Dec. 9, 2004--Four out of five small business owners cite their websites as major contributors to the overall health of their businesses, according to a study released this week.

Of small business owners who said they have a business website, 77% claimed their business is healthier--defined as having a better competitive advantage or stronger economic footing--as the result of the website, while 81% reported that their websites generate business leads. The results were based on nationwide survey of 530 small business owners conducted in October by Interland, a provider of online services for small businesses.

"The killer application that this group is now turning to is online marketing tools and services that help them generate leads and convert those leads into sales," said Joel Kocher, CEO and chairman of Interland, in a statement. "This survey confirms that a website that provides leads and sales is what small-business owners want from their online investments."

Forty-five percent of respondents said that they anticipated online holiday sales to improve this year, while 42% said they expected similar sales to last year. When asked how they planned to prepare for the holiday shopping season, 58% said that they would update their website, while about a third said they would offer special promotions, engage in direct-marketing efforts or increase the number of items or services they sell. The study found plans to increase online advertising (29%) nearly equaled plans to increase offline advertising (28%).

More than a quarter of those polled said they expected between 26 and 100% of their annual 2004 revenues to be through online sales. Twenty-two percent estimated online sales would account for between 11 to 25% and 36% thought it would account for between one and 10%.

The online survey was administered to a nationally representative sample of leaders of organizations with 500 or fewer employees and company size ranging from under $250,000 to over $5 million in annual revenue.