Start an Online Business

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Think of the web only as a new channel – a different way of putting products and services in front of customers – and you miss the threat and the promise of the Internet, which is that it will utterly change how you do business.

Reasons to Start an Internet Business

Need convincing that the Web is the place for your business to be? Here are 10 reasons why you have to be online:

1. It’s cheap. There is no more inexpensive way to open a business than to launch a web site. While you could spend up to many millions of dollars to get started, low-budget web sites (started with as little as $100) remain viable businesses.
2. You cut your order fulfillment costs. Handling orders by phone is expensive. Ditto for mail orders. There’s no more efficient–cheap, fast, accurate–way to process orders than via a web site.
3. Your catalog is always current. A print catalog can cost big bucks, and nobody wants to order a reprint just to change one price or to correct a few typos. A Web site can be updated in minutes.
4. High printing and mailing costs are history. Your customers can download any information you want them to have from your web site. Sure, you’ll still want to print some materials, but lots can be distributed via the web.
5. You cut staffing costs. A web site can be a low-manpower operation.
6. You can stay open 24 hours daily. And you’ll still get your sleep because your site will be open even when your eyes are closed.
7. You’re in front of a global audience. Watch your site log, and you’ll see visitors streaming in from Australia, New Zealand, Japan, South Africa – wherever there are computers and phone lines.
8. There are no city permits and no hassles. It could change, but in most parts of the country, small web businesses can be run without permits and with little government involvement. As you expand and add employees, you’ll start to bump into laws and regulations, but it’s certainly nice to be able to kick off a business without first filling out reams of city and state forms.
9. There are no angry customers in your face. You can’t ignore unhappy customers in any business; in fact, how well you deliver customer service will go far toward determining how successful you are. But at least with a web business you’ll never have to stand eyeball-to-eyeball with a screamer.
10. It’s easy to get your message out. Between your web site and your smart use of e-mail, you’ll have complete control over when and how your message goes out. You can’t beat a web site for its immediacy, and when a site is done well, it’s hard to top its ability to grab and hold the attention of potential customers.

Choosing a Website Host and Domain Names

With your website designed, you need a place to stow it so that visitors can access it –and you have hundreds of choices. Many hosts are free, and few cost more than a few hundred rands per month. Truth is, setting up your own host – a dedicated computer that’s permanently wired into the net – wastes money and time and, for most small businesses, is a bad idea. Better to outsource hosting to those who specialise in it.

When picking a host, you first and foremost want to know if a host can handle e-commerce activities. Some of the most barebones companies simply aren’t equipped. Other criteria that are important to most users: setup and monthly fees; amount of available storage space (you want at least 10 to 25MB to start as well as the option to add more space as your needs expand); and connection speed (some very low-budget hosts rely on slow 56K modems, while most business-level hosts have high-speed connections.

Comparing hosts is difficult, so a good policy is to quietly set up an account and test the host – kick the tyres, so to speak – for several weeks before announcing your presence to the world. Isn’t that expensive? Yes, but more expensive – and embarrassing – is to make a big push for traffic, only to have your host drop the ball and leave you with annoyed visitors who can’t quite make it in. Better to know your host is operating smoothly before inviting guests to the party.

Master of Your Domain

Before setting up your site, you also need to stake out your domain name. There’s wide agreement that nothing matters as much as a good name. Yet who would have thought Amazon was one? What most matters in a name is that it’s easy to spell and easy to remember. For my money, that’s an argument against using a catchy name with an unorthodox country code suffix. Most computer users automatically type “co.za” “com”, or “net”. Throw a weird ending at them, and you may lose them. So I would recommend a clunky name with a “com” or “net” ending over a catchy name with an unorthodox ending.

Search Engine Listing

Just about every search engine provides tools for easy registration of new sites. Just look for an “Add URL” or “Add Site” button, and then follow the directions (ordinarily no more complex than typing in the address and hitting “Send”).
There are hundreds of search engines to choose from. But there’s little value in being on an index no one uses, which is why e-tailers should focus on a handful of high-traffic engines. The leading search destination is Google.

Low-Cost Options

What will lure visitors to a site? Winning visitors becomes a matter of creative, persistent marketing. And the good news is that it’s still the little things that will bring plenty of traffic your way. There are fundamental steps that too many businesses neglect. For instance? “You should always put your URL and a reason to visit your Website on your business cards”, says Larry Chase, publisher of Web Digest for Marketers, a weekly e-mail newsletter that delivers short reviews of marketing-oriented sites. “I call this cyberbait. For example, you should mention what people will get when they visit the site, such as a newsletter or a list of ‘Top 10 Tips’. That substantially increases visitors and eventually customers or subscribers.”

An e-mail signature is an especially powerful – and absolutely free – tool. Create a signature with a link to your website in it and have it automatically attached to every one of your outgoing e-mails. If your e-mail recipients click on the link, they’ll be taken to your site. It only takes a few seconds to create an e-mail signature, and it’ll bring in visitors to your site every day.

Another low-cost traffic builder: “Get active in online discussion groups and chats, and, where appropriate, give out your URL,” says Shannon Kinnard, author of Marketing With E-Mail. Sell organic products? Scout out the many groups that focus on organic food and get active. A good place to find groups is at Google Groups which archives discussion lists. Getting active in these groups spreads the word about you and your site and you’ll get traffic coming to you. Another big-time traffic builder for any website that retails is posting items for sale on the major auction sites, such as Bid or Buy.

Providing Great Customer Service

E-tailers used to be innocents who thought that with web-based retailing, all customer service would be a thing of the past with the entire sales and service process becoming neatly (and oh, so inexpensively) automated. Ha! If there’s a mantra for e-commerce players, it’s this: Customers may be virtual, but their money is real.

How can you provide the best online service possible? Just follow the leaders:

• Anticipate questions. Many e-tailers anticipate questions and then answer them in their FAQs. This will save you and your customers time. Of course, sometimes customers will e-mail you with questions, and this can be a good thing. Get lots of e-mail complaining about a certain feature that the customer has simply misunderstood or bemoaning the lack of a particular product that you know is in stock, and you are learning important things about how your site is failing to communicate to visitors.
• Stay in touch. At Hewlett Packard’s hpshopping.com, every customer is asked if he would recommend hpshopping to friends, and 88% say they would. But the small percentage who say “no” aren’t forgotten. Just contacting them alone is often enough to win them back.
• Respond quickly. The web is an instant medium – except when it comes to getting responses from many businesses that seem to route incoming e-mail into a folder labelled “Ignore Forever.” Smart e-tailers know better, however. With a small staff, you might find a 24-hour standard to be enough of a challenge. But monitor customers. If they demand a faster response, somehow you have to find a way to meet their needs.
• Hold their hands. Online, not every customer knows how to shop, and you have to be ready to help them buy. No brick-and-mortar retailer has to teach customers how to buy, but online, that remains a thorny problem. Every day thousands of shoppers log on for the first time, and these newbies genuinely crave handholding as they make purchases. Understand that and be ready to help. Be patient, too.
• Use cut and paste. Canned responses – cut-and-paste scripts – are used by all the leading sites, which track questions, hunt for the most asked, and produce templates for their representatives. You can do likewise. As you answer customer questions, file away your responses. Odds are, you’ll be asked the same question within the week, and it’s a great labour saver to have an answer ready.
• Stay sensitive. A worry with e-mail: It’s easy to seem cold and unresponsive in the formality of the written word. Read and re-read your responses before they go out. You want to be – and appear–interested in the customer’s issues and eager to find solutions.
• Offer choices. It’s important that you offer a variety of choices that customers can use to contact you, such as e-mail and phone. The easier the online shopping experience, the more likely the customer will come back for more.

These steps will get you started delivering better customer service, but they’re not enough. Successful entrepreneurs say that the only way to do online service right is to have the right attitude, really believe the customer is king, and make sure that every one of their customer service reps know it. Many fail on this score, but when you’ve made customer service your top and continuing priority, success is within reach.

Here’s the blunt truth about e-commerce: Most of what you want to know will not be in books or even in magazines and newspapers. This industry is exploding so fast that the only medium that is successfully tracking developments is the Web itself. When you want to know more, or need answers to questions, log onto the Web and go searching. The information you crave is rarely more than a few mouse clicks away.

About the Author

Entrepreneur Magazine, South Africa.