Does your business have any business on the web?

While in business school we had many key items drilled into our heads. Some included economies of scale and scope to drive down cost. Others included maximization of operations through process adjustments and Bottleneck recognition. Well I don’t want bore you guys into managerial submission, but I do want to talk about Web sites.

First let’s look at websites as extensions of the business and realistically categorize them. Like anything in the business world, websites are optional, but they are also a point of judgment. A website is a virtual representation of your company, and in some cases the only representation of your company (think http://www.amazon.com/, http://www.google.com/, and http://www.facebook.com/). I also know of Multimillion dollar companies that do not have a webpage because it will only help them marginally.

Let’s focus on that last concept for a few moments. You always hear about the infinite vastness of the internet, but how effective is staking claim to a spot on it really worth to your business. In business school we had a couple of definitions for the styles of business that included products and services.

Obviously the easiest type of business to justify having a space on the internet is products based, because what is being paid for can be shipped to almost any location on the planet. I have personally seen catalog companies go online and jump 4 and 5 times in size just by having a good e-commerce site. That is the good news. The bad news is that without a good e-commerce site these companies take on thousands of dollars of overhead trying to setup their online store, and may never get recognized by search engines like google or yahoo.

Then there is the other type of business that cannot be easily shipped. It is safe to say that services are 99.9% regional and that has proven to be a problem with the World Wide Web in the past. There are 2 major service categories that are lost in the shuffle. One category is lawyers, and the other category is accountants. To circumvent this location ambiguity web sites are adding descriptive terms to their site to describe where they are performing these services.

For the lawyers, they are joining major law websites like lexus-nexus and martindale-hubble and setting up sites with them. Those two web site companies work by allowing law firms to setup mini-sites inside of their domain, which can have links to the practice's actual web site. Because these two sites generate so much traffic by “economies of scale” (thousands of law firms have mini sites with them) they rank higher on google and yahoo searches. Going back to the multimillion dollar company that does not have a site, they are a law firm that received almost 100% of their internet traffic from the mini site, and so they let the main web site go away when the hosting contracts came up for renewal. They figured it was a waste of money that was only being looked at 20-30 times a month.

As a business school graduate I must say that EVERY company should have a web presence, but I also have to advise that different style companies require different levels of web presence. In summary, if you are a turn based company it is probably a wise idea to setup a proper e-commerce site, but if you have a service business you should evaluate how much you can or want to divulge with rest of the world in intellectual property. Producing good information for free generates traffic, but you want to hold a little back to make money off of.

As a side note, and I also suggest this for all companies with web sites, I installed code for Google analytics on http://thinksmallgroup.com/ and the site has had visits from Canada, China, and New Jersey...Okay, maybe New Jersey is a state in the US, but sometimes I don’t understand a word they say...does that count?