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Online Business or Store With A Door,
The Things You Need To Know
Have you been tossing around the idea of starting your own business? Maybe a physical store with a door, an online store, a blog, or creating an online presence for an existing business? Regardless of the type of business, there are things you need to consider beforehand.
Being your own boss, no more nine to five, setting your own schedule, vacation when you want, working from where you choose are just some of the desirables of owning your own business.
But, whether you choose an online business or a store with a door, there are many things to consider first.
Online Business or Store With A Door?
An online business can offer many benefits that a traditional business can not. In order to see if starting a web-based company is the correct path for you, you must weigh all of the rewards along with the risks.
One of the key benefits of running a business online is the cost involved. For most companies, there are no property overhead costs because much of the companies’ duties can be performed from a home office. The start-up cost is also usually much lower. For the price of a domain name and a good hosting account, many types of companies can be up and running almost immediately for little or no cost.
The flexibility that an online business offers is a key benefit. Since these types of companies can be run virtually from anywhere, the company employees are not tied to one single location.
The company can be a full-time endeavor, or it can be something that the owner just does in their free time. The internet never sleeps so profits can keep coming in at any hour of the day, even when the webmaster is sleeping or on vacation.
The World is Your Oyster
Another key point is the overall customer base. Since the web is available just about everywhere in the world, the entire planet can provide potential sales. A local company can only grow as large as its surrounding areas. This can limit overall profitability.
Since customers from all over the world can shop from online businesses, different doors are going to be opened. There may not be enough customers to sustain a brick and mortar business dedicated to selling a micro niche product, but an online company can sustain itself easily.
Online Businesses Can Offer Services Different
The online world has created new businesses that would not be possible offline. Search engine optimization firms, for example, would not exist without the web. Backlinking and social networking specialists would not have a function in a regular business environment.
Even if a company already has retail locations, they can turn that existing company into an online business. Physical products or services that the business already offers to its local customers can be sold to a worldwide audience. This can also create more cash flow to their retail locations because name awareness is going to be greater for them.
Constantly Growing Market
Another solid reason for starting an online business is the fact that the market is still evolving. The internet is still really in its infancy. There are many countries that have yet to establish a large online presence for their citizens. There will be many years of potential growth available for the savvy business owner.
Running an online business can require great personal motivation, and this is what can halt many potential entrepreneurs. Many people look at it as easy money, which it often is not. Just like any other business the company will only succeed with hard work and dedication.
Providing a Service
When starting an internet based business it’s important to evaluate your individual strengths. Many people start by trying the affiliate marketing model. In this model, a webmaster is paid a percentage for products that they sell for other companies. This is a fairly competitive business model. What some webmasters may want to consider is offering some sort of service to these marketers to help them in their pursuits and earn some initial cash.
Cash in the Hand
The benefit of providing a service is that payment is guaranteed. For an online business just starting out this can be key to their sustained success. With the affiliate model, money is only made if a product is successfully sold. It can take months to find items that actually sell. This can make progress slow going.
If a business owner is good at graphic design, they can offer that service to other webmasters. There is a huge market for this service because every marketer needs this in some form or another. Website headers, banner ads, and even entire site designs can be sold.
Writing content is another lucrative business. Every website will eventually need some form of written content. Search engines put a great deal of importance on high quality updated content. Many marketers don’t enjoy doing this aspect of the business, or they own too many websites to keep constantly updated by themselves, so they outsource this.
Social media is also a fast-growing area of the web. Many businesses want to get in on this increased traffic source but are unsure of how to do it. Many times they will outsource this aspect out to third-party companies that specialize in maximizing exposure for them.
Selling backlink packages is another service that many internet marketers tend to outsource. Getting links to a website holds a great deal of importance in the eyes of the search engine. Every link is seen as a popularity vote. If getting into this business, then it is important to learn how to correctly provide on-topic linking methods to clients.
Virtual Assistant or Blog Manager
There are those that will pay others to do the actual posting to their websites. Usually, content will be provided by a writer, and this company will be the bridge between them and the website owner. They upgrade the website with new content on a daily basis which frees the site owner to take care of other aspects of their businesses.
These are just a few examples. There are also many non-webmaster related services that you can offer for your business. If a company finds their niche, and a good client base, then they will be able to prosper.
Everyone is different and something that one person finds cumbersome others will find enjoyable. When they get together then both companies can enjoy a profitable partnership.
Why You Need a Business Plan
Before starting to actually write a business plan it’s important to do adequate research about the entire business process. Only after a great deal of information is obtained should one work on the finished business plan. Trying to write up a legitimate plan without an abundance of information will make the process much more difficult.
Purpose of a Business Plan
The exact purpose of a business plan is to create a path that must be followed in order to attain business success. If the business requires outside financing, then the finished business plan is going to be the blueprint that is presented to investors or bankers for approval.
The first thing to figure out is exactly what the business or service is about. During this stage, it is a good idea to take stock of what skills those involved with the business actually possess. There may be areas that need to be further researched before a company can get off of the ground.
It is quite important to figure out what resources are available to the start-up company. If employees are needed, what number of people that will actually be required? Many first-time business owners underestimate labor requirements which can turn off potential financiers.
Is Your Plan Viable?
The viability of the overall plan should be carefully examined. Many times an individual can become so passionate about the business idea that they may not figure out it is an unrealistic plan. It is important to make sure that things are not just based on opinions. Actual concrete facts about the business potential should be obtained through a variety of methods. Seeking the advice of impartial business persons, if possible, should be part of this plan. They may be able to offer advice that will increase the efficacy of the planning process.
Look to the Future
Looking at possible future changes should be considered. This is especially important for online based businesses. The landscape of this area is constantly changing so it’s important that plans are made in the event of a market shift. Planning the re-evaluation process will allow a company to adapt in the future.
After a thorough examination of the entire business process is complete then writing out the final business plan can be tackled. There is going to be a lot of unnecessary information that will not make it to the final draft but it’s all part of the planning process.
How to Create a Business Plan
After thorough research into a new business is carried out, it is time to write a solid business plan. A business plan should not be thought of as a static document. It should always be viewed as a work in progress.
A business plan is primarily meant to give direction to make a company profitable. It is not solely something to present to potential investors.
An Executive Summary
A business plan should start with an executive summary. In this area, the mission statement should be included. A mission statement can be as long or as short as is required. It is meant to be a way to briefly present the overall purpose of a company.
The executive summary should also include the potential start date of the business, the names of any founders and their job titles, the location of the company, what products or services are offered, and a brief summary of the future plans of the company.
Main Section and Goals
After a brief table of contents, there should be a section dedicated to the overall plans of the business. It should start with a description of exactly what the company is going to do. Marketing, competition analysis, operating procedures, needed personnel, as well as any business insurance information can be included here if necessary.
A financial data section should be included. Copies of loan applications, equipment supply lists, analysis of break-even points, three to five-year summaries, cash flow information, as well as listing the methods used to attain these projections.
Finally, any supporting documents that are prudent should be attached. This can include tax returns or personal financial statements of the owners, copies of licenses or necessary legal documents, copies of resumes of the company owners, and any other documents that may be deemed necessary by potential investors in order to obtain financing.
All of this may seem overwhelming at first, and many sections of the business plan may not be totally necessary for all businesses.
There are many pieces of software, as well as templates, that will make this process easy for any skill level. Through a series of questions that the business owner answers, they can create a very professional looking document with minimal effort.
Many people tend to ignore this process if they are not seeking financial backing from outside sources. This can be a critical mistake for many new companies. A solid business plan is a blueprint that will guide a business to succeed.
Financing Your Business
Starting an online business can be very similar to starting a regular brick and mortar one as far as financing issues go. It is important to plan ahead in order to make sure that all financial aspects are covered before moving ahead. It is not very productive to have unrealistic expectations about what will be necessary, so all potential risks must be considered. Running out of cash flow midway through a project will cause it to fail.
Online Businesses are Low-Cost
How you get financing is going to depend on the size of the company. If the company is going to be a one-man show, then costs are going to remain fairly low. If the scope of the business requires land rental, employees, and high-end advertising budgets then larger amounts of financing will be needed.
Most smaller companies start out by financing things through their own personal bank accounts. This may seem like one of the riskiest ways to go about starting a business, but when one keeps in mind the low start-up costs that a small firm will have, then it makes sense.
Financing through credit cards is another common tactic. This is riskier than personal financing because the company not only has to turn a profit, they have to make up for the added interest that will be accrued while the business is waiting to become profitable. If the credit APR is reasonable though, chances are this will not be that large of an issue.
Friends and Family
Seeking out funding through family and friends is another option. The benefits of this method are that they are usually not going to charge interest to the owner. If things go wrong though, and the borrower cannot repay the loan, then it can create great friction in the relationship.
For larger companies that need high levels of financing then trying to get capital from investors makes the most sense. This can be one of the most difficult methods though.
The idea will have to be truly unique, and the business plan must be quite solid before these entrepreneurs will consider offers to finance. They will also have a say in the business, which may make things difficult for the company owner.
Getting a traditional loan through a bank is the final option. This can be a difficult way to get financing as well. The owner will have to have a high credit ranking and offer up collateral in the event that they are unable to pay the money back.
After the many failed online start-ups during the nineties, banks have become more leery about lending to these types of businesses. Offering collateral lets them have a means of recouping any losses in the event that the company goes under.
Getting a Domain and Web-Hosting
One of the first steps that must be done after the planning phase is registering a business domain and getting adequate hosting. These will act as the company’s doorway to the world wide web. Without either of these, it is nearly impossible to run a successful online business.
A domain name is the actual name of the business URL. This is going to be the name that will be branded for the company so it is important to make sure it is available. A quick check on any domain registrar will let the user know if the domain is available for them to purchase. Getting the actual .com version is preferable. People naturally type this in before they will a .net, .org, or other URL variety.
Once the domain name has been secured, it’s time to purchase some hosting. A host is a physical computer in a data center that will hold all the websites information so that it can be accessed anywhere in the world.
There are a few different types of hosting packages that are available depending on the needs of the company. Virtual hosting is the least expensive options. These are shared accounts that have multiple different customers on one computer system that share resources.
A dedicated server is an entire computer dedicated to the entrepreneur’s business.
A dedicated server is generally not needed by most companies unless they plan on serving millions of surfers a month. It is a good idea to talk to a hosting company before plans are made so that they can offer advice on which option will be the best for the intended usage. Most good hosts will allow upgrading to a larger package without an additional setup fee.
There are many free methods of hosting a website available. Some companies on shoestring budgets may initially feel like opting for one of these. If possible this should be avoided though.
If the free hosting company goes out of business then all of the work a company has done to promote themselves is totally lost.
I use and love Siteground.
Getting a Website
A business has many methods available to them to get their websites up on the world wide web. There is software available that can be purchased so that the owners can create the site in house.
Purchasing a template online is a method that many new businesses use. There are many great looking templates available for almost any type of company. Hiring a website designer is also an option but if a company can’t afford to hire a designer, then templates offer a very reasonable priced middle ground.
If this seems daunting, then a business may think about outsourcing the technical aspects of a sites day to day operations so that they may focus strictly on the actual promotion and running of the business.
I use self-hosted WordPress (.org as opposed to the free version .com) with the Genesis Framework and a Genesis child-theme. This format makes it easier to change themes without losing any of your valuable content. I have also hired a WordPress VA (virtual assistant) to help keep things running smoothly in the background for a very reasonable cost. I use Grayson Bell at iMark Interactive.
Finding a Market
Successfully choosing a potential market for one’s business can be the difference between success and failure. In order to properly service customers, an exact target audience should be chosen.
A majority of early research should focus on this topic in order to make sure that there is an actual market available for the company to service. If no customers are willing to pay for what is being offered, then no amount of marketing prowess is going to create a successful venture.
Business to Business
Choosing to have a business that markets to other businesses can lead to great success for some companies. Companies tend to have money set aside to purchase these types of products or services. If they are happy with what they are getting, then this can lead to a long term relationship between the two enterprises. This can give a constant influx of new capital without having to rely on constantly making sales from new avenues.
Business to Individuals
Choosing to market directly to individuals can also be a great way to grow a business. Regular people also use service-based businesses for a variety of reasons. This market can also easily be segmented into niches that can be targeted by your company.
Although this is a much larger market than business to business can be, it is more difficult to create recurring customers each month. This means that the ups and downs of the economy can have a negative impact on overall profits.
Judging the Size of the Market
Great thought must be put into the total number of potential customers for a given product. If a business has a great concept but the number of paying customers is too small, then it’s not going to be a viable model.
It’s also important to not shoot for too broad of a demographic. This tactic may work for some big box retailers, but a smaller company is not going to be able to compete against them on prices.
The purchasing power of the customers should also be considered. Targeting a demographic that does not have money to purchase the product or service offered could spell disaster. A company marketing expensive custom jewelry to seniors on a budget would surely not survive.
Creating an Online Presence
When creating an online presence it is important to create a solid plan. Many businesses just put a website up and then focus on marketing but marketing can be a bit different than the act of building your brand.
The company image is what people will respond to when they are deciding whether or not to make a purchase. People are more willing to frequent a business if they feel like it is accessible to them and their needs as well as trustworthy.
Start a Blog
A blog can be a great way for a company to offer an inside look into the way things are run. This can also be a way to put a face to the names of the individuals that are working behind the scenes on the website.
Most websites have a blog page to share news, product information, and updates with their readers or customers.
These posts can be a bit fun but should target information that is prudent to the company’s image. This shouldn’t be a place for employees to upload vacation pictures unless travel products are part of the focus of the business.
An account at one of the major social networking sites can also allow people easy access to a company. These websites are starting to become even more popular than traditional search engines so they can be a massive source of traffic for your website.
Posts on these accounts can be even more laid back than those on a blog, but it is still important to maintain a professional image that benefits the company.
Create an Email List
Building an email list can be a very important step in any company’s success. It is important to research all email related rules and regulations so that the business does not get into any legal trouble for spamming.
These emails should be highly targeted to the customers’ needs. They are designed to make sure a customer does not forget the existence of a company. It is much easier for a webmaster to maintain a buying client than it is to obtain a new one. I use ConvertKit for all my email needs.
Marketing Your Business
Marketing your business online can be quite different than doing it offline. Traditional marketing methods should be set aside to favor ones that are more suited to the online world. It is important to find a plan that works but if it’s not, try something different.
Press releases can be a great way to start marketing your online business. These can be put together in-house, or they can be outsourced to a writer for a minimal fee. There are services that will send out these releases to websites all over the internet. This can create some buzz for a site that is still brand new.
Customers are more likely to make purchases from a company that they trust. It is very important to start building this trust and a brand as early as possible. Setting up accounts at different social media outlets, forums, and other online places where people congregate can help this process.
Taking part in online forums can lead to many sales. It is a good idea to become an active member for a few weeks before starting to offer services. People are very savvy about being spammed, and jumping right in with business offers will turn many members off and may even result in being banned. Start by taking part in discussions and adding real value to the account. Once some trust is built, then a company can add in a footer to their posts to get business. This passive method can work wonders in the long term.
Media Buys and Advertising
Doing media buys is another great way to market your company. People can purchase advertising on websites in the same niche as the company to drive traffic their way. The higher traffic websites will cost more, but they are able to offer more ad impressions than smaller companies.
Paid Search Ads – Such as Adwords
Purchasing search engine traffic is another method of marketing a site. Most of the major engines allow a company to bid on keywords that they want to target. They will only have to pay when a user clicks on their ad. This is called pay per click advertising. The cost of this can be minimal if a niche is not very large, but if it is a highly competitive one then the cost can become prohibitively expensive.
Creating contests is a low-cost tactic that many companies use to market their services. People can fill in a form on a website in order to enter these contests. Some companies will have these set up on their social media sites, and in order to enter the contest, the surfer has to add their page to their own.
Keep trying new methods in order to create continued success.
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