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| Bring your Business Idea Up to Speed: Starting an e-Business |
It used to be that the powerhouse corporations had the markets all sowed up. Small start-up companies did not have a chance to get their foot in the door, let alone thrive. But thanks to the Internet, the new playing field is scalable if you have the right tools. In fact, small businesses fare especially well in this medium because they are adaptable and quick-changing in a high speed environment. You may be wary considering that the Dotcom bubble has burst a few times, but with some research and a smidgeon of caution you can step over the pitfalls that took many internet companies to their doom.
The Internet holds a variety of opportunities for e-Business proprietors. The projected online spending for 2007 was $105.2 billion. Add these potential profits floating around in cyberspace to the advantages of running a Web-based business and you will realize what all the buzz is about.
The Internet is the street on which your virtual storefront will reside. All your information is right there on your Web page allowing you to avert the high costs of printing brochures and catalogues. 24-hours a day customers can patronize your business and you don't have to lose sleep wondering if your staff is holding down the fort. With an e-Business you can fill customer orders with more accuracy and less manpower than a traditional street-side business. Your audience will reach as far as the Internet does and your start-up costs could be as little as a couple hundred dollars. With less employees on the payroll and fewer city regulations to worry about, you can focus on the real task: increasing the profitability of your company.
Many start-up Internet companies are B2Bs. The potential for business-to-business sales has attracted entrepreneurs and investors alike. While B2Bs are projected to fare better than businesses that sell to individual consumers, they also require more savvy about the industry they market themselves to. Unlike an individual consumer who will have no qualms about spending $10 with little or no confirmation of your physical presence and business practices B2Bs who usually have industrial sized orders, may be more cautious. You may have to provide additional avenues of service such as closing major deals in person or offering telephone support services.
Getting Started
The first thing you will need to do is shop for a host. A host is a virtual site that is always accessible to interface with customers and handle your transactions. The last thing you want as an e-Business owner is for your customers to come to your site and be unable to do their shopping. IT professionals use the restaurant analogy. Whereas your consumers are the patrons who come to eat, the host/server takes and processes their orders and, in some cases, handles payment. Without a host, your customers are likely to leave without doing business. Hosting a Web site can be done independently, but most businesses hire outside of their business. Depending on the capacity and speed of the site you want, you can spend anywhere from $10 to $10,000. You will want to look for a Web hosting company that can expand as your business expands. If your space is insufficient for the traffic it sees, your entire site could crash.
Some companies that do hosting such as Google or Yahoo will start you off with 1 to 5GB of space and offer high-speed T1 or T3 connections for around $25 per month. Any slower connection speed and you might lose the customers attention. Telecommunications expert, Johnny Demerson, says “The rule of thumb is that you have 8 seconds for your Web page to load before your customer moves on to another site.”
What's in a Name?
Next you will need to get registered and this means deciding on a domain name. Web surfers generally remember the most common suffixes to a Web address: “.com”, “.net”, “.edu” and “.gov”. Other domains such as “.info” or “.biz” are becoming more popular. Obscure endings, however, can get lost in translation.
To set up a Web site in one of these domains, go to www.networksolutions.com. Network Solutions was the first to offer domain registration which is why their endings are the most recognizable. To establish a name that has not already been taken, type in your idea and let Networks Solutions do the search for you. They may even offer alternatives in the event your name has been taken. Some hosting services will throw in registration with the package; however, having a common suffix is worth the expense. Experts also suggest that the name appearing between the “www” and the suffix should be simple and easy to remember.
Finally, you will need to register with a search engine. Getting your Web site to pop-up toward the top of a ‘search results' list on a popular search engines such as Google or Yahoo is not cheap. So you will need to find other ways to brings Web surfers to your site.
The good thing about e-Commerce is that there are several ways to get your name out there that will cost you next to nothing. Consider creating an e-mail signature that includes your URL or Web address. E-mail signatures appear at the bottom of your outgoing e-mails. They only take a few moments to set up and can be seen by everyone you send an e-mail to. Marketing experts also suggest auctioning an item on e-Bay. E-bay brings masses of people to their site daily. By posting an item, you can also list your URL there and attract more traffic to your site. Popular online classified advertisers may serve the same purpose.
There are also the chat groups. If you specialize in a specific product, look for discussions about related topics and join them. Disseminating your information among people who already have an interest in your product is smart marketing. Direct e-mailing campaigns can also be effective, but avoid creating spam. Your correspondence should be personal and useful, and give the recipient the option to choose to receive future e-mails.
Also, there is the traditional business card. Make sure you list your URL address correctly and think of an incentive to attract recipients to your sight.
Tricks of the Trade
To be in online retail these days, you have to accept credit cards. In order to offer this service you have to have merchant status. To join the club consider applying with your own bank or other local banks. Another option is to contact a company that gives accounts to online merchants including Cardservice International, VeriSign and Credit Card Processing Services. PayPal is also used widely by companies including eBay. Do some comparative shopping and consider the cost of processing your transactions with your revenue and number of transactions.
As an e-Business, you will have to make an extra effort to extend good customer service. Some of your customers will be first-time online shoppers and may need you to usher them through the experience. Provide space for feedback or surveys and respond to e-mails quickly. React quickly to any common problems your patrons might be having. Because they may not be able to ring you on the phone, try to answer questions preemptively with a FAQ's section. If possible, list a phone number for consumers who prefer more traditional methods of communication.
Avoiding the Pitfalls
When a few small start-up companies began making millions on the Internet, everyone wanted to jump on the band-wagon. Some had little concept of basic business strategies and spent more than they earned. They impulsively bought advertising without regard for their budget and paid exorbitant salaries on the hope of high profits without crunching the numbers first. Some sold their products for less than they acquired them hoping to gobble up a large stake of the market only to find that they hemorrhaged money this way.
At the time this innovation of e-commerce had some e-Business owners believing they were invincible. They ignored their shareholders and defied the number one rule of business: to make money. Long-term success on the other hand requires a sensible plan. If you are going to join the ranks of profitable e-Business owners, you must remember that your e-Business is still a business in its respective industry with competitors, suppliers and finicky consumers. It requires the same diligence, planning and research as any other business. In short, if you value your investment you will acknowledge that there is always risk and take the necessary precautions to avoid them.
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