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SMALL BUSINESS: Technology Special | SMALL TALK: Advice
From Small Business Experts

Booting Up Your Web Business

April 08, 1998|KAREN E. KLEIN | SPECIAL TO THE TIMES

Q: I'm starting my business on the Internet. As I develop my Web site, do I need a database management system attached to it to manage a catalog? How do I accept credit card payments?

--Doreen Gournaris, San Pedro

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A: The biggest, most booming area on the Internet right now is adding e-commerce to Web sites. There are several major components you will need to do business on the Web: a credit card validation service with debiting to your merchant account; a secure server layer certificate that shows the credit card information you are taking from your customers is encrypted; a shopping cart common gateway interface, which is an interactive program that tracks your customers through your Web site, allowing them to select items from different pages; and a cataloging tool on your end that works as a database management system.

How do you manage to set all this up? There are two approaches designed to be as simple as possible for the entrepreneur. The first is to let your Web host--your Internet service provider--set you up with its existing systems. Set-up fees will run $5,000 to $20,000, depending on how fancy you want to get with your system. More expensive software will do things such as set up automatic sales and special rotating offers on your monthly loss leaders. Your ISP will probably also charge a maintenance fee that is based on a percentage of your sales or a flat fee of around $1,000 to $5,000 a month.

Another approach is to pay a consultant to set up the system for you and install it, then plan for you or your staff to update the site monthly, changing prices, rearranging products, etc. Set-up fees again will be in the $5,000 to $20,000 range, and the time to do the set-up will take between one and six weeks.

Locating your Web site in an Internet "mall" is another approach, and the mall will usually take responsibility for driving traffic to your site. You simply supply the pictures and prices for your products and the mall sets up your system for you, with you adding and deleting products as needed.

Many malls are now in operation, and they all work a little differently. Some will set up your systems for free, and others will charge set-up fees of up to $5,000. Most of them will charge 5% to 15% of your gross sales (not your profit) as an ongoing fee. Some want you to market your products exclusively on their site, and others do not prohibit you from marketing at other places online. Also be aware that some will drop you from their mall if your volume does not reach a certain threshold after several months.

--Peter Benjamin, Web consultant,

Marina del Rey

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Q: Where can I find a media writer to help me with product descriptions and/or newsletters for my nutritional products company?

--Amy Kwan, MAXX Marketing, Los Angeles

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A: Call the Public Relations Society of America's local office at (213) 461-4595 and ask for the referral list. They can help steer you to a professional public relations firm or a freelance writer.

If cost is a factor, you might try the public relations departments of local colleges. I have found, especially with product descriptions, that if you are very specific about what you want, a student can do a more than adequate job for you at a lower price.

Newsletters have become so specific that most are written by people who specialize in the particular field they are writing about. Try asking local printers or copy shops for referrals. These places typically print lots of newsletters, and they see all kinds of quality levels in both writing and design and can give you some feedback about the various small companies doing this kind of work.

Your Yellow Pages is another source, and, of course, nothing beats simply asking other business owners for referrals.

--Anthony Mora, president

Anthony Mora Communications, Los Angeles,

and author of "The Alchemy of Success"

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Q: I have led trips for the Sierra Club for many years as a volunteer and I now would like to open a for-profit service and begin escorting two one-week trips a year, but I need to find liability insurance that does not cost $3,000 to $4,000. I don't want to risk my retirement savings or home because someone's mother drowns in a swimming pool or something equally unlikely. What do you recommend?

--John Lajeuness, La Crescenta

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A: The answer depends first of all on what kind of service you plan to offer. If you plan to simply make arrangements for groups to tour established travel destinations, similar to what a travel agent does, you might qualify for specialty travel agency policies that are fairly cost-effective, especially if you can get under a group insurance umbrella.

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