Steps to Take Before Starting an Online Business
Anyone can become a groundbreaking entrepreneur. Education, financial backing or even experience do not need to be defining factors in business success.
That doesn’t, however, mean that it’s easy. Hard work, determination, and planning are all key to building any business from the ground up. The following step by step guide is designed to help point you in the right direction.
Ask yourself some important questions
Why are you so set on starting your own business? Are the reasons financially driven, or are you fed up with the daily grind of a 9-to-5 life?
Once you know the ‘why’, you can start digging deeper into the ‘how’ and ‘what’:
- What areas are you skilled in?
- What are you passionate about?
- How much money can you afford to lose investing in a failed business?
- How much capital is required?
- Are you prepared to be an entrepreneur?
What’s your idea?
Hopefully, if you’re seriously thinking about starting your own business then you at least have a crude idea in the pipeline.
If not, there are a number of helpful tips to give you the tools you need to come up with a winning idea.
Stick to these simple pointers and the entrepreneurial world is truly your oyster:
What technological developments are on the horizon and how will they impact the world we live in? Can you think one or two steps ahead?
Find something that annoys you, and solve this problem.
Struggling to think of an idea which is entirely unique? Why not take an existing business and try to improve it in a tangible way, making it better, cheaper or, faster?
Get out into the world and talk to people. What do they want/need, how can you make their lives better? Most importantly, ask for advice and help from existing successful business people.
This is one of the most effective ways of determining what kind of products or services may be profitable for your prospective business.
A successful market research campaign can help determine who and where your potential customers are, informing you of the most likely groups of people who may buy your goods or services.
Take note of the following foundations of solid market research:
- Primary research–collect information pertaining to current sales and practices as well as take into account the plans of your competition. This may include but is not limited to the following:
Questionnaires and surveys;
- Secondary research– analyzing and evaluating information which has already been gathered and published. Use the data to identify who your competition is and who your target demographic may be.
- Data collection-
Quantitative data requires significant sample sizes to enable accurate statistical analysis. The use of web analytics in relation to your business website, for instance, is integral in helping you find out how long visitors are browsing your site and from which page, in particular, they click away.
Qualitative data is normally garnered from interviews and focus groups, helping businesses to learn about the viewpoints of their consumers as well as what they value and believe in. Sample sizes are generally pretty small.
- Three biggest market research mistakes:
Making use of only secondary research;
Making use of only information online;
Gathering information from only the people you know.
Make your product or service available for people to interact with. A fresh outlook may aid in discovering issues you have overlooked. Moreover, this group will develop into your first brand cheerleaders, particularly if their input is acted upon.
By developing prototypes and asking for feedback before making changes and improving your product, your business can continually improve and remain relevant.
Here are a few pointers to help collect feedback in a constructive way:
- Try not to get ahead of yourself when receiving negative feedback. This can be some of the most useful information you receive, so it’s important to consider it as objectively as possible.
- Thank people for their feedback, especially when it isn’t positive. This will earn you respect and ensure that continued feedback is forthcoming in the future.
- See the patterns. If multiple people say the same thing about your product or service then chances are it’s true.
- Make sure you ask why people have given particular feedback. How can you improve the product and what might be an improved solution?
- Business structure (ie LLC, corporation or partnership);
- Company registration;
- Tax implications;
- Licenses and permits;
- Bank accounts;
- Trademarks, copyrights, and patents.
Formulate a business plan
In simple terms, a business plan is a document which describes how your business will develop from origins to final product or service.
It’s a good idea to include the following in a business plan:
- Title page:
Begin with the name of your business. This might sound simple but can actually be a lot harder than you think.
- Executive summary:
Essentially a synopsis of what your plan contains. This can include a company description, the issue the business is seeking to resolve and why you are trying to solve it now.
- Business description:
What is the nature of the business you are seeking to start and what does the sector look like now, and perhaps, most importantly, what will it look like in the future.
- Market strategies:
Who are your intended customers and what is the most effective way of selling to them?
- Competition analysis:
SWOT (strengths, weaknesses, opportunities, threats) analysis of your competition.
- Design and development:
A plan of your product development and evolution as well as detailed costs for this process.
- Operations plan:
How will your business be run from day to day?
Where, when and how is your money coming in. Make projections for key performance indicators such as turnover, revenue, profit etc
There a multitude of ways in which you can choose to finance the start of your business:
This method might take a while but it comes with a long list of benefits including being in complete control of your own future.
- Friends and family:
This can be difficult for many entrepreneurs but is at least worth considering as an option.
Government funding for startup businesses can be a very effective way of getting your company off the ground. It can be a long process but at least you don’t have to surrender any equity in your business.
This is a great way to raise a significant investment at low risk for investors.
- Angel investors:
Online platforms such as Gust and AngelList can help match potential investors in your industry or sector with your particular business.
- Startup accelerator:
Companies with the purpose of helping new businesses to develop. The majority offer free resources such as office space, consultancy, and chances to network and some supply seed funding too.
- Bank loan
Concentrate on the two cornerstones of successful products or services: simplicity and quality. Try to avoid settling for the cheapest version of your product. It may reduce your manufacturing overheads but it won’t provide your brand reputation any favors.
Follow these simple guidelines and this process should be as smooth as it can be:
It’s vitally important that you retain a level of control over the development of your product or service if you want it to properly embody your vision.
- Reduce risk:
Make use of appropriate checks and balances.
Don’t rely too heavily on one contractor.
- Use specialists:
Avoid cutting corners when hiring people to bring your vision to life. There can be a temptation to use ‘all-rounders’ to do multiple jobs in order to save time and money. DON’T. Find people who are the best at what they do and what you need to be done.
- Research and learn:
The more you know about the production process yourself, the better decisions you can make about who to hire when and how much that work should cost.
Put together a TEAM
As your business grows, you will need to start hiring people to help run it. Whether you’re in need of a contractor, employed or CEO, there are some simple points to consider which can help you find the best fit.
- Make your goals for the business clear.
- Follow a well established hiring procedure.
Location, location, location
Your decision concerning the location of your business will be influenced by different factors depending on your needs.
Consider the following pointers when choosing where to plant your flag in the map:
- Maintain consistency between the location of your business and the style and image you are attempting to portray.
- Who are your customers and is their proximity to your location a deal breaker?
Footfall. If your business relies on customers physically coming to your location then make sure it is easy to find. Organic pedestrian traffic is the key for retail businesses, for instance.
- Competition. Use your market research to determine whether it’s good for your particular business to have competitors in close proximity or, in fact, whether the complete opposite is true.
- Infrastructure. Is the location capable of supporting the day to day operations of your business?
- Costs. This can include rent and utility bills for a building or office space.
Selling your product or service is the primary objective of any business. There are different ways of approaching this business aspect but the following four pointers should be cornerstones of any sales strategy.
- Listen to your customers. This is by far the best way to discover what people want and need. Once you have this information, it’s your responsibility to work out how you are going to deliver it for them.
- Find the right balance between the hard sell and the soft approach.
- A no isn’t the end of the world.
- A business will succeed or not based purely on the revenue it can generate. You can have all the organic website visits and click-throughs you like, but if you ain’t selling goods, you’re not making any money, and that ladies and gentlemen are what underlines all of this.
There a multitude of methods to grow your business. Acquisitions, new market opportunities, or expanding your range of products or services will all enable your company to grow in influence.
There are, however, two key characteristics which all businesses that experience growth have in common:
- Marketing. Businesses which grow successfully have a solid strategy to market themselves. Using social, SEO, PPC and email campaigns, they are able to properly understand which groups of consumers they should focus on.
- Customer retention. Your existing customer base is your most valuable commodity. They have already subscribed to your marketing emails and they have already purchased from your website. They don’t need to be convinced that your brand is worth investing in, you just need to reward them for their loyalty.