The Israeli economy is dominated by big companies, but its backbone is its 400,000 small and medium-sized businesses. Those are companies with annual turnover of less than NIS 100 million, but they employ more than a million people, some 55% of the workforce. They are also a major source of new jobs. Around the world, companies with less than 100 employees are responsible for about 90% of all new jobs.
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Now, thanks to the latest generation of web technology, the playing field between corporate giants and small and medium-sized businesses is become more even. Websites, digital publishing and social networking applications give them the tool to reach wider audiences at low cost. The Internet is reducing the advantage of size, which has always been the biggest barrier to smaller enterprises. It is even putting marketing power into the hands of the self-employed.
Industry sources estimate that small and medium-sized businesses, most of which cannot afford the traditional channels of television, radio and newspaper advertising to reach customers, are spending NIS 600 million annually in web marketing. But many smaller businesses have yet to fully exploit the new environment.
These businesses have basically two options: They can do it themselves, or they can retain an internet company to do it for them, usually for a fixed monthly fee. That means building a website, adapting it for mobile devices, opening a Facebook account and sending out regular newsletter by email.
Meir Brenner, managing director of Google Israel, says web marketing is not only cheaper but more effective for small and medium-sized enterprises because it aims at bringing results. Advertising in the mass media are more aimed at developing a brand for big companies with deep pockets.
"A business needs first of all to be on the web so that people can access it even when the office is closed," he says. "Then it needs to develop the site itself and monitor it and later explore using tools like mobile or video."
Here is a brief guide to establishing an online business presence:
Building a site
The first step for a small or medium-sized business is to build a website. That entails choosing a web building platform and a hosting platform, then obtaining a domain name and creating a strategy for getting it into the public eye.
Revital Salomon, who develops sites under the brand The Shark Lady, says the price for building a good, basic site is about NIS 2,500. The cost can rise to NIS 10,000 if it includes features and hundreds of pages of content.
Most web builders use open-source platforms such as WordPress, Joomla and Drupal, which means most of the cost is for design and content. A domain name costs just $12 a year while hosting can cost anywhere between $20 and $200 annually, depending on the size of the site, in gigabytes: A website with a lot of images or complex flash functions will cost more. Companies offering hosting in Israel include Triple C and LiveDNS. GoDaddy is a popular U.S. hosting site.
Businesses seeking to build a website quickly can get help from Google. In February Google Israel and the Industry, Trade and Labor Ministry launched a joint venture to help small businesses go online using platforms like Webydo, Israel Post, Cal Business iDigital and B2C Print. Users get the first year free, including domain name hosting and telephone support. An added benefit is the direct link to Google, which gives it a higher profile in web searches.
After the first year, however, the fees rise to NIS 65 a month for hosting and NIS 80 a year for the domain name. The business itself must see to data backup and security (protection against hackers ). Moving the site to a new platform is expensive and time-consuming.
Brenner says that in the seven months since the program was launched around 10,000 websites have been developed through it.
Another company that offers website construction is Zap Group, whose prices range from hundreds to thousands of shekels a month.
Promoting the site
The next step is to promote the site, to make sure it it is displayed prominently in web search results. Even platforms built with Google Israel need to do this. Salomon, of The Shark Lady, says WordPress can ensure relatively high placement. For more ambitious website owners, hiring someone for search engine optimization can cost NIS 1,000 a month.
"Not every website needs search engine optimization," Salomon says, adding, "It depends on the competition. As a rule, it's better to begin promoting the site through friends - sending emails, opening a Facebook page. That's how to get the businesses rolling."
For those who don't want to retain a professional, Google or Facebook ads are another option. You pay according to the amount of exposure or number of user clicks, which typically amounts to a few dollars a day. A consultant can advise on the most effective text and images, as well as frequency and price - all critical factors in the ads' effectiveness. These service can cost a small business between $2,000 and $24,000 annually.
Make use of user forums
Another way for small and medium-sized businesses to stand out on the Internet is by participating in online forums dedicated to various goods and services. The biggest of these in Israel are those operated by Golden Pages and Zap Group, which bring in about four million users a month, or the blogging channels operated by Tapuz, with about 1.5 million users.
Zap offers custom packages, based on a face-to-face meeting. The price varies by the location of the business, the degree of exposure the customer wants and how high up the business will appear on the site. For example, a household mover that spends hundreds of shekels a month on an online forum package will appears lower down in the search results than a competitor with a more expensive package. It costs NIS 2,000 a month to ensure a place at the top of the search results.
Tapuz has begun offering a similar service for its own blogging channels, Tapuz People, and has invested NIS 1.5 million to develop its business services. For NIS 250 a month a business can buy itself placement in the appropriate forum (for example, pregnancy and child birth forums for a labor coach ), 25,000 text ads in forums, a mobile site and access to web analytics tools.
A Facebook presence
With its many online communities and dedicated pages, the world's biggest social networking website is another way to get word of your business out to the online public.
"With these groups you need to operate cautiously: Don't come in in a heavy-handed way, rather, make recommendations and give tips and then introduce yourself," says Salomon. "These groups are a good way to get to know the competition as well as business in related and complementary areas that can be a source of referrals."
Another option is to retain a social media manager to create and maintain a Facebook page for your business. Be careful, as this a field in which many people claim to have expertise; do your homework before you hire someone. Zap Group, for one, offers a Facebook-support service that includes the cost of placing advertising.
The next level up is to conduct sales online. This requires a far more sophisticated website than a purely informative one, as it involves clearing and special e-commerce security services. A business that already has clearing services through a credit card company can easily expand the contract to include online transactions.
Another option is to build the site using a company that builds e-comerce sites. MyStores, for example, offers a "virtual shop" that is linked to a Facebook page, as well as customer newsletter. A MyStores client would generate business by bringing customers to its Facebook page, which in turn is linked to a online catalog. Customers click through to the MyStores site to complete the purchase. The business itself is responsible for fulfilling the orders but MyStores monitors inventory and delists products that are out of stock from the site. Payment is through Paypal or similar services.
MyStores has an introductory offer of NIS 200 a month for businesses stocking 100 items or less.
According to one survey, 39% of Israelis compare prices on their mobile devices before making purchases. That means a presence in the mobile world is as critical as an Internet presence to any business. Small and medium-sized business can avail themselves of Google's Click-to-Call, which provides ads with phone numbers that can be dialed by clicking on the number that appears on a cellphone screen. Both Zap Group and Tapuz offer mobile Internet in their service packages.
Another tool is easy.co.il, which offers location-based advertising services. That means a customer searching for a bookstore, for example, would see all the nearby options, assuming the GPS on their mobile device has been turned on. A business can put up a simple text ad, and for now the service is free.
Another option is to build tailor-made apps for your business. Zuznow and Duda Mobile offers apps at tens of dollars a month.