By Steve Strauss

Steve StraussSteve Strauss is one of the country's leading small business experts, a columnist for USATODAY.com, and the author of the "Small Business Bible." If you would like to have Steve speak to your group, or to sign up for his free e-newsletter Small Business Success Secrets!

Why your business needs a Web site

Hi Steve: I am thinking about starting an online business or at least having a Web site for point of contact of a local home business. I recently attended a small business seminar at my local chamber of commerce. However, they didn't give very much information on Web-based businesses. Is there some advice you could give me or perhaps some resources you could recommend?

Susan, Texarkana, Texas.

A: There was a time not long ago when a business could do without a Web site, but that time has long gone.

Should your business have a Web site, even if your business is small and sells products or services you don't think can be sold online? My answer in 1998 is the same as my answer today: Yes, if you have a business, you should have a Web site. Period. No question. Without a doubt.

Also, don't be so quick to dismiss your product as one that can't be sold online. Nowadays, there's very little that can't be sold over the Internet. More than 20 million shoppers are now online, purchasing everything from books, computers, cars, real estate, jet airplanes, natural gas to you name it. If you can imagine it, someone will figure out how to sell it online.

Internet marketing research firms predict that the number of online consumers will grow at a rate of 30% to 50% over the next few years. These numbers alone should be enough to persuade you that your business should have a Web site.

Let me clarify: I'm not saying you should put all your efforts into selling your wares over the Internet, though if your product lends itself to easy online sales, you should certainly be considering it. The point is that you should, at the very least, have a Web presence. This enables your customers, potential employees, business partners and, perhaps, even investors to quickly find out more about your business, and the products or services you have to offer.

That said, it's not enough that you just have a Web site. You must have a professional-looking site if you want to be taken seriously.

Since many consumers now search for information online prior to making a purchase at a bricks-and-mortar store, your site may be the first chance you have at making a good impression on a potential buyer. If your site looks like it was designed by a barrel of monkeys, your chance at making a good first impression will be lost.

One of the great things about the Internet is that it has leveled the playing field when it comes to competing with the big boys. With a well-designed site, your little operation can project the image and professionalism of a much larger company. The inverse is also true. I've seen many big company Web sites that were so badly designed and hard to navigate around that I found myself leaving them. This is good for small business people, it's your turn to shine!

You also mention that yours is a small operation, but when it comes to benefiting from a Web site, size doesn't matter. I don't care if you're a one-man show or a 10,000-employee corporate giant. If you don't have a Web site, you're losing business to other businesses that do.

Here's the exception: It's actually better to have no Web site at all than to have one that makes your business look bad. Your site speaks volumes about your business. It either says, "Hey, look, we take our business seriously and we've created this wonderful site for our customers!" or it screams, "Hey, look, I let my 10-year-old nephew design my site. Good luck finding anything!"

Your Web site is an important part of your business. Make sure you treat it as such.

Online profit streams

Whether you're just beginning to develop your business model or simply analyzing an existing business, your chief focus should be on how you're going to generate income. There are seven ways to generate revenue on the Web:

  • Sell your own products
  • Sell your own services
  • Drop ship products
  • Recommend affiliate products
  • Sell ad space
  • Create a joint venture with like-minded businesses
  • Start an affiliate program

Let me explain each of these a little further:

1. Sell your own products. The main advantage to selling your own products is that you, ultimately, control how much profit you make on every sale and you, therefore, have the potential for the biggest profit margin. You know exactly what each product costs and you can try out different price points to see what works the best. People appreciate good value, and removing the middleman is a great way to provide your customers with competitive prices that keep them coming back for more.

2. Sell your own services. Whether you're a small-town dentist, a high-priced online legal consultant, a real estate agent, a tutor, a landscaper, a bed- and- breakfast owner, an auto-mechanic, a caterer, a fitness trainer or anything in between, you can profit from selling your service online. It's easy to get started selling a service online, but your revenue potential, in most cases, is limited. That's because, unlike someone selling a physical product that can be stored and shipped on demand, you can only provide as many services as your time allows.

When you sell a service, you're essentially selling a relationship with yourself. And this requires is that you spend more time and effort establishing your credibility and developing rapport with your visitors than is typically required on a site merely selling a product. You not only need to establish the benefits of the service you're offering, you also need to establish the value of you providing this service.

3. Drop ship products. If you want to sell products without the hassle of tracking your inventory, setting up a warehouse and maintaining a confusing shipping/receiving infrastructure then drop-shipping may be the choice for you. Drop shipping lets you sell quality, brand-name products on your site for a hefty profit, while the drop shipper takes care of fulfilling the order. (They warehouse the stock, pack the orders and ship them out to your customers.)

4. Recommend affiliate products. Recommending affiliate products creates a "no-risk" partnership that allows you to promote another company's products or services on your site to earn a percentage of their sales. As one of the company's "affiliates" or promotion partners, you earn a commission each time someone is referred to their site and makes a purchase. To advertise their wares, you might post a banner on your site that links to the affiliate program's site, or you might publish an article about the company and their products in your newsletter.

5. Sell ad space. Once your site has lots of highly-targeted traffic, or a large, targeted opt-in list, you may be able to sell advertising. Advertisers are willing to buy ads when they're being directed at large numbers of their target market. Nowadays, though, advertising revenues are a lot less than they used to be, so I don't recommend you making this your sole source of income. Selling ad space can be a great additional profit stream, but it's unlikely to keep your business afloat on its own.

6. Create a joint venture with like-minded businesses. Joint ventures are all about related businesses teaming up and combining skills, products, services and resources to create new streams of income and profit. One great way to profit through joint ventures is to seek out products or services that would benefit your visitors, and then approach the companies that provide those products or services. Ask them if you can recommend their products or services on your site for a portion of the profits. Most companies will gladly agree to this arrangement. After all, there's no risk for them since they only pay you when you refer a paying customer.

7. Start an affiliate program. With your own affiliate program, you can recruit an army of people (your affiliates) who will recommend your product on their Web site for a percentage of any sales they refer. You have the power to exponentially increase your income as more and more affiliates sign up and you continue to teach your existing affiliates how to increase their commission checks (and your income).

How did Steve answer other questions? Read his previous columns

Steve Strauss is one of the country's leading small business experts, a columnist for USATODAY.com, and the author of the "Small Business Bible." If you would like to have Steve speak to your group, or to sign up for his free e-newsletter Small Business Success Secrets!, visit his Web site. Have a question for Steve? Send him an e-mail.