E-Commerce: Is It Right for Your Small Business?
By Jennifer LawtonThe Kauffman Center for Entrepreneurial Leadership

E-commerce is a funny topic for me. I'm in the "Internet business," and every day I lead engineers, technical types, and Internet-specific professionals. Yet, if I asked each and every one for a definition of e-commerce and then asked all my entrepreneurial friends the same question, we might not get consensus.
In its basic form, some would say, e-commerce is the ability to conduct business electronically. In its loftiest and most misunderstood form, others would argue, it is to conduct business on the Internet. For those partial to complete confusion, it is to conduct business using technology, through an intra-, extra- or Internet solution.
'Phew, glad we cleared that up! Since entrepreneurs these days have been hoodwinked into thinking their customer rosters and ability to increase revenue at a meteoric pace are absolutely, undeniably based upon the use of e-commerce, well, it's something they—and you—want to get a firm grasp on.

Focused Thinking
Getting a solid handle on what's actually a quivering mass of Jell-o requires attention to a pair of practical issues about e-commerce: what it really is and who it's for. Only after considering these basics can you determine what your specific e-commerce strategy could or couldn't be, or should or shouldn't be.

What follows is our attempt to break down the issues into five statements that we hope will guide your thinking.

1. In your business, e-commerce is a concept that is aligned with, if not directly related to, your presence on the Internet.
When the Internet was "new," which I define as the time it was opened to the general public as opposed to the academic or scientific world (before Al Gore invented it, right?), everyone "had to have the Internet" to be competitive, and heck, to keep their doors opened. A lot of flutter swirled around getting on the Internet and not nearly enough around what that meant.
During this new era, I counseled many a worried business owner about what to do. At that time, the Internet was thought to be a marketing tool—no more, no less. So my counsel went like this: "The Internet is just another way to share information. It's just another tool."
My message, then and now, is that the Internet can enable you to sell and deliver products to your customers. If it's the appropriate tool, then use it! If it isn't the appropriate tool, then don't use it.

2. E-commerce allows you to gather information from customers, while delivering a marketing-and-sales pitch through a Web site.
Although the information you gather concerns orders, you can also ask customers or clients questions about who they are, where they want products shipped and billed to, what method of shipping they would like you to use—indeed, just about any question you would like to ask! In addition, e-commerce could enable you to process credit card information on the Internet, as well as take "cyber cash" from customers.
As an information dispensing-and-gathering device, e-commerce becomes a catch-all for using the Internet to conduct business per se. It allows you not only to advertise, market, and sell, but also to keep track of accounts receivables and payables, provide technology support...you get the idea, all from a single source: your Web site.

3. E-commerce can be a fully integrated solution or a technical "front-end" to a business that otherwise isn't wired.
Once you look at an e-commerce solution, you will need to consider the flow of information from your Web site into your back-office operations. Do you want a customer pushing a button to enter data into your client database, send shipping instructions to a warehouse, charge a credit card, enter information into your accounting system, and, for that matter, deliver a cup of coffee to your desk as you sit reading your morning paper? It's up to you to decide how much or how little of the process you want to "go electronic."
Regardless of your approach—full integration, partial integration or no integration—you need to understand the process from start to finish before you proceed. If you don't understand the process up front, you run the risk of designing, redesigning, throwing out, starting over, and redesigning again, all of which is very, very expensive. The cost can range from $200 a month for a simple setup to hundreds of thousands a month, all of which is comparable to the difference between using Quicken versus an enterprise-wide accounting package.

4. The online world has as many e-commerce solutions that suit a specific need as The Body Shop has bath products. If you don't feel you have the data to sort through and choose the best solution, you're hardly alone!
You can lick this problem easily. Work with a knowledgeable person you trust to help you understand not just the technical issues of the e-commerce solution you're considering, but also the business issues. Examples of such professionals include consultants for the Internet, systems integrators, and technology-savvy marketing types.

5. E-commerce is not about technology—it's about your business. While it is tempting to think of your e-commerce solution as something "the geeks need to worry about," don't go there.
E-commerce is a part of how you run your business. It will be expensive to implement and should be seen as an investment. You should exercise the same care that you would use in choosing a 401K provider, suitable office space, your key personnel, or your enterprise-wide accounting package.

The e-commerce decision is one that you, the entrepreneur, have a choice in making. Do you want to conduct your day-to-day business online? If the answer is yes, then you need to work with sales, marketing, finance, tech support, customer service, information systems, network administration, support staff, and the receptionist to make sure you incorporate all pieces of a solution and inform all people about the purpose of the solution.

What It Is, Who It's ForAs the founder of a computer consulting firm, Net Daemons Associates Inc., I used e-commerce when advising clients on its suitability for everything from resume and food delivery to inventory management. Then, in February, when NDA was acquired by Interliant, formerly called Sage Technologies Inc., a major objective for me became helping other companies devise appropriate e-commerce solutions, which is one of Interliant's services.

Bottom line: e-commerce is both a concept and a tool, its whole greater than the sum of its parts. It's for you—if you want it, that is. So before you go down the e-commerce path, make sure you know your goals. And stick to your guns about those goals no matter how sexy the new solution looks behind door number three.