Small Business Survey: Understanding the Business Opportunity

Small Business Survey: Understanding the Business Opportunity

Study reveals that online access to key metrics is the most sought-after value-added feature by small businesses.

In a new report titled, , Celent Communications confirms previous lines of thinking and exposes new findings related to small business use of financial products and services. The survey, conducted in November 2001, aims to clarify the wants, needs, satisfaction levels, and structure of small businesses in the US in order to de-mystify the small business segment for financial institutions.

Celent tested the publics perception that small businesses are adopting online financial services faster than their corporate counterparts and discovered that small businesses infrequently use the Internet for basic online transactions. Only two percent of businesses indicated that they regularly paid bills online.

Despite the fact that small businesses do not currently utilize the Internet for banking transactions, the study found that the majority of small businesses would like more services automated online, comments Ariana-Michele Moore, co-author of the study. This would suggest that the propensity of small businesses to use online services is high, but small businesses are either unaware of what is currently available online or frustrated by the current lack of robust solutions."

Celent also queried small businesses about what value-added services their banks could add to enhance or expand their online experience. The study found that access to key metrics (e.g., list of top 10 accounts receivable, cash balance, etc.) is the most appealing value-added service.

The good news here is that 20 percent or half of the businesses that showed an interest in this service would be willing to pay for the service, adds Meredith Outwater, co-author of the study. Small businesses are looking for ways to streamline processes and save time; and due to their smaller scale operations, they are able to recognize the cost and benefits of a solution more quickly. This factor will greatly assist financial institutions in assessing fee structures for these value-added services and achieving an ROI.

The study details a variety of findings including customer satisfaction levels by bank size, channel preferences for different functions, payment mechanisms most often used, and products and services owned by small businesses. The report also looks ahead and examines the prospects for online and wireless adoption, one stop shopping opportunities, and customer service. It concludes with recommendations for financial institutions interested in making a larger impact in the small business segment.

A Table of Contents is available online.

of Celent Communication's Institutional Securities & Investments, Property/Casualty Insurance and Wholesale Banking research services can download the report electronically by clicking on the icon to the left.