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Not Every Business Needs - or Wants - a Web Site
Research Shows Key Online Tools Have Yet to be Embraced by Majority of Small Business Owners
RIVERWOODS, Ill., Dec 16, 2009 (BUSINESS WIRE) -- In spite of a growing interest in social networking, online transacting and using a Web page to promote their operations, the majority of small business owners still don't consider use of the Internet as mandatory in running a small business in America today, according to research from Discover.

"Over the last three years we've seen a steady increase in the number of entrepreneurs who are going online to promote and grow their businesses, but the Web has yet to become a must-have tool for everyone," said Ryan Scully, director of Discover Business card, which commissions monthly research by Rasmussen Reports. "While traditional methods for marketing and advertising a small business still work, Web resources are starting to make a difference for a significant number of entrepreneurs when it comes to finding new business leads."

Discover has been tracking the business concerns and economic confidence of America's 22 million small businesses since 2006, and some key trends are emerging with regard to online resources.

"My Business Will Never Need a Web Site"

The number of small businesses with their own Web sites has grown 36 percent in the past two years, but still fewer than half of owners have one. The number of small businesses that have Web sites grew from 33 percent in November 2007 to 45 percent in August 2009.

Forty-six percent of small business owners said it is a myth that every company should have a Web site, 44 percent felt the opposite and 10 percent were not sure. Consumers seem to agree. While 46 percent of them say that they expect every business will have a Web site, another 37 percent don't think every company needs one. The remaining 17 percent weren't sure.

"Just because a small business doesn't have a Web site, doesn't mean it can't be found on the Internet," Scully said. "Most telephone listing services give their business customers some kind of online option, which means a search engine can probably find a phone number or address for most of the businesses you're looking for."

When asked to choose from a list the biggest reason why they don't have a Web site, 41 percent of small business owners said that their business doesn't need one, 19 percent indicated "cost," 16 percent chose "not enough time to monitor and manage,"10 percent selected "some other reason," 9 percent said "complexity," and 1 percent answered "not sure."

The remaining 4 percent had no doubt: They chose the option: "My business will never need a Web site."

"That's not so hard to believe," Scully said. "Many corner markets, drycleaners, bakeries and other mom-and-pop operations have enough neighborhood foot traffic that they really don't need the Internet to turn a profit, even if it might contribute to one, but the need isn't 100 percent. On the other hand, I'll bet 99.9 percent of them have a phone."

Social Networking and New Business Leads

Small business owners are increasingly leveraging online tools and resources to connect with customers and generate new business leads.

The number of small business owners who are part of a popular online social networking site has jumped from 22 percent in October 2007 to 40 percent in April 2009, and 40 percent of small business owners said this year that they have used e-mail to promote their businesses.

Nearly half of all owners said that they have used social networking sites to promote their businesses, and nearly a third of those owners said the biggest benefit of using these sites is getting new business leads.

As for consumers of small business products and services, 47 percent say they are more likely to use a business or a service if it has a web site and 43 percent would consider using a business that they heard about on a social networking group.

Data was collected as part of the monthly Discover Small Business Watch poll of 750 random small business owners with less than five employees. Consumer data is from a random sample of 3,000 users of small businesses. The survey of business owners has a margin of error of plus or minus 3.8 percentage points; the margin of error for consumer data is plus or minus 1.8 percentage points.

The views and opinions expressed by small business owners and consumers who participate in the Small Business Watch survey are their own and do not necessarily reflect those of Discover Financial Services or its affiliates.

DATA

Small Business Owners (Random sample: 750)

1. Is it a myth that "every" business needs a Web site? (August 2009)
46% Yes
44% No
10% Not sure
2. Does your business have a Web site?
(August 2009 - November 2007)
45% - Yes - 33 %
54% - No - 65 %
1% - Not sure - 2 %
3. What is the biggest reason why you don't have a Web site? (August 2009)
41% My business doesn't need one
19% Cost
16% Not enough time to monitor and manage
9% Complexity
4% My business will never need one
10% Some other reason
1% Not sure
4. Have you ever used e-mail to promote your business? (April 2009)
40% Yes
58% No
1% Not sure
5a. Are you a member of any online social networking community such as Facebook, Linked-In, My Space or Twitter? (April 2009)
38% Yes
62% No
0% Not sure
5a.i Are you a member of a popular, general-interest online community? (October 2007)
22% Yes
78% No
5b. [answered by those who said yes to 5a. ] Have you ever used social networking sites to promote your business? (April 2009)
45% Yes
55% No
0% Not sure
5c. [answered by those who said yes to 5.a] What is the biggest benefit to your business of being part of an online networking community? (April 2009)
32% Getting new business leads
26% Not benefited at all
18% Benefited in other ways
17% Getting business tips
2% Getting new suppliers
2% Getting new employees
3% Not sure

Consumers (Random sample: 3,000)

6. Do you expect every business, small or large, to eventually have a web site? (September 2009)
46% Yes
37% No
17% Not sure
7. Are you more likely or less likely to use a small business that has a web site? (September 2009)
47% More likely
17% Less likely
34% It would have no impact
3% Not sure
8. Would you consider using a service or small business that you heard about on a social or business networking site?
(September 2009 - October 2007)
43% - Yes - 31%
32% - No -55%
26% - Not sure - 14%

About the Small Business Watch

The Discover Small Business Watch is a monthly index measuring the relative economic confidence of U.S. small business owners who have less than five employees, a segment that consists of 22 million businesses producing more than a trillion dollars in annual receipts. The Watch is based on a national random survey of 750 small business owners. It is commissioned by Discover Business card, which strives to offer the best business credit card for American small businesses, and is conducted by Rasmussen Reports, LLC (http://www.rasmussenreports.com), an independent survey research firm. The numeric index is calculated by assigning values to responses to a set of six consistent questions. The base value of the Watch was established at 100.0 based on surveys conducted in August 2006. In addition to generating the index, the Small Business Watch surveys small business owners every month on key issues, and polls 3,000 consumers four times per year to gauge purchasing behavior and attitudes towards small businesses. For past results and survey data, visit http://www.discovercard.com/business/watch. For information on Discover Business card, visit http://www.discovercard.com/business.

About Discover

Discover Financial Services (NYSE: DFS) is a leading credit card issuer and electronic payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America's cash rewards pioneer, and offers student and personal loans, as well as savings products such as certificates of deposit and money market accounts. Its payments businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in 185 countries and territories. For more information, visit http://www.discoverfinancial.com.

SOURCE: Discover Financial Services

Discover Financial Services
Jon Drummond, 224-405-1888
jondrummond@discover.com
or
Robinson Lerer & Montgomery
Amanda Bonzo, 646-805-2060
abonzo@rlmnet.com