How the Internet Changed Business

How the Internet has Changed Small Business Forever

Ten years ago, the Internet as we know it hit screens. It was 1995 when Explorer and Netscape emerged as the leading browsers for Internet users. Of course, a lot has changed since the days when it took several minutes to load one Web page. Today, URLs are as common as phone numbers for most businesses.

During the last decade, we've been to the top of the world--during the dot-com boom of the late 1990s--and back down again, when it all fell apart a few years later. But with the bad came the good: The Web forever changed the business world. The following small-business owners are shining examples of how Web-based technologies can be a businessperson's best friend.

1. E-mail

Because it changed the way we communicate in business

Phoenix-based PMP Tools ( http://www.pmptools.com ) provides test materials for project managers studying for professional certification exams. Test takers can find prep courses, review books and study tools on the site, which employs 11 people. Brent Knapp, the site's founder, started publicizing PMP Tools by posting information in Yahoo Groups chat forums and by buying lists from Hoovers and Forbes for marketing mailings. His results were decent, but not perfect. He got a 3 percent response from what was then a $3,000 monthly project that took three days to complete.

"We spent time designing the mailing and printing it. And then we all sat around stuffing envelopes and calling companies to get the right contact person to mail it out to," he says.

Last year, Knapp decided e-mail might be a better option. At the very least, he would save $2,950 per month and three days of manpower; the template and automation tools he uses take all the legwork out of creating a newsletter. He saw results almost immediately. Now Knapp sends a daily newsletter to about 12,000 people, a number that has climbed 10 percent each month. The newsletter contains a project management review, crossword puzzle and product promotion. Sales have gone through the roof since it launched, topping $1 million last year.

The company also benefits from e-mail in another way: employee contact and customer service. "We literally have no incoming calls--ever," says Knapp. "Everything--99 percent of what we do--is handled via e-mail. People don't want to call in. People don't want to wait on hold. We have a one-hour e-mail policy, so our customers get an immediate response. I can't imagine working without e-mail."

2. Google

Because it changed the way we advertise our small businesses

Fake food creates real profits for June Barnard. The retired banking vice president purchased her self-named business, which sells faux martinis, fake fruit and plastic bakery items, among other things, in 1997. It was a place she remembers walking past as a kid growing up in Chicago. "I was familiar with the store, but never thought it was open to the public," she says.

After buying the small business, Barnard communicated with customers--a select group of Chicago-based museum curators, food packagers, stylists and parents--by mailing about 5,000 catalogs each year. Her revenues, she says, were a modest $225,000, despite the fact that she created a Web site for Barnard Ltd. that same year ( http://www.barnardltd.com ). Four years ago, her daughter noticed the explosion of search engine marketing and suggested Barnard buy several keywords on Google. She took the advice.

"In the beginning, I had 10 keywords. Then I went up to 30. I did 'fake food,' 'artificial food' and 'baked vegetables,' " says Barnard. "The results were pretty incredible. Once I added more words, I saw a 70 percent increase in sales."

Barnard spent $500 to $600 per month during the second year and watched her revenues jump another 31 percent. Since then, she's seen a 20 percent year-over-year increase. Today, Barnard buys placement for 113 keywords at an annual cost of about $30,000. The difference: She grossed $760,000 in 2004.

"Google changed my whole buying strategy," she says, "No longer can I inventory a dozen of something. Now I have to go deep in it. I used to think if a someone called and asked for two or three of an item, it was good," says Barnard. "Now I get calls for 40 or 100 of something. We recently sold fake waffles and toast to Tiffany & Co.--thousands of pieces. They never would have found me if it wasn't for that Google search."

3. eBay

Because it introduced us to online auction sites where we can now buy and sell for our small businesses

Like many small-business owners, Tom Howle's first headquarters was in his garage. Howle, who sells and services sound and music equipment such as wireless microphones and speaker stands to churches and consumers, opened the doors to his retail store in 1998, two years after he launched his business. Two years after that, he opened virtual doors on the auction site eBay. Instantly, he cast a wider net.

Howle pays a seller fee of about $15 a month plus 13 cents per item for his eBay storefront, where he has 60 to 70 items listed at any time. Last year, about 20 percent of his sales at Sound Services ( http://www.tomssound.com ) in Birmingham, Ala., came directly from auctions. He grossed $570,000, and eBay sales comprised $103,000 of that number.

There are pluses and minuses, he says. For one thing, eBay margins are lower because of competition. But, as he points out, he's able to unload things that might never sell in his retail store. This means he can be more flexible with trade-ins, expanding his retail store's customer service.

"My retail store reaches an area of about a million people or so. My eBay listings reach the whole country. If I get something esoteric or unique, I can put it on eBay and there's someone out there who wants it. Even at low margins, I can continue turning over on eBay," he says. "Even if I only make a 10 percent margin on it, it's also at a fairly low effort."

4. Amazon.com

Because it introduced small business to e-commerce

Laura Modrell started