ebusiness and your Business
One of the most difficult issues for anyone planning a new, or running an existing small business is to understand the full potential of the Internet. This issue is not limited to businesses - the stock market analysts have been having trouble for the past 9 months or so! Massive over valuations of "dot coms" followed by, arguably, over correction of valuations and a drying up of investment funds.
The Internet can have a very beneficial impact on almost all businesses but identifying which features should or could be exploited is complicated by business specific factors such as markets, location, staff skills, types of product/service etc.
In this section of the sbas ebusiness guide we will look at the potential of the Internet from a business perspective - hopefully you will recognise aspects of your business and be able to relate to the ideas.
The Internet is a global "utility" similar to a global Electricity grid, but its deliverable is information rather than electricity! Almost anyone in the world can connect to this utility and once connected can use it to send and receive information. The power of the Internet is due to its accessibility and the co-ordinated use of information (senders and receivers have to speak the same "language").
So what can the Internet do for a small business?
Replace paper/post based ordering with electronic orders
- Cheaper, faster and more reliable than post
- Reduces order processing costs -more orders with fewer staff
- Shortens the order/delivery cycle
- Can be used between customers and/or suppliers
- Enables around the clock order taking
- Business can be based in better locations
- Local, national, international orders via same process
- Automated credit card payments - fast and secure
- Automatic gathering of email address for marketing
Product/Service Advertising via a Web Site
- Accessible by local, national, international customers
- Always open 24hrs a day!
- Up to date product/service details and prices
- Direct links to order forms
- Eliminate/reduce paper brochures
- Encourage customer feedback by email
Staff communications - email
- Faster, more efficient communications between staff
- Eliminates geographic impacts in dispersed teams
- Can be used to direct remote staff � sales force etc.
- Direct Marketing to customers/prospects
- Closer links with suppliers/partners
- Regular marketing bulletins
- Customer satisfaction surveys
Competitive information
- Monitor competitor products/prices via Web sites
- Identify new product/service developments
- Test market new ideas
What can't the Internet do for business?
The most obvious limitation of the Internet for product businesses is that it can't actually deliver products - although service businesses can sometimes look to electronic delivery as well! For instance a coal merchant may be able to advertise, order from suppliers and take customer orders online but they will still need a lorry and delivery team to fulfil their orders!
However some businesses will find that product packaging can be adapted to better suit an Internet enabled operation. For instance a bakery could repackage specialised products to smaller unit sizes - making airfreight more cost effective and significantly improving the quality of the delivered product overseas.
When selling via the Internet, usually via a web site, the customer interface is less personal. This requires new techniques when planning catalogs and ordering systems. it is important that this web "shop window" contains all the information the buyer might need, they can't walk into the shop, feel the products and ask questions!
When customers order on-line they are placing a high degree of trust in your business - their credit cards are being charged before they have actually seen your products. So strong guarantees are required including money back conditions, target delivery times, freight costs etc.
Exploiting ebusiness
Hopefully, some of the benefits described above have given you some idea of where you might gain most from Internet usage. There are basically two dimensions to be considered when investigating Internet exploitation;
Exploiting the Internet in an existing business
With an existing business the main emphasis is on using Internet facilities to enable changes to business processes. Sometimes these changes can be dramatic - linking electronic orders directly into the delivery, inventory and accounting processes. The Internet can reduce costs, increase capacity and extend the scope of your business - having beneficial impacts on revenues and profits.
Basic questions to consider are;
- Could your product/service be sold to a larger market?
- Could you modify your product/service to make it more attractive to Internet customers
- How do you currently take orders, at what cost?
- Could you order electronically from your suppliers?
- How do you currently promote your business, could this be replaced by Email/Web Site?
- Could you cope with increased business volumes?
- Is there an opportunity to generate a new type of business?
Exploiting the Internet in a new business
Some new business opportunities will be based on Internet technologies - for instance a Web Site selling music tracks. Other new business ideas will be more conventional but at the planning stage there is the opportunity to develop high value innovation and gain competitive advantage. For instance you might be planning to open a cafe. It would be possible to establish a Web Site which offered menus updated on a daily basis, recipe details of popular dishes, customer booking facilities, information on seasonal foods, special diets etc.
Basic questions to consider are;
- What is the market - could it be extended?
- Are your products suitable for on-line sales?
- How will your customers order and pay for products/services?
- Who are your suppliers - do they use Internet facilities
- Who are your competitors, check their Web Sites for competitive info.
- Could you choose a better location if you used the Internet for marketing/ordering?
- Are there local Web Sites you could use to promote your business?
Getting Started
Once you have identified the potential for Internet usage in your business you will need to decide which type of facility you will need. The most common facilities are Internet Mail(Email) and the World Wide Web (www). For more details of the technologies and standards you will need, checkout the sbas Internet guide
If you have a specific question on any aspect of ebusiness, ecommerce or Internet usage in your business, then use the sbas Enquiry service to submit your question to an Accredited Business Adviser.