ENTREPRENEURSHIP

1. ENTREPRENEURSHIP Lecture No: 21 Resource Person: Malik JawadSaboor Assistant Professor Department of Management Sciences COMSATS Institute of Information Technology Islamabad.

2. Previous Lecture Review • Explain the differences in the three types of capital small businesses require: fixed, working, and growth. • Describe the differences in equity capital and debt capital and the advantages and disadvantages of each. • Describe the various sources of equity capital available to entrepreneurs, including personal savings, friends and relatives, angels, partners, corporations, venture capital, and public stock offerings. • Describe the various sources of debt capital and the advantages and disadvantages of each. • Discuss valuable methods of financing growth and expansion internally.

3. Describe the benefits of selling on the World Wide Web. • Understand the factors an entrepreneur should consider before launching into e-commerce. • Explain the twelve myths of e-commerce and how to avoid falling victim to them. • Learn the techniques of designing a killer Web site. • Entrepreneurs in Action – Bill Gates OBJECTIVES

4. The Internet: Changing the Face of Business • The most successful companies embrace the Internet as a mechanism for transforming their companies and for changing everything about the way they do business. • Business basics still apply online just as much as they do in brick-and-mortar businesses. • In the world of e-commerce, size matters less than speed and flexibility.

5. Benefits of Selling on the Web • Opportunity to increase revenues and profits • Study: 72 percent of small online companies report increased sales, and 65 percent report higher profits. • Ability to expand into global markets • Ability to remain open 24 hours a day, seven days a week • Capacity to use the Web’s interactive nature to enhance customer service • Power to educate and inform

6. Benefits of Selling on the Web • Ability to lower the cost of doing business • Study: 73 percent of online small companies experienced savings because of lower administrative costs. • Ability to spot new business opportunities and capitalize on them • Ability to grow faster • Power to track sales results • Conversion rate – the percentage of customers to a Web site who actually make a purchase.

7. E-Commerce • 70 percent of small businesses in the U.S. have a Web presence. • Of those small business owners who do not have Web sites: • 77 percent say their products and services are not suitable for selling online. • 37 percent say they do not see any benefits of selling online. • Barriers: • Not knowing how or where to start • Cost and time concerns

8. Factors to Consider Before Launching into E-Commerce • How a company exploits the Web’s interconnectivity and the opportunities it creates to transform relationships with suppliers, customers, and others is crucial to its success. • Web success requires a company to develop a plan for integrating the Web into its overall strategy.

9. Factors to Consider Before Launching into E-Commerce • Developing a deep, lasting relationship with customers takes on even greater importance on the Web. • Creating a meaningful presence on the Web requires an ongoing investment of resources – time, money, energy, and talent. • Measuring the success of a Web-based sales effort is essential to remaining relevant to customers whose tastes, needs, and preferences constantly change.

10. Assessing Your Company’s Online Potential • Does your product have broad appeal to customers everywhere? • Do you want to sell your product to customers outside of your immediate geographic area? • Can the product you sell be delivered conveniently and economically? • Can your company realize significant cost advantages by going online? • Can you draw customers to your company’s Web site with a reasonable investment?

11. 12 Myths of E-Commerce Myth 1: Setting up a business on the Web is easy and inexpensive.

12. Follow-up Investments Setting up a Web site is only the first investment: • Redesign Web site • Buy more computer hardware • Automate or expand warehouse to meet customer demand • Integrate Web site into inventory control system • Increase customer call-center capacity Lesson: Focus on your company’s core competencies and outsource all other aspects of doing business online.

13. 12 Myths of E-Commerce Myth 2: If I launch a site, customers will flock to it.

14. Promotion Is the Key! • Print URL on everything related to your business • Web-based newsletters • Write articles that link to your company’s Web site • Host a customer chat room • Sponsor online contests • Establish a blog

15. 12 Myths of E-Commerce Myth 3: Making money on the Web is easy. Study: Web retailers invest 65 percent of revenue in marketing and advertising, compared to just 4 percent for their off-line counterparts. Myth 4: Privacy is not an important issue on the Web.

16. Privacy Online • Study: 80 percent of Internet users say that privacy of their personal information is either important or very important. • Estimate: If online companies were able to alleviate customers’ online privacy and security issues, online retail sales would be 24 percent higher!

17. 12 Myths of E-Commerce Myth 5: The most important part of any e-commerce effort is technology. Myth 6: Strategy? I don’t need a strategy to sell on the Web! Just give me a Web site and the rest will take care of itself. Myth 7: On the Web, customer service is not as important as it is in a traditional retail store.

18. The Importance of Serviceon the Web • Study: 57 percent of Web shoppers who fill their online shopping carts become frustrated and leave the site before checking out. • Result: For every $1 they spend online, customers leave behind $4.51 in abandoned shopping carts. • Reasons: • Shipping and handling charges too high • Delivery times too long • Checkout process too lengthy • Insufficient product information available

19. 12 Myths of E-Commerce Myth 8: Flash makes a Web site better. Lesson: Simplicity rules! Myth 9: It’s what’s up front that counts. Myth 10: E-commerce will cause brick-and-mortar retail stores to disappear. Myth 11: The greatest opportunity for e-commerce lies in the retail sector. Myth 12: It’s too late to get on the Web.

20. Strategies for E-Success • Focus on a market niche. • Develop a community. • Attract visitors by giving away “freebies.” • Make creative use of e-mail, but avoid becoming a “spammer.”

21. Strategies for E-Success • Make sure your Web site says “credibility.” • Consider forming strategic alliances. • Make the most of the Web’s global reach. • Promote your site online and offline. • Develop an effective search engine optimization strategy.

22. Designing a Killer Web Site • Understand your target customer. • Give customers what they want. • Select a domain name that is consistent with the image you want to create for your company and register it. • Short • Memorable • Indicative of a company’s business • Easy to spell

23. Designing a Killer Web Site • Make your Web site easy to navigate. • Create a gift idea center. • Build loyalty by giving online customers a reason to return to your Web site. • Establish hyperlinks with other businesses, preferably those selling complementary products.

24. Designing a Killer Web Site • Include an e-mail option and a telephone number in your site. • Give shoppers the ability to track their orders online. • Offer Web shoppers a special all their own. • Follow a simple design. • Create a fast, simple checkout process.

25. Designing a Killer Web Site • Assure customers that their online transactions are secure. • Post shipping and handling charges up front. • Confirm transactions. • Keep your site updated. • Test your site often. • Consider hiring a professional to design your site.

26. Entrepreneur in Action • Bill Gates

27. What he said: • Life is not fair – get to use it! • The world won´t care about your self-esteem. The world will expect you to accomplish something before you feel good about yourself. • You will not make $60,0000 a year right out of high school and you won´t be a vice president with a car-phone until you earn these things.

28. What he said: • If you think your teacher is tough, wait till you get a boss. • Flipping burgers is not beneath your dignity.Your grandparents had a different word for burger-flipping: they called it opportunity. • If you mess up, it´s not your parents´fault, so don´t whine about your mistakes, learn from them.

29. What he said: • Life is not divided into semesters. You don´t get summers off, and very few employers are interested in helping you find yourself. Do that on your own time. • Television is not real life. In real life, people actually have to leave the coffee shop and go to jobs.

30. Describe the benefits of selling on the World Wide Web. • Understand the factors an entrepreneur should consider before launching into e-commerce. • Explain the twelve myths of e-commerce and how to avoid falling victim to them. • Learn the techniques of designing a killer Web site. • Entrepreneurs in Action – Bill Gates Lecture Review