A mere decade or two ago, the internet was an unknown entity and all businesses only existed in reality. Since then, the evolution of technology and subsequent blow-up of the internet completely changed the goalposts and reinvented what it meant to be a business.
Nowadays, 99% of businesses, whatever sector they’re in, have an online presence of some sort. Many of which trade solely online. So, if you are thinking of starting online with your next big idea, here are a few ‘musts’ to consider beforehand.
Marketing becomes even more important with an online business. Many entrepreneurs will tell you about the significance of marketing on a business’ performance, and research has shown that firms generally spend around 7-8% of revenue on marketing.
With no physical presence to act as natural marketing for your online brand, online businesses can often suffer as a consequence. So, you could have the best money-making idea, but without an effective marketing strategy it will be much harder for that idea to succeed.
How are you going to get your name out there? The simple answer at the moment is social media. This is relatively cheap depending on the level you wish to take your promotion to. Some businesses have Instagram, Twitter or Facebook accounts that have naturally grown a huge following without investment; think novelty food products and other brandable items that consumers want to share and follow.
For the most part, Facebook Ads, paid boosts and even sponsored posts are all required to develop a large following that is going to significantly help your brand. It is worth exploring how much this could help your business. Just make sure you check for domain names and social media username availability first, so that your social media accounts can be consistent with your domain name and ultimately your brand. A Facebook name that differs to your Twitter name may confuse consumers – make it easy for them.
Blogs are an additional way to draw people to your site. By creating useful, informative and entertaining posts, people will visit your site and while there may discover they want to buy/use your service. If you know what you’re doing with seo content as well, a blog really can be a great way to generate traffic to your business and is something worth preparing beforehand.
One of the most beautiful things about online businesses is that they require very little money to get up and running. The rise in popularity of drop-shipping sites mean you could be operating a profitable business where you only pay for stock when an order is placed, meaning the only fixed cost is the domain name. If you have a laptop and a broadband connection you are good to go.
However, if you are looking to start a real revenue-busting empire, you are going to want to inject some financial capital into your business at some point. Determining a budget and planning how you are going to utilise that to optimise its efficiency is key with any business.
Get this wrong, and you could end up losing all your money before you have even got a business set up. In Greg Dinkin’s book regarding business, he mentions 13 traits that are shared between winners of poker, business and life. He suggests that in playing at the right stakes, poker players start from a position of strength. Dinkin refers to how it is crucial to replicate this theory in business, ensuring that you have enough cash to cover your assets as you will put your business at risk if the stakes are too high. It is often less of a problem with online businesses, but still something worth thinking about.
Ultimately, for the most part businesses aim to make a profit. So creating a financial strategy to maximize revenue is important. If nothing else, revenue management can be put towards investing in capital to further growth. But you should make sure you assess and explore all potential revenue streams and be open to new opportunities to increase revenue should they come.
What is your exit strategy? Many businesses experience huge success, but then suffer due to either not adapting to natural progression of the market or other critical factors. Before launching, you must think about where you want your business to realistically get to. Do you want to take your online business into reality at some point? Is the goal to sell it after five, ten, twenty years? Make sure you know where you want to get to so that everything you do can be targeted towards reaching that goal.
Many of these considerations are general and not necessarily specific for online businesses. However, if you are just starting up online how you go about each aspect is very different than if you were setting up a shop on a high-street. There are thousands of things to consider when starting an online business, but following these fundamentals is a great place to get you going on your way to entrepreneurial success.