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Business Services Industry

At first site

Entrepreneur, May, 2000 by Melissa Campanelli

So you've got it in your head that you need a Web site? Now you need a place to put it. You need something to put on it. You need payment systems, security systems, privacy policies. Daunting? Don't turn back yet: This is just the beginning.

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Setting up an online business can be one of the most exciting and challenging experiences today's entrepreneurs will ever have. While it might seem as though you're entering a brave new world, setting up an e-business is very much like starting a traditional business venture--meaning it's important to plan before taking the plunge.

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When starting out, plan a specific budget. Knowing ahead of time how much money you have to work with will dictate both design and Web hosting choices. It will also narrow your options among an overwhelming number of possibilities.

Web experts say there are three pricing categories that define most Web sites: less than $10,000; between $10,000 and $30,000; and $30,000-plus. There are high-end and low-end choices within each category, but this categorization is the first step toward sharpening your focus.

If your company falls in the $10,000 or less category--and sells a small volume of products--you can outsource the whole project to an ISP, which will not only provide Internet access, but also "host" the Web site on a high-speed computer.

Many ISPs will help you create a simple yet functional Web site with predefined templates that may include shopping-cart and catalog features. ISPs also usually offer domain-name registration, security, transaction processing, payment processing and report generation.

Because these service providers base their fees on the size of the site (in terms of the total computer memory it requires and its number of visitors), they can maintain a small Web site for less than $100 per month, setup fees not included.

When choosing an ISP, it's vital you ask the right questions." [You've got to find out] what its track record is for downtime, if it has a backup system in place and how it works, and if it's filled to capacity," says Bernadette Tiernan, a consultant and author of E-Tailing (Dearborn Financial Publishing).

If the site requires customized services that aren't found in simple templates, it may be necessary to enlist the e-commerce services of a Web hosting company. Basic services, which include what ISPs offer and higher levels of customized solutions, usually cost between $200 and $500 per month. A hosting company may also offer value-added design services to set up the site.

Do-it-yourselfers have even more options, varying in technical complexity and the amount of time required, when it comes to designing a site. One possibility is to use e-commerce services provided by Internet portals like Yahoo! (www.store.yahoo.com), or e-commerce service companies like Intel's iCat (www.icat.com). Both companies offer solutions for building a small online storefront. For a monthly price of between $100 and $300, they offer Web hosting; a secure server for credit-card transactions; databases for fulfilling orders and tracking customers; advertising placement; and search engine registration.

Luis Hernandez Jr., 40, founder of motorcyclebooks.com, used Yahoo! three years ago to establish his Web site. "It was so straightforward," he says of creating his site, which sells books, magazines, manuals, videos and DVDs to motorcycle enthusiasts. "Within a week, I built a store, and I've been working [with Yahoo!] ever since."

The range of higher-tier companies willing to spend between $10,000 and $30,000 usually includes businesses that are wellfunded and seeking a more professional look or that sell high volumes of products or services. When you're able to spend this much, you can either afford to build the site with in-house resources or outsource it to specialists. However, keep in mind that each possibility has advantages and disadvantages.

While designing and maintaining a Web site with an in-house staff obviously allows you more control over design, database information and e-commerce transactions, it also requires a skilled team of technical experts, a flair for good design and expensive equipment. Most Web experts say that because in-house development requires such an enormous amount of training, time and expense, entrepreneurs might be better off outsourcing these functions.

If you hire out, you'll first have to choose a Web development firm. These companies are either independent site developers, Web design shops, tech consulting firms, system integrators or interactive marketing units of advertising agencies. Most offer everything you'll need to get started on the Web, including consulting services, Web hosting, design and site registration with search engines and directories.

Finding a Web developer can be daunting, but to make it easier, most experts suggest asking a trusted colleague, business associate or ISP for referrals. "It's best to stay within your community, especially for small businesses," says Anita Rosen, author of The F-Commerce Question and Answer Book (AMACOM Books). "So ask your friends, or other small businesses in your community, which companies they're using and what they like about the experience." (For more information about choosing a Web host and site designer, see "Net Profits" on page 56).

Business Services Industry

At first site

Entrepreneur, May, 2000 by Melissa Campanelli

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