A person who wishes to become a business owner but does not necessarily have the capital to start a brick and mortar business might consider an online business. You can reach millions through the Internet and determine how large you want your company to become. Although as easy as it might sound on paper, an online business still requires appropriate funding, strategic planning, a great product and a solid marketing plan. Here are a few tips on how to make your online business a success!
1. Have a Business Plan
I am always surprised at how many business owners have spent their life savings on their dream business, yet have never considered creating a solid marketing plan. Within two years and sometimes less, they sadly have to close their doors. It is crucial to understand the potential of your revenue stream, break-even duration and other factors you may encounter in the first three to five years of your operations. It is important to include where you want to be in the future. What will you do if you fall on hard times? A solid business plan will prepare you for the unexpected, whether it is good or bad.
2. Online Business Formalities
If you want an online business, you have to take the time to organize it correctly.
Most communities do not require a business license for people operating businesses out of their homes, but it is becoming more common as they see it as a source of revenue. Check with your city or town to see if you need a business license.
Next, you will need a sales tax number. As a business, if you sell an item that is shipped within the same state in which you live, then you will need to collect and pay sales tax for this transaction. To get a sales tax number, you will need to register and a number will be assigned to you. Also, wholesale companies will not do business with you if you do not have a sales tax number.
You will also need an IRS Tax ID Number. Simply go to www.IRS.gov. This ID number is also another name for your business. You certainly do not want to give out your social security number to everyone with whom you do business. Your IRS tax ID number shows that you are credible and valid so you can do business with larger companies.
3. Be Accountable, Invest Wisely
Any business venture is a RISK. Experts claim that most new businesses fail because they are undercapitalized. Businesses also fail because they don’t know how to track their cash flow and fall short in properly analyzing their expenses. If numbers aren’t your game, don’t hesitate to hire a professional to keep you on track.
Analyze your revenue and expenses every 90 days. If you are not on course with your business plan, make the necessary changes in your expenses. However, don’t make the mistake of just cutting back. You have to think outside of the box and be creative. There are many ways to improve your customer base.
4. Market Your Business Online
The online world is everything but static. Once you get your business up and running and you are driving revenue, it may be easy to put your feet up and relax. Don’t do it! Take this time to find new products, new services and new methods of marketing to take your company to the next level. Don’t underestimate the marketing value of social media or online advertising. Reach your customers on a one-on-one playing field. There is always something new to learn that could be applied to your business practices.
5. Network – Be Proactive
Networking is nothing new in the business world. Word of mouth marketing is still a principal part of any successful marketing plan. If you have the gift of gab, it can take your business in many directions. Create relationships and take advantage of the right business opportunities that may come your way. B2B partnerships may be the determining factor as to whether your company can ride out a storm.
6. Have a Solid Backend Software System
Be sure that you have the right ECommerce software. Your backend operation is the nucleus of your online storefront, so it is imperative to spend time analyzing the backend operations functionalities. Features include inventory management, credit card processing, reporting systems, analytics and more. Your backend operations should be accurate, measurable and provide real time data.
An online business may not be for everyone, but if you choose to explore it, always have an unbiased evaluation of your business. Be prepared to recognize and improve upon your mistakes. Rectify your errors faster than your competitors and spend your time on duties that drive revenue. QCBN
By Donna Werking