Things to Do Before Starting an Online Business
This is a guest post written by Raul Harman
The reason why the idea of starting an online business is so appealing is due to the fact that it takes several hours to put into action (come up with a business idea, register your company, and start doing business). Needless to say, this doesn’t mean that rushing with a launch is a smart thing to do. Even online businesses need a plan, an infrastructure, and a financial safety net. All of these aspects are something you need to think about before starting a business, seeing as how tackling these issues retroactively might be more than what you’ve bargained for. With this in mind, here are five things you need to do before starting an online business.
Make a business plan
Just because your online business has somewhat lower break-even point and your idea sounds brilliant doesn’t mean that you can just rush head-first into the unknown. What you need is a business plan that consists of the executive summary, execution plan, financial plan and a detailed description of your angle and opportunity. This is a complex process which may seem fairly simple at first, which is why it’s a good idea to look for some professional help before trying to tackle it on your own. One last thing you need to understand is that potential investors and business partners always demand a business plan, which is something you’ll need when you start gathering the funds.
Gather enough money
Before you even start gathering the money, you need to do some budgeting and make a financial projection in order to see just how much you need. You see, it usually takes at least six months for most businesses to become profitable, which means that you’ll need to have enough money for six-months-worth of supplies (unless you’re providing advisory services), salaries (even if you only hire online workers) and expenses (even though you’re not leasing an office) in your reserve. This, as you can see, depends on the nature of your business and the scale of your business plan.
Once you know how much money you need, you should pick a method or several. Traditionally, you would apply for a loan or look for a partner but depending on the industry, you might also be able to go with crowdfunding. On the other hand, those with an asset on their hands might consider selling it in order to acquire their initial capital. Still, this is a risky business practice that might not end up as you planned. This is also why most experts advise keeping your personal and business funds and assets completely separate.
Register your company
As for the registration of your company, there’s a fairly simple procedure that you are advised to follow. First, start by determining your business structure. Will you run your business as a sole entrepreneurship, limited liability company (LLC) or a partnership? Next, you need to pick a name, seeing as how it’s necessary to submit one during your registration. For this, you need to check availability within your niche and home region. Finally, you need to submit an official company registration which can, nowadays, be easily done online. This significantly saves you both money and effort.
Invest in digital marketing
An online business depends on the ability of its clients to find it and the credibility/reliability it has in their eyes. Positive customer experience is the best way to establish this, yet, it only affects those who already made a purchase. For the audience you hope to turn into paying customers, the safest bet is to invest in digital marketing. By boosting your SEO efforts, you’ll be easy to find, by investing in professional web design, you’ll look more professional, and by advertising through the right channels, your conversion rate will skyrocket.
Keep your personal life in check
Online business has no set work hours, seeing as how you need to be at your customers’ disposal at all times. This is especially true if your customers are based in several different time zones. In other words, it’s easy to overcommit to your business and let your personal life suffer because of it. While this is a dilemma that all entrepreneurs face at one point, with an online business it’s even harder to make this delineation. Therefore, even finding a reliable time management app might make a difference between making it and burning out.
While this preparation stage might be somewhat simpler than if you were to start a brick-and-mortar business (no need for leasing the office, furnishing it and avoiding several other expenses), it can still be a lot of work. Nonetheless, if you approach this issue systematically, it shouldn’t be too much of a difficulty even for a first-time entrepreneur.