Small business portal Clearlybusiness.com was launched in August. Funded by Freeserve and Barclays Bank, it enters an increasingly competitive arena with a huge potential market to fight for.
Clearlybusiness aims to improve the survival rate of small businesses by providing them with the back-office resources they lack. The portal believes that at present only half of companies make it to their third year of trading.
The deal between Dixons Group's Freeserve operation and Barclays to set up Clearlybusiness was made public in April. Each had been considering independently the opportunity to create a portal aimed at small businesses.
Freeserve had already managed to attract some 300,000 small and medium-sized enterprises (SMEs), while Barclays felt it needed to offer its many SME customers extended ecommerce facilities. The site initially went live on 19 June - a soft launch for testing and getting user feedback. The full launch was made on 16 August.
Banking on Barclays
Stephen Shelley, managing director of Clearlybusiness, claims that the site has a headstart over rivals, bringing in Barclays' existing customer base of something like 450,000 SMEs and its knowledge of the small business market.
"I think other than the banks and utilities, nobody has any real scale in this marketplace," he says. "Barclays has the physical presence in which to promote Clearlybusiness."
"A lot of the research shows the top constraints for small business are around the fact they don't have the time to deal with all the red tape; they don't have time to deal with managing people; and they don't want to have to spend their time managing their cashflow. Clearlybusiness offers over 120 free guides, which are intended to give practical tips about how to solve specific problems," he adds.
"If, for example, someone's problem was, 'how do I increase my sales?', the guide talks about real practical things you might do," says Shelley. The guide also refers readers to some of the free services that are on the site.
"If you take marketing and if you have your own website, you can sign up for a free banner exchange programme which effectively starts promoting your site on other sites."
SMEs can access a whole host of mailing lists and mailing labels. The site also has a market research facility so that SMEs can get the lowdown on competitors, and how they might want to pitch their business against their rivals. The site plans an 'ask the expert' feature for the end of September, targeted at the startup market to begin with.
Third-party services
While many of the site features are free, some third-party services are charged for, and Shelley believes the selection process of the commercial partners is key to the site's unique selling point.
"We are looking for people who can bring something to the customer base," he says. "It might be because they are offering something unique, or they are offering something at a price people wouldn't get in a traditional environment. It might be that they are offering convenience and speed that makes it far superior to the off-line environment.
"For example, the legal service is a subscription service that costs £400 per year - for which you get access to a complete range of standard legal documents. The average small business spends something like £2000 a year with their solicitor. One of the things which is going to be added to that is a 24-hour helpline where they can talk to a solicitor. If you contrast the price of that to what people are paying off-line you are talking about some real savings."
Clearlybusiness thinks its free features model sets it apart from competitors such as Work24, which use a subscription base. Shelley believes the depth of the site's content, and the services and support it offers, will give it a headstart on the likes of BTClickforbusiness and Virgin Biz.net.
"The thing one shouldn't forget is that we have the ability to take some of what we are doing online into the off-line world. So if a small business wants to talk to someone, we have something like 1800 small business advisors within Barclays.
"We also have all the PC World [part of the Dixons/Freeserve group] business staff who can talk to our customers about computing and technology." All these staff are being trained to handle Clearlybusiness enquiries.
The Barclays and Freeserve channels are being leveraged to drive customers to the site. "If you look at it from a business perspective we have a route to get to customers. Biz.net doesn't have a route to get their customers other than advertising, and that's just not sustainable," says Shelley.
Because most SMEs are arriving at the site through these bricks and mortar channels, the advantage of having real-world backup is apparent to Clearlybusiness. However, Shelley accepts that there is scope for the site to highlight the availability of so-called real-world advice for SME visitors who do not arrive through a bricks and mortar referral.
The competition
Meanwhile, the competition remains unfazed. Afam Edozie, marketing director at Virgin Biz.net, claims Virgin has a "first-mover advantage", allowing it to offer the most comprehensive range of information.
He stresses that the site focuses on the very smallest business, fewer than 20 people, and that its primary aim is to help those businesses develop online through their websites.
Edozie points out that the site can arrange a merchant service account for these small businesses, essential for ecommerce. "Banks such as Barclays turn away three out of four small businesses who apply for merchant service accounts," he says.
Grant Broster, head of internet for business at BTClickforbusiness, says the site has 125,000 users who are members of BTClick ISP. He, like Edozie, believes the work that has gone into the site content in the 18 months since it went live has given it an advantage.
"We have thousands of reports available, from health and safety to data protection. BTClick members get premium access to chargeable services like credit checking through Equifax and company information from Dun&Bradstreet," he says.
Broster says there are plans to increase the personalisation of the site, to help SMEs navigate the increasing amount of information. BTClick is working on improving the statistics about what features of the site small businesses are actually using. And it has teamed up with Yell.com to provide SMEs with sales and marketing information about customers.
Clearlybusiness does not have an ISP revenue stream. In its initial stages, the site is making its money from banner advertisements. In the future, however, it aspires to generate most of its revenue from ecommerce through the site - it will take a share of the revenue from customers buying products and services off the site, such as office stationery, legal services, human resources training and office supplies.
The future
Looking further ahead, Clearlybusiness plans to offer application service provision (ASP) services. "We are certainly evaluating what to do in that marketplace. What is fair to say is that we will pilot something this year," says Shelley. The site would offer basic applications to start with, "Outlook or something like that", he adds.
There is a demonstration area about ASP facilities on the site now. Visitors can click to see how Word, Powerpoint, and Excel would work. Businesses have been asked to register their interest, and where appropriate they are asked what type of software they would be interested in having in the future.
"We have been surprised by the high number of people who have registered their interest," says Shelley. "I think we are quite confident there is a demand there. What is also clear is while there is a demand for generic stuff, there is a high demand for bespoke stuff, accountancy software where there's design tools. The one thing I would say about ASP is all the research I have read indicates that the biggest growth and take up of ASP services probably will be in the SME market, because of the cost savings.
"The issue will be getting somebody to say, 'I trust the people I am dealing with to look after my information and that they won't lose it'. There are concerns about the security of sites. It is a leap of faith to say I am going to store my stuff with you.
"I think the commercial reasons for doing it are quite compelling. The challenge will be to persuade customers, and I don't believe it's difficult. We have just spent a lot of time going to see some of the big hosting companies and you look at some of the security they have - it would survive a nuclear bomb. I think customers will need educating that it's safe. That leap of faith is important," says Shelley.
That leap of faith may not have been helped by Barclays' website recently having a high-profile security breach following a system upgrade that allowed customers to view each other's bank account details online.
"The approach we took with the site was to test it six weeks before," says Shelley. "We could have launched much sooner but we deliberately didn't for those reasons. We wanted to invest a lot of time and effort in testing the robustness of the site, and we are continuing to spend an enormous lot of time and money on doing that."
Clearlybusiness is developing fast and already has an offering to rival its main competitors. But small businesses are likely to want to commit to making just one site their business information and services hub. Time will tell which site has the killer combination of features.
See also:
All IT Management
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