Over the past several decades, technological innovation has led to an explosion in online commerce. Large providers such as IBM and Oracle – powerhouse companies traditionally focused on hardware – have become overshadowed with the emergence of a new line of purely web-based companies. Firms like Amazon and Facebook, like eBay and Overstock before them, have moved to the foreground. At the same time, brand name retailers and big box stores have worked tirelessly to stake out a footing for themselves in the new global online marketplace. In vying for market share, the competition has changed in both form and pace.
The growth of these companies has in many ways made the playing field more level than ever before. Anyone can create a website, start offering products or services, and grow to compete with multi-billion-dollar enterprises. If you share the goal of becoming a successful online entrepreneur, below are a few good steps to help you start out.
- Define your offerings. Decide what you plan to sell to clients or customers. Are you going to be selling tangible goods? If so, will they be items that you design and manufacture yourself, or will you be selling secondhand merchandise? If you instead plan to sell services, spend some time thinking about your own core competencies and how you can best help clients. Define your focus as much as possible around your core strengths, so you can be sure you can compete. Regardless of what you’re selling, this step is critical for developing a critical understanding of what your company is going to do and how it will benefit clients.
- Find your outlet(s). This will be based largely on your offerings – whether they’ll be goods or services, the target clientele and price point. While your own Amazon store may make sense for selling original wares, items that are used, second-hand, or less standardized may be better suited for eBay or Etsy. If your focus is instead on services, you may find a good home on Fiverr or UpWork until you develop sufficient market share to build your own website.
- Explore delivery methods and costs. Once you have defined your online offerings and the outlets you’ll use to attract customers, spend some time thinking about how you will be delivering final products to customers. If you plan to sell tangible goods, this means researching shipping methods and costs to find providers who can deliver your goods in a timely, reliable, a cost-efficient fashion. If you are selling services, decide whether work product will be delivered through web platforms like UpWork or Fiverr, or whether you will be driving business to another platform for managing projects, delivering work product, and invoicing clients.
- Foster positive feedback and ongoing client engagement. Once you have begun operations, marketing to customers and delivering goods or services, seek feedback from customers. Your goal is not only to identify possible ways to improve, but also to gather positive reviews from satisfied customers to help drive future business. Depending on the nature of your company, it may also be beneficial to engage directly with your customers, particularly through social media, in order to keep your brand foremost in clients’ minds and to stay abreast of their future needs. This ongoing engagement will foster future growth as a company – not just by protecting market share but by driving innovation and advancement within your business.
- Reinvest for the future. Many people who start new businesses are motivated primarily by money. However, if you want to make your business a long-term success, do your best to hold off on reaping financial benefits from your new company. As you start out, go into your new business having minimized your monthly financial needs. Structure your business with an eye toward long-term sustainability with minimal resources required. After all, it may be awhile before money starts coming in, and once revenue does start it will probably be slower and smaller than you expect. What money does come in, during the early stages, should be largely reinvested for future growth. As you begin to operate in earnest, your needs will change quickly. Whether it’s new inventory, better software or equipment, you’ll need to make some critical investments as you begin to ramp up operations. Don’t deny your business these critical reinvestments early on by siphoning off all the early revenues.
Small business and entrepreneurialism are the backbone of most developed economies. While large, established firms draw more headlines, it’s the small businesses and self-employed who create the vast majority of the jobs and drive most innovation. If you’ve decided to take the step to start your own online business, be sure to follow these steps to set yourself out on the best path to success.
Steven McMeechan is a strategic marketing and communications specialist with over twenty years’ experience in senior marketing management roles across a range of industries including Information Technology and Financial Services. He works for Capstone Financial Planning and lives in Melbourne Australia.