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ENTREPRENEURSHIP . Lecture No: 21 Resource Person: Malik Jawad Saboor Assistant Professor Department of Management Sciences COMSATS Institute of Information Technology Islamabad. Previous Lecture Review.
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ENTREPRENEURSHIP Lecture No: 21 Resource Person: Malik JawadSaboor Assistant Professor Department of Management Sciences COMSATS Institute of Information Technology Islamabad.
Previous Lecture Review • Explain the differences in the three types of capital small businesses require: fixed, working, and growth. • Describe the differences in equity capital and debt capital and the advantages and disadvantages of each. • Describe the various sources of equity capital available to entrepreneurs, including personal savings, friends and relatives, angels, partners, corporations, venture capital, and public stock offerings. • Describe the various sources of debt capital and the advantages and disadvantages of each. • Discuss valuable methods of financing growth and expansion internally.
Describe the benefits of selling on the World Wide Web. • Understand the factors an entrepreneur should consider before launching into e-commerce. • Explain the twelve myths of e-commerce and how to avoid falling victim to them. • Learn the techniques of designing a killer Web site. • Entrepreneurs in Action – Bill Gates OBJECTIVES
The Internet: Changing the Face of Business • The most successful companies embrace the Internet as a mechanism for transforming their companies and for changing everything about the way they do business. • Business basics still apply online just as much as they do in brick-and-mortar businesses. • In the world of e-commerce, size matters less than speed and flexibility.
Benefits of Selling on the Web • Opportunity to increase revenues and profits • Study: 72 percent of small online companies report increased sales, and 65 percent report higher profits. • Ability to expand into global markets • Ability to remain open 24 hours a day, seven days a week • Capacity to use the Web’s interactive nature to enhance customer service • Power to educate and inform
Benefits of Selling on the Web • Ability to lower the cost of doing business • Study: 73 percent of online small companies experienced savings because of lower administrative costs. • Ability to spot new business opportunities and capitalize on them • Ability to grow faster • Power to track sales results • Conversion rate – the percentage of customers to a Web site who actually make a purchase.
E-Commerce • 70 percent of small businesses in the U.S. have a Web presence. • Of those small business owners who do not have Web sites: • 77 percent say their products and services are not suitable for selling online. • 37 percent say they do not see any benefits of selling online. • Barriers: • Not knowing how or where to start • Cost and time concerns
Factors to Consider Before Launching into E-Commerce • How a company exploits the Web’s interconnectivity and the opportunities it creates to transform relationships with suppliers, customers, and others is crucial to its success. • Web success requires a company to develop a plan for integrating the Web into its overall strategy.
Factors to Consider Before Launching into E-Commerce • Developing a deep, lasting relationship with customers takes on even greater importance on the Web. • Creating a meaningful presence on the Web requires an ongoing investment of resources – time, money, energy, and talent. • Measuring the success of a Web-based sales effort is essential to remaining relevant to customers whose tastes, needs, and preferences constantly change.
Assessing Your Company’s Online Potential • Does your product have broad appeal to customers everywhere? • Do you want to sell your product to customers outside of your immediate geographic area? • Can the product you sell be delivered conveniently and economically? • Can your company realize significant cost advantages by going online? • Can you draw customers to your company’s Web site with a reasonable investment?
12 Myths of E-Commerce Myth 1: Setting up a business on the Web is easy and inexpensive.
Follow-up Investments Setting up a Web site is only the first investment: • Redesign Web site • Buy more computer hardware • Automate or expand warehouse to meet customer demand • Integrate Web site into inventory control system • Increase customer call-center capacity Lesson: Focus on your company’s core competencies and outsource all other aspects of doing business online.
12 Myths of E-Commerce Myth 2: If I launch a site, customers will flock to it.
Promotion Is the Key! • Print URL on everything related to your business • Web-based newsletters • Write articles that link to your company’s Web site • Host a customer chat room • Sponsor online contests • Establish a blog
12 Myths of E-Commerce Myth 3: Making money on the Web is easy. Study: Web retailers invest 65 percent of revenue in marketing and advertising, compared to just 4 percent for their off-line counterparts. Myth 4: Privacy is not an important issue on the Web.
Privacy Online • Study: 80 percent of Internet users say that privacy of their personal information is either important or very important. • Estimate: If online companies were able to alleviate customers’ online privacy and security issues, online retail sales would be 24 percent higher!
12 Myths of E-Commerce Myth 5: The most important part of any e-commerce effort is technology. Myth 6: Strategy? I don’t need a strategy to sell on the Web! Just give me a Web site and the rest will take care of itself. Myth 7: On the Web, customer service is not as important as it is in a traditional retail store.
The Importance of Serviceon the Web • Study: 57 percent of Web shoppers who fill their online shopping carts become frustrated and leave the site before checking out. • Result: For every $1 they spend online, customers leave behind $4.51 in abandoned shopping carts. • Reasons: • Shipping and handling charges too high • Delivery times too long • Checkout process too lengthy • Insufficient product information available
12 Myths of E-Commerce Myth 8: Flash makes a Web site better. Lesson: Simplicity rules! Myth 9: It’s what’s up front that counts. Myth 10: E-commerce will cause brick-and-mortar retail stores to disappear. Myth 11: The greatest opportunity for e-commerce lies in the retail sector. Myth 12: It’s too late to get on the Web.
Strategies for E-Success • Focus on a market niche. • Develop a community. • Attract visitors by giving away “freebies.” • Make creative use of e-mail, but avoid becoming a “spammer.”
Strategies for E-Success • Make sure your Web site says “credibility.” • Consider forming strategic alliances. • Make the most of the Web’s global reach. • Promote your site online and offline. • Develop an effective search engine optimization strategy.
Designing a Killer Web Site • Understand your target customer. • Give customers what they want. • Select a domain name that is consistent with the image you want to create for your company and register it. • Short • Memorable • Indicative of a company’s business • Easy to spell
Designing a Killer Web Site • Make your Web site easy to navigate. • Create a gift idea center. • Build loyalty by giving online customers a reason to return to your Web site. • Establish hyperlinks with other businesses, preferably those selling complementary products.
Designing a Killer Web Site • Include an e-mail option and a telephone number in your site. • Give shoppers the ability to track their orders online. • Offer Web shoppers a special all their own. • Follow a simple design. • Create a fast, simple checkout process.
Designing a Killer Web Site • Assure customers that their online transactions are secure. • Post shipping and handling charges up front. • Confirm transactions. • Keep your site updated. • Test your site often. • Consider hiring a professional to design your site.
Entrepreneur in Action • Bill Gates
What he said: • Life is not fair – get to use it! • The world won´t care about your self-esteem. The world will expect you to accomplish something before you feel good about yourself. • You will not make $60,0000 a year right out of high school and you won´t be a vice president with a car-phone until you earn these things.
What he said: • If you think your teacher is tough, wait till you get a boss. • Flipping burgers is not beneath your dignity.Your grandparents had a different word for burger-flipping: they called it opportunity. • If you mess up, it´s not your parents´fault, so don´t whine about your mistakes, learn from them.
What he said: • Life is not divided into semesters. You don´t get summers off, and very few employers are interested in helping you find yourself. Do that on your own time. • Television is not real life. In real life, people actually have to leave the coffee shop and go to jobs.
Describe the benefits of selling on the World Wide Web. • Understand the factors an entrepreneur should consider before launching into e-commerce. • Explain the twelve myths of e-commerce and how to avoid falling victim to them. • Learn the techniques of designing a killer Web site. • Entrepreneurs in Action – Bill Gates Lecture Review