The Impact Of E-Commerce On Small Businesses

Introduction:

E- Commerce is a phenomena that is emerging rapidly between businesses all over the world, and it has affected the businesses at all sizes in many aspects.

This research is looking at the small businesses, and its importance in the market and economy, EC and its benefits and limitation, and what impact has electronic commerce had on the businesses.

Small Business:

Definition: A small business may is a business with a small number of employees. The definition of "small business" often different by country and industry, but is generally under one 100 employees in the United States, while under 50 employees in the European Union. These businesses are normally privately owned corporations, partnerships, or sole proprietorships.

Small businesses are common in many countries, and it depends on the economic system in the country. Examples include: small shops, hairdressers, tradesmen, lawyers, accountants, restaurants, photographers, small-scale manufacturing etc. Small businesses are usually independent businesses that have little influence on the market.

The smallest businesses, often located in private homes, are called micro businesses (term used by international organizations such as the World Bank and the International Finance Corporation). The term "mom and pop business" is a common expression for a single-family operation business with few or no employees other than the owners. When looking at the number of employees, the definitions in the USA and Europe are the same: under ten employees.

(sbc004.pdf) (Griffin, 2003)

The Importance of small businesses:

Small businesses have a clear relationship with the economy in general, and if we take an example like the U.S. where over 86% of businesses have no more that 20 employees, and the total number of people employed by these small businesses is nearly one-fourth of the entire U.S. work force, so they play a very important role in its economy as they offer a big help in the economic growth of the country, and these businesses contribute a lot to the economy by hiring one, two, or more employees, even in the internet based business.

Because of their size and need to keep their customers, new businesses are more flexible and respond quickly to changes in the market than many other and established businesses.

Small business is an important source of new jobs in many countries, they also hire at a faster rate than big companies especially in the economic recovery times.

Many innovations came and started in small business.

Nearly all the goods and product that are manufactured by big companies are sold to customers by small companies.

(Griffin, 2003) (DoctorEbiz.htm)

Advantages of Small Business:

* Small businesses can grow with customer needs. Often, they can create products and services that address highly personalized requests at a moments notice.

* In case of sole proprietorships they are simple to form, they have the benefit of freedom which is the most important, and also it needs low start up costs.

* Tax laws permit them to treat operating expenses and sales revenues as part of their personal finance.

* Small businesses can obtain new data from a market, or even a client or two, and dramatically change their business model to align with a new opportunity.

* The proper use of technology allows small businesses to put up big shop follow-up, service and prospecting without the overhead.

(Griffin, 2003) (DoctorEbiz.htm)

E-commerce:

Definition: E-commerce or (electronic commerce) consists of the buying, selling, marketing, and servicing of products or services over computer networks and the Internet.

When we talk about e-commerce we also need to talk about E-Business which is the cooperation with other businesses and organizations, serving customers, and to have and manage the company throw electronic transaction in the business. This is all to advance and improve the business overall performance. (Turban, 2006)

Benefits of E-commerce:

E-commerce has many benefits and advantages for businesses, consumers and customers, and for the whole community.

Benefits for Businesses:

The fast expansion of E-commerce is the most important recent trend in small business starts ups, it has helped firms to expand and create new businesses mush easier and faster than before as it has provided new ways of doing business.

International reach: it has helped businesses to reach domestic and international markets with minimum cost to find the best and most efficient suppliers, expand the business, attract more customers, and collaborate and find the best suitable partners for the business.

Reduce expenses: This is also the main advantage of website designing as once the web site is design for you it greatly reduces the cost of hiring an offline organization for marketing. Website design also promotes your business without customary charges, such as electricity bills, in-house expenses associated to offline marketing. When you decide to use web site designing all work is being done for you. You don't have to go to any specific location to promote your business as the design website is accessible all over the world.

Interaction with customers: EC helps to improve the relations with customers, as personalized communication in buying the products, and doing services will attract consumers.

Up to date stock: all products on the web site will be up to date in term of quality, price, and type.

No Government permits: when a company launches a web site, it doesn't need to register and pay license fees fore the web site.

Long hours: the business is open twenty four hours, seven days a week with no other extra costs.

Benefits for Customers:

Extra choice: consumers will have much more choice over the web and different range of goods.

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