| There has never been a better time to start an Internet-based
business than right now. The Internet is exploding, as more people
have begun to use it regularly.
According to Jim Daniels, editor of the Bizweb
E-Gazette, new Internet sites have been popping up at the rate of
one per minute. As it expands at this pace, it's clear that the
Internet’s entanglement of words, pictures, sound, and motion is
becoming more than just the most important new communication medium
since television.
Many of the businesses now piling onto the Internet may totally
misunderstand this new medium. They may end up losing millions of
dollars and eventually decide it’s not living up to its hype. Other
businesses may totally ignore the Internet. Their competitors,
meanwhile, will use it as a tool to literally steal their customers
away.
Since it opened for commercial activity in 1991, the Internet is
poised to turbocharge E-commerce. Market researcher Forrester Research
Inc. figures that by 2002 Internet commerce among U.S. businesses
alone will hit $327 billion, equal to 2.3 percent of the Gross
Domestic Product (GDP). By 2005, E-commerce could jump to as much as 6
Percent of GDP.
Analysts see E-commerce making up a huge portion--20 to 60
percent--of such industries as computers and software, catalogs,
energy, and books. Thousands of companies are promoting and selling
products ranging from food and beverages to cars and trucks to
information and financial services.
Unfortunately, the high-tech world and the Internet in particular
haven’t caught on with Latinos. According to Rivera, less than two
percent of the Hispanic population of San Jose, California, aren’t
in high-tech occupations. "Mexican Americans are more
traditionally minded when it comes to business," said R. J.
Rivera, partner in SiliconValleySquare.com,
a new Latino marketing site on the Internet.. " ‘If it worked
for my father and his father, it will work for me’ is the prevailing
attitude."
"E-commerce must be seen as a regular business," he
added. "But unlike a regular business, a highly technical partner
is an integral part." While Rivera handles the technical and
sales side, his partner, Larry Yiu, handles publicity, sales and
accounting. What they need now is a webmaster to maintain their site.
Who should have a business on the Internet? "If you’re
local, don’t use the Internet," Rivera said. "But it’s
great for national marketing of a product."
The first thing an entrepreneur should do to be successful on the
Internet is target who will buy his product. He needs to find where
these people go when they’re online? What do they do? What do they
read? Can he reach them regularly and at a low cost?
There’s no point in trying to sell to a particular market if an
entrepreneur can't easily identify them and reaching them is a costly
endeavor. If his market is so specific that in order to reach just one
customer he has to advertise to thousands of people who would never
buy what he’s selling, then the Internet may not be the way to go.
As in traditional business startups, the reason for failure is
often undercapitalization. Rivera planned on spending $10,000 a month
on marketing. "That’s not that much compared to high
advertising budgets," he said. We had to look at our product,
target audience, and our return on investment. Most new companies fail
in their advertising--generating sales and sustaining business can be
a problem without proper marketing."
"I can’t stress enough the need to be well capitalized, as
well as realistic," he added. "We’ve spent 50 percent of
our capital on development and the rest on updates and marketing of
our site, including 25 percent on media coverage."
The underlying battle with maintaining a business on the Internet
is the ability to command and sustain the attention of consumers. To
succeed, businesses on the Internet must invent new ways to market
themselves, new ways to learn what customers want, new ways to forge
lasting relationships with them.
Creating and mounting a professional-looking site takes some doing.
Experience has shown that the design of a web site isn’t as
important as the words used. After all, it's the words, not the
graphics that sell products! The words download almost instantly,
while graphics take longer. The entire home page should be on a
consumer's computer screen in less than 20 seconds.
A entrepreneur can bring consumers to his site and have sold to
them. But is that all? Surprisingly, many business owners drop the
ball right there, letting millions of dollars in sales slip away. Not
only should a good sales pitch be designed, but also a back-end sales
program. Once a customer buys from a site, it's just that much easier
to sell to them again in the future by keeping in touch with them on a
regular basis.
Remember, in E-commerce competition is always just a click away. |
