Making the Leap to On-line Business

(Toronto, June 19, 2000) -- Leading Canadian entrepreneurs are recognizing that the strength of eBusiness lies in on-line connection to customers, according to the Entrepreneur Of The Year174 Institute's annual survey.

More specifically, the survey shows that 82 per cent of companies today have their own web sites compared to 15 per cent back in 1996 (source: E&Y Entrepreneur of the Year Study, 1996).

Top-line findings indicate that entrepreneurs who have set up their own web site or are intending to do so are twice as likely to say that eBusiness has been very helpful in enhancing customer relations (26%) than reducing costs (12%). One in ten (10%) say eBusiness has been very helpful at increasing sales.

"Entrepreneurs are visionary by nature so it's not surprising that they see the huge opportunities of moving their business on-line. Top performing companies understand that eBusiness is a conduit to building solid relationships with their customers", says John Goudey, leader Technology, Communications and Entertainment, Ernst & Young LLP.

The survey--completed in March 2000 was conducted by Ernst & Young and the Angus Reid Group for the Entrepreneur Of The Year Institute--polled Entrepreneur Of The Year program finalists from 1994 through 1999. The fieldwork for the study was conducted between January 26th and February 15th, 2000. The 250 respondents from across Canada operate different sized companies. Annual revenues of participating businesses range from less than $5 million to over $50 million. These Canadian entrepreneurs represent the top tier of independent business owners and operators and most come from traditional lines of business.

"The challenges of the Canadian business environment lends itself to entrepreneurs who see the future and have the creativity and business know-how to develop innovative ways to manage distribution and small markets. Entrepreneurial spirit is the driver to instilling an approach to business that often breaks away from traditional methods," says Jacques Dostie, national director, Ernst & Young Entrepreneurial Services. "The EOY Institute members surveyed bear testament to this as they look beyond the on-line retail aspect of the Internet toward the introduction of web-based solutions, customer relations and supply-chain issues."

While these businesses are also attempting to create an on-line presence many entrepreneurs still harbour some concerns. Many respondents that have or intend to have a web site to sell products and/or services indicate they are very concerned about the privacy (33%), security (34%) and reliability of information provided by site visitors (27%). Others are concerned by the increased competition in their industry (23%) and the costs necessary to undertake technological transformation (20%).

Other Survey Highlights

• Ontario businesses have the highest number of existing sites (87%) followed by the Pacific region (86%). Quebec has the highest percentage of companies intending to start a web site in the next 6 months (16%)
• Currently, 82 per cent of respondents maintain a web site, and 11 per cent intend to start a web site in the next six months. Of these companies, 71 per cent plan to use their internal IT departments as their eBusiness solution provider
• Those most likely to maintain web sites: companies with an international scope (86%) compared with companies whose scope is domestic (77%).
• The most positive way that companies' Human Resources departments have been affected by eBusiness is in the recruitment of employees (36%). This positive effect is higher in Business-to-Business companies (44%) than for Business-to-Consumer companies (21%).

"In this connected economy, businesses have to respond to requests from different time zones while overcoming the logistics and other related issues," says Dostie. "Canadian businesses, however, are in an ideal situation to succeed. This country has an exceptionally sound telecommunications and distribution infrastructure, and government policy in many areas promote the expansion of eBusiness."

The Entrepreneur Of The Year was founded by Ernst & Young, and is sponsored by Canadian Business magazine, BMO-Nesbitt Burns and Global Television Network. The Institute was created to celebrate great entrepreneurs and make the public more aware of the beneficial effects entrepreneurial companies have on society. Membership is exclusive to Entrepreneur Of The Year award recipients. Visit www.eoy.ca for more information.