Setting up a small-business Web site on a budget.
Pamela Jackson is passionate about her home business, Candyflorist.com. Inspired by the movie “Willy Wonka and the Chocolate Factory,” she set out to sell bouquets that look and smell like floral arrangements, except that the “flowers” themselves are made of various types of candy, especially chocolates. “I looked at all the online candy and flower companies, and they were all focused around holidays,” she says. “None of them were focused on the candy itself.” So she set about creating edible bouquets and selling them online out of her home in Aspen, Colo.
Though Jackson’s company is whimsical, she didn’t just up and start the company on a whim. The seeds of Jackson’s candy greenhouse were planted when she worked as an accountant for Johnson, Harband, Foster, and Darling (JHFD) in Pacific Palisades, Calif., while working towards an MBA at Loyola Marymount University in Los Angeles. There she learned the inner workings of business and became fascinated by all the automation that makes businesses work.
When she returned to her Aspen home with an MBA in hand, she was determined to start a businesses that virtually ran itself with minimal human intervention, much like the chocolate river that flowed through the mythical Wonka chocolate factory. She started with Peachtree accounting software from Norcross, Ga.-based Peachtree Software, with which she was familiar from her days at JHFD. When she talked to Peachtree, she found that it’s not just about accounting anymore. She could run her entire online business using a suite of services from Peachtree.com. With passion and technology combined, she booked $150,000 in revenue in her first year in business. Next year, she expects to book a quarter of a million dollars in revenue. When she hits that kind of volume, she may need to push the button on the Wonkavator that launches her business outside the home.
Jackson’s success story is part of a quiet trend of small office/home office (SOHO) entrepreneurs carving out successful niches online. One measure of the size and growth of the SOHO sector is how much SOHO businesses spend on technology. In 1998, the SOHO segment spent $51.1 billion on technology; in 2002, SOHO businesses are expected to spend $71.2 billion, according to International Data Corp. (IDC).
Because SOHO operators typically have neither the necessary cash nor the expertise to own and operate Web site hardware and software, SOHOers commonly outsource their online needs, as Jackson did with Peachtree.com. Because of the growing trend toward outsourcing, more and more of the SOHO technology investment is going to service providers. Hosting service providers can help get businesses registered and get an online presence. Application service providers (ASPs) can help with everything from driving traffic to the site to securing online transactions. Managed service providers (MSPs) can offer soup-to-nuts Web software and support.
Using an assortment of service providers, having your own business Web site doesn’t require an MBA. But while each step in the process may be easy, developing a successful SOHO Web site involves lots and lots of steps. Here we provide a step-by-step approach to developing a SOHO Web business using service providers.
Before you get into the nitty-gritty details of taking orders, accounting for them, and shipping packages, you need to find a hosting company that can get your domain name registered and provide space on a server with high-speed access to the Internet. With this approach, you need not have a high-speed connection to and from your home, though it helps to have a broadband connection for uploading files to the server that housed your site. Because the site itself is connected directly to the Internet by a connection faster than broadband, you can get better performance for your site than you would if you housed the computer at home and have visitors access it through your broadband connection to the Internet.
Lisa Bickford, president of the Stockton, Calif.-based InReach hosting company helps her customers register a domain name and establish an online presence. She says she turned her dial-up Internet service provider (ISP) into a hosting company in the mid-to-late 1990s when other members of fraternal groups to which she belongs–Rotary, Lions Club, etc.–kept asking her how they can get “one of those domain sites.”
“Initially, most of them just wanted a specialized domain name for their e-mail addresses,” she says. “That evolved into simple Web presences and eventually into colo [colocation] sites.”
Colocation sites involve dedicated servers that are housed at the service providers’ climate-controlled, secure facility. These are for sites that need highly advanced features such as database-driven interactivity. For most SOHO shops, simple hosting, which involves up to thousands of sites sharing a single server, will suffice. “Most of our more than 5,000 hosted domains share space on our servers,” she says. “But there is a huge market opportunity for colos,” she says. “A lot of small Web design businesses find out it only costs $199 a month to move the box off the kitchen table and into our facility.”
Bickford suggests that SOHO businesses carefully pick a domain name that will be easy to remember and spell. “A lot of SOHO businesses have really long names that can be hard to type and remember,” she says. “It would be better to pick a short, catchy domain name and let us register it for you.” Jackson’s domain (which is hosted by Peachtree.com) for example, is candyflorist.com while her business name is The Flavor Bouquet.
John Lee, co-founder and director of marketing for Chicago-based dedicated server hosting provider Hostway Corp., divides his customers into two groups: those that need managed service and those that require unmanaged service. “If you use technology that we support, we can manage the entire server for you, including the database, scripting, maintenance, and security. All you need to worry about is the content,” he says. “But we can’t support everything, so if you have special needs, you will need to go with the unmanaged service, where you basically buy or lease the machine and house it at our facility, but you are responsible for all the coding and maintenance issues in addition to the content.”
Lee says Hostway supports the two most popular Web site platforms: Windows 2000 with Internet Information Server, MS SQL database, and ASP scripts; and Linux with Apache and a PostgreSQL database and PHP scripts, in addition to a small variety of open-source database and scripting languages.
Skygolf gps, a Jackson, Miss.-based company that delivers GPS-based caddie advice to golfers’ handheld computers, switched to Hostway for its Web site primarily based on price and performance. “We had a lot of very specific needs, so we had to go with unmanaged service for most of our site,” says Jason Catlin, Skygolf’s director of Web services. “But even with the unmanaged service, we have had same-day response for technical support, which is unusual, especially at this price.”
Skygolf’s needs are unique because it houses a huge database of downloadable applications that subscribers can grab from its Web site. The applets use GPS technology to enable golfers to get a clear picture of every hole on thousands of courses, including how far specific hazards are from the tee, how long certain shots are from the golfers’ current position, and detailed greens information. Subscribers to the site can either download one of 3,000 currently available courses or enable their own courses with the software. The plethora of technologies required to manage this system basically forces Skygolf to use unmanaged colocation services, except for the server that houses the database of subscribers, Catlin says.
Whatever your needs, once you have a domain name and a host, the key to success is the content, says Bickford. InReach gives its customers a questionnaire to help them develop content that will effectively communicate their company’s mission, goals, and market focus. Questions include: What kind of information do you want to include? Will you be selling something on your site or will it merely be a brochure site? Will your site include an e-mail component? “A lot of our customers don’t know what to put up at first, but we just ask them what printed materials they currently have,” she says. “Sales and marketing material can be a great starting point.”
Once you know what you want your site to say, figure out a design environment for your content. The design of your site should reflect your company’s brand identity. Most Web hosting providers, including Hostway and InReach, can help you with the design. After all, it is in their best interests for your business to succeed; if it does, you will be a stable customer for them.
“Whatever you decide as far as content,” Bickford advises, “plan to update it at least once per week. Stale or old information can turn away customers.”
Five steps to marketing success
One of the biggest mistakes SOHO entrepreneurs make is assuming that people will visit their site once it’s up. The reality is, you have to promote your site to get traffic. Failing to market your site is like throwing away the resource on which you’re spending monthly time, energy, and dollars.
Mike Dever, CEO of enterURL.com, a Philadelphia-based Web site monitoring and marketing service provider, says there are five steps to successfully marketing a Web site.
1. Use some of the available tools to help develop a site people will want to come to;
2. Perform traffic analysis to determine what aspects of your site are working and what are not and emphasize the positive while changing the negative;
3. Drive traffic to the site with marketing tools such as site optimization and search engine placement;
4. Use some available tools to develop a way to handle transactions on the site, including shopping carts, catalogs, and transaction processing software;
5. Develop ongoing newsletters and other e-mail systems to develop a relationship with existing customers.
While your hosting provider can usually help you with step 1, many of them partner with other companies to provide you with the services you need to complete steps 2 through 5. If they can’t help you, with a little bit of Web research on your own, you can find low-cost service providers for every step.
One company that can help you with traffic analysis is San Diego-based Web Side Story. Its leading Web analytics program, Hitbox, can help you track user behavior and access the information from any Web browser for a small subscription fee. Once you have a detailed understanding of how your users are navigating through your site, you can develop a plan of action to optimize your site for your particular user base.
While content and design affect user behavior, studies show that site performance is also a key issue. If you have a lot of heavy graphics on your site, you may be unwittingly sending good customers away as they tire of waiting for your site to load over a dial-up connection. A helpful tool to analyze the speed of your site from various types of connections is Nimbus from New York City-based Shunra software. While Shunra is a high-end enterprise analytics company, it has released Nimbus as freeware to help SOHO users understand how their sites load at various different connection speeds. The software loads onto your computer’s network interface card (NIC) to simulate user-selectable speeds. If you are accustomed to viewing your site from a 1Mbps broadband connection, you can set your NIC card to 56Kbps and see how it loads. You might be surprised how slowly those product pictures load. Simply scaling down the size or resolution of the pictures can help your site load at the same speed for 56K users as it does for your broadband connection.
As for transactions, there are too many vendors to list. Peachtree is one of the few that provides an end-to-end solution for SOHO selling. Jackson of The Flavor Bouquet uses Peachtree WebsiteCreatorPro, WebsiteTrader, and Peachtree Contact Manager to build a sophisticated e-commerce Web site. “It’s literally five clicks from accepting an order to approving the credit card to importing it into my accounting program, outputting an invoice, and printing a FedEx label for the customer,” Jackson says.
She adds that the ASP approach Peachtree takes enables her to give them feedback on what features she would like to see and finding them available on the next quarterly update.
Though Peachtree does not offer all the marketing solutions SOHO businesses might need, Jackson says she is worried about doing too much marketing. “I want to make sure we can handle all the business we get,” she says, adding that she’s concerned about getting more orders that she can fill with the size of the business right now.
Dever says she shouldn’t worry about growing too fast. Marine.com, a Durham, Conn.-based marine-supply SOHO business, developed a marketing plan with enterURL to drive traffic to the site and increase business. Dever says taking marketing one step at a time helped Marine.com grow at a manageable rate.
“They started out hiring part-time people to help them with the increase in business, and, as the business grew steadily, they added full-time people,” Dever says. “It all happened incrementally because we took the marketing plan one step at a time.”