Starting a Business Online
Content
Starting a Business Online Part I By: Robin Green
BUS107 Professor Antuan Mifsud January 29, 2012
1.
Identify the advantages and disadvantages of taking your small business online by performing
a SWOT analysis. Even with the economy still recovering from a major malfunction, there is still a need for basic necessities and clothing is one them. I have been operating this business for quite some time and although I made it through the recession hurdle I could still benefit from more business. Engaging in ecommerce may be the answer. After some research, I have put together the following SWOT analysis (Pahl & Richter, 2007) to aid me in my decision: 1. Strengths a. Up until now my customer base has been mainly local residents and tourists. Of course tourism has decreased but I still get a fair share of those seeking souvenirs and other miscellaneous items. Putting my business online can increase my customer base and offer my current customers automatic payment options. b. For some time now I have contemplated hiring another sales associate but have been unable to afford the additional expense. Being online will not require an additional associate and can still perform business transactions before and after normal business hours. 2. Weaknesses a. The one thing that I enjoy about my store is interacting with my customers. Engaging in e-commerce take away this ability and since I sell clothing, my ‘try before you buy’ motto will no longer be an option.
b. For the past year, 45% of my clientele has been acquired by word of mouth. Until my online business is fully functional and frequented regularly it will take longer to build to acquire regular online clients. It will take even longer to build and online reputation. 3. Opportunities a. Although much of my clothing are by national designers, some are my own designs. I have always thought about offering these designs to larger retail chains and having them displayed online may create the opportunity to do so. b. Starting my clothing business took every dime that I had plus a small business loan. Since then I have been able to pay off my loan however I still don’t have back what I personally invested. Putting my business online just may open up a few investment opportunities that I haven’t able to secure locally. 4. Threats a. The opportunity to present my personal designs to a broader customer base may indeed have some benefits. However, there is a chance of someone stealing and manipulating my designs as their own. b. Hacking customer databases has become a worldwide problem. I will definitely be cautious and work extra hard to protect my online customers. 2. Because the Internet connects computers all over the world, any business that engages in e-
Commerce instantly becomes an international business. The key issues that any company faces when it conducts international commerce include trust, culture, language, government, and infrastructure. Explain how you would address each of these issues. As I mentioned in my SWOT analysis, I take great pride in interacting with my local customers. They trust me to tell them the truth and provide them with quality merchandise at reasonable prices. I am aware that since I may have customers from all over the nation, maybe the world and establishing
this kind of relationship with my online customers will not be as easy. I would start by adding a picture of myself to the website; this should add a more personable touch and to give a virtual sense of eye contact. After all Canadians believe that sustained eye contact suggests trust. (Guffey & Almonte, 2007) In addition to a money back guarantee, I would also offer a wide variety of payment options that could smooth the cultural barriers in places like Japan who prefer cash or cash transfer transactions over credit card transactions. (Schneider, 2011) Excepting payment options like PayPal and Western Union can help in this area. Language options may also pose a problem, however considering a standard language translation service onsite may assist with that issue. This will also comply with some countries requirements that product advertisement on the Web be in that native language. Dealing with different government s will be difficult but I don’t believe selling clothing will violate too many censor or restriction laws. 3. Businesses that operate on the Web must comply with the same laws and regulations that
govern the operations of all businesses, but they face 2 additional complicating factors as they try to comply with the law. First, the Web extends a company’s reach beyond traditional boundaries. Second, the Web increases the speed and efficiency of business communications. Explain how you would overcome these complicating factors that come with e-Commerce in order to comply with the law. A standard “terms of agreement” would be by biggest defense against these legal obstacles. Many web businesses have chosen to ship to only their countries of origin and this is an option that I may chose temporarily until I have done more research. Serving only US residents would also assist me with speed and efficiency issues. My shop opens Monday thru Saturday from 10 am until 8 pm. I will be sure to state these hours on my site and include that orders will only be processed during those times.
4.
Law enforcement agencies have difficulty combating many types of online crime. Describe 2
online crimes prevalent in e-Commerce and what you would do to prevent these crimes. Just like my physical store, with an online store I still have to take into consideration security especially for my customers. Hacking and fraud have become the two biggest online crimes in the world and as an online business owner I have a duty to protect my customers from these crimes. Hackers in the online world are what we in the physical world may call eavesdroppers. They use special programs, usually written by themselves, and obtain unauthorized access to computers and networks. (Schneider, 2011) Once they break in they can do anything from damage systems by adding viruses to stealing customers’ information such as credit card information; this is usually where fraud comes into place. Identity theft is growing rapidly and online information is the biggest target. To protect my customers from these activities I would first make sure that I have a very secure firewall put into place and update it regularly. Although this may not prevent hackers but it may deter them. I would also encourage my customers to take advantage of other secure payment options such as PayPal.
References: Pahl, N., & Richter, A. (2007). SWOT Analysis - Idea, Methodology and a Practical Approach. Norderstedt, Germany: Druck und Bindung.
Asher, S., & Chambers, W. (1997). Wooing & Winning Business: The Foolproof Formula for Making Persuasive Business Presentations. New York , NY: John Wiley and Sons, Inc.
Guffey, M. E., & Almonte, R. (2007). Essentials of Business Communication. Toronto, Canada: Thomson Southwestern.
Schneider, G. (2011). Electronic Commerce. (9th ed.). Mason, OH: Cengage Learning
BUS107 Professor Antuan Mifsud January 29, 2012
1.
Identify the advantages and disadvantages of taking your small business online by performing
a SWOT analysis. Even with the economy still recovering from a major malfunction, there is still a need for basic necessities and clothing is one them. I have been operating this business for quite some time and although I made it through the recession hurdle I could still benefit from more business. Engaging in ecommerce may be the answer. After some research, I have put together the following SWOT analysis (Pahl & Richter, 2007) to aid me in my decision: 1. Strengths a. Up until now my customer base has been mainly local residents and tourists. Of course tourism has decreased but I still get a fair share of those seeking souvenirs and other miscellaneous items. Putting my business online can increase my customer base and offer my current customers automatic payment options. b. For some time now I have contemplated hiring another sales associate but have been unable to afford the additional expense. Being online will not require an additional associate and can still perform business transactions before and after normal business hours. 2. Weaknesses a. The one thing that I enjoy about my store is interacting with my customers. Engaging in e-commerce take away this ability and since I sell clothing, my ‘try before you buy’ motto will no longer be an option.
b. For the past year, 45% of my clientele has been acquired by word of mouth. Until my online business is fully functional and frequented regularly it will take longer to build to acquire regular online clients. It will take even longer to build and online reputation. 3. Opportunities a. Although much of my clothing are by national designers, some are my own designs. I have always thought about offering these designs to larger retail chains and having them displayed online may create the opportunity to do so. b. Starting my clothing business took every dime that I had plus a small business loan. Since then I have been able to pay off my loan however I still don’t have back what I personally invested. Putting my business online just may open up a few investment opportunities that I haven’t able to secure locally. 4. Threats a. The opportunity to present my personal designs to a broader customer base may indeed have some benefits. However, there is a chance of someone stealing and manipulating my designs as their own. b. Hacking customer databases has become a worldwide problem. I will definitely be cautious and work extra hard to protect my online customers. 2. Because the Internet connects computers all over the world, any business that engages in e-
Commerce instantly becomes an international business. The key issues that any company faces when it conducts international commerce include trust, culture, language, government, and infrastructure. Explain how you would address each of these issues. As I mentioned in my SWOT analysis, I take great pride in interacting with my local customers. They trust me to tell them the truth and provide them with quality merchandise at reasonable prices. I am aware that since I may have customers from all over the nation, maybe the world and establishing
this kind of relationship with my online customers will not be as easy. I would start by adding a picture of myself to the website; this should add a more personable touch and to give a virtual sense of eye contact. After all Canadians believe that sustained eye contact suggests trust. (Guffey & Almonte, 2007) In addition to a money back guarantee, I would also offer a wide variety of payment options that could smooth the cultural barriers in places like Japan who prefer cash or cash transfer transactions over credit card transactions. (Schneider, 2011) Excepting payment options like PayPal and Western Union can help in this area. Language options may also pose a problem, however considering a standard language translation service onsite may assist with that issue. This will also comply with some countries requirements that product advertisement on the Web be in that native language. Dealing with different government s will be difficult but I don’t believe selling clothing will violate too many censor or restriction laws. 3. Businesses that operate on the Web must comply with the same laws and regulations that
govern the operations of all businesses, but they face 2 additional complicating factors as they try to comply with the law. First, the Web extends a company’s reach beyond traditional boundaries. Second, the Web increases the speed and efficiency of business communications. Explain how you would overcome these complicating factors that come with e-Commerce in order to comply with the law. A standard “terms of agreement” would be by biggest defense against these legal obstacles. Many web businesses have chosen to ship to only their countries of origin and this is an option that I may chose temporarily until I have done more research. Serving only US residents would also assist me with speed and efficiency issues. My shop opens Monday thru Saturday from 10 am until 8 pm. I will be sure to state these hours on my site and include that orders will only be processed during those times.
4.
Law enforcement agencies have difficulty combating many types of online crime. Describe 2
online crimes prevalent in e-Commerce and what you would do to prevent these crimes. Just like my physical store, with an online store I still have to take into consideration security especially for my customers. Hacking and fraud have become the two biggest online crimes in the world and as an online business owner I have a duty to protect my customers from these crimes. Hackers in the online world are what we in the physical world may call eavesdroppers. They use special programs, usually written by themselves, and obtain unauthorized access to computers and networks. (Schneider, 2011) Once they break in they can do anything from damage systems by adding viruses to stealing customers’ information such as credit card information; this is usually where fraud comes into place. Identity theft is growing rapidly and online information is the biggest target. To protect my customers from these activities I would first make sure that I have a very secure firewall put into place and update it regularly. Although this may not prevent hackers but it may deter them. I would also encourage my customers to take advantage of other secure payment options such as PayPal.
References: Pahl, N., & Richter, A. (2007). SWOT Analysis - Idea, Methodology and a Practical Approach. Norderstedt, Germany: Druck und Bindung.
Asher, S., & Chambers, W. (1997). Wooing & Winning Business: The Foolproof Formula for Making Persuasive Business Presentations. New York , NY: John Wiley and Sons, Inc.
Guffey, M. E., & Almonte, R. (2007). Essentials of Business Communication. Toronto, Canada: Thomson Southwestern.
Schneider, G. (2011). Electronic Commerce. (9th ed.). Mason, OH: Cengage Learning
