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9/14/07

How the Internet Levels the Playing Field for the Small Entrepreneur with Big Ideas

A common theme among aspiring entrepreneurs is that they possess as many ideas as stars in the sky. You and your business partners spend countless hours preparing a “package” that you can show people in hopes that they will think your idea is great and will want to help. You and your business partners planned and thought of every possible, microscopic detail. You are very proud of your idea and your work, however, you soon realize that a big monetary investment is necessary in order to put you idea “into action.”

This is the point where most ideas fall apart. Getting financing is not an easy task. You can try the traditional channels (such as banks and other lending institutions), but chances are, unless you have vast amounts of experience, excellent credit, and a large amount of collateral, you will most likely not get the loan you sought. An alternative is to find “private money.” The problem with this is that many times private investors will want a large piece of your idea (by way of a percentage of gross revenue) or will want management control. You may agree to a “bad” deal if you are desperate and find that the investor is making more money than you! What are your alternatives?

This is the part when you may expect that I tell you how great the Internet is and how it has changed the modern business model. Well, it is true that the Internet is great, and it is true that the Internet has revolutionized modern business, however, many pitfalls exist that can make your Internet business awakening a real life nightmare.

First, the good. The Internet is a relatively inexpensive way to advertise your business. It allows many opportunities for an aspiring entrepreneur that would otherwise be closed off in a traditional business building model. The Internet allows provides a very large audience where you can sell your products. In other words, you are no longer restricted by state and international borders. The world is your oyster, so to speak. In addition to the advertising benefits, start-up costs are relatively inexpensive. Owning and maintaining a website is far less costly than owning (or leasing) and maintaining an office and/or store.

Now, the bad. The Internet can have many pitfalls for the inexperienced “webtrepreneur.” You have to be wary of the people you meet on-line. Many people will promise you gold, but only deliver lead. Make sure you do not jump into a “business relationship” on-line just because the other person delivers a good pitch. That being said, there are many sincere people on-line who will possess goods and/or services that may help you in your business endeavor. Feel these people out, develop a steady communication, and ask for credentials. Who knows, you may be able to build an important business bridge!

One of the biggest problems with Internet companies is that something may be wrong with your website code. In other words, your page may not be navigating properly, loading properly, or receiving and sending payments properly. In order to prevent these problems, you are going to have a website programmer, or some other computer savvy person on the payroll at all times. As inventory changes or new products come in, you are going to have to update your website in order to make sales. This is where your programmer comes into play. In may be costly at first, but losing business to lost sales due to website malfunctions, will cost you much more.
As a whole, the Internet has made it easier for entrepreneurs to pursue their dreams. Remember to weigh the advantage against the disadvantages. Take advantage of the benefits and avoid the pitfalls and you may find the success for which you are looking.


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