The internet has made it much simpler to start your own business. However, there are still a few things to consider when you start on your online business adventure. Just because your storefront is virtual doesn’t mean that you don’t need a product or marketing. You need to decide what you are going to sell. How you are going to fund your business. Who you are your customers. There are still a lot of decisions to consider even when your business is online. How much time and expense are you willing to put in?
I’ve been running this blog for over a year now. At the same time, my wife and I had been planning the start of her own ecommerce business for the last 6 months. Last week we launched her ecommerce business which sells a physical product, animal beanie hats. (Btw, they’re really cute and lovable. If you have a kid at home, they’ll love these hats which you can find over at Hetty Hats. Gotta give the wife a plug…)
At the same time, both of us have been maintaining our full time jobs and raising a rather rambunctious (though totally lovable) 3 year old boy. Between the two of us, I’ve learned a lot about online business as well as juggling a few things.
So here are a few things to consider before you launch into starting your own online business:
What are You Going to Sell?
The first consideration in any business is your product. An online business is no different. The one advantage of running an online business is that it gives you the opportunity to venture into different types of business than you might otherwise. You can sell a physical product or a virtual product. You can provide services or information. You can really stretch the limits of your imagination to find a business. But at the heart of it all lies the question of what are you going to sell?
If you have a physical product that question is easy.
If you are offering a service, you are selling your own skills.
If you want to run a blog and offer information, you are selling your knowledge.
When it all comes down to it, you need to decide the focus of your online business.
Once you figure out your online business focus, you can strategize on other aspects.
How are you Going to Monetize?
This is the next thing to consider. You need a plan on how you will monetize your online product. Are you simply selling a product? That’s easier and more direct. Then you just need to simply plan the logistics behind how you will be accepting payments and transferring ownership of the product. (i.e.. shipping) You can even simplify this process by selling other people’s products through affiliate marketing.
But if you are selling a virtual product, service, or information. Then there are a variety of methods to monetize your online business.
You may want to go with an indirect route of providing a lot of valuable free information and charging for advertising space on your website. Using this method, you are giving away your information, but you are indirectly making money from your valuable information through your website’s real-estate.
If you are providing a service, you can charge per session, but you can also charge on a recurring basis if you have an ongoing service.
Depending on the combination of what you are selling and how you plan to monetize, you will be adjusting your overall strategy accordingly. It will affect things like your initial investment into your business in time and money as well as many of the logistics behind your business.
How Much will you Need to Invest into Your Online Business?
There’s no doubt that running an online business is much cheaper than renting a brick and mortar sales space. If you run a brick and mortar business, you’ll be spending thousands of dollars every month to keep your business open. However, the simple act of opening your online business is basically your domain and hosting fees.
You can often find a free trial for many website services to launch your business. For example, if you want get up and running with an ecommerce business, shopify offers a free 30 day trial that includes a fully customizable website, commerce hosting and all the tools needed to get up and running.
With the 30 day free trial, you can get up and running quickly and start selling right away. If you plan your marketing campaign correctly, you can make some sales right away and continue on with their low cost solutions with your earnings. Even their paid options start at only $29 per month. That’s a good way to start up without any out of pocket expense. Or you can use that time to shop for lower cost solutions and then transfer your domain.
However, even with the low cost of starting your website, you’ll still need to consider the other costs of your business. If you have a physical product, then you’ll need to stock some inventory in advance. That can cost a few thousand dollars as startup costs. You’ll need to find out who manufactures your product and negotiate the best price with them. This will also affect how much you charge for your product and ultimately how competitive you’ll be in the marketplace.
If you are selling a virtual product or service, then your investment will be mostly in time and marketing expenses. At this point, you are selling yourself. So, you need to build up your reputation. Expect that you will be spending time marketing yourself by blogging, writing articles, guest posting, etc. Your business won’t earn any money until you build your reputation in the online community. If you are going this route, then you’ll need to think on the real world logistics of how you will support yourself while you are spending months working on building up your online reputation before earning any money. This is more of an investment in time.
No matter what your online business, you will need to put in an initial investment. Plan ahead on how you will best spend your time and money.
How Will You Operate Your Online Business?
This is the final big question that you’ll need to consider.
Operating your online business encompasses a multitude of logistical questions. Will you need customer service options? How to serve your customers? How will you communicate with your customers? How will you deliver your product? Where will your business be based?
First off, plan how you will be delivering your product.
If you have a physical product, you’ll need to plan out shipping and the costs of shipping your product. You’ll need to build that into the price of your product or make sure that your ecommerce platform has that solution built in. You’ll also need some sort of return policy. Plan it out ahead of time. You’ll have to write out who pays for shipping on returns and how all that will be handled. Then you’ll need to research the various options available: ups, fedex, amazon drop shipping, U.S.P.S. etc…
Even if you have a virtual product, you’ll have to plan out your delivery system. How will you provide a download link to your customers? You have to make sure that the link isn’t permanent or anyone can just stumble on it and download your product? What about security? Will it be encrypted?
If you are offering a service, you’ll need to think on how to deliver your service through the internet. Can you provide training through teleconferencing? Email conferencing? If your customer is buying a service, they may expect interaction with you personally. How will you manage your time?
You’ll need to investigate the services that are available to help you deliver your product in the most efficient way possible.
Don’t forget also that you have a website to manage as well in an online business. Do you have the programming skills to operate a website? It’s ok if you don’t, but you want to outsource your website services. Like I gave in the example above, there are low cost solutions for website services, but it’s another thing to consider.
There are a lot of things to consider in any business. These are simply the four big considerations when you start an online business that will get you up and running. If you plan out these four areas, you’ll have a good foundation to get started with your business venture.
Good Luck and to Your Success!