Under the impact of modern technology, customers now tend to be enticed away from brick-and-mortar stores by online rivals. This is a common-seen reason why many retailers are turning their heads to eCommerce. In fact, the allure of running an online business is hard to resist despite its own set of difficulties. Even so, we know better than anyone else that they cannot stop you from making your move. That’s why we are here to give you an answer to the question in your mind: ‘What are the things I need to start an online business?’
The following criteria for starting up an online business may not guarantee your success, but we are sure that they will help you find a way to achieve it easier.
Criteria For Building An Online Business
1. Clear Target Market & Customers
First, you need to go out and look for a niche in the market. The majority of people who are new to entrepreneurship make a similar mistake of looking for a product first, then a market. To succeed, the key is to discover a group of people who are looking for a solution to the same issue then try to solve it with your products and services.
Carving out a unique market segment and positioning yourself as the go-to brand for a specific demographic build your credibility and lead to a more concentrated business.
For example, Lefty’s – a company from San Francisco, came up with the idea of selling items specialized for left-handed people who accounts for about 10% of the global population.
A full-of-opportunity niche market is where no one can completely solve the problem. Most of the target customers are willing to pay for the effective solution, and you will always have a chance to earn an expected income. The Lefty’s example may not be the best to show you how a good niche market is, but it does help to visualize what you should do to find out the right one for your business idea.
After identifying your target market, you can conduct online market research to get an insight into what your target customers want, need, or lack. It aids in determining the company’s vertical depth, competitiveness, profitability, and the validation of your product concept, pricing, and demand.
2. Good Products & Services
This is a make-or-break factor as high-quality products and services contribute to unwavering customer loyalty, resulting in repeat purchases. In contrast, your customers will soon seek an alternative if they have to pay for items of poor quality.
As you are a new entrepreneur planning to launch an online business, you should be aware of the complex relationship between product and service quality and revenues from the start.
To various people, product quality can signify different things. Some associate high quality with longevity or durability, while others look at its efficiency and usability. Check out all of these features and try to enhance them if possible.
3. Unique Selling Point (USP)
A USP is a point right in between your customers’ wants and your business’s advantages. It’s not so much about what you sell that needs to be unique, but rather the message you choose to emphasize that your competitors don’t.
While a slogan is one approach to express your USP, you may also incorporate it into other aspects of your online business, such as your return policy.
Let’s take a very well-known example of M&Ms with the sweetest advertising slogan of all time, “The milk chocolate melts in your mouth, not in your hand.” They came up with a unique USP out of a truism that chocolate quickly melts. You see, product benefits will be marketable as long as they are meaningful to potential customers.
No matter what way you choose, remember that a USP should, at its heart, instantly address a potential customer’s most common question when they come across your brand: “What makes you different?”
4. Specific Business Plan
A business plan is essential because it allows you to anticipate potential roadblocks and plan for future growth and profitability. An effective plan will assist you in better identifying your market, clarifying your objectives, creating a marketing roadmap, and making the right decisions.
You should pay attention to various aspects of a standard business plan, and the following are several of them.
In this part, you have to determine your business model that plays a vital role in the legal and tax obligations you must meet. If you want to build a small-scale business, you can choose a sole proprietorship or partnership to start with.
Due to the importance of this decision, we highly recommend you ask for support from an attorney beforehand.
Whatever your vision is and what you hope to achieve with your product, it all comes down to how much money you can earn with your online business. Financial projections will help you plan your beginning budget, set financial targets, and even attract investors.
Here, you need to think of any documents that describe your current financial condition and predictions representing your future expectations. In most cases, a financial plan consists of three main components: income statement, cash flow projection, and balance sheet, as well as a brief analysis of these three statements.
Although an online business requires fewer licenses and permits than a physical one, you must still address a number of legal issues related to tax, labour force, etc. Thus, ensure your business has enough necessary documents and paperwork ready for legal activities such as registration or applying for tax ID numbers.
As every state and country has its own set of rules, make sure you have double-checked details with the local authorities and seek professional legal assistance to be on the right track.
5. Effective Marketing Strategies
To start an online business, you must be aware that marketing is among the most important things. It can maximize your chance to improve sales, expand the business, in addition to raising brand awareness. In essence, marketing ensures the future of your company by engaging new and existing customers.
Unlike a marketing plan, a marketing strategy is a long-term idea for promoting a company’s products and services and gaining a competitive advantage over your rivals. In other words, you must understand both your brand and your customers to find strategies to connect the two.
Start with a goal, for example, generating revenue. You cannot do anything without knowing what you want to achieve. Then, carry out marketing analysis since you need to be familiar with the marketing you will jump into. Use SWOT analysis to figure out your strengths, weaknesses, as well as upcoming opportunities and threats.
Finally, set a budget for this. You must ensure that you have set aside sufficient funds to reach your objectives without wasting money. In this way, your marketing strategies become worthwhile.
6. Sufficient Capital
Money doesn’t grow on trees. As you know, to start an online business, you must do various things, and at each step, you should think about how much money you will need to achieve its goal.
Theoretically, startup capital includes finances for any expenses incurred prior to launching a business, as well as the money required to run the business until it achieves positive cash flow or when sales exceed costs.
Compared to a physical store, building an online store is much more economical, but it does not mean that you will not have to pay anything. For this reason, be sure that you prepare enough amount of money before taking the very first step. You can do it with a detailed business plan.
7. Comprehensive SEO Understanding
A study pointed out that the internet, the universe, and the human brain share many things in common. Speaking this way, your business website is just a little star in the online universe brimming with dozens of virtual worlds.
To survive in such a competitive place, you need to make your site noticeable, and the easiest way is with SEO optimization. Ensure that you acquired practical knowledge of SEO prior to beginning the website development process.
With an improvement in this facet, your site will get a higher Google ranking, driving more target customers.
As you know, nowadays, there is a wide range of channels available for selling products online, such as social networks (Facebook, Instagram, etc.), marketplace (Amazon, eBay, Alibaba, etc.), or eCommerce websites.
Depending on your purpose, you could choose a channel for your own business to start with, but in most cases, a website is the most favoured option among online retailers.
Coming to eCommerce web development, you need to keep in mind a few things as follows:
Remember that customers are not always patient. You have less than five or even three seconds to capture their attention. For this reason, give priority to your site’s loading speed.
The look and feel of a website is a contributing factor in customers’ first impression as it takes them less than a second to form a judgment about your business base on your website’s appearance. Thus, pay attention to this aspect, or else you will risk losing them to your competitor.
It is critical to creating a website with secure transactions that customers can trust and not be concerned about their privacy. If your site cannot meet this requirement, they will choose to shop elsewhere.
Given that mobile devices account for the bulk of web traffic, it’s reasonable that you should consider making your design mobile-first. Make responsiveness a priority as this will vastly improve your user experience.
Rather than building a website from scratch, using website development services is a simpler way. In the market, there are numerous providers who offer a variety of this kind of service for different eCommerce platforms (Magento, Shopify, etc.).
With just a click away, you can find necessary information about their services at ease. Choose an eCommerce platform first, then decide which company you want to corporate with later.
Tigren – a company specialized in solutions for the development of eCommerce sites will be a wise choice. With nearly 10 years of experience in the field, they are currently offering many Magento services from which you can get your money’s worth.
9. Useful Tools For Performance Tracking & Enhancement
Today we are more empowered than ever to start up a successful online business thanks to technology innovations. Going online, you can find helpful tools (Google tools, SEO tools, marketing tools, etc.) that allow you to deal with your business issues, including appraising and improving performance.
For example, you can use Google’s PageSpeed Insights to test your site’s load times and work on removing useless elements that cause slow speed issues. Also, you can use Canva – a great online tool that helps you with design efficiency, from designing a business card to a presentation within minutes.
The Bottom Line
Although the online world is changing fast, the basic concepts of starting an online business have stayed the same for years and may only change until the fifth technology revolution. Stick to this checklist, walk the walk, and you will find your own way to success.