Before making any decisions on whether to build a Web site or not, you have to define the difference between need and want. If you just fancy the idea of launching your business into cyberspace, just ask yourself if you would fancy a major drop in your bottom line.
It can be that serious because in some instances a poorly prepared approach to e-commerce may have a detrimental impact on your “bricks and mortar” store. When it comes to your livelihood, which is more often than not based on your business’ viability, fancying something is not enough.
You have to be certain that the e-commerce direction will cement your business future while opening up extra economic opportunities. This is where sound and well thought-out planning and research come into play. This depends on the nature of your business. What you have to realise is that the Internet is not going away.
The e-commerce decisions you make today may affect the role you have in the marketplace tomorrow. It may even impact on whether you are actually still in the market tomorrow.
It would be a rare occurrence if you felt forced to take your business online. However, these days many in the small business industry regard it is as a necessary tool to compete.
Depending on the nature of your business, you need to ask the following questions:
What are the advantages of putting your business online?
Is it going to add or detract from your offline presence?
Do you have the people power to create and maintain an online business?
Does your product have a niche market that would work well on the Internet?
What model will you use for your Web site? Will it just be information based or will it be fully operation as a money-making arm of your business?
Could your online business do better than your competitors? If not, could it deliver your goods/services cheaper?
What is your purpose?
Deciding what your purpose is depends on your product or service, and the nature of your business.
You may want to set up a Web site that is purely for information purposes only. A platform to inform the general public, and therefore potential customers, about what you can do for them and the goods and services you sell. It may also offer information like your address, how customers can find you, your operating hours, price lists and catalogues.
This is how most businesses begin their Web existence, sort of like an electronic brochure, which focuses on providing information about the company and its products.
However, increasingly there has been an evolution, which has seen the creation of e-commerce. It is when you decide you want to reach new customers and make money from your Web site that the complexity of e-commerce comes to light.
If you want your Web site to make money it is wise to do the research. More and more businesses are using e-commerce as an additional revenue source as the world’s population becomes increasingly more tech savvy.
Of course this leads to other issues:
Marketing strategies and shipping/ordering requirements
How to attract, keep and encourage customers to buy
Knowing your cyberspace target audience
How to outsell and out-manoeuvre Internet competitors
Knowing the tricks of the Internet and how to make the most from your Web site presence through affiliate programs and advertising
How to complete online transactions.
Of course, it all may sound a little daunting, but the task is relatively simple if you are well-informed. As with any worthwhile venture, there may be a little bit of elbow grease needed to get started.
Is there a market for you?
Once again, this boils down to knowing and understanding your business and industry. If you have a sound understanding of your product/service you will know how it will fit into the competitive Internet arena.
It is also important not to forget that once you are on the Web, you are no longer operating within certain geographical constraints. You will be operating in a borderless and faceless world with a sale just a mouse click away. Having broadened your market to the four-corners of the globe, you have to be prepared for the implications.
It is important to look at the e-commerce big picture and work out your position within it. The Internet opens your business up to the world. Anyone from Japan to Greenland can get on the Internet and access your business. If you are prepared for international customers, and have the capabilities to deal with them, excellent.
However, not all businesses will be ready to go global. It depends on the individual and the product. Some businesses are purely local. For example, if you are an online greengrocer, you wouldn’t need more than a second or two to figure out that taking your business global would be a costly exercise, especially if you were offering free delivery!
Can you afford it?
Whether you can or can’t afford the expense of a Web site is an important question to ask yourself. Can your business sustain the initial outlay needed to create an online business?
It really depends on the nature of your Web site, but set-up costs could range from as little as $1,000 up to more than $20,000. Of course, that also depends on whether you decide to develop and design your own Web site from scratch or if you bring in a professional to do it for you.
To work out how much your site can cost you, set yourself a working budget. You should:
Figure out your budget based on how much money you would save by having the online presence based on a certain time frame, for example, 12 months.
Combine that figure with any extras you can afford to add to give you an amount you will be comfortable in spending.
Investigate thoroughly the options available to you when it comes to setting up a Web site.
Try not to over extend yourself financially. You do not want to be faced with a huge uphill financial battle at the beginning. However, it is worth remembering you have to spend money to make money.
Look at a cash flow chart based on the best and worst possible outcomes. After putting in the necessary research, outline what you think will be your monthly expenses and income for your Web site.
Not be put off in the first few months of online trading. You really need to give it time to work for you.
When it comes to making money and Web site overheads, it is also important to aim at converting information requests into sales. There is no use employing extra staff to handle the rise in customer requests for information via your Web site if you are not making any sales.
The site is then costing you money and is not serving its function correctly – helping you make money.
How will it impact your business?
Apart from the financial implications, going online can have an impact on customer perception. Your Web site should be every bit as professional as your business is. You can not afford to present an unprofessional approach to your Internet customers.
Think of your online business as an extension of your bricks and mortar premises. Your business, both offline and online, should be treated as an entire entity. What happens to one will have a direct impact on the other.
If customers online are getting poor service then they just may hesitate when it comes to dealing with your offline store.
And also remember, if you thought word-of-mouth was a powerful tool, consider what a global e-mail system could do to your business. Studies have shown negative customer experience online can impact on sales at your offline store.
You do not want this to be the case with your Web site. The idea behind its creation is for it to become a financially viable arm of your existing business. It was not to become the bane of your existence. You want it to make you money and it will. Making the decision to become what is known as an “e-tailer” is not easy. But it is one which definitely needs consideration.
Don’t forget your competitors are also in the same position as you are. They are probably considering taking the e-commerce path – that’s if they haven’t already set-up a Web site.
If you do not at least consider the opportunity and put in the appropriate research, you may find yourself losing sales instead of boosting them. Competition for market dominance is hotting up. By going online you can also save yourself money which can be invested back into your business.
Money will be saved as a result of:
Streamlining operations. Your Web site is an excellent tool for fielding customer inquiries and orders. This will help free your staff to concentrate on other areas of your business.
Increased productivity. By having a streamlined business operation the spin off will be increased productivity. Staff will have more time to do more work.
E-commerce is also an excellent avenue for creating and building new business collaborations.
But it is important to remember that it could have a detrimental impact on your already established business if not prepared and launched correctly. For example, if you do launch an online venture and it fails, it could have an impact on how customers perceive your offline business.
They may think you have gone out of business if they are searching for your non-existent Web site. They can even come to the conclusion that your offline store has also closed.
Positive effects of e-commerce
While we have looked at a few of the pitfalls, it is obviously worthwhile to consider the positive e-commerce impacts on your business.
The best outcome, of course, is that your e-business turns into a highly successful moneymaker. E-commerce will also help to raise your company/business profile. It should help to generate money to reinvest into your bricks and mortar premises.
There is also the option some small business people consider of tearing up the lease and conducting business exclusively online. While it can be done, this is a big decision and depends on the nature of your business. It could have the same affect on customers as closing down your Web site. They could decide you are insolvent and not use your online store. It is wise not to be too hasty when making such a far-reaching decision.
It shouldn’t have to be all or nothing. Of course, it depends on the type of business you operate. According to one e-tailer that runs a wine store with an online arm, doing business on the Web is a dream and the costs involved extremely low.
However, he had no intention of closing his “real-world” store because it helped to provide warehousing for merchandise and was still extremely profitable.
These are all considerations only you can decide on. Testing the waters first is always good advice if you don’t want to find yourself in over your head.
