More small firms are reaping the benefits of internet trading, but the majority have yet to be convinced that the investment in new technology could be worthwhile.
The Government fell far short of meeting its target of getting a million growing businesses trading online by the end of last year.
In fact, only 490,000 companies were using e-commerce, a drop of 50,000 from 2001.
While most businesses have a website, many are reluctant to use it as a tool to trade with customers and suppliers.
Michael O'Higgins, head of IT consulting at international management advisers PA Consulting, says: 'For new and growing businesses to succeed, they must appreciate how web technologies can enable them to buy better and sell better.
'The challenge is not so much getting them online, but ensuring that they are doing so in a way that adds value to business.'
Website www.websiteit.com offers companies a website building and hosting service with the capacity to trade online. Founder Mike Quinn says: 'Today, not having a website is like not having an address. If you have no presence, people can't find you.
'Small firms have to ask themselves how much their competitors may have sold over the internet today. What have they missed out on?'
Richard Newlove, 42, set up Amina Technologies four years ago. The company, based in Huntingdon, Cambridgeshire, makes loudspeakers. His latest designs, called Soundpax, are flat-packed with cardboard casing.
He says: 'When we came up with the Soundpax speaker it was very difficult to get retailers to take it on and promote it. So we decided to use the internet instead.' Richard used www.websiteit.com to set up a site selling the speakers, which now account for ten per cent of the company's sales.
He says: 'Because the site was created and operating in less than a day, we were able to start selling immediately. 'It is essential to have a web presence. It is then simple for customers to find the business. In our case, the web is also generating interest in the product from retailers.' The biggest barriers to small firms taking up internet trading are cost and time.
Quinn says: 'Many small firms think setting up a website costs a lot of money. This may have been true in the past, but now the investment in building a site and training staff to use the internet is justifiable for the vast majority of small companies.'
