Business must use technology to grow
Businesses that don’t take advantage of current Internet technology are going to have a more difficult time making it, experts say. But there is help available.
For one, Penn State Extension Service has a 12-hour workshop that provides hands-on training.
An editor of a major industry magazine has written a booklet guiding people into the world of cyberspace.
And, there are online services to help businesses with payments for goods and services, such as PayPal and CitiBank.
“You can’t survive today without an online component for your business,’ Rieva Lesonsky, “Entrepreneur’ magazine editorial director, said.
“One of the things you look at in terms of national trends is the SBA says that a little more than 500,000 business start each year. One-in-12 Americans say they want to start a business. So you look at what kind of business they want to start. A good one is an online business. But you can start a business online or offline; just make sure you have online component,’ Lesonsky said.
Getting started is where Penn State comes in, according to Lucinda Barron Robbins, Penn State extension agent.
Penn State has held three online workshops through its center at Uniontown Mall.
“I would love to instruct another one,’ Robbins said, “But there just doesn’t seem to be enough interest. I could speculate all day why, but I would hope businesses would recognize that the Internet is a tool that is necessary to maintain a viable business.’
While many businesses think of the Web in terms of business-to-customer selling, “Folks should also think about business-to-business services,’ Robbins said.
And those in Fayette County can take advantage of the technology more easily than businesses in other parts of the state.
“There is a lot of discretion among policy makers about a digital role between rural and urban areas and Fayette County is in an excellent situation to take advantage of that. We are well wired. People can do business online from most places in the county. In the state’s northern tier, like Elk County, they don’t even have the availability of dial up and those folks don’t have the opportunity to take advantage of a new way of doing business.
“I hope more people recognize the importance and that utilizing technology is more than setting up a Web site and waiting to see what happens,’ she said.
Robbins directs people interested in Penn State’s online help to www.ebusiness.extension.psu.edu and to those who want more information to the local Extension office at 724-438-0111.
“One of the things I have found is that people think it’s really scary and hard to get it started,’ Lesonsky said.
“You have to ask yourself, what do you want to sell, what do you want to do as far as competition, then go online and see what they are selling or what special thing they are doing and then you figure out the basics of your business,’ Lesonsky said.
She explained that for startup businesses, a one-in-three trend is for people to turn to services such as PayPal as their payment acceptance firm.
“Once you do that it’s all about marketing. We think marketing on the Internet is a really good way to do it. Using your computer is a vital part of setting up your business today. And online business does not need a brick and mortar presence but a brick and mortar business must have a business,’ Lesonsky said.
“Entrepreneur’ magazine, she added, survey its reads several years ago and found that 30 percent of them did business online. “For our readers today, we see we are close to having 70 percent of them in an online business. In 2002, only 40 percent had their own business web site.
“There are far more businesses that are going online today and more and more Americans are doing their shopping that way,’ Lesonsky said.
One of the costs of doing business online, however, is how to accept payments for services or products.
“Of course you have to provide something that is secure for payment. That’s where PayPal or other services come in,’ she said.
Robbins agrees.
“There are multiple systems for payment. Accepting a credit card is one option. The challenge is to create a secure site. So there are services such as PayPal, which is best known, but CitiBank and a few others offer payment services such that the buyer is using secure payment services and the seller gets the payment and can deliver the goods,’ Robbins said.
“A lot of what can be done with the technology is not so much selling goods, but also selling service. If I can find out about the service you provide, or book a room at your bread and breakfast, then much it’s more likely I will use your business. It’s important for businesses to maintain contact through email by letting customers know what their specials are. That kind of service is what is traditionally small business,’ Robbins added.
“You really can’t say that setting up the technology to do this is going to cost thousands and thousands of dollars. In most cases, the cost will be low,’ Lesonsky said.
“Nearly everyone today has a computer.
“In terms of a startup business, the most important thing is cash flow. You can do tons and tons of business but you must have money coming in. You have to be sure you are getting paid in a timely fashion and it’s not going to cost you more,’ Lesonsky said.
She explained businesses have a “five-year period of where you are in the process of starting something or adding something to your business and that’s when cash flow is so important. You want to spend some of your money on marketing but not on things you don’t need to when there are better low cost alternatives out there.’
“With the Internet today there is no neighborhood shopping. The world is your neighborhood. You can contact someone in another country, another continent.
“But you have to do your homework in order to make that transaction easy. You have to do your homework and figure out what’s it going to cost me to do that,’ Lesonsky said.
Lesonsky recently wrote “The Entrepreneur’s Guide to Doing Business Online,’ a handbook for small business owners with tips and steps to follow when considering an e-commerce strategy.
The guide is available for download at https://www.paypal.com.
A recent survey by IPSOS commissioned by PayPal, showed that at the end of 2004 only about half of the nation’s small businesses had their own Web sites, up from about 40 percent in 2002. IPSOS surveyed 900 companies, each with annual online sales of $50,000 to $5 million and asked about the benefits and challenges found in operating an e-commerce site.
Overall, 77 percent of the small businesses surveyed said that an online presence had a positive impact on their businesses. Sixty-five percent said that the biggest benefit of having a Web site was the ability to increase the number of customers. Sixty-four percent cited notably increased revenue and sales after moving their businesses online.
Nearly three out of four of the companies surveyed (73 percent) said that conducting business online enables them to receive payments faster, and 70 percent said they could conduct business more easily with e-commerce.
The survey also showed that e-commerce did not appear to result in a reduction in the number of employees needed to run the business. Presumably, staffing to handle increased shipping activity, keep the Web site current, ensure online security and communicate with customers required employee levels to remain the same.