Starting an online business can be daunting. But, instead of being overwhelmed, think about it as an exciting journey. Focusing on the important components common to all companies, and organizing them into manageable chunks, can help.
Consider this a crash course in entrepreneurship.
Make a Checklist
With the ascendance of technology, it's easy to forget how helpful a simple checklist can be.
Writing down and visualizing goals for your business helps cement the steps you should take to achieve your end goal: running your own business.
A checklist helps you to stay organized, to focus on goals, and, ultimately, to succeed. When making a checklist, consider the following categories:
- Support. Your business will need plenty of support to succeed, especially during its first few years. Before opening your business, establish a versatile, reachable network of people who can help you get started. A business partner can be a great asset, but consider professionals such as a financial adviser or a technology expert as well.
To start your network, explain your most pressing needs to your family, friends, and colleagues. Ask them who might be a good fit. And once you've started building a client base, the people you serve can also become part of your network.
- Structure. Businesses are often structured by the goods or services they sell. Consider whether a traditional approach works best for you and whether elements from other models can help. Don't pigeonhole yourself or your company. Starting a new enterprise means thinking differently than the competition, and part of that includes how the company is structured.
For example, if you get easily overwhelmed or you are comfortable only with certain tasks, a sole proprietorship may not be for you. If you know you need to be in control of all aspects of the business, partners may not work. The structure you choose will depend on your own needs, the licensing required, taxes, and commercial goals.
- Financial systems. Many entrepreneurs start based on an idea or with a service or product they want to improve. Based on the specifics, you'll need to know how you're going to manage finances and organize your accounting systems. If this isn't your forte, you'll need to seek help from investors, advisers, accountants, and other financial experts.
Evaluate Your Idea
Many people have good ideas, but not every idea blossoms into a business—particularly online. Ensure demand for your product or service exists. Even if there is a demand, that's not always enough to support a virtual enterprise. Evaluate your idea based on these factors:
- Focus. Let's say you want to start a bookstore in your town. There are several considerations regarding stocking your store. You need to get books easily, which means making meaningful connections with publishers, shippers, carriers, and fellow retailers. You'll also need to decide what genres you're going to sell and whether your bookstore will carry unique products other than books that will set it apart. For example, many bookstores also carry journals, bookends, gifts, coffee mugs, and foodstuffs.
- Manufacture. Some businesses fold when the entrepreneurs can no longer keep up with the demand or when their manufacturing needs aren't easily met. For instance, you might want to start a company that sells bath products for people with sensitive skin. It may be easy for you to make a few batches of this product, but be mindful of demand and how much you can realistically produce in a day, week, month, or year.
- Startup costs. Your trade will likely incur several startup costs; know what these are and how to handle them before opening an online store. For example, some entrepreneurs plan to avoid inventory costs by going the dropship route. Doing so saves time and money in the short term, but it means someone else must carry and ship products on the business's behalf, which means your profit margins will be lower. It's crucial to solve these and other financial questions to keep from burning out early in your venture.
Research the Competition
Competition can make entrepreneurs nervous. After all, if a huge corporation already offers what you do, how will your product or service make a difference—and how will your business stay open? But competition can also be a healthy part of entrepreneurship.
Before starting your own company, pinpoint your competition and spend some time researching it. Consider these key components:
- Imitable techniques. Examine what your competition is doing that you want to imitate. For example, maybe you're opening a healthfood store and notice your competition offers free cooking workshops. Consider doing comparable workshops that haven't been covered by the competition, or maybe re-title a similar project as a class instead of a workshop.
- Unique selling points. You may not be the only IT service online, but maybe you're the only one that teaches people how to analyze their blogs for SEO. Find what makes your business stand out, and use it. Brainstorm with your team to come up with original taglines, sales, and discount options.
- Client base. It may seem like every other business has thousands of clients while you're struggling to get off the ground, but everybody has a different audience. Think about your ideal customer, including factors such age and gender, lifestyle (e.g., working single dad vs. college grad searching for jobs), and their problems or needs and how to solve them.
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Starting your own online company may seem daunting, but focusing on what can set your business apart and how to target ideal customers can make your dream a reality. Start with a careful evaluation of yourself, then follow through with some market research to stay focused on your customers and on the path to success.
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