March 29, 2024

Setting Up Shop On The Internet

Wayne Harris | 5/1/1996
Nine months into the launch of Good Green Fun Inc., Manny Lorenzo has experienced all the disappointments to which entrepreneurs with startup businesses are prey - higher expenses and fewer customers, so he has yet to break even. Making matters worse, Lorenzo, whose Miami shop sells goods with a tropical theme, was so unhappy with his first landlord that he relocated.

Even so, most retailers would kill to have the traffic Lorenzo's shop generates, especially for the rent. Last month Good Green Fun attracted more than 1,400 shoppers, while paying rent of only $50 a month.

Lorenzo's secret? His shop exists on the World Wide Web, the portion of the Internet capable of displaying both graphics and text - and, increasingly, video - to thousands of computer networks around the globe.

All those computers translate into millions of potential customers, according to "The American Internet User Survey." At the start of the year, an estimated ten million people in the U.S. had Internet access through a local Internet service provider or through a computer network at school or at work. Another ten million have Internet access through a commercial online service like America Online. And Internet use is growing explosively: More than half the Net users have begun surfing the Net in the past year.

Although virtually every Fortune 1,000 company now has a Web site, the relatively low distribution cost acts as an equalizer between the Wal-Marts and small companies like Good Green Fun.

Lorenzo launched his Internet business for a fraction of the cost of either a traditional retail shop or a direct-mail startup. Besides his $50 a month "rent" payment to his Internet service provider, his major expense is a $200 monthly payment on a $6,000 loan for high-end computer equipment.

The first step in setting up a Web site is to contact one of the half dozen or so local Internet service providers doing business in Florida. To find them, check ads in newspaper business sections and local trade publications, or ask Internet-savvy friends and business acquaintances.

Many Internet service providers will design a basic Web site or "home page" for small businesses for as little as $100. Keep in mind: You get what you pay for. Often these page designers are computer programmers by training, which is why so many Web sites are visually unappealing and poorly organized.

Before ponying up for the design of a Web site, review other sites fashioned by the same designer. Are they appealing? Would you be inclined to buy a product or revisit any of them? If the answers to any of those questions is no, you haven't found the right Internet partner.

Well-designed sites are crucial for small merchants because, with hundreds of thousands of Web sites, there's fierce competition for Net surfers' attention. Worse, some of the corporate elephants that have ventured into merchandising know what they're doing. Time Warner's Pathfinder site, for example, draws browsers by offering such enticements as features from Time magazine, breaking news and stock quotes, chat sessions about the O.J. Simpson verdict (still!), and a handy online calculator that will tell you the time-weighted return of your investment portfolio. But Time Warner's Pathfinder is a retailing tool, too. A "DreamShop," for example, pushes products from national retailers such as Eddie Bauer, Spiegel and Sharper Image.

Even on well-designed sites, turning browsers into shoppers can be a major challenge because of credit card security concerns. The security threat is probably overrated, but in marketing, perception is more important than reality, says Charles Hofacker, a marketing professor at Florida State University and himself an owner of an Internet marketing service. "You go into a restaurant, give your credit card to a 17-year-old making minimum wage who disappears with it for ten minutes. That is considered safe. An Internet vendor asks you to fill in your credit card on a Web page, and that is considered unsafe," says Hofacker. He continues, "In either case, of course, you are only liable for $50, and almost invariably the issuing bank won't require that you pay the $50."

Credit-card impediments to doing business on the Web will be disappearing by the end of the year when a coalition of companies, including Visa and MasterCard, expects to improve Internet security.

The Web is an interactive and fast-paced medium. Successful sites attract traffic by giving away something useful, a la Pathfinder's investment-return calculator, and they keep that traffic coming back by being entertaining, informative and responsive. If you view the Web simply as place to stick an ad, you're missing the point.

Learning the Lingo
Just starting to surf the Internet? Here are a few terms you should know:

World Wide Web. The Web is a huge collection of interconnected Internet computer files containing text, pictures, graphics, video images and sound. Today, it's the primary way businesses and organizations use the Internet to reach consumers.

Web site. A part of the World Wide Web that contains information prepared by a particular company, government or organization.

Home page. The first page of a Web site.

Web browser. Special software programs that use graphics to help navigate the Web. The best-known browser is Netscape Navigator.

URL. It stands for Uniform Resource Locator, which is the address of the Web site. Keep in mind that often the last two or three letters in a URL designate what type of organization is sponsoring the site, such as ".gov" for U.S. government sites, ".org" for non-profits, ".com." for commercial sites and ".edu" for educational institutions. Non-U.S. Web sites generally use a country designation, such as ".ca" for Canada or ".uk" for the United Kingdom, as the last part of the address.

Hypertext. A word or words in a World Wide Web document that provide a link to other related documents at Web sites around the world. Click your mouse on the hypertext word, which generally is underlined, and you will access the related document immediately, even if it is on a computer thousands of miles away.

MANAGEMENT
Learning By Doing

Premier FastTrac, a new entrepreneurial training program to give entrepreneurs the skills to develop, launch and operate successful small businesses, is being sponsored by the University of Florida's Cooperative Extension Service and the North Florida Technology Innovation Corp. of Gainesvile (NFTIC).

Through two series of classes, would-be small-business operators and existing owners will develop a feasibility study and a business plan. FastTrac I, for those thinking of starting a business, consists of nine, three-hour classes held once a week on topics such as market research and financing.

FastTrac II is an 11-week series of classes in which current business owners put together a business plan. Cost for FastTrac I is $300; for FastTrac II, $500.

A pilot FastTrac II program with about 35 students is under way in Gainesville. It's entrepreneurs teaching entrepreneurs," says UF Professor Elizabeth B. Bolton.

For information, call NFTIC at 904/462-0498. o

MONEY MATTERS
Small Change

The Governor's Conference on Microlending (see "Small-Business Adviser," Feb. 1996) will be held May 16 at the Orlando Airport Marriott. Keynote speaker is internationally known leader of microlending programs Dr. Muhammed Yumus, managing director of the Grameen Bank in Bangladesh. Microlending programs loan money in small $500 to $5,000 increments to start-up business owners. To register ($25 fee), call 904/681-6555.

Back To School
A computer's value comes from knowing how to use it.

"Double click and there you go," says ExecuTrain instructor Karen Kresge brightly, as she explains the basics of editing a Microsoft Excel 5.0 spreadsheet. Kresge paces, continually checking the progress of ten students tapping information into desktop PCs. The day-long program, one of 250 courses offered by ExecuTrain at seven Florida locations and 140 other locations worldwide, teaches the basics of entering and formatting data using the popular spreadsheet software.

Colleges, community education programs, private teachers and private computer training companies are all in the business of helping computer users upgrade their skills. "People use only about 12% of their software application's capabilities," says Paul Vicary, director of sales for Productivity Point International/Northeast Florida, a computer training company with offices in Jacksonville and Tallahassee.

Bruce Tigert, owner of Bayshore Title Insurance in Tampa, quips that when he was in school, the only computer training was on the old binary punch card system. So Tigert, 42, and one of his employees are attending classes at Tampa's year-old TrainingUSA. They've taken two half-day classes, Introduction to Computers and Windows 95. Next, the duo will learn the Internet and Microsoft Access, a database management program. "As a small-business owner, if I'm not well versed in what computers can do, I'll be left behind," says Tigert.

Customized computer training also is available for small businesses. Jay Arnold, coordinator of computer technology programs for the corporate training program at St. Petersburg Junior College, says specially designed corporate courses accounted for more than half the 5,000 people trained by his school last year. As an example, he cites a company that wanted expeditious training for five people on the PageMaker desktop publishing software. Generally, though, custom training is more cost-effective for larger groups. "Most typically our people train 20 to 40," says Arnold, whose school charges $1,065 for eight hours of instruction, including materials, for up to 20 people.

Prices for computer classes vary greatly. Those offered through adult education programs often cost less than $50; junior college programs generally run $50 to $100 and one-day classes at private computer training companies are $145 to $195. Multi-class packages often are available.

Most private companies restrict class size to 10 or 12 students while junior college and community education courses are often larger. Ana Santos, coordinator for extended studies at Miami-Dade Community College's North Campus, says her school's 16-hour weekend programs cost $55 and can have as many as 30 students.

For those who don't want to take the time to attend a class, multimedia CD-ROM products that provide self-paced, interactive learning are the newest training tools on the market. They're colorful, easy to use and more sophisticated than the self-tutorials packaged in software programs.

Without computer software know-how, a state-of-the-art machine is worth little. "It's just a computer," says Beverly A. Hill, managing partner of ExecuTrain of Florida. "It's only as good as what you put into it."

Wired
A new wave of office technology makes choosing the right product tougher than ever.

Small-business owners setting up shop have a dizzying array of office technology choices. Computers can double as fax machines, a new generation of pagers operate like cellular phones, digital copiers transmit documents to computers and "multifunction" machines can copy, scan, print and fax.

Before buying or leasing equipment, however, it's crucial to analyze your business' specific needs and then figure out which office equipment fits the bill. The multifunction office machine, for example, may look irresistible, selling for a bargain-basement $500 to $700. But an all-in-one package of features can bring a business to its knees when it goes on the blink, as it certainly will. "When you have a problem with one part, the whole thing is down," says Tim Russ, an owner of Kittinger Business Machines in Orlando.

Once you decide your business needs a computer, copier, fax machine or other equipment, here are a few things to consider before closing the deal:

Buy or Lease. Consider the cost of buying the equipment versus leasing it. Among the issues: tax benefits, cost of maintenance, expected life of the equipment and how long it will be needed.

New or Used. "You can put in a used machine at about half the cost," says Russ. Reconditioned copiers, fax machines and computer equipment are available through many office equipment retailers.

Service. Investigate repair service policies before buying or leasing equipment. Ask if there's a guarantee for same day service, whether parts are readily available and how much training repair people have on the specific model you are considering.

How You'll Use the Equipment. Pay for quality where you need it most. If, for example, your business depends heavily on faxing, it's worth it to spend a few hundred dollars more to get an easy-to-use machine with laser technology.

Cost of Parts and Supplies. Low-cost equipment isn't a bargain if you have to buy high-priced supplies from the equipment's manufacturer.

Where To Get More Help
For in-depth research on specific makes and models of everything from cellular phones to postage meters, there are three publications. Check libraries for these advertising-free publications.

Better Buys for Business. Until recently known as What to Buy for Business, the ten-year-old publication covers one subject per issue. Topics for 1996 include copiers, plain paper fax machines, printers, multifunction machines, computers, phone systems and postage meters.

Annual subscription (ten issues) is $125; single copies $27 for non-subscribers. Also, the company's 640-page reference book, "The Office Equipment Adviser," published in September 1995, is available for $28.95. Contact What to Buy for Business Inc., Santa Barbara, Calif. (http://www.betterbuys.com/bbfb), 800/247-2185.

Business Consumer Guide. Each issue, which typically runs 50 pages, contains three reports on business equipment and services. Topics this year include computers, copiers, fax machines, multifunction machines, phone systems, overnight delivery and payroll services.

Annual subscription (12 issues) is $119; single copies $25 for non-subscribers. Published since 1992 by Beacon Research Group Inc., Watertown, Mass. (http://www.buysmart.com), 800/938-0088.

Update: The Executive's Purchasing Advisor, is a monthly publication that covers office equipment. A fax-on-demand service that provides updates on equipment, The Copier Buyer's Guide ($12.95) and newsletters on copiers, fax machines and printers also are available. Annual subscription for Update is $115; fax-on-demand service is $125. All are produced by Buyers Laboratory Inc. in Hackensack, N.J. (http://www.buyers-lab.com), 201/488-0404.

Tags: Florida Small Business, Politics & Law, Business Florida

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