46% of respondents identify increased sales or revenues as the main benefit of being online
Montreal, QC (July 9, 2019) – A new study released by BDC, Canada’s bank for entrepreneurs, finds that growing a business online equates with higher revenues, direct communication with customers and easier access to global markets. The study indicates that, although being online fuels growth, only 4 out of 10 Canadian SMEs with an online presence sell, receive and take orders online. Consequently, 60% of Canadian SMEs are missing huge growth opportunities.
“Still too many Canadian entrepreneurs leave money on the table for grabs by Canadian and foreign online competitors. Considering worldwide retail e-commerce sales are expected to double between 2018 and 2021, it is vital that Canadian business owners take their digital presence seriously,” says Pierre Cléroux, Vice President, Research and Chief Economist at BDC. “A strong online presence should be at the heart of any business that wants to continue growing and remain competitive.”
The study is based on a survey of 1,485 Canadian businesses with an online presence and with national or international activities. Although most Canadians are buying online, close to half of all Canadian SMEs didn’t have a website in 2017, according to Statistics Canada.
Growing online: Worthwhile but challenging
The study finds that businesses building their market expansion strategy on top of their online strategy are more likely to enjoy higher revenues and profit growth. They are also close to three times more likely to export. However, SMEs face a variety of challenges when growing their business online, such as data protection and security (32%), lack of knowledge of Internet technologies (25%) and the difficulty of hiring and retaining qualified talent (24%).
Only 15% of respondents identify the cost of setting up an online store as their top challenge. Businesses that expand online spent on average $37,458 on their website and $29,210 on their online marketing in the last three years. Larger businesses tend to spend seven times more than smaller businesses to optimize their online presence.
Planning is key
“The first step in expanding online into new markets is to get your online strategy right. Then, you can build your market expansion strategy on top of it,” says Philippe Desjardins, Business Advisor at BDC Advisory Services. “As in many business opportunities, planning is the best way to achieve long-term, sustainable success and avoid common pitfalls.”
The study also identifies six online practices businesses can follow when expanding to new geographic markets:
- Measure your business’ website performance
- Improve your visibility with search engine optimization
- Invest in search engine marketing
- Continually tweak your website to meet customer expectations
- Make your online expansion plan the core of your strategic plan
- Personalize it with customization
Access the complete study here.
BDC is the only bank devoted exclusively to entrepreneurs. It promotes Canadian entrepreneurship with a focus on small and medium-sized businesses. With its 123 business centres from coast to coast, BDC provides businesses in all industries with financing and advisory services. Its investment arm, BDC Capital, offers equity, venture capital and flexible growth and transition capital solutions. BDC is also the first financial institution in Canada to receive B Corp certification. To find out more, visit bdc.ca.
SOURCE: Business Development Bank of Canada (BDC)