Home-based e-business - an option for the self-employed ?

Appendix 1


•  Comparison between physical establishments & e-businesses

The development of e-commerce has completely transformed the way in which business is conducted. With the adoption of e-commerce, a virtual office or shop can be set up and reach millions of customers worldwide through Internet. Smaller businesses can stand a chance to venture beyond the confines of the local market. Company size is no longer an impediment for those ambitious enterprises with a keen interest to break into the world market. Electronic commerce has eliminated geographical boundaries and time zone barriers. Through e-commerce conducted over the Internet, we can reach the far corners of the earth and develop new markets that may be too costly to explore through conventional means. This is particularly useful to small businesses, which can ill afford the costs of establishing physical presence overseas to tap those markets.

Electronic commerce encourages streamlined business processes, flatter organizational hierarchies, continuous training and inter-firm collaboration. It facilitates communication up and down the supply chain, with the result that simplify the operational process and the inventory level can also be cut down. Through closer and more direct contact with both customers and suppliers via the Internet, businesses can be trim down unproductive inventory, shorten the production cycle and reduce the throughput time. By putting information on product description, support services and order status online, businesses will be able to provide more efficient and effective services to their customers at lower costs. Such services can also be customized for individual customers to build up customer loyalty.

The start up cost and the operational cost for an e-business is far less than the traditional set up, which is especially true in Hong Kong where the rental fee and the labor cost are still very high compare to other countries. At the same time, the risk involved in running an e-business is comparatively lower than the physical establishment.