Despite a bumper year for internet retailers, more than three-quarters of the UK's small businesses are still failing to take advantage of a widening online customer base, new research shows.

A study by BT and the Institute of Directors (IoD) found that just 24 per cent of companies provide a website through which their customers can buy products.

The report shows that the other 76 per cent of small firms failed to claim a portion of the £50bn that was spent via the web in 2005.

Last year saw the online retail market grow in prestige, with sales booming in the run-up to Christmas. As the high streets suffered from a dip in consumer spending in the second half of 2005, e-shop sales never fell below their targets and posted record growth rates.

BT said that small businesses with a transactional website saw their customer base increase by 81 per cent last year, while more than half claimed they reached more international buyers through the internet.

"Many smaller businesses have a website, but haven't seen the potential for making money from it," said Mick Hegarty, general manager of Broadband and VoIP at BT Business.

"They also think making it transactional could be costly or time-consuming, but that’s just not the case anymore. There is a wide range of cost-effective options available that fit every budget.

"Moving away from just having an online brochure to selling direct over the internet opens up a great new opportunity to increase sales."

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