Sree's Stories



May 24, 1999

TECHNOLOGY

Wrestling with the Web
Got a ".com" but no strategy?
How you tame cyberspace depends on your company's unique needs

By Sreenath Sreenivasan

IF YOU'RE STILL wondering whether your business should get wired, you're probably asking yourself the wrong question. "A small business has to be on the Internet, the way it has to be in the Yellow Pages. It's that simple," says Andrew Bartels, a small-business analyst consultant at Giga Information Group in Cambridge, Mass. By the end of this year, Arthur Andersen estimates 36% of small businesses will have a Web site, nearly three times the percentage in 1997.

A more appropriate question these days is how to make the Web work for your business. "How far you take it depends on your long-term goals," says Alice Bredin, who runs a small-business consulting firm in New York. Already, entrepreneurs are finding that the Web can be a way to defy their geographic isolation, better serve existing customers, or find new ones. It doesn't mean you have to necessarily sell anything -- though you certainly might want to try -- nor hire the priciest Web-design firm in town. But for many customers, the Web is becoming the first stop for comparison shopping and research. If your product or service isn't listed, you're missing out. Its marketing value can be incalculable, too, as a way to develop customer mailing lists and gather feedbacks on your product or service. As you craft your Web strategy, says Julian E. Lange, professor of entrepreneurship at Babson College, look, above all, at potential cost savings before you even think about generating revenues. Ask yourself if the Web will let you reduce expenses for customer service, tech support, or public relations, for instance.

In the profiles that follow, you'll hear the good news -- and the bad -- from companies that have expanded an existing business onto the Web and survived to tell the tale. In some cases, they're doing better than before. In others, they've had to adjust how they do business and redeploy resources. They've all learned something in the process.

You'll see that functionality often wins out over beauty, as in the case of the simple Web site of Northland Marine in Three Lakes, Wis. The do-it-yourself site is as humble as a homemade piecrust -- no Java coding or fancy graphics -- but it's doubled the company's sales.

The Web, at its best, can help you reduce your cost of doing business. Secure transactions can replace expensive toll-free phone orders, as Selina Yoon discovered on her Asia for Kids site, by getting die-hard catalog fans to complete their orders online. On the other hand, Northland Marine found that making Web customers call a live person to complete a purchase reduced returns and saved money.

The Web can be a way to serve your customer better. If your clients are high-tech companies, as in the case of Meetings Plus, they'll find it more convenient and natural to handle transactions over the Net. And having a well-functioning Web site enhances your image as a tech-savvy company.

Achieving the best balance between offline and online activities is often key. Maryland art dealer and consultant Taba Dale has shifted more of her golf art sales to the Web because it saves her time, money, and headaches. But little Northland knows it must maintain its brick-and-mortar store as an insurance policy, fearing its Internet sales could be eclipsed by larger competitors.

Maintaining balance requires planning. You can wind up with the luxurious problem of too much new business from a Web site, straining resources. You may need to retrain staff, or hire new employees, as Meetings Plus did.

Spending carefully, without going overboard, works for most of these entrepreneurs. They've ratcheted up gradually to test the market. But when it's time to make a major investment, as in the case of Asia for Kids and TABA Inc.'s Scottsdale Collection Online, they don't flinch.

And you shouldn't assume the Web will solve all your problems or substitute for sound business judgment. "It is not some sort of get-rich-quick scheme," says Mark Weaver, professor of entrepreneurship at the University of Alabama. "You have to be even more perfectionist, more meticulous, and more prepared to adjust to the changing rules of business online."

This article was originally published in the May 24, 1999 print edition of Business Week's frontier.