The African Computing and Telecommunications summit (ACT 2000), currently underway at Sun City, has provided an ideal opportunity to learn from others. Several speakers have shared tales of their encounters at the information and communication technology coalface at various levels of enterprise.
Matthew White, owner of a secondhand bookshop, describes his three-year journey from retail to e-tail. White first encountered computers in 1967, retaining a keen interest in technology ever since.
Three years ago he decided to take his business, Huxley`s Books, onto the Internet. He went the conventional route, inviting several Web-development and hosting companies to consult to his business needs.
Unfortunately for White, the IT industry in general had not yet begun to marry business and technology strategies, with the result that consultants who understood the technological requirements to achieve his general goals were almost clueless about ways in which to use the self-same technology to meet his specific business requirements.
Those requirements included a flexible searchable database and a transacting functionality.
"All of these consultants wanted to offer me a 'solution` - possibly the most abused word in the English language - which would force my business into a straitjacket that I was convinced would have me out of business before long."
All of these consultants wanted to offer me a 'solution` - possibly the most abused word in the English language - which would force my business into a straitjacket that I was convinced would have me out of business before long.
Matthew White, owner, Huxley`s Books
Acting on the advice of a friend, Web aficionado Arthur Goldstuck, White then tried to track down e-tail bookstores on the Web, hoping to find an existing infrastructure from which he could learn a thing or two. He came across the Advanced Book Exchange (ABE), a network of more than 7 000 online bookstores, hosted in Canada.
The ABE provided access to database management freeware produced by FoxPro. Prone to error and non-intuitive though it was, the FoxPro product was more flexible than the "solutions" offered by local companies, and at a membership fee of $25 per month for hosting up to 10 000 titles, the ABE was more affordable. White says one of the larger companies that consulted to him at the time offered Huxley`s Books a solution for a mere R250 000 initial outlay.
White`s first sale through the ABE was one of the most arbitrary titles in his collection - a Union Pacific Railroad employee instruction manual circa 1910. He sold that title for $20, and within days had three requests from around the world, looking for more copies of the same book.
The cost impact was phenomenal. [...] Rent has been slashed by 80% and salaries are down by 45%.
Matthew White, owner, Huxley`s Books
In the first year online, 2% of his stock generated 10% of the company`s annual sales. By then, Rosebank, the area in which Huxley`s Books had always been, started to succumb to increasing criminal activity.
"The authorities allowed criminals to overrun the area," says White. "The President and his esteemed peers would have us believe that crime is a direct symptom of poverty. My opinion is that while there is a connection between the two, just expecting it to go away is not going to do any good. Crime destroys jobs and hampers economic growth."
His own business is a case in point, White explains. Driven from crime-ridden Rosebank to the relative safety of Honeydew, Huxley`s Books had to let four of its seven full-time employees go.
With just a tenth of his turnover generated online, White took a leap of faith and in January this year made the store`s offering completely electronic, joining two other major book exchanges in the process.
"The cost impact was phenomenal. Before, I would need R70 000 per month to break even, of which 20% went towards rent and 35% salaries. Rent has been slashed by 80% and salaries are down by 45% and the business breaks even at R40 000 per month."
Carefully monitored sales reveal that Huxley`s Books is selling at a progressive and steady increase of R5 000 per month. Even with downsizing, White says the business is well on its way to making its first profit as an Internet company this year.
Although it still uses FoxPro, the company is testing its own in-house database management application using FileMaker Pro. The main bottleneck in the current system is caused by the amount of time taken to update book descriptions, which in the interest of customer satisfaction have to be detailed and accurate.
There have been several major challenges to overcome on the way. The issue of credit card security has been dealt with in what White admits is a very low-tech way. Customers split their credit card details up over a series of mails, sent at a staggered pace. The details are pieced together on Huxley`s side, and the transaction proceeds from there.
Another erstwhile impediment is that of access. Huxley`s runs off a dial-up ISDN line - the only problem, White says, is that it`s sometimes not quite as stable as Telkom would have consumers believe.
So, what advice would White offer to other small businesses wanting to get onto the Internet? "Be sceptical of people offering you 'solutions`. Learn as much as you can about technology; it is definitely adaptable to your business."
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