Startup Companies Leading Transition to Online Business Activities

Casting a Wide Net: Online Activities of Small and New Businesses in the United States Businesses, particularly new businesses, are using the web in diverse ways as they pursue their commercial activities. While newly Casting a Wide Net: Online Activities of Small and New Businesses in the United States acuviu released data shows overall incidence of a reported website among the population of U.S. businesses was only about a quarter in Seventh in a series of reports using data from the Kauliman Firm Survey meldence October 2011 likol than likely than not to have a website, Online sales were reported by 6 percent of all U.S. businesses in 2007, compared with more than a quarter of young firms. Additionally, among online sellers, young firms were about twice as likely to generate more than 50 percent of revenues online. In examining differential outcomes from online activities, our analysis shows having a business d by 6 KAUFFMAN the ONLINE GNLINE website had the earliest and most Kauffman Firm Survey long-lasting effects among startups. ARRRIAIA KAUFFMAN The Foundation of Entrepreneurship Prevalence of Internet Activities Website Internet Sales All Firms 24.8% 6.0% Young Firms Employer Firms Only 51.5% 26.8% 40.5% 7.3% 4.8% Asian 26.5% Black 35.2% 4.7% Hispanie 29.8% 4.5% White Female-owned 39.9% 7.4% 39.8% Source: Survey of Business Owners, 2007. Kauffman Firm Survey microdata. 7.4% Prevalence of Internet Activities by Industry: 2007 70 60 Kauffman Foundation 50 Website 40 Intemet Sales 30 20 10 Total for All Sectors Arts, Entertainment and Recreation Source: Employor firms only. Survey of Business Owners, 2007. Prof, Scientific, and Tech. Serv. FIRE All Other Industries Admin, and Support, Waste Man. Sers. Wholesale Trade Construction . and Warehousing E-Commerce Sales as a Percentage of Total Sales, United States: 2004-2009 45 Kauffman Foundation 40 35 30 25 20 15 10 ---- ----- 2004 2005 2006 20117 2008 2009 Manufacturing Wholesale Retail -----. Services Source: LU.S. Census Bureau, 2009 Annual Sunvey of Manutcturers, 2007 Econcmic Census-Manutacturing. 2009 Arnual Wholesale Trade Sunvey, 2009 Annual Retail Trade Survey, and 2009 Service Arnual Survey. Internet Sales as a Percentage of Total Sales* All Firms Selling Online, 2007 Young Firms Selling Online, 2007 13.9% 49.1% 32% 25.8% 37% 42.2% Online sales less than 5% revenues Online sales 51%-100% Online sales 5%-50% "SBO category breaks at 5%-49% and 50%-100% Source: Employee Fimms Only, Survey of Business Owners, 2007; Kaufiman Fim Survey microdata, 2007 Assets and Revenues by Use of Website S800,000 Kauffman Foundation $700,000 S600,000 $50,000 S400,000 $300,000 $200,000 S100,000 2004 2005 2006 2007 2008 Assets (Firms with website) 2009 Assets (Firms ---- Revenues (Firms without website) Revenues (Firms without website) with website) Source: Kauffman Firm Survey microdata. Manufacturing Retail Trade Transportation