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BUCK THE CREDIT CRUNCH STARTING AN ONLINE BUSINESS PDF Print E-mail
Monday, 22 December 2008

Rating 3.1/5 (8 votes)

Recession-Proofing Starting an Online Business

References - Times online ecommerce – planning for the future .
To really buck the credit crunch , you need two things a counter cyclical business model and a platform that has lowered it's cost and technical barriers to entry by adopting an open source business model .

STARTING AN ONLINE BUSINESS

According to ONS [OFFICE OF NATIONAL STATISTICS} online spending rose in the UK in November 2008 ,accounted for 3.8 percent of total retail spending . Defying the recession .The figure is higher in the US , and is only set to rise , driven by a desire for 24/7 convenience , the perception of lower costs , global reach and ultra low fixed costs .

Much of this recent growth is being driven by entrepreneurs seeing opportunity in upheaval and small cap retailers seeking to leverage an existing customer base and reputation online .


Depending on your exposure to the credit crunch .Reading this article is either prudent planning for the future .Or a vital step in saving your business , by cutting overheads . In which case there is no time to lose .As with all change there is a learning curve , a time lag between setting up and operating , with our help , the sooner you get started ,the sooner you will become a savvy online operator . Able to set up and operate an automated e commerce venture .

ECONOMIC OUTLOOK

How the credit crunch feeds into the real economy .



Driven by the collapse of housing prices , paper wealth is eroded . Banks who have over leveraged themselves are forced into unwinding lending positions . When Lehman brothers is allowed to collapse a domino effect occurs and the Icelandic banks go down , creating 1929 hysteria , banks are no longer safe . Banks looking to balance the books stop lending and start hoarding . The credit crunch starves business of short term finance and cash flow becomes an issue , business cut back on capital investment looking to conserve cash . At the same time consumption falls off a cliff . Demand declines costs are cut and jobs go , the specter of unemployment halts spending as employees save for rainy day . The result the economy is sent into a death spiral .

WHAT WILL THE NEXT 2 YEARS HOLD

SHORT TERM OUTLOOK : 3 – 12 MONTHS

You need to focus on the safety net against defaults on housing repayments , government backed loan guarantees ,interest rate cuts and falling commodity and fuel prices and ignore tax .It is these factors that feed through first and lead to an increase in real wealth for the majority of population who are salaried with a mortgage . Panic that these measures have not worked are premature , the trickle down is lagged resulting in stored up spending power

The reasons why are down to

• Consumer confidence - a fear that business is going to get worse leading to unemployment and a possible change in outlook as a society we may no longer look to spend next months pay-check today . • The perception prices which will fall further • Profit taking - by banks and energy companies.

MEDIUM TERM OUTLOOK : 6 – 18 MONTHS

The cost of money and existing debt will be lowered as loans are renegotiated . The banks and the fuel companies end the profit taking cycle after clawing back losses , the stock market starts to stabilize and pension funds will breathe again as the stock market bottoms out and starts to rise slowly . 6 – 18 months

LONG TERM OUTLOOK : 18 – 48 MONTHS

Only in the long term will loans be restored to previous levels as risk takers and home buyers are priced in by a combination of cheap money and rising levels of consumer sentiment , increasing demand for housing , pushing the price up , 18 – 48 months [chastened banks will be gun shy for some time ] .

If You Don’t have a transactional Website you are losing business to your competitors

Hard times drive innovations . Those who survive are the first to adapt , they see problems as opportunities , when the good times return , they are leaner and fitter . They realize that the definition of insanity is doing the same thing you have always done and expecting different results . When the facts change you need to change your behavior .

You have 2 years , in that 2 years business around you will go bust .The downturn will not last forever , with luck you will come through it . You need to ask yourself these questions now is it time to change your Business model ?
Is the financial shock enough to motivate a change in business model ?
is it time for you to start planning for a future Online ?


Barriers to Entry

At it’s most basic if you can use e-mail then you can operate online .

  • Time –If you are prepared to work hard , burn the midnight oil , work weekends , with our rapid development prototyping platform you can have a pilot or test up and running inside 7 days , out of office hours .
  • Cost – Low cost modular framework means you can scale up , you can spend as little or a much as you want . We do not take a fee but we do take a percentage on the buy .We take a long term view we are set up to save you money by putting together the Most cost effective start up packages .
  • Knowledge – No specialist required , Web 2.0 CMS moved ecommerce and intranet towards simplicity , operating a modern e-commerce site on a daily basis is now no more complex that using a word processor .

    There are a few things you

    WEB BUSINESS ARE BOOMING – CASE STUDY

    CAVEATS -

  • SUPPORT - While we do endeavor to automate our site to take advantage of economies of scale ,we will provide support and consultations for a fee in certain circumstances .

  • HIDDEN COST - What will cost is traffic and marketing , you will hear first page is vital otherwise forget it and with hundreds of millions of sites first page is tough . But this should not deter you from making your site add on . The rules are still the same for an online business as offline . What is to stop you , publishing a website on a shop front , or publishing in correspondence .With a web site you can advertise a site on google or local google , or in the local media . Lower costs mean you can advertise deals online and compete online .In a global market you can pursue niche expertise . Foster customer loyalty and repeat business by being on demand 24/7.

  • INTRANETS - Most importantly and this is what everyone neglects is that a website is not just external , it can be inward looking as well . In the early days data based web sites should be looking to leverage disclosure and back-end in house training platforms.

    Sounds like a lot of work well it is'nt .

    The web 2.0 revolution has moved the internet on , the initial jump is no longer a huge leap of faith . it once was , you just need a willingness to experiment and to embrace change .
    • Last Updated ( Sunday, 03 May 2009 )
     
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    'They say Rome wasn't built in a day, but I wasn't on that particular job'- Brian Clough

    Quality sites need not cost hundreds of thousands . Open source power some of the biggest sites in world including Youtube , twitter and Facebook . No coding is required with a little effort you can be up and running inside seven days to learn about the Open Source revolution read on.

    OPEN SOURCE PROPOSAL

    It is only recently that the credit crunch has led SME and large business to seek out more bang for their buck , accelerating the migration towards open source solutions .

    Open source is free , yes that is FREE like commercial TV . Money is made from consulting , training , bespoke applications , support and donations to foundations. Expertise measured by time spent at the coalface, will always be valued . The trick with open source business model is to democratize the platform , turning it into a marketplace , allowing developers from all over the world to develop niche expertise , driving innovation by meeting demand in a rapid timely manner, 24/7 365 days a year .

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