A LARGE shop or outlet filled with with thousands of customers seven days a week is the stuff of dreams for many small businesses. Property prices may bar them from setting up shop on Oxford Street, but there is an affordable way to pull in the punters — they can show off their wares online.

Increasing numbers of small and medium-sized enterprises (SMEs) are getting in on the act and setting up websites, according to Netcraft, a company that analyses use of the internet. Yet the Federation of Small Businesses (FSB) says that those with an internet presence are still a minority — only 18 per cent.

Many small-business owners feel that they do not have the time or expertise to set up a website, the FSB says. They should, perhaps, find it. Becoming internet-savvy can bring substantial rewards.

Matthew Knowles, of the FSB, says: “The internet is a further marketplace that can bring in new customers to a small firm. The average FSB member trades within 50 miles of their base, but the web allows them to expand their operations at a much lower cost than by opening another satellite shop or office. Investment in IT equipment, advice and security may be an expensive first hurdle for a small firm to get over, but once it is crossed the returns can be significant.”

Online retailing is expected to double over the next five years, according to IMRG, a research group.

Experts say that small businesses do not have to spend a fortune to expand by selling online. Fasthosts, an independent hosting company, charges £15.99 a month for software to start and design a business website. The FSB’s own software, supplied by Microsoft, starts at £10 a month.

Of course, simply launching a well-designed website is not enough in itself. The name and content of the site are crucial to attracting potential customers.

Ed Johnson, marketing director at Fasthosts, says: “The major routes for web surfers to find websites are search engines. Our research shows that two thirds of people only actually look at the first two pages of results brought up. So businesses must make sure their website is listed in those pages. They can do this by search engine optimisation.”

The first step is to submit the website to the search engines. This can be done free on the search engine’s website, but almost half of SMEs fail to do it.

Choosing an appropriate web address is also key, Mr Johnson says. A domain name that reflects the nature of the business will score well with search engines. But an address such as “secondhandcars.com” or “accountancy.co.uk” is likely to cost thousands of pounds. Making the name of the firm the domain name will be much cheaper. Fasthosts sells “.co.uk” addresses from £2.95 a year.

Also vital are the text and links in the site. “The key is to make sure there is lots of text in there which reflects the business you do,” Mr Johnson says. “If your home page is just nice graphics, it will not help to boost your rankings. Also, the more links you have from other sites, the better.”

Most search engines ask each website to submit a list of up to six keywords describing their business. Websites that put in many more than that are veering towards spamming.

“There is an ethical way of doing search engine optimisation and an unethical way,” Mr Johnson says. “Several companies have been stung because they have used methods to promote their sites that search engines did not agree with.”

For the latest SME news visit www.timesonline.co.uk/enterprise

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