E-Commerce Among OK Value-Added Entrepreneurs

Glenn Muske

Rodney Holcomb

Mike Woods

E-commerceOct, 2001

Research Objectives

Identify start up & growth road blocks for value-added business owners

Examine information technology use– Access & ability to compete in global market

Literature

Medium to Large Business – 80% have sales web site

Small Business – 50% have sales web site– Small Business Computing, May, 2001

Methods

Telephone Survey– 274 Micro business

owners• 10 employees or less

– 70% Response rate• N=193

– 103 Value-added businesses

• 71 food• 32 other agriculture

Total Sample Value-Added

54% Male 56%

51 Mean Age 51

23% Farm 28%

25% Rural, Non farm 22%

24% City> 50,000 18%

3 # employees 3.2

Demographics

Reasons to Start

Control/Independence 50%

Financial 18%

Use Ag Output 12%

All Respondents Value-Added

87% WP 83%

80% Financial 83%

62% Graphics 60%

45% Production 49%

51% Publications 55%

59% Database 62%

89% Internet 90%

Technology Use

Internet Use

96% Email

66% Marketing Information

68% Customer Information

46% Leads

42% Customer Service

39% Purchasing

38% Travel

28% Non Web Sales

Why not?

48% Lack of Knowledge/Desire

Overall Profit

All Respondents Value-added

29% 0 33%

21% <$500 21%

18% <$25,000 15%

6% >$75,000 4%

Web site Owners

(n=34)

No Web site(n=69)

67% Male 51%

51 Mean Age 51

29% Farm 28%

21% Rural, Non farm 23%

27% City> 50,000 15%

3.6 Avg # employees 3

Value-Added OwnerDemographics

Reasons to Start(Web site vs No Web site)

Control/Independence 62 vs 44%

Financial 9 vs 23%

Use Ag Output 15 vs 10%

Web Development

# with web sites – 34 Average # months on Web –18 Who designed?

– Company – 57%– Individual (not owner) – 29%

Who maintains?– Company – 38%– Self – 35%– Individual (not owner) – 27%

Web Site Owners

Web Revenue– Mean = $7430– Median = 42250

Web Expenses– Mean = $1435– Median = $500

Web Profit

Mean = $6359 Median = $1500

35% Earn $0 or less 12% Earn $19,500 or more

3% Web decreased overall profit 6% Web added to overall profit

Web Site Sales

All Web Owners

Value-addedon Web 50% of sales within

Value-added –No Web

37% 36% <50 miles in OK 63%

12% 13% >50 miles in OK 6%

19% 6% Surrounding States 6%

24% 13% U.S. 0%

3% 0% World 0%

Significant Factors of Value-added Web Owners

Sell less with in 50 mile radius Sell more outside of 50 mile radius in OK Sell more in U.S. Want to increase sales Added new product/service Improved customer service

Significant Factors of Value-added Web Owners

More likely to have used OK Coop. Ext. More likely to expand somewhere else

– Rural person more likely to move outside county

More likely to have had business training More use of computer

– Finance, Internet, purchasing, customer info, leads

Significant Factors of Value-added Web Owners

More likely to have modified goals because of awareness of complexity

More likely to feel have adequate financing More full-time employees (2.8 vs 2) More likely to say quality evaluation a

problem

Affect of Time with Web Site

Profits not significantly different– Substantial

• $9983 (≥ 18 months) vs. $3138 (< 18 months)

Sites ≥ 18 months– More interested to expand U.S. sales– More likely spouse has a job outside– More likely to be “other ag” business

Web Satisfaction

With contacts– 46% Somewhat or very satisfied

With sales– 46% Somewhat or very satisfied

Web Problems

35% None

19% Development

23% Updating

12% Hits

12% Other

More Information

Glenn Muske

Micro & Home-Based Business Specialist

OK Cooperative Extension Service

405-744-5776

muske@okstate.edu