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July 16, 2013

Essay on Why do Small Businesses Need a Website


The question as to why small businesses require website is indeed has a clear-cut answer. Given the onset of technological innovations, website is an important to project, run and expand one’s small business globally.  In general, business requires its strong presence in the market and in the case of small business such a need becomes even more pressing. In a digital age, website has fast become an indispensable component of small businesses. Though, there are still some small businesses that are run without their website presence.
     A website is necessary because it connects the small business man to the rest of the world. It allows for him to make inroad into the unexplored markets. With the growing use of internet, the once-traditional markets (bazaars for example) have shifted their attention to the online business mainly for the reason that online buying and selling does all with minimum time and ease. The website as a mode of business operation is convenient both for the seller and buyer.
    Now, more and more people look for the desired products and services online as a matter of fact. Internet marketing in particular and business in general has largely replaced all other means such as phone books and newspaper ads because it provides a convenient platform for the potential customers to get relevant information and products. It can safely be said that small business ought to have their online presence through website if they want to sustain in a stiffly competitive market. People can live without the product you are selling offline because they will find some other perhaps your competitors online.  In such a situation, going online becomes a part and parcel for a small business to sustain itself in the globalized market.
    If people are searching for the products that you deal in then the question arises whether they will find your website online or not?  A well designed and well-presented website will increase the chances that you will not allow your potential to go away.  From marketing standpoint, website is far more effective than the traditional modes of marketing such newspaper ads and pamphlets. There is much more that a website can do for you to enhance the productivity and profitability of your business.
   A business website always remains on ads and the entire process of marketing your products and services is cheaper and pretty affordable. Small businesses can have amazing ads on their website which in turn will boost the profitability of your business. Website helps smalls business establish their credibility and integrity to enhance their business.
   The website of a small business clearly indicates that the company means business and is serious about it. If people get to know about the website, they will naturally look it up online.  It is however necessary to ensure that the website is loaded with the useful information and the services being rendered online should establish the relationship of trust with the existing and potential customers.  Given this, if a small business does not still tend to go online then of course its absence from the internet will carry a warning sign keeping people away from the business.
A well-established business yields profits through regular sales. The website should be optimized to attract a significant amount of traffic.
As we have discussed above E-Commerce is the buzzword of this millenium and it is not possible for any organization to ignore the benefits of E-Commerce. E-commerce website covers the following three areas to improve the business of a company:
·         Doing the business on the Internet helps the companies to deliver their product in less time
·         Internet and E-commerce helps the company to recognize the needs of the consumer and how these needs can be fulfilled more effectively
·         E-Commerce website helps the customer to get the competitive prices for everything
To achieve these benefits it is necessary that the E-Commerce model of a company must be modeled based on the following points:
·         Company has to make it sure that its E-commerce business model must be flexible enough to run smoothly in the future also
·         The website must be sticky enough for the potential customers, and the model is planned in such a way that it has the ability to retain and satisfy the customers
·         Customers in today’s business scenario have many choices. Any company which is running its E-Commerce business must make it sure that its website and business must be unique and cannot be replicated, furthermore it is also able to fulfill all the needs of the customers
·         The E-business of the company must have the brand recognition
·         It is not easy to run the E-Commerce business smoothly, thus an E-business is only successful if the company allocate all the necessary resources to its E-business
This study will attempt to emphasize on the advantages of e-commerce, security issues taxation issues, and try to prepare a general strategy for entering in this market. Managers all over the world are analyzing the Cost / benefit analysis of establishing their e-business and many of them would be willing to spend significant amounts on their infrastructure to reap the obvious benefits of being e-enabled. After all, e-commerce effectively translates to formidable profits and a promised lead over the competition.
Reasons for being global:
The world has become a global village now. It is necessary for anyone and everyone to think global in doing business in this global village. Diversity and globalization in the new economy and the present business situation has produced a work force made up of people all around the world. They have different life experiences, perspectives, preferences, values and style. This diversity of work force is reshaping and rewriting the way of doing business.
Following are some of the reasons for an organization for being global:
·         According to David Aaron, the former commerce undersecretary for International Trade, “if there is to be a recession in America, the only place to look for any potential dynamism is going to be Europe” (Rossant, 44). The plan for going global for any company helps the company to capture the markets of Europe and Asia and hence helped for the betterment of the economy of the country
·         CNN has reported “ Less than a year ago, the Skepticism of European business towards electronic business was much criticized. Now, with the dot-com crash in the U.S., Europeans will be able to benefit from their conservatism, according to market researcher Gartner Group Inc. ‘Europe is not suffering from the U.S. dot-com hangover. U.S. companies have gone down the wrong road and need to back out. This will take them nine months to a year,’ said Alexander Drobik, vice president at Gartner. European companies put a lot of thought into their electronic business strategies and learning about the Net, while their U.S. counterparts rushed to launch dot-coms, said Drobik” (Evers, 20). 
·         One of the most important reasons for going online is competition. Every company wants to start its own online business before its competitor would do that
·         It has been estimated that the process of sending employees to other countries, i.e. the expatriation process costs almost two and a half times more to the companies than to hire the local employees for the company. It has also been said that this process could cost $ 250,000 in some cases (Culwell, 104). Due to the financial issues, the lack of knowledge of the employees, culture differences, isolation of employees to their families, language barrier etc. the expatriation process has a high failure rate. E-Commerce helps the company to become global without sending their employees to other countries and hence saved their millions of dollars 
·         Such companies which have already implemented their E-Commerce business have much higher value than the local companies.
Potential Complications of E-Commerce:
Although E-Commerce business is very profitable for any organization but there several reasons of its potential failure. Some of such reasons are:
·         When a company starts its business on the Internet, it emphasizes more on the security issues and the secure transaction processing rather than building a good and reliable relationship with the customers. This sometimes leads to the failure of the E-Commerce business of the company
·         It is sometimes happens that customers pay the wrong amount or sometimes he or she was charged more than once, this type of complications shatter the confidence of the customers on online shopping
·         Taxation issues are also offered the potential complications to the E-commerce business. For example in some countries like United States E-Commerce is not taxed while in other countries, like European countries goods are taxed differently
·         Intellectual property issues and rights are different at different countries, these rights are also a source of complication in E-business
·         Privacy policy of a company is the written policy of the company, which tells how the company uses the information provided by the customers. A well-written and well-maintained privacy policy helps to build the trust of the customers on the company
·         Security policy of the company describes the measures it has taken to make the transactions secure. It has been estimated that almost 61% of the E-Commerce website claimed that they are secure sites and 44% of them supplied additional information on the type of security the system provided
            An E-Commerce site may fail due to any of the above mentioned complications and vulnerabilities. Garden.com is a good example of failure of an E-Commerce site.
Benefits of E-Commerce website:
There are several benefits of using E-commerce in the business. Some of such benefits are:
·         All the information about the company can be accessible for the customers and this information is updated regularly
·         With the help of E-commerce a company is able to reach to its customers twenty four hours a day and seven days a week
·         With the help of E-Commerce website, a company is able to reach such markets and customer, which it has never thought of reaching before
·         With the help of the E-Commerce website a company can easily receive feedback from its customers without any extra cost
·         With the help of E-Commerce companies costs for storing and maintaining information has decreased
·         E-Commerce reduces the cost of maintaining the inventory system of the companies
·         E-Commerce also reduce the cost of telecommunications
·         E-Commerce increased the choices for the customers. Now a person can select his or her desired item in minutes without leaving the comfort of his or her home
·         With the help of E-Commerce the people of developing countries also enjoys the services and products of developed countries.

Concerns of E-Commerce:
Privacy and security are the prime concerns of the customers while shopping online. The security of an E-Commerce website is not just providing secure transactions but it also includes the privacy of the important and confidential data of the user like credit card information etc. it is also the responsibility of the company that such data of the customers are well protected.
Sometimes it is difficult for the potential customers to find their desired item on the Internet. This is also one of the major factors why people are not purchasing on the Internet.
Thus we can say that taking consumer confidence as critical to the success of e-commerce, one might argue that without at least the level of protection that exists in the real world marketplace, it would be difficult to achieve the win-win outcome that is necessary to realize the full potential of E-Commerce.
Strategy for E-Commerce project:
Needle had suggested a business strategy (Needle, 165) while Lynch suggested Management strategy for the EC business of an organization. Ghosh has set some questions for a company, to determine how this company will be become helpful for its potential customers.
An E-Commerce project can be implemented after completion of the strategic planning and the cost-benefit analysis. Nevertheless, before that it is compulsory to reckon both the external business environment and the availability of information technology resources. Hutchinson explained four E-Commerce scenarios that can be employ to finish the above task.
Strategic planning for EC is either competitive or cooperative. Porter favored the defensive competitive strategy while some other scholars favored the cooperative approach . Folz described that the return on investment (ROI) for any E-Commerce business is closely related to the total resources and their cost required to make E-commerce project a success and the benefits gained from the E-commerce project.  
Thus the review of all above-mentioned literature determines the critical issues and considerations, which influenced the success and failure of E-Commerce and which are necessary to consider before entering into E-Marketplace.
The strategy formulation is one of the most important factors influencing the success or failure of any E-Commerce project. The strategy is either competitive or cooperative. In the case study we have mentioned here, Berri Ltd. has used the competitive strategy.
            They offer a full line of products in their profitable market segment to close off any entry points; raise buyer switching costs by offering low-cost training to users; raise the cost of gaining trail users by keeping prices low on items new users are most likely to purchase; or increase scale economies to reduce unit costs. 
Creating A Web Team and Assigning Functional Skills To Subprojects:
            In setting up a Web team, the roles and responsibilities of the team leader, user management, Webmaster, and technical staff should be defined. The project leader often has the strategic challenge of being a "visionary" regarding the tasks of aligning business and technology goals and implementing a sound enterprise E-Commerce plan. Such a plan is best arrived at by compromising with those experts about particular data and information and how they should be structured and presented in a online, hypermedia environment. The details need to be developed by the joint efforts of different functional areas; IS. Marketing, customer relations, purchasing, accounting, finance human resources, security, and other operations. Such involvement will have a far-reaching impact on decisions regarding how the E-Commerce implementation plan is to be implemented. The project team can be managed in a matrix format by assigning functional expertise to subprojects.
            If a mechanism is put in place that brings together all relevant technical people, the rules concerning security, authentication, link management, markup language standards and so on could be properly developed, updated on a regular basis, and satisfactorily applied towards drafting and interpreting an enterprise wide internet policy. Such a mechanism is beneficial to the policy process in that it is more likely to produce a policy consistent with the enterprise’s business goals and strategies.
Some companies go beyond organizing a web team by establishing a completely independent online company, such as was done by Barnes & Noble in 1999. In other cases an IS group is in charge of building the web for other functional areas or for the company’s customers and / or suppliers. Finally, the use of an outside vendor as a site developer should be considered.
E-Commerce Taxation:
As we have discussed earlier, there are many complications related to the expansion of E-commerce, one of such complications is the taxation issue of E-Commerce.
There is a hot debate going on whether E-Commerce should be taxed or not. Governments are concerned about the expansion of the E-Commerce and believed that the taxation of E-Commerce would provide huge sales tax revenues in the future while on the other hand, they also thought that taxation of E-commerce at such early stage would discourage the companies involved in E-Commerce business and affected the growth of E-commerce industry (Heartfield, 56).
The merchants who are involved in the E-Commerce business consider that if E-Commerce would not be taxed then it would give unfair price advantage to the E-Commerce business. While E-Commerce vendors are of the opinion that main street merchants pay sales tax to get the services like water fire etc. they have also said that they have to pay the shipping and handling charges for fulfilling the orders of the customers which main street vendors do not have to pay.
All in all, there is a lot of prospect that a small business can envision in the foreseeable future by going online.  The website speaks volumes of a business. The most common purpose of having a website is branding. It helps entrepreneurs establish long-term customer relations and improve its visibility in the densely competitive market.








Works Cited
  Heartfield, John. “Make your small business website:easy answers to content, navigation and design” Rockport Publishers, p.44, 2004
Culwell, Lori “Million dollar website: simple steps to help you compete with the big boys--even on a small business budget” Prentice Hall Press, p.104 2009
Rossant, John, Europe's Big Test, Businessweek
Evers, Joris, Gartner: Europe to leap-frog U.S. in e-business, CNN, March 30, 2001
Needle, D. “Business in Context”, London, Thomson Business Press, p.165 1994



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