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From NIST/MEP - Small Business and Information Technolog

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From: Wayne Pferdehirt (
Date: Tue Jul 21 1998 - 11:41:20 CDT

I thought some Printech and Printreg users might find this article
re. small businesses and use of information technology interesting.
June 1998

Small Business and Information Technology

IBM and the U.S. Chamber of Commerce recently announced the results of
their study on U.S. small business and information technology. The
study's results show that small-business owners appreciate the value
of IT, but when it comes to what technology to buy, where to purchase
it, and whom to turn to for help and advice, most express uncertainty
and are reluctant to take risks.

Among the survey's significant findings are:

    a.. As a community, small business knows technology, believes in
    it, and
uses it for at least some of their functional needs. A full 90%
reported using technology for accounting, finance, and billing and
more than 50% use technology for 10 core business functions.
Additionally, 96% report owning a PC and 83% report having a modem and
a CD-ROM drive. Of those surveyed, two thirds (67%) have Internet
access and a quarter (24%) have a Web site. Of those with Internet
access, one third (30%) use it to promote their services, one half
(49%) use it to find out about potential customers, 63% use it for
answers to specific questions, and nearly all (85%) use it for e-mail.
While only 25% of all small businesses report being familiar with
"e-commerce," some are already practicing it. Slightly more than one
third (37%) of those on the Net use it to place orders, 29% use it to
receive orders, and 9% use it to pay suppliers. The majority of firms
using the Internet, 70%, have been on it for fewer than two years.
    a.. Attitudes on the value of Web sites are mixed; 46% of those
    with Web
sites believe they are worth the time and effort, 37% are uncertain,
and 17% either did not answer or felt they were not worth the time and
    a.. Most small businesses are cautious about technology. Sixty-one
percent buy after technology is proven, 31% wait for price to come
down, and 54% wait to hear of others' experiences before buying.
Although 83% want to grow, only 47% consider themselves
pro-technology; 47% are neutral and 5% express concerns about
technology. Fifty-five percent consider technology to be "more of a
cost than an investment" and 60% express some degree of confusion when
purchasing technology.
    a.. As a group, however, most small businesses also exercise a
short-term approach to buying technology and a large number, 46%, buy
it only as individual pieces and when needed.
    a.. When the time comes to deciding which technologies are best
their businesses, most are in need of help, advice, and guidance.
Three out of four say they would benefit from assistance with
technology. In spite of this, only 13% rely on consultants for
purchasing advice and information while 76% rely on friends for
keeping up-to-date on technology.
    a.. Most spend relatively little on technology, averaging $7,000
year, or 8% of total expenditures. Specifically: minority owned firms
spend 12% of annual expenditures; female owned 9%; and male owned 7%.
U.S. Small Business Profile

Small businesses with fewer than 100 employees were surveyed. Of the
1,010 firms surveyed, 70% have 1-4 employees and 59% have annual
revenues of less than $500,000. The majority (40%) are services
companies, with retail (18%) and construction (11%) making up the next
largest bloc. Most (72%) are not home based.

Wayne P. Pferdehirt, P.E., AICP
U. of Wis., Solid & Hazardous Waste Education Center
610 Langdon Street, Room 532, Madison, WI 53703-1195
Phone: 608/265-2361 Fax: 608/262-6250

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