How to cost out your ebusiness

Costing out your ebusiness project needs will help you get it off the ground successfully. Particularly important is ensuring that you're spending wisely and considering all of your options. As well, you don't want to find yourself with hidden costs down the road. Be certain that you've gone over everything in detail and included all possible expenses.  Essentially, there are two types of costs to consider: direct and indirect.

Direct Costs 
In-house: very expensive. The company buys all equipment and develops software itself. This requires a higher capacity Web connection, such as a T-1 line, instead of a simple Internet connection. Larger companies looking for a unique system and absolute control over security usually take this route.

Outsource: you could outsource website development (which can cost as little as a few hundred dollars and can climb beyond $10,000) to specialists in the field who offer customer relationship management and website management expertise. Sometimes, this may include contracting with a higher-capacity hosting service that specializes in ebusiness. Outsourcing provides some customization and control over specific operations and can cover intensive technological functions such as server operations.

ASP Models: application service providers (ASPs) can source everything from hosting/e-commerce services to specific business services such as office administration, sales and marketing, and human resources management. ASPs allow businesses to choose only the services they need.  Many outsourced services for small businesses have migrated from the CD-based software model to the Web in order to lower prices; this is usually charged in the form of relatively low monthly fees. 

Indirect Costs
When planning an ebusiness initiative, don't forget about indirect costs. They can be substantial and often higher than direct costs. Indirect costs usually involve the management of software and technology that helps your business operate and the design, management and marketing of your website. When planning for indirect costs, consider:

Mobile business management
A common indirect cost involves the operation of business outside the traditional office environment. Many entrepreneurs do not have offices in the conventional sense but operate virtually. Things to consider:

Communications. Traditional telephone services, email and messaging can be conducted via the Internet. Often, these communications tasks can be conducted via handheld devices. Examine your business and determine what kind of communications management would best suit your needs. If much of your business is communication-based, such as sales, then a mobile device may be the best option.

Networking. Many entrepreneurs need to remain constantly connected to information sources. Today, there is virtual office software available, often through low-cost ASPs, that allow a mobile operator to network with co-workers or allied entrepreneurs via the Internet. Also, relatively low-cost, sometimes bundled, software is available to connect a portable computer to a larger fixed computer so that it acts as a field terminal.

Payment, banking, and accounting. Low cost software is available by CD or through an ASP that can help you manage cash flow and accounting. Some of this software also provides financial intelligence functions (dashboards) such as sales charts, time tracking, and cash-flow statements. This software is also migrating to wireless networks.

Task and time management. Busy entrepreneurs must often schedule their activities closely in order to be efficient. So scheduling and task management software is readily available to help administer their time. This software is usually quite low-cost, and is often bundled with office software.

Technology maintenance
Simply buying computers and other technology (such as networking technology) is not enough. Hardware and software must be maintained and serviced regularly. This can be done by:

• Creating an IT department: If your business is heavily dependent on technology, it might be wise to have an in-house IT person on hand at all times. This will ensure that critical operations are always in top shape.
• Contracting out: Technology maintenance companies have sprung up to serve small businesses that do not need or want a complete in-house IT department. For a monthly fee, these companies will service technology on a regular basis.
• Fee for service: Very small operations often have an on call technology maintenance provider who will service technology and software, as well as correct problems as required. These providers usually charge an hourly rate in the $100/hour range. Many can now provide service remotely via the Web.

Website design and architecture
Be prepared to invest time and money in creating a well-designed and effective website. There is an art to guiding viewers through a website, generally termed as "usability", which simply means how easy it is for website visitors to move around the site. Usability can affect traffic and effectiveness.

• Put yourself in the place of people visiting your site.
• Can they find what they are looking for within 3 clicks?
• Is the purpose of the site clear to any visitor immediately?
• Are the fancy and distracting graphics kept to a minimum?
• Is your site overpowered by content and graphics? 
• People read websites differently than written material, so the writing should be direct and simple. The information should be easy to find and useful.
• Blatant sales pitches and demands for personal information at every turn usually force visitors to abandon a site quickly.
• If your website is complex or central to your business, it's worth spending a few thousand dollars on a site designer who can organize the site's architecture.

Website management
A significant indirect cost involves continued management by a webmaster. This job is often given to the person or company that devised the site's architecture, but it can be contracted out or performed by someone in-house. Some tasks that they may perform:

• Keeping the site dynamic
• Regularly adding useful content  (e.g. tips, news, and educational information) to encourage repeat visits. This is especially important for B2B service websites that merely generate sales leads. Either have someone in the organization find fresh content, or outsource it. Marketing companies sometimes perform this service for a monthly fee, or charge off-the-shelf prices for developing material.
• Monitoring traffic patterns and then refining the site to better match user needs.
• If some pages are rarely visited, while others are heavily used, then change the site to meet your clients' needs.
• Identify how visitors found your site and what they do when they are there.
• User tracking and analysis software, such as low-cost standalone or ASP-based, is available, often from Internet Service Providers (as part of a website hosting package) or private providers such as Blizzard, OneStat, Webtracker, WebTrends or many others to help entrepreneurs track such things as site visitor numbers, search engine steering (how they found your site), unique usage patterns, marketing effectiveness, conversion rates, and geographic origins. 
• Handling inquiries, testing links and fixing broken ones, adding new links, and other administration tasks.