Starting an Online Business, Online Business Tips

For all those starting an online business, here’s a question for you. What is the biggest problem people normally encounter when starting an online business?

Is it simply a matter of getting off on the wrong foot or is there more to it? Well here’s a few of my online business tips that might help you.

Map Your Business Strategy

As a small business owner you know that the objective of a business is to sell a product or service and make a profit. Unfortunately many small business owners never take the time to sit down and work out a viable business plan. They never take the time to map-out where their business should be going, how they will get there, what their online business has to offer or who their customers are.

Granted, things are never easy for a small business owner. No matter how hard you try, there are always problems to solve. Just take comfort in knowing you’re not alone. Every small-business owner goes through the same thing.

It’s Never Been Easier to Start a Business

The days when it took weeks, months, and a myriad of forms to get your business started have gone, it’s never been easier to start a business. Now, if you can buy a domain name and register your business online, you’re in business the next day.

Staying in business on the other hand is a much more complicated matter. The increase in overall selection and more focused completion make it more difficult for businesses of all sizes to retain customers who can change their suppliers with the click of a mouse.

Online Business is Serious Business

Many people think having an online business is just a bit of fun, it’s not a real business after all. Wrong. Having an online store is just as real as any bricks and mortar store and just like a bricks and mortar store you have to put some serious thought into the business. If you don’t you will never be successful and significantly increase your chances of failing.

To succeed online there are some important factors you should practice.

1. Integrity. The temptation to cut corners, omit information, and do whatever it takes to get ahead occurs every day. Don’t succumb. Don’t become just another scam artist. Without trust your business with eventually fail.
2. Patience. In business you need lots of tolerance and fortitude.
3. Priority service. Always give your best service and support.
4. Communicate. Reply to supplier and customer emails promptly.
5. Solutions. Don’t sell a product, sell a solution to a problem.
6. Discipline. Don’t waste time on unrelated issues.
7. Service. Offer the right service and support and the money will follow.

Initially, most start-ups simply follow the crowd. They see a niche that appears to be doing well and jump in with both feet (as it were). After this initial learning stage, they start finding their real niche and target market. Taking the time to decide your niche market is the smartest way to continue your business.

• You don’t have to be passionate or even enjoy your chosen niche, but it does help. It makes life more interesting.

Take the time to be yourself and develop a genuine interest in the niche and in those who demonstrate a similar interest. Be the person who creates the products and services which can solve their problems and meet their needs.

Customer Communications

With regards communicating with your customers, if you don’t have the time to answer customer emails then create a frequently asked questions (FAQ) page on your web site.

This is easily created by answering customer email questions and then placing those questions with answers in a FAQ. You’ll be surprised how often the same question gets asked.

To keep customers up to date get an autoresponder from AWeber, GetResponse, Constant Contact or iContact. This enable you to write one email or a batch of emails and have them sent at a scheduled time to all your customers. Autoresponder can do a lot more than this but that’s another story.

Business Capital

Always a challenge for small businesses is the raising of capital. Obtaining capital is important because with access to funds you can garner more exposure, find and take advantage of more business opportunities and supply solutions to customers. Having the right capital enables research into innovative technologies, it enables the development of prototypes and filing of patents.

• Without the right amount of funding, small businesses stagnate and ultimately fail.

Too often small business owners fail to focus enough on cash flow generation. In order to head off problems, you must be adequately capitalized with enough cash reserves to meet obligations as they arise and to handle downturns and emergencies.

For small businesses, handling business accounting and taxes may be within the capabilities of the business owners, but professional help is usually a good idea. A good accounting package such as those provided by Sage or Quicken is always worth the investment.

Never stretch your business finances to breaking point. If necessary, reign in the business development. I’m not suggesting you stop growth, just practice a little moderation.

Competition and Small Businesses

The biggest challenge facing most small businesses is increasing competition. Once others see your niche as being lucrative they all try to jump on the band wagon.

This usually means lowering costs to customers, which means your margins continue to shrink. Many small businesses go out of business trying to compete.

Before you get to this stage, pick a cut-off point and get out of that particular niche. Don’t continue the downward spiral. Find or create another niche product.

Small Business Expansion

Have you thought about how you will expand your business? If not, start doing so now.

Most small businesses begin as sole traders, with just yourself or yourself and a few family members working from home.

With expansion comes employees. With employees comes the place of work, either an office or factory or both. With expansion comes increased responsibilities, rules, regulations, taxes, etc.

Finding and retaining the right talent can also be major problem for small businesses, especially if the type of person you are looking for is in high demand.

Whatever you do, do not jump into expansion too quickly. Think very carefully first. Is there an alternative to having your own workforce? Could you contract the work out?

Getting Paid on Time

If you’re business deals with the general public then getting paid on time should not be a problem, you’ll generally charge and receive payment prior to supplying your goods or services.

With business to business (B2B) transactions on the other hand getting paid can be a challenge, especially in a recession. Delayed payments will eat into your working capital and if you have to borrow you are increasing your financial risk.

Think very carefully before offering B2B extended payment terms or borrowing to cover your customers delayed payments. Providing goods to customers who cannot pay is a sure disaster. If a business is going to fail, make sure it isn’t yours.

Mistakes in Starting an Online Business

Finally, here are a few of the big mistakes to avoid when starting an online business.

• Waiting too long to launch a product/service.
• Solving an unimportant problem.
• Not really listening to customers.
• Not being different.
• Choosing a niche you don’t care about.
• Confusing “blog” with “business”.
• Spending too much time thinking and not enough time doing.