Taking Your Small Business Online: 4 Points to Consider
Savvy business owners are embracing the consumer trend to shop and buy online. For small business owners, this may be an opportunity to explore a digital business model. From offering an online product demonstration to consulting with a key client, many are turning to virtual delivery methods to preserve and grow revenue streams, strengthen customer loyalty and improve customer experience.
The idea is to continue to maximize revenue by improving business offerings while minimizing costs.
Here are four points to consider before taking the steps to move your business online.
1. Impact on Operating Costs
Moving to an online model changes your operating costs. New or increased costs may include buying computer software, website hosting and other online tools.1 You may also realize savings if going digital enables you to decrease business travel, reduce the physical footprint of office space or a retail storefront, and replace in-person meetings with online sessions.
Allowing employees to work remotely in your new online model may yield other benefits. For example, besides reducing recurring overhead expenses, you may see a boost in productivity when you allow your team to choose a remote workplace.2
2. Expanded Marketing Opportunities
A great customer experience is the foundation of any successful business.
Moving your operations online allows you to take advantage of new digital marketing opportunities. You may also want to track customer response, acquisition rates and abandoned carts. The resulting data can help inform decisions about ways to optimize your operations. A strong social media presence and a high-performing website that garners robust search engine traffic can be excellent channels for attracting new customers.3 Your web presence gives you a far wider reach, potentially attracting customers worldwide.4
Keep in mind, it may be unrealistic to expect your in-person customers to switch to online ordering immediately. You may need to support old methods as you transition to online sales. Over time, customers who shop online and in person are more valuable than those who shop in a single channel.5
3. Payment Processing Options
When moving to an online sales model, you must offer customers online payment methods. These may include card payments and electronic funds transfers to your business bank account.
Follow Payment Card Industry (PCI) standards.6 Some payment processors offer this as a built-in feature that integrates with your website.
You may be familiar with physical credit card payment terminals and fee structures. If so, be aware that taking a greater percentage of payments over the internet may increase your average transaction cost.7
Fees to process payments can be more expensive when a physical card is not present, as there is more potential for fraud.8 But lower costs elsewhere in your business, and increased sales, may compensate for higher processing fees.
4. Protection Against Cyber Risks
Online operations may create new business risks, such as a heightened exposure to cybercriminals. Hackers prowl the web for vulnerabilities, looking to exploit data or drain bank accounts. Consider improving your online security by maintaining appropriate cybersecurity best practices.
These include using strong passwords and up-to-date software and staying aware of the latest cyber risks. Social engineering, ransomware and phishing attacks aim to subvert traditional antivirus software and gain access to your devices.9
While you may benefit from a website that is open for business all day and night, it’s critical to take steps to secure your online assets. In the event that you become the victim of a cyber attack, cyber insurance can help protect your business from the costs associated with a breach.
Stay Competitive, Stay Protected
Providing customers online access to your products and services may also help buoy your business in turbulent times. As you consider the move, keep in mind that protecting your company’s data and that of your customers is a top priority.
Taking your small business digital is a big step. It’s also a good time to make sure that your insurance coverage is current and meets your business’s unique needs, especially as you evolve it to the digital marketplace. Talk to your local independent agent or Travelers representative today.
Sources
1 https://www.sba.gov/business-guide/plan-your-business/calculate-your-startup-costs
2 https://www.chicagobooth.edu/review/are-we-really-more-productive-working-home
3 https://www.uschamber.com/co/grow/marketing/how-to-target-small-business-customers
4 https://www.trade.gov/ecommerce-sales-size-forecast
5 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7492145
6 https://www.federalreserve.gov/paymentsystems/2019-December-The-Federal-Reserve-Payments-Study.htm
7 https://www.federalreserve.gov/SECRS/2022/November/20221117/R-1748/R-1748_081021_140753_423623478640_1.pdf
8 https://www.uspaymentsforum.org/us-payments-forum-fall-market-snapshot-next-steps-for-contactless-fraud-in-focus-alternative-payment-boom/
9 https://www.ftc.gov/business-guidance/small-businesses/cybersecurity
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