Small businesses are still failing to make the best use of the Internet, according to a new survey by the Federation of Small Businesses.

One key factor in making the most of the Web is to ensure that the decisions made and the solutions chosen match the needs, challenges and opportunities of your business.

To help small businesses start this crucial evaluation process Microsoft's bCentral.co.uk, has put together some practical guidelines on what should be considered before taking the first step into the world of e-commerce.

Is there a market for my products and services on the Internet?
Some businesses are more "e-commerce ready" than others. If you sell products from a catalogue to users who have computers, e-commerce marketing can be a logical extension of your existing sales efforts. It can also help you reach customers who are looking for businesses like yours - in many cases, customers you might never find on your own.

If, on the other hand, you sell gravel by the ton to local contractors who phone you whenever they need a truckload, e-commerce may not be cost-effective - although that could easily change in the future.

Will e-commerce help me sell to my existing customers more efficiently?
Many companies sell to the same customers on a regular basis, especially in the business-to-business arena. For such vendors, an e-commerce website can minimise the need for routine sales calls. It also makes ordering quicker and easier for the customer, who can make purchases via a step-by-step interactive process or a web-based electronic form.

How ambitious are my e-commerce goals?
At the simplest level, an e-commerce site can be nothing more than an on-line product sheet with an e-mail link that says "Write for a price quotation". At the intermediate level, an e-commerce site could be created with an easy-to-use Web authoring tool. Individual pages within the site could link to a database of product descriptions and prices, with an e-form for submitting orders.

Am I prepared to devote resources to inquiries, transactions and customer support on the Web?
Placing a site on the Web is merely the first big step in profiting from e-commerce and following through with customers is equally vital. For example, prompt processing is necessary and if customers have questions or problems, they need to be able to contact a human being via e-mail or an e-form without delay.

Once I've made a sale, how do I get the buyer to come back?
By using tools such as bulletin boards or newsgroups, scheduled on-line chats, and electronic mailing lists, you can develop a community of users who return to your site even when they aren't ready to buy something. Each time they return, they are exposed to your new products or special offers.

How much can I afford to invest in e-commerce?
The best way to answer this question is to estimate what you'd spend to grow your business without e-commerce. Would you hire a sales representative, spend more on advertising or use direct mail? Finally, would an e-commerce website reduce the cost of selling to existing customers as described above?

Should my e-commerce site be hosted in-house or by an outside service?
Unless you have advanced computer skills, a Web server and a dedicated high-speed connection to the Internet, you'll probably want to have your site hosted by an Internet Service Provider (ISP).

Where can I get help in setting up an e-commerce Web site?
Chances are, you'll use a consultant to help you plan and launch your e-commerce Web site. The technology consultant may recommend you run your own site or they may run it for you. There are experts who can help evaluate your needs and business goals and will design a solution specifically for you.

Consult our Doing business online section for more information on setting up and running a website for your business, or browse our web developers directory to find someone to build one for you.