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.

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Discuss the role of eCommerce in practical business applications

 

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

 

 

 

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

 

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