30.08.2023
ENTREPRENEURSHIP: ONLINE BUSINESS - WHY START AND HOW TO PROSPER
Many people dream of owning their own business, but in reality only a small part of them decide on this step. If you still have no experience and your budget is limited, you might consider developing an online business. It carries less risk and also has a number of advantages over the standard type of business.
Most people lead busy lifestyles and when they need to buy something, they increasingly choose to do it online instead of visiting a physical store. Online business allows customers to shop from the comfort of their home instead of walking around the stores. Shopping online saves time, effort and money.
What are the advantages of online business?
It's relatively cheap to get started
The amount of initial investment required deters many from creating their dream business. You need to budget for rent, leasing, purchasing inventory, budget for employee salaries, advertising, etc. If your venture fails, it can ruin you financially.
On the other hand, for an online business, all you need is a computer, a domain name, and a website. This means that starting an online business with a few hundred BGN initial capital is completely feasible, and you don't have to risk all your savings or take out loans to become a successful online entrepreneur.
There is great potential for growth
When you own a brick-and-mortar business, you have to deal with real-world constraints—from real estate costs to local search. If you don't have a top location or you don't offer unique products/services and you haven't built an image yet, your business can quickly go bankrupt.
When running an online business, none of these limitations can stop you. You can sell to anyone, no matter where they live, and your pool of potential customers expands every year as more and more people become comfortable with online shopping.
By 2025, e-commerce will account for almost 25% of global retail sales. In addition, the global internet population is also growing, with internet users worldwide expected to reach 5.6 billion by 2025.
More people online means more potential exposure for your online brand – especially if you don't mind taking your business overseas. Many people are willing to pay higher shipping costs in exchange for a quality and unique product.
You are always available
Another big advantage of an online business over a brick-and-mortar store is that it can operate 24/7, even during lockdowns, extreme weather conditions, and other unforeseen circumstances.
Once your business website is online, you are always available to sell. Buyers can order from you at any time. Since you don't need to be physically present to make sales, your business can generate revenue with less day-to-day involvement.
It is important to follow certain steps to create a successful business:
A business niche is the area you focus on – a market segment and target audience that you will primarily care about. This can be anyone from sports enthusiasts to amateurs and professionals.
You need to choose a suitable niche for your new business. To find the right target audience, make sure it has:
- a problem that no one else is solving (the way you would);
- willingness to pay you for solving this problem;
- a large enough discretionary income to afford your decision.
Once you've chosen the right niche, it's time to clarify your business idea. Here are some ideas:
Build an eCommerce Store – Ecommerce has been around for over four decades, but now is the best time to start an online store.
Once you've determined your niche, choose an e-commerce platform, set up your online store, and start driving traffic to it. If you intend to host yourself, you can choose a dedicated service.
Enter Dropshipping – Dropshipping is an online method that allows you to sell physical goods without maintaining inventory. With it, the customer orders a product on your website, you forward the order to the manufacturer, and then the manufacturer ships the product directly to the customer.
Dropshipping is an attractive option for those looking to enter e-commerce without taking on the financial risk of maintaining inventory. Statistics show that dropshipping businesses are constantly on the rise.
Become an Affiliate – Affiliate marketing is worth considering if you want to start an online business but aren't interested in creating your own products. This is a popular way to make money online.
The first step is to sign up for an affiliate program. Choose someone else's product to promote to your audience. This can be any digital product or physical good. You receive a commission for each sale generated through your referral link.
Promote affiliate products on your blog by creating SEO or social content around relevant keywords and then optimizing it to get organic traffic from Google. You can also promote affiliate products to your email list subscribers by allowing your affiliate partners to host webinars for your audience.
Affiliate marketing has an extremely low startup cost. You only need to pay up front for a domain name, web hosting and email marketing software.
Offer Web Design Services - Create a portfolio website to start attracting clients. You can learn the basics of web development and design through e-learning and experimentation platforms.
Alternatively, you can register with a freelancer site. However, freelancing can be challenging. While you can benefit from location independence and a flexible schedule, you'll have a harder time predicting income and financial stability at first.
Regardless of which option you choose, once you acquire web design skills, you can expand into creating and selling your own products – this gives you greater financial stability and provides greater autonomy.
Create an interesting blog - do you have a writing talent? If you can write engagingly and enjoy it, then a blog is an online business idea worth considering.
While having a blog isn't a business model in itself, it does allow you to build an audience. Once you have an audience, you can sell your products or services, promote affiliate products, run sponsored campaigns with brands, etc. – which helps you earn passive income while working on other business projects.
When conducting product research, you should review the following main product types:
Physical goods
As the name suggests, physical goods are tangible objects that must be manufactured, stored in a warehouse, and shipped to customers.
Selling physical goods can be lucrative, but profit margins can be low if you don't manage your operating costs well.
Digital downloads
You can also sell digital products – this category includes anything a customer can download to their device, such as e-books, audio courses, podcasts, online courses, etc.
Digital products have higher profit margins than physical goods. However, pricing them can be difficult as they are often perceived as having less value than physical products.
Services
Almost any service available remotely can be sold online. Selling services is one of the fastest ways to start an online business and make a profit.
However, it is important to keep in mind that this is a business model where you are selling your time. This means that your earning potential is limited because you only have a limited number of hours in the day.
To create a successful online business, you will also need market research dаta:
Marketing research is an important step in starting your own online business. It helps determine the depth, competitiveness and profitability of any chosen business vertical.
You certainly don't want to offer something that no one is willing to buy. By conducting online market research, you can learn what your target audience wants, needs, or lacks.
Here's how you can get started with market research:
Check SERPs (Search Engine Results Pages)
Look for variations of your product/service keywords and analyze search engine results pages (SERPs). What type of content is currently ranking on the first page? Which businesses pay to advertise above organic search results?
This will help you pre-assess your competition and get information on advance SEO and digital marketing strategy based on the content your target audience prefers.
Research the competition
It's a good idea to take a close look at your main competitors outside of the SERPs. Who are the biggest business players in your niche? How much money do they make? What are their strengths and weaknesses?
By looking at other players in the market "under the microscope", you can understand what can give you a competitive advantage over them.
Track high performing keywords
Analyze how demand is changing for different products in your niche and what content ranks best by monitoring niche-relevant keywords.
You can use tools like: Google Trends, Google Keyword Planner, Ahrefs, Semrush.
Once you know who your target audience is and what they want, you can begin the process of attracting sales and scaling your business. This data will help you develop a deep understanding of your prospective customers' needs, their preferences and reasons for buying.
To analyze buyer needs and preferences, be sure to research the following areas:
Demographics – Demographics include basic socioeconomic characteristics and patterns such as age, gender, ethnicity, income, and occupation.
Psychographics – psychographic data includes various psychological characteristics such as values, beliefs, interests and opinions.
Your online business will not prosper if your products are mediocre. You need to find the price-quality balance to turn your company into a recognizable brand and your products into a trend in your industry.
When looking for products to sell online, consider your sourcing strategy. This can be done by:
Create your own products – this option is relatively easy if you plan to sell digital products/services.
On the other hand, physical production of products involves hard work in terms of design, material selection, partnerships, etc. Financial costs are also higher.
However, manufacturing will always give you an edge over the competition in terms of quality, product range and branding ability.
Finding a Dropshipper – Finding a manufacturer that allows you to dropship their products is potentially lucrative. In fact, many small business owners negotiate dropshipping deals with foreign manufacturers to offset business expenses.
Partnering with a wholesaler – A wholesaler can provide your business with a range of products to purchase and list in your online store. Some may even offer you a product distribution plan.
You need to holistically evaluate the viability of your product before purchasing or manufacturing a large order. To do this, ask yourself the following questions:
Is there a successful online company already selling such products?
Is the demand for this product sustainable or just temporary?
Do the bills come out with this product ie. can you sell it at a profit?
Remember, it doesn't matter how trendy or exciting a product may look. The important thing is that it is viable from a business point of view.
Brand is the overall essence of your business. You need everything from an online business name to a web design to convey a consistent visual image and ideas. The same goes for your off-site presence, from social media and e-newsletters to packaging.
As you work on your brand identity, pay attention to the following details: logo, color scheme, landing pages, page layouts, typography, graphics and photos.
Your brand image should be the overall result of the successful combination of all these elements.
Some small business owners believe that traditional business laws do not apply to online businesses. This is not true.
Although online businesses require fewer licenses and permits than brick-and-mortar operations, there are still a few important legal details you need to sort out. Specifically:
- What business license do you need to start a business?
- Which legal structure makes the most sense - a sole proprietorship, a limited liability company or a corporation?
- Are there any permits you need to get?
- Are there examinations you need to pass?
- Do you need a sales tax license?
- Are there specific regulations that only apply to online businesses?
- What are the laws regarding hiring contractors and employees?
Each country has its own laws. Make sure you always check with your local authorities.
It's time to prepare for the launch of your website. To ensure that the website becomes successful and viable, consider the following steps:
Choose your e-commerce platform
An e-commerce platform is the technical backbone for online sales. This software provides you with all the features you need, from product catalog to payment processing.
Some of the most popular options are: BigCommerce, WooCommerce, Shopify, Adobe Commerce (Magento), Salesforce Commerce Cloud (Demandware).
Make sure you choose a platform that provides all the features you need at a price you can afford.
Add your products
Once you've chosen a platform and store theme, add products to your catalog. Pay special attention to product images – provide high-resolution visuals showing the product from different angles.
Product descriptions are also essential. Don't just list the features, focus on the added value the customer will get.
Product images and descriptions greatly affect the conversion rates of your product pages. Therefore, do not spare time and effort to make them well.
Choose how you will make the deliveries
Fast and free shipping is the number one driver for making an online purchase and can greatly affect the quality and quantity of your sales.
Make sure all products reach your customers without delay. It's good to have several delivery strategies including: store pickup, freight carriers, same day or next day delivery, free shipping.
Make sure everything works
Finally, once your eCommerce store is live, triple test all aspects. Make sure all pages look good on all devices, including desktop, tablet and mobile.
It is important that the website works well in all browsers, from Chrome and Firefox to Safari and Microsoft Edge. All buttons must be associated with the correct applications.
If you have the budget, it's a good idea to hire a quality assurance professional to conduct site tests for you and report the findings.
Once everything is set up, it's time to start driving traffic to your eCommerce store. Prioritize the following channels:
- paid ads – allocate an advertising budget for pay-per-click (PPC) ads on social networks and in search results. This is one of the fastest ways to improve brand awareness for a new store;
- influencer marketing – start building partnerships with social media influencers to create testimonials promoting your products;
- social media marketing – complement paid campaigns with organic traffic by building an audience on social media platforms such as LinkedIn, Instagram and Facebook;
- search engine optimization (SEO) – make sure all pages on your website are optimized for SEO and create a content marketing strategy for your written content;
- email marketing – create an email list by saving the email addresses of users who visit your online store. You can then promote your products to your email subscribers.
Are you convinced yet that creating a successful online business is not an overwhelming task? You just have to walk the path step by step.
The process from research and development to launching your website can be complex, but it's not complicated. By following the recommendations in this guide, you can build a profitable online business on a small budget.
