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 Online
Business
How to start your online
business?
If you've ever had an idea for a product or
service that you think could net you a fortune,
you may well have considered setting up an
internet business with the aim of sitting back
and watching the money roll in.
After all, in 2007, consumers spent £62.2bn on
online goods and services. Over the past 10
years, the growth of the internet has resulted
in the high-profile successes of many
internet-related businesses. Just a few weeks
ago, for example, price comparison service
Moneysupermarket.com became the second-biggest
internet float in the world since the dot.com
implosion, after that industry behemoth, Google.
The internet has certainly revolutionized the
way we live our lives, and offers a place where
individuals can compete with global
organisations. But just how easy is it to get
started?
Getting your Business Plan
right
The starting point for any new venture is to create a
business plan.
You need to know your target market,
know your competition, attract funding,
secure good resources, build consumer
loyalty – especially blogger coverage – and
forge alliances with strategic partners.
Preparation and research are key.
The objective
of the business plan is to tell a simple yet compelling
story that leaves the reader wanting to meet the management
team and find out more about the proposition. It should be
as succinct and accessible as possible, but
needs to examine all possible outcomes.
Finding a Market
One of the most important elements of setting up an online
business is finding out if there is a market for your idea.
It is all about finding a niche, or what
is often called a competitive advantage.
Financing
There are many different financing options available to
aspiring entrepreneurs. For many businesses, raising funds
may involve several sources.
Bank finance in the form of a loan or overdraft is usually
cheaper than selling shares or equity in your business, says. But equity investment is ideal for
those businesses that do not want to increase their level of
borrowing, or are unable to provide the necessary security.
If you're considering equity investment, two options are
so-called "business angels" and venture capitalists.
Business angels are wealthy individuals who look to invest
in growing companies wanting to raise between £10,000 and
£250,00. They will also offer contacts and advice. Venture
capitalists will only invest – usually a minimum of £2m – if
they can see a significant return in three years, say.
For internet start-ups with a sound business proposition but
without the necessary security to obtain conventional
lending, the Small Firms Loan Guarantee is another option.
A common
error businesses make is to ask for too
little financial support in the hope of
getting at least some of the funding needed.
But this is potentially a recipe for
disaster. All businesses need to be properly
financed
How to get your Website
right?
Websites will set you back varying amounts.
The cost is relative. While a basic one
could cost as little as £500, a really good
one that dominates the market could cost up
to £20,000 or more.
If
building your own website is not an option,
try searching for web designers online, or
ask friends and colleagues for
recommendations. Keep the site clean and simple: people
will buy from you if they trust the site and can find what
they want.
Make sure you update your website's content constantly, as
innovation, imagination and invention are essential if you
are going to succeed in the longer term. Also make it easy
for people to get in touch: your business
needs to present a human face.
Marketing that
works?
One area where internet businesses often fail is marketing.
Too many people fall into the trap of developing their
product or service and then expecting orders to come racing
in. But with no 'shop window' through which to promote
yourself, how are potential customers going
to find you?
Sites such as
Google AdWords can be a cost-effective way of
advertising. These operate on a "pay per click"
basis, so you only pay when someone clicks through to your
website.
Emailing your friends and family with
details of your site, and look out for chatrooms and discussion
forums, and let people know you are there. Network with
others and get referrals.
You may want to get a company to do search engine
optimization (SEO) for you to ensure that you catch any
potential customers searching for your type of product on
the likes of Yahoo! and Google. But try to get them to work
on the results. SEO is not that important if you have spent
money effectively on online ads. A lot of
people try to get to the top of search
engines; and there can only be one.
Customer Transactions
Make it fast and easy for customers to order, as a site with
a difficult sales process is likely to lose customers.
Fulfil every order as fast as you possibly
can.
Websites should be easy to navigate so users don't get
frustrated and leave without making a purchase. Security
should also be a priority, and potential customers should be
assured their details will be kept safe.
How you treat customers matters.
Talk to them as often as possible and help
them to get to know you and build confidence
in you and the services you provide. Ask
them what they want from you and react to
what they tell you.
Start small and have
Patience
Don't give up your day job too soon, as it will take time
for your internet venture to grow – and in the meantime
there may not be much incoming revenue. As a budding online
entrepreneur, you'll need lots of energy, enthusiasm,
determination and passion; but you also need to be
realistic. Success on the web is rare. While many businesses
are launched, few make a profit, and most
will never see a return on investment. That
said, while starting up an internet business
can be one of the toughest things you ever
do, it can also be the most rewarding.
"If you want to set up an internet business, you have to
convince all the people around you it's a good idea. Put in
your own time and energy, but other people's
money – and take as much advice from other
people as you can.
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