Increased digital engagement for small businesses is associated with an increase in annual revenue of approximately $350,000.
In this 2013 report, Deloitte surveyed over 500 small Australian businesses to measure their level of digital engagement. The report finds that small businesses making full use of the internet are two times more likely to be growing in revenue and typically earn twice as much per employee than those with low levels of digital engagement. Small businesses with high levels of digital engagement also enjoy broader sources of revenue and have more favourable growth prospects.
Deloitte notes that small businesses often have more uncertain revenue streams than large businesses and therefore diversification is important. Those small businesses utilising the full potential of the internet benefit enormously from digital engagement, by attracting new customers from broader regions. According to the report, 75% of revenue growth for digitally engaged firms was created by reaching new customers rather than existing customers.
The survey demonstrates that many small businesses are sceptical of the benefits associated with digital strategies. Many small businesses reported concerns regarding the initial cost of implementing digital activities into their business and uncertainty about both the relevance of the internet to their industry and which actions to take. Therefore, Deloitte stresses there is much to do to convince small businesses of the high return on investment offered by digital engagement.
The report emphasises the need for a clear road map for those small businesses looking to become more digitally engaged. In building a low-cost website a small business can increase the probability that it is growing from 28% to 43%. Increasing the level of digital engagement from medium to advanced levels increase the chances that a business will be growing from 45% to 62%. In light of the significant benefits Deloitte believes it is essential to provide a blueprint for digital engagement in order to remove the uncertainty preventing some small businesses from adopting these strategies.