This is number one in a new series on small business online.
I’m delighted to be writing about this because I love small business. In fact, prior to becoming an e-commerce “expert,” I spent a lot of my time coaching young entrepreneurs and holding workshops with small business owners.
Come to think of it, I miss that.
I still get a shiver when I walk down the street and see a new retail business opening up. There’s a faith and personal courage there that you just don’t find in big office towers.
You think it’s hard to risk $5 million in venture capital?
It’s much harder to risk $50,000 raised through a second mortgage and loans from family and friends.
Anyway, when it comes to e-commerce, small business folk have a few things going for them. Here, off the top of my head, are a few things that give business owners and managers a real advantage online:
- They haven’t learned their way into a hundred boxes that limit their options.
- Their vision isn’t obscured by a hundred white papers or a limo of MBA’s
- They do things that can’t be done, because they haven’t heard that it can’t be done.
- They haven’t been told that their web sites should have tabbed navigation bars at the top, just like Amazon.com
- They don’t spend their money on expensive conferences where people who’ve never risked everything with a second mortgage tell them what to do.
- They spend time building a site that works well, rather than a site that looks good.
- They don’t race after each new first-mover in every new category. Instead, they are more likely to have new and original ideas.
- Their business plans don’t contain that time bomb known as the “VC exit strategy.”
- They don’t spend $150,000 a year on a New York salesperson three months out of college.
As you can tell, I’m a fan. That said, there are plenty of ways in which small business owners can get it wrong online. Here are some of the biggest traps they can fall into:
- Spamming. Being new to the online industry has its advantages-and disadvantages. A big disadvantage is not understanding how different the online world is when it comes to unsolicited promotions.
- Listening to bad advice. Small business and newcomers online are often ill-equipped to recognize the difference between good advice and bad advice.
- The belief that you can get rich quick. “Hey, if those kids who created Hotmail can do it.” “Did you see how fast those eBay guys became billionaires?!” “We can do it too!” Yes, you can. You can win the lottery as well.
- Finding access to the right tools for the job. Many of the software and hardware suppliers to the e-commerce industry aim at the bigger players-for obvious reasons. As a result, smaller businesses can become starved for good solutions.
- Lack of scalability. When you build your e-commerce platform with small business budgets, success can kill you in a hurry-because there’s no scalability built into your systems.
- Lack of good financial forecasting. With limited experience and limited access to seasoned online expertise, it’s hard to anticipate the real costs of running a business online. Beware poor cash flow
- Difficulty in reaching prospects. While bigger online enterprises are spending 70 percent of their revenues on huge promotional campaigns, smaller businesses are stuck with the question: “If I don’t have a million bucks to spend, how can I reach my audience?”
- The belief that you’re playing on a level playing field. No, you’re not!
As you may have noticed, some of the disadvantages I’ve listed directly contradict some of the advantages.
That’s what makes business online so interesting.
And that’s what gives me a whole lot to write about on the subject of small business online.