The launches seem to come every week: May 24 it was Onvia; Sept. 8, AllBusiness; Oct. 11, SmartOnline. Even Microsoft joined the crowd, back on Sept. 31. In a haze of promotion, one promises "small-business answers," another boasts of "small-business solutions," and yet another vows to help business owners work more "wisely."
What's all the fuss? A digital land rush is under way for dominance of a new Web category called the online small-business center. The developers of these sites sense a huge opportunity in serving the country's 23 million small businesses, whose owners increasingly look online for help running their operations. As envisioned by this crush of competitors--26 of them at last count--small companies will shift huge chunks of their internal research and drudge work to the Web. Need to buy some market research? Looking for an insurance quote? Just cruising for some free downloadable form letters? In theory, you'll do this and more from your favorite small-business Web site--which will eventually become a seamless companion helping you run your business more efficiently.
Doug Newberry, whose stock market software firm, Stocksystem.com, operates from a spare bedroom in his house in Amelia Island, Fla., might be a poster boy for this vision. "My whole company is virtual," boasts Newberry, who will soon start using a Net bank to pay bills and manage accounts receivable. Already, he's spent $1,500 for a series of press releases issued through Digital Work, a Chicago-based startup that's one of the new breed of small-business sites. Instead of printing and stuffing envelopes by hand, Newberry sends text to Digital Work, which handles all the printing and mailing details. "The Internet does everything," he says.
The new offerings split into two basic categories. One consists essentially of malls--sites that collect dozens of small-biz-related services under one cyber roof. The other is part of a more sophisticated trend known as Application Service Providers (ASPs). These sites serve up small-business software for tasks like business planning and contact management.
The malls, sporting names like Allbusiness, Allbizdepot, Digital Work, Onvia, seek to wrap their brand name around a sprawling menu of services and products, using the freebies as bait. The free services typically include legal libraries, downloadable business forms and trade show listings.
Of course, you could track down each of these services separately on the Web, but who's got time? "I hated having to weed through so many sites that don't pertain to what I was doing," says Lauren Magri, a San Francisco party planner who recently used Allbusiness to get free advice on drafting contracts.
And many of the offerings are indeed useful. Take DigitalWork's $100 Salary Survey service, which displays up-to-date wage information searchable by region and industry. Or Allbusiness' $75 service for doing employee background checks. But are these deals consistently cheaper than those you can find by yourself? Hardly. The sites generally "co-brand," or repackage the standing prices of their third-party partners. DigitalWork's Salary Survey tool, for instance, is available for the same price directly from its creator. Onvia says it works out special deals for members, though many of the services, such as AT&T cellular service and @Backup's data storage, can be found in other forms on the Web. And while the sites are all trying to inspire loyalty, they've yet to offer their best customers long-term discounts or frequent flyer miles.
What about bCentral, the month-old small-business effort from Microsoft? It plans a big debut in November, but so far the site remains a meager collection of links to other Microsoft properties, such as its Expedia travel site. The company promises to beef it up, but for now, there's little designed directly for small-business owners.
The ASPs have taken a different tack--"leasing" powerful software for completing business tasks. Say you want to write a snazzy marketing or business plan, but you don't want to shell out $60 on planning software you'll use once. Enter an ASP such as SmartOnline, which charges a one-time $25 fee to use its planning tool, complete with sample text, expert advice, and mathematical calculators--directly via a Web browser. Your plan is then stored on Smart Online's servers and can be viewed by colleagues with a password. Freeworks, launched this month, has still broader ambitions: automate and refine your paperwork flow. Expense reports, purchase requests, and vacation requests are all converted into electronic memos routed to co-workers via e-mail.
Such sites "aren't destinations or portals. They're business platforms," explains Kneko Burney, a market analyst at Cahner's In-Stat Group. "Instead of having a local desktop, you live and breathe on this site."
Sounds convenient--but it may also leave you vulnerable, despite guarantees against disaster and criminals. After all, many of these vendors are startups, and the competition is already fierce. "I'm pretty leery," says David Mead, an Austin (Tex.) real estate appraiser. "There's the general bugaboo of a crash, and then what happens if the company goes out of business that night? The next morning you look for them and they're not there."
In the near future, however, analysts like Laurie McCabe at Boston's Summit Strategies say outsourced applications will be a way of life for small companies. "A year from now, small businesses will be saying, `If I'm not taking advantage of these low-cost, low-risk services, I'm an idiot,"' says McCabe.