Why Statistics Are Not Always What they Seem
- 16 Comments
- February 18th, 2009
This statistic is making the rounds and lots of people are repeating it: only 44% of small businesses have websites. It’s from a survey by Webivisible and Nielsen.
I am skeptical.
Before blindly accepting that as gospel truth, I suggest we examine this statistic more closely.
(1) No one really knows how many small businesses have websites — This is not something for which you can find hard external evidence. The U.S. Census doesn’t cover it. There are no databases of information that will give you a good answer to this question. So the best that can be done is to take a survey and extrapolate based on that.
(2) Sample size is key in a survey — The survey referenced above was based on 261 SMBs. Now, that’s a mere fraction of the 27 million small businesses in the United States. While I think this survey is an interesting data point, it’s just one data point. Don’t stake your life or reputation on it, because the sample size is pretty small.
(3) There’s not enough data about the businesses to make that statistic meaningful — The survey doesn’t say what size of small businesses were surveyed. It doesn’t break down the responses by age of the business. Nor does it tell you what industry the respondents are in.
Those are critical factors that drive a small business’s need for a website and the value the website can deliver.
In other words, some small businesses need a website more than others.
Let’s take size of the small business, for instance, and examine that for a moment.
If you’re talking about single-person businesses — the consultant or freelancer who just got laid off 6 months ago and decided to start a business, or the small landscaper who plows snow in the winter and cuts lawns in the summer — then I find it a lot easier to buy that 44% figure. Business owners in that situation tend to have tiny marketing budgets anyway — zero to perhaps a few hundred dollars a month.
Plus, a micobusiness that small only has the capacity to handle a limited number of clients or customers at a time. Many times the owners don’t plan to or even want to grow. Growth would require substantial expenses to hire employees, add trucks and equipment, get insurance, etc. — eating into their profits short term. For a business of that size, it’s hard to justify a website in the midst of a long laundry list of pressing needs, including their need to feed and clothe their family from their earnings.
On the other hand, if you’re talking about larger small businesses — say with at least a couple of employees or revenues over a half million — that 44% figure is nonsense. A much higher percentage have websites.
There’s another reason I am skeptical. That 44% figure, as a blanket statement, just doesn’t square with my own experience. It’s a rarity these days for me to meet an established business owner of a substantial-sized small-business at a networking event who doesn’t have a website. In fact, it almost never happens any more. Five years ago that happened — but not today.
To make a statistic like this valuable, it needs to be broken down into smaller chunks … segmented. I think that if another survey were done that asked the right questions, it would have value for us all:
- size of business (by annual revenues, and by number of employees)
- age of the business (startup vs established)
- industry the business is in (some industries are entirely local and prospective customers do not yet go on the Web in large numbers as their main way to find a vendor, for customer service information, etc.)
As it stands, trying to lump all 27 million small businesses into one homogenous whole with one statistic, doesn’t really tell you much of anything useful. But break it down, and suddenly the information becomes meaningful to those selling Web design, marketing services, and other Web-related products and services to small businesses.