Online Business Start-Up Information, Research Paper Example

The internet has become an invaluable economic tool in the past few decades. As it currently stands, competent online activities are practically essential in the operations of many businesses across the world. A growing number of companies are now being positioned as entirely virtual entities that function through the internet alone in a system known as e-commerce. Of course, operations will need to be administered by people who may then be required to congregate in a headquarters type of location, but there would be no area in which the public could access their services and/or products without using the associated online environment. There are several advantages to using an online-only business model, such as reduced operational costs and the ability to easily reach a global audience, as well as drawbacks in areas like customer security and appealing to every applicable culture. A thorough review of these and many other factors would be required in order to accomplish the successful implementation of any online business venture.

One of the most attractive characteristics of e-commerce centered business models is the opportunity to reduce costs during both start-up and regular operations. The potential goes far beyond the obvious savings gained from reducing need for physical space. For example, marketing models in all e-commerce systems have the distinct advantage of being a part of the advertising medium by default and thus have direct access to these channels without needing to seek assistance from outside firms as would be the case for television, radio, or physical marketing projects (unless the company had the unlikely benefit of being a part of that industry as well). However, online start-ups are not required or advised to handle all marketing tasks in-house and may instead benefit from the assistance of relatively inexpensive experts who operate via a similar virtual storefront (Motahari-Nezhad, Stephenson, & Singhal, 2009).

An additional unique aspect of online business is the instant ability to become an advertising source for other companies through third parties like Google or reciprocal agreements, presenting an additional resource to offset start-up and operational costs that would be otherwise unavailable. The cost efficiency of online business models would be of no use if the medium were unpopular. It is therefore understandable that the most important aspect of virtual industry may be the opportunity to instantly reach customers without geographic restrictions. Internet access is available across the planet and has become the framework for the emergence of a global economic community. The simplicity of becoming visible and accessible to prospective buyers from virtually all markets through a single channel is a benefit of the internet business model that cannot be understated.

Among the possible disadvantages of internet business is the struggle to maintain the confidence of the customer in the security of their transactions and information (Ding, Huang, & Verma, 2011). Internet crime is a serious issue that can cause problems for companies in a variety of ways. Consistently evolving malicious techniques used by hackers require an equally ambitious focus on maintaining the latest security updates in software and hardware, introducing new costs along with the need to either include these skill requirements in a company position or to employ outside sources. While the chances of a start-up business being victimized by hackers may not be significant, there remains a common perception that online transactions are inherently risky. This view is especially held by older customers who were not raised in an online-enabled environment and so the prevailing view may be different in the future. However, at the present the majority of the population may harbor suspicions about online security and resources will be required to adequately demonstrate this quality through expensive systems and/or informational marketing campaigns.

The various assortments of customers that can be reached through solely online means are not homogenous in customs, beliefs, and values. Accordingly, a system that does not appeal to the uniqueness of each target market will be likely to fail within those that are neglected. Websites and other storefronts will need to incorporate elements that appeal to all targets as either a single entity or through the implementation of multiple access portals that are tailored to each customer group as deemed necessary. This is much different from the traditional physical model, which should also apply a multicultural approach when operating internationally, because communities on the internet are often built on concepts other than nationality whereas local stores are always subject to regional influences. E-businesses must then conduct marketing and other research in a manner that is less clear and potentially more expensive in comparison to the more commonly available literature on regional market variables (Slater & Yani-de-Soriano, 2010).

It is necessary to utilize the internet in some form to succeed in most start-up ventures in order to keep pace with the competition. This need is intensified when the business plans to conduct operations as a solely online entity. There are many factors that can affect an e-business but may be overlooked due to their alternative or non-existent role in traditional physical operations. Marketing conditions for internet based companies are different because it can also be a source of income and helps to reduce costs along with the freedom from rent or other fees associated with material location needs. Challenges of such a venture include adapting to be a viable choice for multiple market groups based on non-regional characteristics and addressing the threat of security threats directly as well as their role in rattling consumer confidence. These variables along with a host of others must be considered from the conception of an internet start-up project and throughout the creation of a marketing strategy for the obtainment of funding.


Ding, X. D., Huang, Y., & Verma, R. (2011). Customer experience in online financial services: A study of behavioral intentions for techno-ready market segments. Journal of Service Management, 22(3), 344-366.

Motahari-Nezhad, H. R., Stephenson, B., & Singhal, S. (2009). Outsourcing business to cloud computing services: Opportunities and challenges. IEEE Internet Computing, Palo Alto,10.

Slater, S., & Yani-de-Soriano, M. (2010). Researching consumers in multicultural societies: Emerging methodological issues*. Journal of Marketing Management, 26(11-12), 1143-1160.