We cannot promise you millions

(.... but we can give you the tools to make them)
                                     London, UK Dec 2006.

When the telephone was invented in 1876, it was widely regarded as an exciting piece of technology. But there was a lot of scepticism about its worth as a business tool. Some of this scepticism came from the custodians of UK business, who should have known better. Stockbrokers at the London Stock exchange snorted, "Who needs so many telephones? We have messenger boys."

In those days, messages were sent between companies by runners or messenger boys, in much the same way that today's bike couriers do (except that they did the deliveries on foot). The streets of the city and the offices of the big corporations were swamped by these messenger boys who kept the commercial heart of London (or indeed any big city of the time) beating.

As it turned out, those who had the foresight to invest early in a telephone system reaped the rewards, leaving the sceptics to play catch up. The telephone went on to transform business (and indeed, personal life) in ways unimaginable by its creator.

Initially, the ownership of a telephone granted an advantage over those that did not have it. But it quickly became commonplace and an essential business tool. Today the telephone is more important to a Business than is physical premises.

Why the epistle on the importance of the telephone in business? Well, the rise of the telephone is in many respects mirrored by the rise of ecommerce.

Research carried out by Paypal - one of the largest online payment systems, reveals that online spending in the UK rose to £8.2bn in 2005 - at the same time that high street spending fell by £122.3bn. Another survey, conducted by the finance company - Alliance & Leicester - concludes 87% of its respondents are using the internet to purchase goods and services more now than they did five years ago. Similarly, The Observer of October 1, 2006 points out that a number of high street big names (Norwich Union, HMV, Currys etc) are switching to online trading in panic as they rapidly lose out to online retailers like Amazon and Play.com. Hardly a week passes by without another big news item about the unstoppable rise of online trading. The latest story from the Evening Standard revealed that a record 18 million UK customers shopped online in July 2006 alone

As with the telephone - we are gradually moving away from seeing the online store as an additional sales channel. Online trading is becoming an essential tool without which traders cannot survive. The Paypal research was particularly pertinent. It estimates that 2,000 small businesses would fold this year, due to the continued switch from traditional to online trading.

Why, then is it that more that 70% of small and medium-sized retail businesses still do not have their stores on the internet (source: www.thesurveyshop.com)? Firstly, they have to face the cost of setting up an ecommerce store. In order to get one up and running, the merchant would probably have to employ the services of a web/ecommerce developer. This would set the merchant back by an average of £2000. And then there are the costs of maintaining and updating the store. For instance the merchant might decide to modify the details of some of his/her products. This regular maintenance would necessitate the continued use of the services of the developer, thereby piling on the costs.

For a small or medium sized business, £2000 + n is a large sum - particularly when the store does not guarantee a return on the investment. It is one thing to have an online store and another thing getting people to buy the products in the store.

But all is not lost. In this age of blind profiteering, the internet is unique in that it has created the YouTubes, MapQuests, Wikipedias and Skypes. These excellent tools are offered free to the end user and are bankrolled by advertisers. The philosophy that gave rise to YouTube and MySpace is creeping into the eCommerce field. Today, software applications like EasyWare commerce (www.easyware.co.uk) pretty much allow the user to build unlimited stores with unlimited products all for free. Indeed as with many of these free, advert-supported services, free-commerce like EasyWare allows the user the option to purchase a commercial, advert-free version, if they are suitably impressed with the free version.

So for all the SMEs out there who are yet to setup up their online stores, there really is little excuse not to have one, and every reason to do so. After all, it would be foolish to ignore the lessons learnt by the sceptics of the humble telephone.