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Contents
Highlights 1
Introduction 3
Business growth
Jobs
Revenue 10
Moving along the continuum
12
15
18
References 19
Highlights
Digital engagement of
Australian small businesses
16%
25%
35%
24%
16%
25%
24%
35%
Digital engagement is a measure of how will business use the internet, such as
having a simple informative website or using digital marketing to attract customers
Introduction
Approach
Data for this project were gathered from a
survey undertaken by TNS Australia (TNS). TNS
Australia surveyed a sample of 500 Australian
SMEs with fewer than 100 employees. This was
a representative sample; survey respondents
were weighted by ABS proportions for state,
industry and business size. The survey consisted
of 20-minute telephone interviews and fieldwork
conducted in February 2013.
The research survey analysed businesses with
1-100 employees. The ABS defines small business
as those with up to 19 employees and mediumsize businesses as those with between 20 and
199 employees. For simplicity of expression, in this
report we refer to small business for all businesses
in the survey, even though 9% have more than
20 employees.
Digital engagement
This report describes a continuum of four levels
of digital engagement. The different levels of
digital engagement are based on the businesses
current use of websites, how they use the Internet
and their level of digital marketing. These four
levels are defined as:
Very lowthe business has a business email
address and uses the internet to communicate
internally;
Lowthe business also has a website and a
presence on social networks and uses them to
market the business;
Mediumthe business also uses the internet
to reach new customers in existing markets,
toreach new customers in the local market
and todisplay advertising online; and
Highthe business makes use of all digital
technologies including for search engine
optimisation and search engine marketing.
Business growth
Small businesses with high digital engagement
earn twice as much revenue per employee as those
with low digital engagement. Median revenue
per employee for small businesses with very low
digital engagement was $87,500 while, for small
businesses with a high level of digital engagement,
revenue per employee was $187,500.
Chart
1: Business growthproportion of digital engagement level
Chart 1.1
100%
80%
48%
44%
38%
61%
60%
9%
11%
40%
11%
20%
0%
28%
Very Low
62%
43%
45%
Low
Medium
Connected Small Businesses: How Australian small businesses are growing in the digital economy 4
Chart
2: Business growth expectationsproportion of digital engagement level
Chart 1.2
100%
8%
12%
11%
34%
32%
80%
15%
14%
47%
60%
4%
40%
5%
6%
71%
20%
0%
50%
52%
Low
Medium
Very Low
Don't know
Steady
Decline
Growth
39%
High
Connected Small Businesses: How Australian small businesses are growing in the digital economy 6
Jobs
Small businesses have an important role to play
insupporting employment growth in Australia
and in reducing unemployment.
Chart 1.3
Chart
3: Growth
100%
10%
15%
78%
66%
21%
16%
80%
44%
60%
52%
40%
20%
40%
12%
0%
Very Low
18%
Low
27%
Medium
High
Decreased
Stayed the same
Increased
Chart
Chart 4:
1.4 Expected growth in employment this yearproportion of digital engagement level
1%
2%
100%
2%
2%
4%
1%
2%
3%
80%
60%
78%
78%
56%
87%
40%
20%
0%
40%
11%
Very Low
19%
17%
Low
Medium
Don't know
Decreased
Stayed the same
Increased
High
Connected Small Businesses: How Australian small businesses are growing in the digital economy 8
Moving up a level
of digital engagement
20%
growth
Revenue
Revenue is often less stable for small businesses
than large businesses. This makes revenue
diversification especially important for small
business (Connolly, Norman & West, 2012).
Chart 1.5
90%
High
58%
Medium
64%
30%
Low
78%
10%
Very Low
51%
50%
29%
39%
38%
7%
2%
22%
39%
25%
2%
0%
20%
15%
6%
40%
15%
31%
26%
45%
60%
11%
80%
Other
Existing customers
New products / services
New national/
international customers
New local customers
100%
Note: Respondents were able to select more than one answer. This chart shows the source of
revenue growth as a proportion of all sources of revenue growth by digital engagement level.
Source: Deloitte Access Economics analysis based on TNS survey results
Connected Small Businesses: How Australian small businesses are growing in the digital economy 10
11
Digital presence
Low
Medium
High
Use of the
internet
To communicate internally
To market or advertise the business
To reach new customers in existing markets
To reach new customers in local market
Use of digital
marketing
Connected Small Businesses: How Australian small businesses are growing in the digital economy 12
Very Low
Low / Medium
High
13
Overcoming
the barrier
Make measurement
part of the digital
strategy
Create customised
and suitable
strategies for each
small business
Provide guides on
which channels are
important for small
businesses strategies
Not clear on
which actions
to take
Uncertain of
relevance of digital
to their business
Challenged by
the cost and risks
of change
Barrier
Chart
7: Digital will increase in importanceproportion of digital engagement
Chart 1.7
100%
1%
1%
19%
80%
39%
37%
58%
60%
41%
40%
20%
0%
43%
40%
32%
10%
Very Low
40%
18%
22%
Low
Medium
15
High
Slight decrease
No change
Slight increase in importance
Big increase
Connected Small Businesses: How Australian small businesses are growing in the digital economy 16
17
Chart 1.8
High
Medium
47%
Low
45%
Very Low
38%
0%
22%
21%
34%
20%
29%
13%
20%
20%
23%
38%
40%
10%
16%
34%
60%
14%
9%
18%
11%
35%
14%
40%
76%
80%
100%
Note: Respondents were able to select more than one answer. This is a proportion of the top 6 business goals reported by all small businesses.
Source: Deloitte Access Economics analysis based on TNS survey results
Connected Small Businesses: How Australian small businesses are growing in the digital economy 18
References
19
Ric Simes
Partner
Tel: +61 2 9322 7772
email: rsimes@deloitte.com.au
John OMahony
Associate Director
Tel: +61 2 9322 7877
email: joomahony@deloitte.com.au
Claire Lyster
Analyst
email:clyster@deloitte.com.au
Contact us
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