By Steven S. Little

Guest Column

North American Precis Syndicate

The dot-com has boomed, and the dot-com has busted. Make no mistake, however, for many small businesses, the dot-com revolution is still providing valuable-and vital-business methods.

For example, in the fall of 1997, Tool Shack, a seven-year-old Las Vegas-based tool store, was facing an uncertain future. Sales had plateaued, margins were falling fast, and the company was facing a major league crisis with minor league resources.

Sound familiar? It should. 2001 saw over half-a-million small businesses close up shop for good. Big versus little has always been part of doing business. The dot-com revolution helped level the playing field by giving all players - no matter what size - access to a worldwide customer base. It also brought with it some catastrophic failures. Upon closer inspection, most failures shared these common roots:

1. They lacked vision. These companies were often led by executives who wanted to be first on the Web at all costs. All too often, that meant not having a well-defined business plan or a solid understanding of the marketplace and customer.

2. They forgot they were in business. The dot-com revolution brought with it a great deal of irresponsibility. The traditional start-up small business doesn’t hire a company chef and a company masseuse. It keeps things lean and mean until it starts to turn a profit.

3. They didn’t understand technology. Companies often spent too little on an infrastructure and couldn’t support their volume, or bought too much “bandwidth” without enough customers to support it.

So can an existing small business, keeping its focus on its customers, its management and its marketplace, succeed using the Web?

Tool Shack proved you can. It opened a Web-based version of its store, featuring 2,000 pieces of merchandise, in 1998. Keeping its small business philosophy intact, Tool Shack changed its name to Mytoolstore.com and succeeded, growing sales by more than 500 percent over three years, and changing its marketplace from the Las Vegas valley to more than 80 countries around the globe.

“We credit our growth to two factors,” said David Pearce, president of Mytoolstore.com. “The first thing we did was partner with a reliable technology provider, to help determine our needs. It provided a seamless integration of Mytoolstore.com’s network and gave us the bandwidth we needed to succeed on a worldwide basis. Without a technology provider, Mytoolstore.com would have had a much more challenging Web experience.”

Secondly, Mytoolstore.com kept its small business mindset. It didn’t overextend its resources, and chose a technology provider that could easily upgrade its systems on an “as needed” basis.

The bottom line: Smart businesspeople can find great success on the Web. While the dot-com business model struggles on, e-commerce steeped in small business principles continues to thrive.

Steven S. Little is Senior Consultant, Business Innovator Group Resources, a division of Inc and Fast Company magazines and a recognized leader in small business growth. The former president of three fast-growth small businesses, Little speaks to over 10,000 people annually about small business growth and management.