An online business venture comes with a host of benefits, such as flexible working hours, working from home, focusing on a niche you actually like, and more affordable startup costs. But it is not an easy walk in the park; it requires research, resources, and more research.
To start, grow, and maintain an online business, you must follow a similar process to starting a traditional business. On top of that, you must also mind digital marketing, online visibility, and other aspects of doing business online.
To help you navigate your new business venture, here’s a five-step process you can follow.
Step 1: Decide on a Business Idea
Potential entrepreneurs tend to jump ahead to web development or branding before having a firm business idea in place. Before you start deciding on website themes, ask yourself:
- What problem are you solving? Just because you have a certain hobby or skill set that you like, it doesn’t mean that there’s a market for it. You need to solve a real-world problem that customers are looking for a solution. And if there are, how many businesses are trying to solve the same problem? How will you differentiate your business?
- Can your business function solely online? Online learning businesses do not require physical infrastructure to operate, but e-commerce businesses require physical distribution and shipping. If you can attend both, you can maintain an online business.
Step 2: Validate Your Idea
Validation of your business idea can be as simple as talking with your target market, asking about their preferences and if they’d choose your business. But when starting an online business, there are other methods you can try to test your market.
- Set up a landing page. You don’t have to set up a full website to run a preview of your landing page, which can tease your product or service. Provide a quick rundown of pricing features and release window.
- Look through customer reviews. Another simple method of gauging customer interest is looking through their reviews. See how people respond to a business, check what they like, and read all of their feedback.
Step 3: Start a Business Plan
Once you’ve studied your market, it’s time to plan. Since you’ve gone through the process of validation, you have the initial pieces of your business plan. Now, you have to place your plans in a format, so you can forecast financials, pursue funding, and revisit your plan as your business grows.
Consider the following aspects of business planning:
- Conduct market analysis. Explore more of your market by conducting a SWOT analysis, which is necessary for confirming your competition, target market, and marketing approach. Market analysis can also help you determine distribution methods, pricing models, and other competitive advantages you can leverage as you enter the market.
- Consider success and funding metrics. Identify your startup costs and consider funding opportunities for your business. Even if your online business will be a simple side gig, think through the sales metrics that you should track to know you’re in the right direction. Reviewing these metrics regularly will let you know if you’re still on the right path. You can do this with a business dashboard or some spreadsheets.
- Set up your website. Once you have finalized your plan, look at your website. Updating your website requires hosting, effective design, and a good platform.
Step 4: Make It Legal
The final few steps concern the legality of your business. Generally speaking, the same business regulations apply online as physical businesses. But there are a few differences.
- Read up on online business regulations. In online business law, there are laws regarding privacy and intellectual property regulations, as well as the distribution of your customer’s personal information. The US Small Business Administration (SBA) provides a thorough rundown of online business law, so read up on these first.
- Register your business. How do you want to set up your business’s legal structure? Some companies choose to form an LLC but do your research first. Also, consider state-specific requirements. Visit your local state’s website for more information on business compliance.
THE FINAL STEP: Maintaining Your Business
Once you start your business, the work does not stop there. You will still need to plan for your business, validate your ideas, and understand your tax requirements. The business cycle continues, as well as involves updating your products and services, as well as your business strategies.
The online business world is your oyster if you know where to go. Navigate your business toward success by establishing a solid foundation first.