The Internet and Small Business

In 1996,

• 37,000,000 people 16 and over in North American have access to the net.
• 24,000,000 of the same have used the net in the last three months.
• The average user spends 5 hours and 28 minutes per week.
• 66% of Internet users are male, 34% female.
• 25% of Internet users make more than $80,000 per year.
• 50% of Internet users are in professional or managerial jobs.
• 64% of Internet users are college graduates.
• Computer ownership amongst 55-75 years olds jumped 43% in the last 16 months.
• Internet usage in 1996 equaled the amount of time watching rented video tapes.

In 1996 alone, the number of users on the Internet doubled! This trend is likely to continue, perhaps at an even quicker rate. Microsoft's Bill Gates and McCaw Cellular Communications' Craig McCaw plan to have about 840 satellites orbiting the Earth by the year 2000 to bring fast Internet access to the entire world.

Naturally, people are still slow to begin making purchases over the Internet. Everyone seems to have the worry that "they" will get their personal information and credit card number somewhere along the line. However, Internet shopping is now just as safe as using your credit card at the gas station.

Millicent

The newest form of online shopping about to be realized has been produced by Digital Equipment of Canada. It is a system for micro-payments on the Internet -- Millicent. This system supports transactions between 1/10 of a cent and $5. These transactions are fully compatible with both Netscape and Microsoft, and can be set up to automatically accept fees at a given rate, or ask for permission for others.

One can imagine the possibilities this presents for some small businesses! Local newspapers can charge by the article! Internet publishers can receive a royalty everytime one of their original javascripts are executed on another page! A new band can receive a small payment everytime one of their songs is downloaded!

It is easy to see how this can be beneficial. As much as 75% of the price of a product can be packaging and distribution. With Millicent and the Internet, there is no packaging and distribution! The company is providing the product directly to the consumer, avoiding all selling, retailing, packaging, and distribution costs along the way.

Many sites, including Seneca's own SIRIS system, make use of a secure shopping site. It allows for the transmission of data without the possibility of interception from outside parties. When using Netscape, the easiest way to see if you are on a secure server is by checking the picture of the key on the lower left hand side of your screen. If the key is broken, the site is insecure. if the key is together, the site is secure.

With this in mind, it is easy to sell many products over the Internet. But you have to gain the consumer's confidence. Here are some tips to do that:

• Use your business name, address, phone, fax, etc. The ability to contact the business in real-life assures people.
• Spend money -- nobody will trust a shabbily designed site.
• Provide information on return policies and customer service contacts.
• Offer an alternative, such as a 1-800 number.

For an example of secure ordering systems on successful online businesses, please check the following sites:

As the Internet grows in membership and prominence, so does the desire to turn it into a successful money-making venture. In fact, the acceptance of the Internet by big business and Hollywood is entirely based on the expectation of skyrocketing advertising revenue. So far, this has not happened. What can we look for in the coming months and years in terms of advertising revenue?

Websites

Like every other small business, you can set up a website. But how are you going to get people there? Assuming your small business isn't global, how are you going to restrict it to your target market? The first step is an attractively designed website that is both aesthetically pleasing, and functional. But you still have to get people there!

If you have a website it should be as much a part of your promotion as your phone number. Your Internet address should appear along with your business address, phone number, and other relevant information on business cards and advertisements. With small business pages it can be hard to have clients visit it unless they know it is there. If there is some money to be spent on Internet advertising and promotion, the following points indicate some effective methods.

Sponsorships

Similar to "This television program brought to you by --" on network tv, the Internet is seeing a growing number of single-sponsor websites. You can reach your target market by cleverly folding your sponsorship into a website.

You place your small advertising banner on a page frequented by your target market. Each time your site is "hit" thanks to that banner, you provide the referring page with a monetary reward.

There is a service on the Internet called CyberGold. It allows companies to contact the market directly to acquire feedback on ads and such. In return, the consumer gets CyberGold payments to deposit in their accounts or donate to non-profit organizations. As more and more businesses become aware of the service, not only will they become more popular, but similar sites will begin to pop up all over the Internet.

This site has not yet begun business, but you can still visit and read about their service. There is also an option to sign up to be alerted when it does begin business.