The internet supports most business applications discussed in this book plus many more.

Business applications can be discussed in terms of how the WWW is accessed:

• Internet (general access by the public at large);

• Intranet (access only by members of a specific organization); and

• Extranet (access by suppliers and vendors). 

Applications can also be discussed by which business applications are supported.  We will address the issue involved in business applications.

The applications discussed are listed below.  If you have further questions regarding these functions, they are discussed more fully within their own chapter in this book.  This chapter addresses the internet implications of these applications.

• Pre-business: Activities undertaken to determine if, how, when and where you should go into business are in this category.

• Marketing: Whether the activity involves market research, sales, advertising, public relations or marketing projects, the web can have a heavy impact on the efficiency and scale of the activity.

• Structure: Research into what organization structure (sole proprietorship, partnership, corporation, etc.) is appropriate and then establishing that structure can all be done on the web.

• Legal Requirements: Establishment of legal structure, trademarks, patents, business name, etc. can be done via the web.

• Financing: Determining the type of financing and doing the initial exploration of financing the business (as well as putting up an electronic company brochure (website) is easily attainable on the web.

• Accounting: Inputting into and drawing reports from computer-based accounting systems are functions that are basic and assist in the management of an organization.

• Taxes: Reporting of taxes owed to and/or by an organization has been a part of the IRS and many state governments for years.

• Insuring: Researching what coverage you need, applying for a new policy, reporting losses and communication with insurance companies, their brokers and agents are examples of what can be done in this area.

• Hiring: Reviewing of new hire applicants (via on-line resumes) has been done for awhile.  Also, personnel procedures and manuals via intranets or extranets are common nowadays.

• Outside Assistance: It is common to obtain services (such as counseling, CPA advice, legal advice) via email and website.

• Business Planning: Many aspects of business planning (such as research, projections, group writing) is done via the web.

• Financials: Reports, input, and projections are all examples of tasks that can be done via the web.

• Resources: The web is an excellent source of resources – worldwide – to organizations of all types.

Many sites are listed below that exemplify how to use the web to your advantage.  The listing of a website is by no means a recommendation or an endorsement of the site.  It is simply one example of many that can be accessed via the web.

The initial steps in forming your business will entail doing research to see who your competition is.  A simple search via a search engine or by business category will show you that information.  Mapping out where your local competition is quite simple via one of the mapping services.

Determining the demographics of your market is important in sizing up your market.  Demographic data for the US, its individual states, counties, California, San Luis Obispo County and the cities within the county are available via the US Census Bureau.  They are also available from the State of California.

Trade associations are a rich source of data and knowledgeable contacts as are the local Chambers of Commerce.

One definition of marketing is “an aggregate of functions involved in moving goods from producer to consumer”, while a market is defined as a “category of potential buyers”. 

Internet users can be defined as a widely diverse set of markets.  Volumes have been written about how to market using the internet.  One website that allows you to explore many aspects about marketing is MarketingPower.com – a free website offered by the American Marketing Association.

A successful marketing program will include a combination of the proper product, place, price and promotion.

Product

Product (or service) definition is the core to success of any organization.  If you have a product you are developing and need to patent or trademark it, you can start that process directly with the US Patent and Trademark Office.  You can get some insights into what the markets need by reading these American Marketing Association articles or these Ask SCORE articles.

Product management is the managing of the product life cycle from product/service concept to extending the life of a mature product/service.  Wikipedia has a very comprehensive article on the subject.

Place

This can be defined as a physical location or website.  Although we recommend that you deal directly with a SLO county commercial real estate agent or building owner, the Economic Vitality Corporation (a non-profit corporation dedicated to providing economic development services and business resources throughout San Luis Obispo County and each of its cities) will work with you to help you find an appropriate location.

If your website will be your primary exposure to the public, you can register your domain name by any of the companies listed here.  You will also need a website provider.  There are many SLO county website designers.  Although a website is a good marketing tool; remember that it is only one of the many marketing tools available.

Price

Pricing is an issue that crosses many organizational functions (e.g., marketing, finance, operations).  Whether you decide to price the product or service to recoup all costs (R&D, manufacturing, distribution, etc.) up front or price it lower to regain all up front costs in a longer term and gain market share, depends on your overall strategy. 

Pricing also includes product positioning.  These subjects are discussed in this article at the NetMBA site.  Wikipedia also has a very comprehensive articles on this and related subjects.

Promotion

This disseminating product/service information to the consumer (whether the consumer is a business or and individual).  There are many promotional channels available on the internet.  These are discussed below within the categories of promotion.

Sales

Direct or indirect sales can be a simple as establishing and publicizing a website and make sales directly or indirectly via an effective internet site.  Indirect sales efforts are often lead by websites that educate the consumer (such as SCORE) or provide in-depth on-going support (such as Hewlett-Packard’s).

The internet can also provide sales support by provision of qualified sales leads, sales call scheduling, and sales call follow up through software and/or the internet.

Advertising

There are multiple forms of internet advertising: banner, email, search engine, pop-up, interstitial and mobile advertising.  There are also multiple forms of payment: click through rate, cost per action, cost per click, and cost per impression.

Banner advertising comes in various standardized sizes.  There are multiple avenues to display your banner ad: banner exchange programs (free form of advertising in exchange for you displaying ads on your site); purchase ads by approaching websites directly, through an ad agency, by joining a banner ad network, or by starting an affiliate program.

Email advertising works well as long as you don’t use spam (unwanted email advertising).  The preferred method of email advertising is to use opt-in programs.  You can use an outside vendor or internal software to email your prospects.  Don’t forget that you can send regularly scheduled newsletters to your existing customers.

Search engines provide advertising based on what the client is looking for (search terms).  You need to go to the search engines on which you want to advertise (such as Google, MSN, Yahoo) to look at their programs to determine which one(s) fit your needs.

Pop-up (or pop-under) ads can provide an eye catching ad to consumers; however, they have become so annoying to consumers that internet browsers uniformly allow these ads to be blocked.

Interstitial advertising serves a web page containing ads before the web page you requested is provided.

Public Relations

Although the term “public relations” is over 200 years old, the term itself is constantly evolving.  PR communicates to individual audiences in order to build, manage, and sustain an organization’s positive image.  The internet is a major PR channel – through the use of blogs, search engines and RSS feeds.

The company can be organized in one of multiple forms: sole proprietorship, partnership (general, limited or limited liability), corporation (C or S) or limited liability company.  Each one has advantages and disadvantages.  Before selecting a particular form of organization, we recommend that you consult with a business attorney and/or accountant.

You can get an overview of what steps are needed to form a company by going to the State of California Business Portal.  The ‘Lectric Law Library’s article, “Selecting The Legal Structure For Your Business”, contains a good comparison between the various forms of organization.

Sole Proprietorship

Although a sole proprietorship is easy to form (just follow the legal requirements), manage (It has only one boss.), doesn’t pay income taxes (Taxes flow through to the owner.) and generally has fewer government regulations affecting it, it does has unlimited personal liability, limited ability to raise capital and hiring of employees may be more onerous.  It is the most common form of company ownership.  Sole proprietorships are registered at the SLO County level.

Sole Proprietor Magazine™ provides information on issues that sole proprietors face.

Although it’s not necessary to do so, the owner may want to register a fictitious name (DBA or Doing Business As).  The county has an on-line DBA application, name search function, and full information about the DBA process.

Partnership

There are a few forms of partnerships: general, limited and limited liability.  Although partnership agreements are, by their very nature, custom documents that reflect the wishes of the partners and the business of the partnership, LawDepot.com provides a good basis upon which an agreement can be formed.

Any partnership agreement needs to be reviewed by a business attorney to make certain it meets the requirements of California.  There are specific fees that a general, limited and limited liability partnership must pay in California.

Corporation

Corporate entities can be formed into “C” or “S” corporations.  The State of California website contains some pertinent information about forming and maintaining a corporation within California.  The filing fees and other requirements for stock (C), close (S), professional and non-profit corporations in California are located here.

A C corporation has the ability to sell unlimited shares of ownership to the general public (as long as specific regulations are followed).  See this article on “Small Corporate Offering Registration”.

An S-corporation has a limitation on the number of shareholders, but is taxed like a partnership (taxation of profits are passed through to the shareholders and not done on a corporate level).

Limited Liability Company

California law allows the formation of limited liability companies.  This organizational structure is treated as a partnership, but with the shareholder protection of a corporation.  As with a C or S Corporation there exists an annual minimum tax and other requirements.  To see these requirements and the state application for an LLC, go the California State website.