Have you ever considered starting your own business?
Well, who hasn't at least thought about it, right?
Going by the statistics, currently, there are 582 million entrepreneurs in the world and the figure is rising over the years. This is due to the fact that there’s greater ease of doing business now than ever.
Considering the changing consumer behaviour and impact of the pandemic, existing businesses have started going with digital ecosystems. Moreover, the majority of the new startups are also internet-based. So, let’s discuss what it takes to start an online business and how you can scale it over the years.
Why You Should Start an Online Business in 2022
Why are you reading this guide?
Probably you are thinking about starting your own business or you have already decided to start one and you’re narrowing down your options. Whatever the case, let’s understand why it makes perfect sense to start an online business now more than ever.
Requires Minimal Investment
One of the biggest challenges that aspiring entrepreneurs face is the initial investment to start the business.
A lot of you may think that starting a venture requires big money. However, it’s not always the case. Your capital requirement is based on what type of business you start.
For example, starting an airline is quite an expensive affair as compared to opening a fish & chips shop in your neighbourhood. However, for people who want to start off with minimal investment, an online business is the most suitable option.
Here’s how to start an online business:
- Arrange a computer and internet service: Your current laptop will work just fine, you don’t need a new one. If you don’t have it, you can buy a pre-owned or refurbished computer at a very affordable rate.
- Register your domain name: You can get it for a price as low as $10 a year. Some domain registrars also offer it free for the first year.
- Subscribe to a website builder: You can build a website even if you don’t know anything about coding. There are easy-to-use website builders that let you build and host your website for less than $30 a month.
So, it’s fairly possible to launch your website for under $100 as your startup cost. Needless to say, the more your budget, the better resources you can avail. But technically, money can’t stop you from becoming an online entrepreneur. Remember, Facebook started in a hostel dorm.
Significant Potential for Growth
Let’s say you have a local coffee shop and you make the finest coffee available out there. How many people do you think will travel from the other side of the city to enjoy your coffee?
Statistics show that 93.2% of consumers don’t commute more than 20 minutes for their everyday purchases. In other words, people prefer eating or shopping within local proximity of 10-20 miles.
But, when you run your business online, there are no geographical limitations. The entire world is your marketplace. As of 2020, there are more than 2 billion digital shoppers globally and they are growing with each passing day.
Furthermore, eCommerce sales will account for more than 20% of the global retail market by 2022. This presents a huge opportunity for current and future online sellers.
Unlimited Business Hours
Just like there are no physical boundaries that limit online commerce, there are no time constraints on your business hours when it comes to internet business.
Believe it or not, you can make money online even while you sleep. For instance, you may be sleeping at night in your country and someone buys products or services from your website in a different time zone.
As a matter of fact, you can keep your internet shop open 24 hours, unlike brick and mortar businesses. Let alone the nighttime, the physical shops and offices had to shut doors even during day time because of the lockdowns. Whereas the online businesses kept booming.
Ideal as Side Hustle
Does quitting your day job to start your venture get you cold feet? How about starting a business while you keep your full-time job?
Yeah, now we can see some sparkles in your eyes!
So, the goal is you don’t have to go all-in right from the start to run your online business. You can start part-time as a side hustle and scale it gradually.
Here are a few ideas you can consider:
- Start an eCommerce store (Details in the later sections)
- Start dropshipping
- Become a freelancer
- Become a social media influencer
- Start affiliate marketing, etc.
Do you know what’s the best part of having your own business?
No one can fire you from it unless you decide to shut shop or sell it to someone else. Owning a business comes with its own set of freedom, benefits, and responsibilities. As a business owner, you take your own decisions and the ownership of the choices you make.
Flexibility to Work from Anywhere
Thanks to the internet, there are countless opportunities today that allow you to make that extra buck from the comfort of your home.
Well, these days you can work from anywhere literally. When all you need is a laptop and internet, you can even relocate to your favourite location say Greece or Miami and work from there.
In fact, you can also enjoy something called work vacation or workation. It means you temporarily stay at a location of your choice, work during the day and enjoy the evenings and weekends. Stay there for as long as you want and then pick the next destination, and repeat.
Finding the Right Products to Sell Online
Let’s say your goal is not just making a quick buck, but you want to build a solid, scalable, and sustainable business that lasts.
In this case, starting your eCommerce store is a wise choice because you can handle it from anywhere owing to the third-party logistics providers. They can help you automate your entire order fulfilment process and scale your business globally through their vast logistics network.
All you need to do is build the right product portfolio and market it effectively. You can choose from:
- Commoditized product line: These are mass-market products that most people need in their day-to-day lives. For example, food items, grains, poultry, dairy products etc.
- Niche product line: Niche products serve a specific set of customers based on their unique needs, preferences, or identity. Some examples of niche products are organic food, cycling gear, football shoes etc.
Whichever of the above segments you decide to serve, invest enough time into research before you start selling online. It’s because choosing your product line is one of the most important decisions that help you build your eCommerce brand.
So, let’s dive into how to choose the products that sell online.
Choosing the Right Product to Sell
When you start your product research, it may feel like everything you could sell is already being sold out there. However, there are always some hidden opportunities or innovative products being launched.
To help you get through this, we’ve outlined some tips to help you decide on your products.
Take a Problem Solving Approach
When you brainstorm product ideas, try to look at some of your own day-to-day problems. Some of the greatest product inspirations often come from an intent to solve such problems for your customers.
For example, this spa headband comes with a hole for the ponytail.
However simple it sounds, it is actually solving a problem for people with long hair.
Ever wondered why Amazon is so successful? It has grown exponentially because they’ve been solving tons of such problems for consumers and businesses. So, think of some of the problems that you want to solve for people and look for the products that can be the potential solution.
Select Product that has Branding Potential
Now that you’ve identified products that can solve the problems of your potential buyers, you need to think about whether they can turn into a brand.
To build a brand you need to understand what resonates with your target audience that would want them to keep coming back to you.
Here are some questions to ask:
- How would your customers like to be addressed?
- How do you want to position your product?
- How would you design a website that communicates your brand message to your audience?
Stay Updated with Trends
If you want to carve a spot for your eCommerce brand, you must consider taking advantage of emerging trends in the market.
As a business owner, use the opportunities that come with being an innovator or early adopter of new trends.
As you can see there’s minimum competition at the first two stages of the innovation lifecycle. At these stages, you can be a market leader and capture a bigger market share than in the late adoption phase.
Moreover, you don’t have to compete on price, so you can also establish price authority and enjoy higher margins.
Serve Niche Customer Segments
An eCommerce niche is a specific segment of customers that you choose to serve based on their needs, preferences, or identity. For example, BENGOO manufactures consumer electronics accessories that are helpful for gamers.
By narrowing down on specific market segment, you can:
- Attract and build a loyal customer base
- Stand out in your product category
- Offer higher-priced inventory
- Save on advertisement costs
Assessing Product Viability
It can be tempting to launch the website as soon as you have a product idea. However, take a step back and check whether the market and the product are viable.
Assessing the product viability can help you check the relevance and business potential of a specific product. Below are the ways you can ensure how feasible your product idea is.
Conduct Market Research
Conducting market research can help you understand the depth and competitiveness of your idea. You can use these two research methods:
- Primary research: This method involves reaching out to potential customers in your target market. The most common research tools are interviews, surveys, questionnaires etc. You can either do it yourself online or hire someone to conduct the research for you.
- Secondary research: It’s a type of research that has already been done and published by an authoritative figure. You can use the reports of studies by government agencies or business authorities in your industry.
Assess Strategies and Performance of Competitors
If you want to win over the competition, first, you need to know who you are going to be competing with. To understand them:
- Identify your competitors: Find out the established and best-performing companies in your target segment. Also, look out for emerging new players.
- Study their websites: Notice how they have designed their homepage and overall website, product pages etc. Take a note of what you liked and also think about how you can make it better on your website.
- Understand their marketing strategy: Learn how your competitors are connecting with their customers at different stages of the buyer journey. You can do this by following them on social media and subscribing to their email newsletters.
Conduct SWOT Analysis
SWOT analysis is a popular technique that helps you identify your business’s strengths and weaknesses and the competitive landscape. Basically, it’s Strengths, Weaknesses, Opportunities, and Threats abbreviated as SWOT.
Here, strengths and weaknesses are the internal factors of a business. Whereas opportunities and threats are the external factors that affect trade.
Determine Target Audience
It’s too early to commit to a product idea before you know and understand the target audience. For this, consider:
- Demographics: Information about their age, gender, education, location, occupation, ethnicity, etc.
- Psychographics: Psychological factors such as personality, values, attitude, interests, lifestyle, etc.
Once you gather these data, you can create a buyer persona — an imaginary character that represents your ideal customers. They are people who have a problem or pain area that can be solved by your product and they would have a history of using such products.
Define Product Criteria
To define specific criteria for your products, you need to evaluate:
- Product weight and size: Selling heavy and bulky products comes with its own set of challenges such as expensive storage, handling, shipping etc.
- Product vulnerability: Fragile products are vulnerable to damage during handling and transportation and can cost you extra shipping charges. This may add to your product price.
- Assess profitability: Get an idea of how much margin you can add to your product cost. If you have to compete on price, you need to sell large volumes to cover your operational costs and still make a profit.
- Seasonality: If your product is seasonal, then you will not have a stable demand throughout the year. For example, winter jackets or snow shovels.
These factors affect your business operations, sales volume, earnings, and expenses and so the overall product viability.
Study Online Business Laws and Regulations
Similar to any other trade, you have to ensure that your online business complies with the laws of the countries you operate in.
Additionally, you need to understand and follow the specific rules and regulations that apply to digital businesses. It includes policies around web accessibility, data privacy, electronic payment processing on your e-store etc.
Let’s take a look at some of these factors.
Taxation laws vary in different countries. Let’s say you are operating a business in Australia, then you are liable to pay the taxes administered by the Australian Taxation Office (ATO). The main taxes you should consider are:
- Goods and Service Tax (GST): The Australian government levies consumer tax on most goods and services sold.
- Payroll Tax: If your business employs workers in Australia, you may need to pay taxes on the wages you pay them.
Besides the above taxes, your business may also be liable for other taxes applicable to certain business activities. Thus, you need to be on top of the taxation laws of the countries where you operate.
Trademarks and Copyrights
Before starting your business operations, you may also want to check if your product or idea is not violating any intellectual property rights such as:
- Trademarks: A symbol, name or design on a company’s products and overall branding that other businesses can not use.
- Copyrights: Legal entitlement to be a sole person to print, copy, or perform an original work such as a book, song, and computer program.
- Patents: Innovators get their innovations patented to retain the rights to use or commercialise them.
It is advisable to steer clear of the above infringements as they may entail heavy penalties and legal implications.
The labour laws are meant to empower the workers and protect their rights. The laws may vary in different countries, but it serves the purpose of correcting the imbalance of power between the employer and employee.
If you want to attract the right talent to your organisation, you need to ensure that your business complies with the labour laws of the land. Failing to do so can also result in hefty fines and legal charges.
Licenses and Permits
Taking the same example of operating a business in Australia; you may need some licences and permissions before your venture can take off.
However, you can start with obtaining your Australian Business Number (ABN) and follow the series of registration procedures mentioned on the Australian government’s official website for businesses.
Similarly, you need to look for the official resources of the government of a particular country where you may wish to run your eCommerce business.
Data Privacy and Security
As an online business owner, you may collect a lot of information from your customers to provide them with a personalised customer experience. You may collect consumer data through sources such as your web pages, check-out, social media etc.
However, you are required to protect the privacy of your customers and also protect their data to avoid any malicious use. These policies may vary according to the type of your business and the land you operate on.
Choosing the Right Platform
There’s a lot more to an eCommerce business than simply listing your products on a website and starting selling. The bigger your vision, the better you need to plan and strategise the resources.
While there are countless eCommerce platforms to build your internet business, look for a platform that has the following features:
- It should allow you to set up and design your e-store easily.
- You should be able to build an easy-to-navigate website.
- It must have an SSL certificate.
- The platform should allow you to integrate third-party tools on your website.
- You must be able to build a mobile-friendly site on this platform.
- The platform should have an in-built analytics tool or should allow external add-ons.
- You should be able to offer multiple payment options to your customers on your website.
The idea is to go ahead with the platform that contributes to the long-term success of your e-store.
Launch Your Online Store
Once you have done your research, found a profitable product line, and chosen the platform to build your website, it’s time to set up your e-store.
Below you can find the step-by-step process to launch your eCommerce website.
Create a Business Plan
Creating a business plan involves documenting the strategy that highlights the business goals and a detailed plan to achieve them. You need to outline:
- Title: Write a captivating title and subtitle for your business plan.
- Executive summary: Though this part of the plan is written last, it’s the first section of the document that stakeholders usually read. It includes a brief introduction of your company, its mission & vision statements, core values, long-term goals etc.
- The opportunity: You need to explain the specific problem that your business is intending to solve through your product offering. This is an opportunity for you to showcase your vision to investors and secure funding.
- Target audience: Write a brief section on who your ideal customers are and how you plan to serve them.
- Competitive landscape: Highlight the existing and potential competitors in the market and your strategy to outperform them. You can also include the infographic of your SWOT analysis in this section.
- Team: Here, you need to mention the people who will be responsible for specific business operations and help you achieve the organisation’s goals.
- Financial summary: This section covers the details of your initial capital, assets, liabilities, revenue projections etc.
Pick a Domain Name
Your domain name is one of the key elements of your website. It’s your first impression for your visitors and defines your brand image.
Hence, consider the following tips while choosing your domain name:
- Use .com (dot com) over other domain extensions
- Include niche keywords that represent your business idea or brand
- Try to keep it short
- Make sure it is easy to type and pronounce
- Avoid using hyphens and numbers (unless the number is part of the brand name)
Design the Aesthetics
Once you register your domain name, the next step is building your e-store. You would get access to plenty of themes and tools on your website builder. However, always think of the long term and choose the template the best suits your brand.
Here are a few things to keep in mind:
- Keep it simple
- Make your website content scannable
- Create a professional-looking site
- Embed your social media accounts
- Use high-quality visuals
- Design a seamless checkout page
- Keep easy to navigate sections or categories
Add Products and Shipping
Now it’s time to add the products to your online store. There are three main ingredients that make a great product page:
- Product categories: Categorising your product line makes it easier for customers to find the items they want to buy.
- Product images: Use high-resolution images that make your products look attractive. You can also hire a professional photographer for this purpose.
- Product descriptions: Here you can address your customers problems or pain areas and explain how a specific product can solve them. You can also hire a copywriter to help you write compelling descriptions.
This is also a stage where you decide your shipping strategy, whether you want to offer free, flat-rate or variable delivery charges to your customers.
Also, make sure you partner with a competent logistics company that can take care of your order fulfilment and help you offer faster shipping options such as same day, one-day, two-day delivery etc.
Market Your Online Store
Your online store is ready, but your customers don’t know that yet. So, you have to go out there and communicate your presence to your potential buyers. Then only you can expect visitors to your website.
Keep reading to learn more about marketing your online business.
Marketing and Scaling Your Online Business
To market and scale your online business, you need to create your eCommerce marketing strategy and learn how to use multiple marketing channels.
We have outlined some of the tactics to help you promote your venture effectively.
Strengthen SEO Performance
As per statistics, 68% of the website traffic is directed from search engines. Hence, it is crucial that your online store is optimised for search engines.
Here’s what you need to consider when it comes to eCommerce SEO:
- Make your website mobile-friendly
- Find out your customers’ search queries and optimise for those keywords
- Optimise your website content
- Optimise images on your site
- Improve web page speed
Besides, you can hire SEO professionals to help you optimise your eCommerce site and increase the quality and quantity of traffic.
Utilise Content Effectively
Since you have already researched your target audience thoroughly and created your buyer persona, you can create content that helps your customers in their buying journey.
- Product or service guide for your customers
- Product videos to explain usage, benefits, etc.
- Stories, case studies, testimonials of other customers
- Frequently asked questions (FAQs) section
- Blogs, whitepapers, podcasts etc.
Make Use of Social Media
Today social media is the fastest way to spread information and awareness online. So ensure that your brand is present on popular social channels such as Facebook, Instagram, YouTube, Pinterest, Twitter etc.
Furthermore, focus your marketing on the platforms where your potential customers are most active. For example, Instagram is quite popular among millennials and Gen Z. Hence, use such opportunities to engage your customers on social media and build relationships.
If you want to scale your online business, you must track and analyse the available data to produce actionable insights.
Here are some of the eCommerce performance indicators that you must track:
Thus, you can use the above metrics to improvise your marketing and growth strategies.
Ensure an Omnichannel Strategy
Statistics show that 73% of shoppers use multiple channels while shopping online. So it is essential that you create an omnichannel experience for your customers.
In other words, offer your customer the same brand experience, irrespective of the device or digital platform they use. For example, allowing them to purchase products seamlessly through your website, social accounts etc.
Tips to Grow Your Online Business in 2022
Having understood the nitty-gritty of how to start an online business, let’s understand how you can grow it consistently over the years.
Customer Obsession is Key
Obsession can be good sometimes. Especially when a business is obsessed with providing the highest quality products and after-sale services to its customers.
Here’s what you can do to delight your customers:
- Study customer data and send them personalised offers
- Customise each stage of the buyer’s journey
- Design a user-friendly website
- Train your customer service team to provide excellent support
- Ask feedback from customers and act upon them
Mobile Optimization is not Optional
53% of the consumers use smartphones for shopping and the global mCommerce (mobile commerce) market is expected to touch $3.56 trillion by the end of 2021.
Hence, you need to ensure that your customers get a delightful experience on your mobile site and app. You can:
- Use Accelerated Mobile Pages (AMP)
- Make a responsive web design for mobile site
- Compress images
- Remove flash and pop-up from your mobile site
Automations are Important
As a business owner, you must look for every opportunity that can help you optimise your time. In this case, automating your business processes can be a blessing. There are plenty of tools and software available that can help you:
- Send automated emails such as welcome messages, newsletters, information on new products, order updates etc.
- Detect fraudulent transactions
- Save abandoned shopping carts and retarget the leads
- Manage your inventory
Thus, automation can increase your productivity by saving time on the above processes.
Educating Over Hard-Selling
Customers no longer prefer outdated salesy advertisements or communications. Instead, help your customers by providing valuable resources that help them solve real-life problems.
Here’s what you can do:
- Write educating content such as blogs, whitepapers, ebooks, etc. and upload it regularly in your blog or resources section on your website
- Make informative videos, infographics, podcasts, etc. and distribute them via emails and your social media channels
- Conduct live product sessions or webinars for your target audience
Once your customer base starts growing, you can:
- Host online events and conferences to engage your audience
- Set bigger goals and track them, measure the performance, and re-evaluate your strategies as needed
Starting an online business has never been easier than it is today because you can launch your website instantly with a very low investment. Moreover, you can also enjoy the flexibility of working from anywhere and anytime.
However, starting an eCommerce site is one thing and growing it consistently is another.
If you are in for the long-term and want to build a sustainable online business, you need to invest enough time during your product research and check the viability.
Furthermore, you must ensure that you are marketing your business effectively across the channels and tracking your performance metrics.
The tips and tactics shared in this guide are reference points that can help you start but just like any other business, you need to work hard and smart to achieve success.
Frequently Asked Questions (FAQs)
How to create an online business?
You need to think of products or services that you want to offer your customers on your website. Then find the ways you can source these products and list them on your website. You also need to manage logistics either on your own or hire a logistics company to fulfil your orders.
What do I need to start a business?
First of all, you need a computer and internet connection. Then you need to register your domain name and build your website.
How to start an eCommerce business?
You need to research the products you want to sell online. Think of the products that can solve the problems of your target audience. Once you have decided on your product line, design a website and list your products there.
How to start an online business from home?
You can start an online business from home and work from anywhere. All you have to do is register your domain name and build your website.
What is the easiest business to start?
Today starting an online business is the easiest option.
How do you develop a business?
You have to decide on a valuable product line and market your online business effectively across the various channels.
What is important for business growth?
First, you need to set business goals and develop a plan to achieve them. Also, you must track your progress consistently and improve your strategies if necessary.