Business Planning

How To Start An Online Business?

E-commerce giants such as Amazon have been a major success for years, and online businesses have grown faster than brick-and-mortar stores in recent years. The pandemic has helped online businesses grow in leaps and bounds, making online shopping a necessity. Online sales were predicted to grow between 15 percent and 17 percent per year, compared to about 5 percent for the overall retail industry before the pandemic sent them through the roof.

Before you start dreaming of sitting on a tropical beach and raking in money from your online business, you need to do the hard work to make it successful. Just like starting any other business, it pays to lay some groundwork before you begin.

There’s a lot to consider before you even establish your e-commerce website. What type of e-commerce model are you going to use? How will you decide what product(s) to sell? How are you going to market your online business?

There’s not one single idea that’s best. You need to find the idea that works best for you. Whether you decide to sell hand-made items to consumers or bulk beauty supplies to other businesses, the first step is to research business ideas, learn the business models and decide what your niche will be. Another helpful thing to do is work with a mentor or advisor who can help you think through the steps to help build your business and keep you accountable

So, what do you need to start an online business?

  • A brand name

  • A unique selling proposition

  • A website

  • Products

  • The ability to collect payment

  • The ability to deliver the goods

  • Qualified Traffic

Come up with a brand name

In most cases, the brand name and domain name are identical. Use a brand name that customers can identify with your product category and positioning. And before you finalize your decision, find out how to choose a domain name.

Why should people buy from you?

What’s your unique selling proposition (USP)—a reason people buy from you that sets you apart from your competitors? This is part of an E-commerce marketing plan.

Set up the website

If you’re familiar with online technologies, you may know how to get an E-commerce website going. If not, this step might seem like the most intimidating. You can also consider a hosted E-commerce solution such as Shopify.

Select Your Product

Though you could sell virtually anything online, you need to decide what works best for you. Do you want to sell something you made, or resell a product, such as beauty products?

Setting up a payment gateway

If you go with a hosted eCommerce solution, there is a good chance that it comes bundled with a payment gateway; otherwise, you would sign up for a basic payment mechanism such as PayPal.

Set up a fulfillment plan 

Some alternatives are:

  1. If you have chosen to sell digital goods, your hosted solution will likely provide you with a mechanism to automatically deliver them.

  2. Since the initial volumes are likely to be low, you could consider shipping the goods yourself; once a day. Most third-party logistics providers will offer you options for pickup too. With small and infrequent sales, you will not manage to negotiate a reasonable price initially. But that will change once your volumes pick up.

Set your budget for pay per click advertising

Having a great eCommerce website is nice, but it’s meaningless if no one visits your site. Start by listing a few primary challenges, such as:

  • How can I get people to visit my website?

  • How can I convert visitors?

  • How can I communicate with customers and prospects?

Now, list the tools you’re familiar with that can help you reach the challenges listed. For example, tools that can help you get people to visit your site could include: 

Unless you’ve got a huge marketing budget, you’ll need to review the options and choose a few to begin. There are no magic solutions, so it’s good to test the tools to see which one works best for you.

Creating an eCommerce Business Plan

It’s tempting to jump right in, but before you become the next Kylie Jenner (and definitely before you quit your job), it’s worth spending some time to think about a business plan. Having a business plan can help cut down unnecessary expenses or losses and stay focused on your goals. It can also help you see the bigger picture and plan for expanding your business. We’ve put an easy-to-use guide and template to help you create a brief business plan. It doesn't have to be long or complicated. The most important things to consider are the product or service you’re offering and potential customers. 

  • What’s your business idea?

  • What makes your business different from others like it?

  • How will your product or service help your customers with their needs?

One of the most important things for a successful business is understanding your customer base. Even if you have the greatest idea for a business, you can’t be successful without customers. To do that, you should be able to answer questions such as:

  • What do your customers want or need?

  • Will you be selling your service or product to individuals or other businesses?

  • Who are your customers?

Ask a mentor to help you determine what (if any) licenses or permits you'll need to operate, but don't let that stop you from getting started today! Some solopreneurs and early stage businesses can start making sales and create an official business entity when they grow. Starting an online business can be rewarding and a great way to become an entrepreneur. Sign up at Sky’s the Limit to get access to business mentors, tools and other support you need.