Go Daddy logo

Very Small Business Unrealised Market For Domain Registrations

GoDaddy Its Go Time logoSmall businesses around the world are an unrealised market for domain registrations, according to a recent global survey commissioned by GoDaddy. The survey found 59 percent of small businesses report that they don’t yet have their own website. But many of these say they will soon, fuelling a demand by small business for domain registrations and associated services such as webhosting.

“While we take for granted that everyone is online, the reality is that for many small businesses it’s simply not true,” said Blake Irving, GoDaddy CEO. “What is clear is that these very small businesses are realizing that if they don’t fully engage online, they are at a competitive disadvantage.”

The RedShift Research survey of 4,000 global very small businesses – defined as five workers or less – in Australia, Brazil, Canada, India, Mexico, Turkey, United Kingdom, and United States – found 35 percent said they viewed their company as just too small to warrant a website. Yet at the same time, many small businesses reported that they understood that they placed themselves at a competitive disadvantage by not having their own website.

According to the research, a major wave of very small businesses will be taking full advantage of the internet soon: 55 percent report they intend to create their own website in the next two years. And they expect that having their own online presence will significantly boost growth by finally making their businesses visible to local, national and international audiences:

  • Forty-eight percent believe that their business will grow 25 percent or more over the next 3-5 years. Eighty-one percent said they expect growth of 10 percent or more. This is not an unrealistic expectation — of those respondents who already have a website, 59 percent say their business grew once they had built their website.
  • Forty-eight percent said they intend to sell goods from their website (e-commerce functionality) within a year of its launch.
  • Fifty-two percent said creating a website will expand their customer base locally while one in 10 believe it will expend their customer base nationally and internationally.
  • Eighty-four percent said it’s important their new website be mobile-friendly.

Perhaps most telling is the comparison of growth expectations with those with no plans to build a website. According to RedShift, those with no plans to build a website in the next two years have lower expectations for their business with just 19 percent saying they expect 25-50 percent growth in the next 3-5 years.

In addition to growth, competition is a key motivator in creating a website: 83 percent of small business owners who already own a website feel they have a competitive advantage over those without.

There are over 200 million small businesses in the world, but for many, making the leap to have their own website is challenging: survey respondents said they hadn’t had the time, money or expertise to create a website:

  • 35 percent said they viewed their company as just too small to warrant one.
  • 21 percent said it was beyond their technical expertise.
  • 20 percent reported that they couldn’t afford it.

The research also found that size and age matters when it comes to viewing a small business as website-ready.  Newer small businesses were nearly twice as likely to plan to create a website as their older counterparts (72 percent in business 3 or less years compared to 42 percent of those in business 4 or more years). And one-person shops were less likely to plan to build a website (42 percent) than firms of 2-5 people (65 percent).

Very small businesses that create their own website will have an impact on how they communicate with their customers. While those planning to build a website are as likely to telephone a customer as they are to email them, the survey found that those already with a website were twice as likely to communicate via email as to phone. That suggests that as these very small businesses get their own online presence, their communication practices will change, perhaps as they become more digitally sophisticated and their customer base grows.

The research also captured interesting demographic data about those very small businesses operators intending to build a website:

  • 41 percent are run by women.
  • 64 percent have 100 or less customers.
  • 39 percent have been in business for three or less years.

The RedShift research found that of the very small businesses intending to build a website, only one in five have bought a domain name for it. In addition, the research showed they are likely to take different paths towards turning that website into reality. Thirty-percent said they are looking for a internet company to help them build it, while others are looking for a web designer (24 percent), asking family to help (21 percent) or intend to do it themselves (17 percent).

The survey was conducted by RedShift Research of 4,009 very small businesses (1-5 employees) in June and July, 2015. Data is available upon request. For more information about the survey, including a free copy of the complete results, please visit https://garage.godaddy.com.