Such a presence leads to higher revenues, direct communication with customers and easier access to global markets.
But the study finds that only four out of 10 Canadian small and medium-size businesses with an online presence sell, receive and take orders online, and 60 per cent of them 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,” said Pierre Cléroux, vice-president or research and chief economist at BDC, in a news release.
“A strong online presence should be at the heart of any business that wants to continue growing and remain competitive.”
BDC said 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 per cent), lack of knowledge of Internet technologies (25 per cent) and the difficulty of hiring and retaining qualified talent (24 per cent),” said BDC.
“Only 15 per cent 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.”
BDC said there are six online practices that businesses can follow when expanding to new geographic markets:
- measure your business’s 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.
“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,“ said Philippe Desjardins, business adviser at BDC Advisory Services. “As in many business opportunities, planning is the best way to achieve long-term, sustainable success and avoid common pitfalls.”
Mario Toneguzzi is a Troy Media business reporter based in Calgary. He writes for Calgary’s Business.