Reasons to Start and Not to Start your own online business - Part 1

Let’s get some facts first.

• According to Yahoo! there are more than 300 million people worldwide online, more than 85 million are in the United States.


• In 2002, there are 554,000 Filipino Internet users according to DigitalFilipino.com. It’s hard to tell how many Filipinos are using internet in 2009 but being recognized by media, such as Jessica Soho report, we can assume those numbers have doubled or tripled for the last 7 years.


• According to iTnews, the total number of people online will climb to 1.8 billion by 2012, encompassing roughly 25 percent of the planet.

Yahoo! already provides the 3 most essential reasons why any business would go online. They are in fact the best reasons why anyone should go online. So I’ll try to discuss them here and add another one.

Double or triple sales
Online users have no time limit and boundary. Just for example in my case, I am online 16 hours a day due to my work. If I want to buy something, I go to amazon.com or ebay.com in the middle of the night or sometimes within office hours. It only takes me one or two clicks and my product is on the way. That is already 1 sale from someone who is just inside the house or an office. Let’s suppose another OFW in Canada would like to buy something for their family here in PH. PH and Canada has 12 hours difference and he/she is probably like me who likes to buy things online. If you have a website, there is a good chance that this person at the other side of the world would buy to you or someone plainly working who got the urge to buy for a utility for their house would find your site. That is another sale that will never happen with a brick-and-mortar shop. Stores online are run by computers therefore they are accessible 24hours a day, 7 days a week and ou don't have to pay for overtime work or monitor customers every now and then. Boundaries between countries do not exist anymore, only interconnected cables and wires.

It is also worth noting that Filipino online users are more likely have finished college and have jobs. According to the research made by DigitalFilipino.com in year 2000, 64% of respondents are college graduate. 21% of them finished graduate school. 36% of 57% respondents are female whose income is on the average of P15,384.50 per month while 25% of 51% of the respondents has an average income of P36,173.68 per month. You can target your market more accurately.
(keywords: availability, accessibility, target specific market)

Increase customer retention
Blogs, social networks, youtube ads, podcast, text message, twitter, contact forms, emails, newsletters – these are some of inexpensive forms of communications available in the internet that you can leverage to talk with consumers and get real time feedbacks. In traditional ways, you could use brochures, catalogs, telephone calls, seminars, bootcamps and trade shows to market your product and services but these do not practice two-way communication and are quite expensive. The first builds brand trust and loyalty when used appropriately. There are also multiple proven ways that are being used to keep customers in your site with the help of this technology.
(keyword: better communication)


Increase company productivity and save more money
New technologies allow you to take virtually any part of your business online, that include supply chain management, billing, shipping, procurement etc. Streamlining these business processes through online systems will allow companies to cut costs significantly in almost every sphere of any business. For example: companies can reduce more than five percents of their maintenance, repair and operation costs by adopting e-business solutions. This five percent savings can turn into 50% of a company’s net profit! A web site can also reduce expenses associated with the production of brochures and other collateral materials.
(keyword: automation)

Low start up cost
Have you heard of FOSS (Free and Open Source Solutions)? Many people offer softwares for free and it’s no joke. Many bloggers share what they know for free, just like this blog. You can choose to DIY (do it yourself) or hire experts to do the job for you. It depends on your business need and expectations. While the latter is more expensive but with things that can be accessed and used for free online, you can already cut half of the costs compared to building an ecommerce 10 years ago. DIY is more appropriate for sole proprietors or with tight budget. DIY can mean free as a beer but the trade-off is a person’s commitment.

Summary
A website has low start up cost but it can do magic in your business but only if properly utilize. There are also other reasons why a website is not suited for you. Read my next post about the reasons NOT TO start your business online.