Electronic Connection Risk for Small Companies, Research Paper Example

Operating businesses through the internet has become a fad if not a culture in modern business conditions at present. It could be analyzed that the openness of the said portal towards creating a more expansive condition of operation for businesses around the globe has gained the interest of most business administrators. If there are benefits to the system there are also some risks to it that operators need to give attention to. Notably, these risks are related to the process by which the businesses are subjected to the openness and the limitless access of the market to the organization through the aid of the internet. These risks are even more evident when the operation of smaller businesses comes into account.

Small businesses are of course noted for their basic forms. May it be a sole-proprietorship or a partnership, small businesses often target a single and specific sector of the market. Due to a small range of capital used for the operation of the businesses, marketing operations are then controlled. With a small target market, it could be assumed that a smaller amount of capital for operations the parallel condition of the factors mentioned seem to be just right. However, when it comes to operating through the power of the internet, a larger market shall be reached, whether or not the organization wants it. When it comes to handling operations of marketing, it could also be regarded that internet requires an almost the same amount of fee for both small and large companies operating through its portal. This means that there is a possibility with which a small organization would invest in a marketing approach that should be paid for with a higher rate and get low results in return.

With the emergence of specific conditions of requirements for businesses to survive the challenge of operating over the net, small businesses ought to handle their operations with much strategic considerations along with the need to be careful when it comes to entering transactions over the internet [may it be B2B or B2C system]. True, at least 70% of the current businesses operated through the internet are small ones that have been established in the very homes of the business owners. Some of these organizations may not establish their brick and mortar offices as they see the sufficiency of operating through the internet. However, like any other businesses, they too would be subjected to the different risks of operating a profiting entity.

Another risk to consider is that of the emergence of the case of several organizations that were given birth during the dot com dot bomb era. This era is particularly characterized by the intensive rise of the number of organizations that were established over the internet. A lot of these organizations are relatively small and are operated remotely from different areas of the world. The wide area that the internet covers specifically promised so much to the operators as they enter the world of businesses with the aid of modern electronic operations including cashless transactions over the net. However, due to the lack of skills in dealing with the requirements and challenges of operating an e-business, at least 45% of these businesses flopped and turned out to be unsuccessful in their operations over the internet. They were not able to reap the benefits of the internet in their businesses due to the lack of control on the changing path that the internet takes especially in supporting businesses. This era specifically reminds small businesses aiming to engage in electronic transactions that it is their strategy that would count in making an approach to business successful. Learning through the twists and turns of the system would pay off a lot for small entities that are established to profit from net-based operations.

References:

Gordon, A. Risks That Small Businesses Face. http://ezinearticles.com/?Risks-That-Small-Businesses-Face&id=392446. (Retrieved on November 4, 2012).

Vitez, O. E-Business Risks. http://www.ehow.com/list_6188289_e_business-risks.html. (Retrieved on November 4, 2012).