Business development · 3 October 2016

Ecommerce drives positive outlook for small business owners

ecommerce
Small business owners trading online predicted stronger revenue and job growth for the coming year
Small firms that use ecommerce and digital tools to grow their business hold a more positive outlook on growth than companies not embracing the digital economy, new research has shown.

According to the Capital Economics SME Growth Tracker, commissioned by Enterprise Nation and Amazon UK, small businesses using ecommerce expected both stronger revenue and job growth over the next twelve months than firms with no online presence.

Small business owners using ecommerce expected revenue to increase by 1.8 per cent over the next 12 months, compared to predicted growth of 1.3 per cent from business owners not trading online.

In a statement, Mark Pragnell, chief project economist at Capital Economics, commented: Companies who export and use ecommerce say they are expecting faster revenue growth than those who don’t sell online or only sell domestically.

The research found that business owners using ecommerce had a more positive outlook over business expansion for the coming year, expecting a job growth rate in their firm of 0.9 per cent, compared to 0.6 per cent in businesses not using ecommerce.

The growth tracker found that not only did business owners using ecommerce predict stronger growth and revenue over the next year, but they also expected to see the proportion of revenue from online sales increase.

Of the 45 per cent of UK firms using ecommerce, online sales were expected to reach 48 per cent of total revenue up from 46 per cent on the previous year.

The growth tracker used the survey of 1, 000 small firms to calculate a confidence index score to assess the economic sentiment of businesses in Britain, ranging from -100 to +100. Businesses using digital tools generated a score of +7, compared to +3 for those not.

Commenting on the findings of the report, Doug Gurr, UK country manager at Amazon, highlighted the power of ecommerce for small firms.


 
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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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