Research Summary

Entrepreneurs Increase Reliance on Internet

Center for Women’s Business Research  ·  October 2, 2001

Stephanie Peacock, Center for Women’s Business Research,

October 2, 2001

Washington, DC –Women-owned businesses are just as likely to be online for business as are men-owned firms, but women entrepreneurs are more likely than men entrepreneurs to find the Internet beneficial for opening up a wider range of business opportunities and allowing more time flexibility, according to a new study from Center for Women’s Business Research (founded as the National Foundation for Women Business Owners), which was underwritten by Wells Fargo Bank.

“Women-owned businesses are similar to all businesses in their use of online technology. Sixty-one percent (61%) of women-owned businesses are using the Internet in their business, about the same as the percentage of men-owned businesses,” said Nina McLemore, Chair of Center for Women’s Business Research and President of Regent Capital. “Overall, women and men business owners agree that the primary advantages of the Internet lie in its information-gathering and communications capabilities. But women entrepreneurs differ significantly from their men counterparts in valuing the Internet’s capability to open up a wider range of business opportunities (40% of women compared to 27% of men) and the increased flexibility of time and schedule it affords them (39% of women compared to 27% of men).”

“Both women- and men-owned businesses are using the Internet to a much greater extent than in the past,” commented Colleen Anderson, executive vice president and head of California Business Banking for Wells Fargo Bank. “More than half of women and men business owners, 52% and 51% respectively, report that the amount of time their firms spend online has increased over the past year. Furthermore, three quarters of women and men expect that their online activity will continue to increase. Consequently, they will continue to search for online services as a tool to increase efficiency and opportunities.”

Almost one-quarter of entrepreneurs (18% of women business owners and 24% of men business owners) do at least some of their business banking online. “However, women entrepreneurs who bank online are more likely than men entrepreneurs to visit their financial institutions’ website (55% of women business owners compared to 37% of men business owners),” added Anderson. “This tells us that the savvy woman business owner wants full customer service online, which includes offering well-organized and comprehensive financial and account information.”

Women and men entrepreneurs are equally as likely to be engaged in using the Internet for e-commerce. Fully three-quarters of women and men business owners who use the Internet (75% and 74% respectively) purchase business goods and services online. Further, half the women and men entrepreneurs who use the Internet (52% and 51% respectively) are now selling their products and services online.

In addition, women- and men-owned businesses both use the Internet to market their firms. Half of both women- and men owned firms have web sites (50% and 54% respectively). Nearly all of the women- and men-owned firms with web sites offer the ability to accept e-mail inquiries and 45% of women- and 46% of men-owned firms also offer a toll-free number for phone inquiries or orders. “Both women and men are actively maintaining their web sites,” said McLemore. “More than one-third (34% of women and 35% of men) have changed or upgraded the design of their web site four or more times since it was first launched. And more than one-third of the sites (39% of women- and 35% of men-owned firms) actually offer online ordering directly from their web site.”

Further, there is no gender difference in revenue generation from web sites. On average, both women- and men-owned firms with web sites receive less than 10% of their revenue from online sales and only one in four (24% of women and 27% of men) indicate that revenues from their web sites have exceeded the cost of operating the site.

The study also shows that home-based businesses are just as likely to be online and actually purchase a larger portion of their business goods and services online than non home-based firms. “The myth that home-based businesses are less technologically sophisticated is just that, a myth,” said Anderson of Wells Fargo Bank. “Nearly 20% (18.9%) of the goods and services purchased by home-based women-owned firms are purchased online, compared to 11% of the goods and services purchased by other women-owned businesses.”

Despite the increasing intensity of Internet use among most U.S. businesses, 39% of women-owned firms and 45% of men-owned firms nationally are not using the Internet for business. These “off-line” firms are older than firms that use the Internet and smaller in size. The owners tend to be older and less educated than the owners of the firms that are online. # # #

4 charts follow.

Editor’s Note: When referring to the study, it should be called “Online and In Focus: How Women and Men Business Owners Use the Internet” conducted by Center for Women’s Business Research (founded as the National Foundation for Women Business Owners)

Center for Women’s Business Research (founded as the National Foundation for Women Business Owners) is a nonprofit research institute focusing on women business owners and their enterprises worldwide. The Center is recognized as the premier source of knowledge on women business owners and their enterprises by corporations, policy makers, financial institutions and the media. Up-to-date intelligence about women business owners and their enterprises worldwide is documented in the Center’s original research and analysis.

Wells Fargo & Company, a member of Center for Women’s Business Research’s Corporate Advisory Council and Corporate Circle, is a $290 billion diversified financial services company providing banking, insurance, investments, mortgage and consumer finance through about 5,300 banking stores, the Internet and other distribution channels across North America, including all 50 states, and elsewhere internationally. Wells Fargo Bank leads the industry in improving access to capital for women business owners and offers a full range of financial services. Through its Women’s Loan Program – the first of its kind -- Wells Fargo Bank has loaned billions of dollars to women-owned businesses nationwide. To help entrepreneurs build and grow their businesses, Wells offers an online resource center at www.wellsfargo.com/biz. The site provides Internet banking and bill payment, and links small businesses with products and services.

Methodology: This nationwide study of women and men business owners was conducted, mostly by telephone, from the end of May through the end of July 2001. Business owners could also complete the survey online, and 42 women and men (6% of the respondents) chose this option. A total of 703 interviews were completed, 356 with women business owners and 347 with men business owners. The entrepreneurs were interviewed by Survey Service, Inc., a woman-owned market research firm.

The sample of women and men business owners was obtained from Dun & Bradstreet’s Dun’s Market Identifier database. Respondents were stratified by gender and firm revenues. A disproportionate number of larger firms were interviewed to ensure adequate numbers for analysis.

At the end of interviewing, the sample of women business owners included 183 whose businesses’ revenues were less than $500,000; 38 with revenues between $500,000 and $999,999; and 52 with revenues of $1 million or more. Eighty-three (83) women business owners did not identify their firms’ revenue amounts. Among the men business owners, 127 had firms with revenues of under $500,000; 50 with revenues between $500,000 and $999,999; and 119 with revenues of $1 million or more. Fifty-one (51) men business owners did not identify their firms’ revenues. The sample was then weighted back to proper proportions, based on revenue.

The interviewing of non-Internet users was stopped when their number reached 209, and from that point forward only Internet users were interviewed. In all, 256 women business owners and 238 men business owners in this sample used the Internet for business, while 100 women and 109 men did not. The sampling errors for sample sizes of 256, 238, 100, and 109 are ±6.3%, ±6.9%, ±10.0%, and ±9.7% respectively, at the 95% level of confidence. This means that 95 times out of 100, survey results will be within 6.3%, 6.9%, 10.0% and 9.7% of population values.

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