get over the internet - cab tariffs and menus, for example. Then there are local business reference sites popping up, which will generate new business if you're listed with them and have a link from them to your website.

The barriers
The big problem for most small businesses has been the highly technical nature of setting up a website and the fear of the huge cost involved. "Most small business owners are skilled at other things, not getting an internet connection and working out how to set up a website. They don't have the time, and they perceive it is too complicated," says VirginBiz.net marketing manager Afam Edozie.

VirginBiz conducted research into small business attitudes to the internet before developing its own website, which offers advice and services to smaller companies. "People were put off having to deal with multiple suppliers - one for a domain name, one to design the site, another for internet access and hosting, yet another for secure ordering and payment services," says Edozie.

"It was too complicated, took too long and, above all, it could often be too expensive. They could be spending £5000 for an ecommerce-enabled site. We decided our priorities would be to provide everything under one roof, cut out the technical jargon as much as possible and make it all an affordable proposition."

And that's precisely what VirginBiz provides. There's a whole range of free useful information on a variety of topics, provided in association with specialist third parties. It's like having a library of small business advice books on hand.

"The idea was to construct a kind of virtual management team," says Edozie. "In any big business you get individuals specialising in certain areas of management - finance, sales, marketing and human resources, for example. A small business has one or two people doing all these things, so they need somewhere to go to get all that kind of information."

In one of its surveys, VirginBiz also discovered that many small business owners get all their advice down the pub after work from friends who run other small companies. "We decided that there was a need for a space on the site where our users could offer advice to other people," said Edozie.

VirginBiz has a forum section divided into areas such as IT, legal, financial and people - the kind of areas where problems might arise and advice might be sought.

There are a lot of handy hints and tips to be found in this section, but Edozie admits that the forums haven't been a raging success. "People tend to want facts immediately, and come and look up information. Not all of them want to wait days for a reply."

Nevertheless, it's not far to go to get advice on the internet. With free internet access services such as Freeserve proliferating, and unmetered access like Surftime and LibertySurf, small business owners are now finding time to look around the internet without fear of running up huge bills. And they are discovering how much information is freely available.

Getting advice over the net
A good place to start is the host of government sites, such as the Department of Trade and Industry (www.dti.gov.uk), even though some of these can have rudimentary information and primarily refer you to seek out advice from a local office.

Into the latter category falls both BusinessLink (www.businesslink.co.uk) and the Information Society Initiative (www.isi.gov.uk). Both sites are aimed primarily at small businesses, and can contain some focused information (the ISI has free publications available for download online, although you'll need to download the Adobe Acrobat reader software to access it).

However, the internet provides more than information - it can provide a direct link to key official bodies and government departments that all small businesses need to deal with at some stage. You can fill out all the forms you need to submit to Companies House at its website, as well as search its database of registered companies. Similarly, the Inland Revenue wants you to start thinking about filing your company tax assessments over the internet.

In the last Budget there was even provision for discounts given to those forward-thinking businesses that start opting for internet-based delivery. But getting wired up for many small businesses will also involve setting up a website, and you'll be looking for help in registering a domain name and finding a site host that you can rely on.

Supporting role
Docklands-based ISP Direct Connection last week launched a Direct Start programme for smaller businesses which provides three levels of service based on experience and needs. The basic service, which incorporates five dial-up accounts, web hosting and domain name registration, costs £50 to set up and £380 a year to run. That may sound steep, but going for a less expensive option can result in tears.

"They simply don't provide the support that we do," says sales and marketing director David Howard-Jones. "The feedback we get is that small businesses don't know the lingo, and want support that is always there and ready to give help in a language they understand. It's our level of support that counts, and small businesses realise that you get what you pay for."

Services aimed at small businesses are proliferating at a steady rate. VirginBiz offers its customers a couple of key marketing services to help their online businesses grow, such as a banner exchange to co-operatively incorporate banner ads on websites, and more are coming soon. Even if you haven't a website to run, there's a growing band of online services that all small businesses can take advantage of.

The launch of BT Click's online payroll service last week offers a full, secure and integrated service that could take the hassle out of monthly staff payruns for many businesses. "It is more cost effective than bureau-based alternatives," says Grant Boster, BT's head of Internet for Businesses. "It will free small businesses from the burden of legislation - they will no longer need to know the 'ins and outs' of employment law."

It's the growing number of propositions like that which are starting to register in the minds of many small business folk. They are the real imperatives that will drive smaller companies to embrace the internet.