Welcome to Week Three

Launching a fully functional e-commerce site is a sizable financial investment in technology, marketing, advertising, inventory, merchant account fees, site-hosting fees, office supplies, labor, etc. Few businesses become profitable immediately, and many failures are due to lack of investment. Startup costs must cover equipment and whatever is required to take an e-commerce site live as well as ongoing expense until the business can meet them. Many businesses budget in the expectation that meeting expenses may take three to six months. Disaster planning and related expenses should also be part of these budgeted funds.

Discuss the role of eCommerce in practical business applications

Identify techniques and tools that can be used to evaluate the driving forces of eCommerce

Assess eCommerce influence on businesses and how it provides a competitive advantage

Join me in the Discussion Board this week as we investigate financing opportunities.

Respond to this week’s discussion questions in 3-4 well researched short paragraphs. Support your view with evidence, explanations and credible references.

Your e-commerce site was successful in its first year of operation; however, you would like additional financing for expansion. You are intrigued by venture capital. Is it usually a good financing source for a small e-business?

Assignment

1. Assume you are going to start a simple e-business from scratch, using no existing equipment or materials. Briefly describe the business, and then do a rough calculation of startup costs, following the list provided.  Research costs that are realistic for the area in which you live. Be generous in your estimates and avoid cutting corners on any expenses. Include a table embedded in your text (Use Word>Insert>Table) which summarizes your estimates, including a total.

    

   Accounting, consulting, and legal

   Advertising, marketing, and public relations

   Business plan

   Business travel

   Communications (including telephone and cellular service)

   Computer equipment and software

   Feasibility study

   Insurance

   Interest on loans

   Internet service provider (ISP) and web site hosting fees

   Inventory

   Labor (employees and contractors)

   Market study

   Merchant account fees

   Office furniture, equipment (such as copy and fax machines) and supplies

   Order processing/shipping

   Phone line (toll-free number, where applicable)

   Printing and design for marketing materials, business cards, stationary

   Rent and utilities (such as elec, heat, water, and sewer)

   Taxes

   Web site design and maintenance

    

2. Publicly held e-commerce companies (Yahoo.com, for example) must publish financial statements with their annual reports, which are available online. Access a recent annual report for one of these companies and review the balance sheet. List the following: current assets, total assets, current liability, total liability, and owner’s equity. Prove that the balance sheet balances by applying the appropriate equation (found in our text). Do not reproduce the company’s entire financial statements in your paper, just the items identified above as needed to balance the equation.

    

   Response should be no less than two pages, supported with credible references and submitted in an APA format