Two Out of Five SMBs Don't Exist Online, Survey Finds

A survey by 1&1 Internet finds 40 percent of midmarket companies do not yet have an online presence.

A survey conducted by 1&1 Internet, a subsidiary of United Internet, found small to medium-size business owners risk unnecessary spending due to confusion over the cost and effort involved in Web hosting and 84 percent of SMBs pay too much for Web hosting.

The results from a study of more than 1,800 U.S. SMBs suggest that most SMB owners are misinformed about the cost of owning a business Website, the company said.

The study discovered that 40 percent of SMBs do not yet have an online presence. Of those businesses without a Website, 53 percent stated they had no idea what a Website would cost each month. Of those SMBs already online, 83 percent report that their Website was essential to their company's success, but cost remains an issue. The average respondent without an online presence guessed that a business Website would cost a whopping $67 per month. Ninety-one percent of those same respondents thought it would cost more than $10 per month, which is the average cost for a professional Web hosting package.

The survey revealed cost was a major factor even for SMBs with an existing online presence. The average SMB spends $45 per month for Web hosting, and 84 percent said they spend over $10 per month. Cost has become such an issue that when choosing a Web host, 64 percent agreed that an inexpensive monthly fee is important, actually outranking service by 33 percent and quality and reliability by 25 percent.

1&1 Internet CEO Oliver Mauss said while many small companies today leverage the Web with increasing proficiency, too many businesses remain excluded from the online world. "Although an online presence becomes more and more important for the acquisition of new customers, small business owners are still unaware of the true cost of Web hosting," he said. "They overestimate the necessary business investments for being online and underestimate how simple and affordable it is to source a Website."

SMBs can significantly lower Web hosting costs by creating and updating their own Website, Mauss said, noting easy DIY Website packages are a way for SMBs to create and maintain an online presence. Currently, 28 percent of SMB owners create their own Website themselves and 37 percent hire a professional Web designer from outside the company.

Once the initial Website is created, future work is completed in-house, the survey found. Forty-four percent of SMB owners cut costs by updating the site themselves, while only 22 percent still employ an external professional

"There are now solutions that are designed for all levels of Web expertise," Mauss said. "At 1&1, for example, the 1&1 MyBusiness Site is the ideal DIY site builder for every SMB owner-even those with less Web experience. When prepared with knowledge and ambition for success, every business can have a fully functional Website without exceeding their budget."