What Skills You Need to Run Online Business
Everyone's seen those reports on TV or the Internet about people who make a pile of money running a YouTube channel. Or who make stuff at home and sell it online for a nice sum. As you sit in commuter traffic or get yelled at by the boss, those daydreams of owning your own online business probably rise up again. How hard is it really, and how much would you make?
If you're going to tap into
the Internet's potential for making money, there are certain skills you'll
need. Some are the same ones you would have needed to start your own shop in
the pre-Internet era good planning,
effective execution and people skills, as well as having a desirable product.
But there are other required skills directly related to running an online
enterprise. The good news, though, is that the Internet itself provides you
most of the tools and information to be successful.
Creating
a Business Plan
You're a would-be digital
mogul, you've got an insanely great idea, and you can start a business with
just a few keystrokes, without changing out of your pajamas even. So you might
think that a business plan a written document that describes your business
concept, market potential, strategy for growth, potential risks and capital
needs is as obsolete as paper ledgers
and accordion files.
The truth is, though, in the
undisciplined, disorganized online world, being disciplined and organized is
all the more crucial for turning that idea of yours into a viable business
model. Otherwise, when you suddenly discover that everybody wants your
revolutionary new widget, you may have no idea how to scale up to meet the
demand, and you'll end up losing the market opportunity.
But don't worry you don't
need an MBA from Wharton to write a good basic blueprint for success. The U.S.
Small Business Administration's website provides an easy to follow, step by step
guide. Additionally, Google searches are likely to turn up sample plans for
your business sector, which you can adapt to suit your needs.
Raising
(at Least a Little) Capital
Unless you're building
sculptures out of trash and selling them on eBay, you're going to need some
money to get started. This cash will cover the cost of purchasing inventory or
raw materials to make your products, as well as necessities like online ads. So
develop a realistic estimate of how much money you'll need until revenue starts
flowing. You may be able to sock away enough bucks from your day job, since
according to a recent Intuit survey, 40 percent of all small businesses started
with less than $5,000 in seed money, and 65 percent with less than $10,000.
But if you have a more
expensive dream business and no wealthy Uncle Ned, don't despair. These days,
you may be able to turn to a crowd funding site such as Fundable, which
proclaims that it's raised money for more than 377,000 startups. Your ability
to write persuasive copy to sell others on your business idea will come in
handy for this site, as well as for applying for any bank or SBA loans.
Designing
a Website
Once you've mastered HTML
and CSS (the codes your browser reads to determine the look of your site), you
can design your website from scratch. Or cheat a little by using a website
template with the design already in place. All you have to do is customize it.In addition to a website
that looks good on computers, you need one that will display well on tablets
and Smartphone. A 2014 analysis by Shopify, an ecommerce shop builder, found
that more than half of the traffic going to online stores that use its platform
now comes from mobile hand-held devices
So make sure your website
has a responsive design, one that can accommodate both big screen and small screen
customers. There are websites (like Mofuse) that help you create mobile
versions of existing website.
Sourcing
Your Product
The Internet might be just a
bunch of electrons moving through space, but you've got to have something a bit
more substantial to sell. Unless you're a consultant offering services or an
artisan who makes his or her own products, you have to find a source to provide
you with inventory. That might mean scouring flea markets and thrift stores for
vintage stuff that you can fix up and sell on eBay, a strategy that Nasty Gal
founder Sophia Amoruso used to create a company with $24 million in annual
revenue in just four years.
You also can arrange to have
your product manufactured to your specifications by an overseas manufacturer,
through a Web portal such as Alibaba or IndiaMart. One downside is that the
expense of a minimum order could run into the thousands of dollars. Finally,
there's also the option of dropshipping, in which you basically serve as the
user interface for a manufacturer who not only makes the product but handles
shipping as well. You can find such a partner through one of several
dropshipping aggregators on the Web, such as WorldWide Brands. Be aware that
margins on this type of enterprise are thin.
Gathering
Business Intelligence
Similarly, you'll want to
use Google to identify competitors to your online store, and study their
websites to figure out how you might stack up against them. Look at what sort
of prices they offer, what their shipping options are and whether they are
using tools such as email lists and mobile optimization. If you want to dig
deeper, you can use paid services such as SpyFu and Opensite Explorer to study
the opposition's use of keywords and search engine optimization, and how well
it's been working for them. Hopefully all that information will enable you to
find things that you can do better than they do, which will give you a
competitive advantage.
Advertising
and Marketing
"If you build it, they
will come" might have worked for the baseball-playing ghosts in the movie
"Field of Dreams," but it's not a very successful e-commerce
strategy. You can have a great business idea, develop a fantastic product, and
build a great website, but unless people find out that you're out there and are
persuaded to buy, you're unlikely to make very much money. On the other hand,
if you're able to develop a well-thought-out, methodical marketing and
advertising strategy to get attention and build brand recognition, you'll
optimize your chances of success.
The first element is coming
up with a brand name that will help people to distinguish you from the sea of
competitors online, and then registering or buying the domain name for
yourself. You also need to be able to figure out the mysteries of search engine
optimization, or SEO a fancy term for
using keywords that consumers are likely to search for, as well as adding links
and titles to your web pages .You can learn more about this topic through
articles like this one).
Invest in paid advertising
such as Google AdWords, which has the advantage of charging a fee only when
people click the ads and go to your website. Those ads are more likely to be
effective if you've got great copywriting skills to entice those consumers, so
try to tap your inner Don Draper.
Building
a Social Media Buzz
Free social media Facebook, Twitter, Instagram, LinkedIn, and
whatever new sites popped up last week are great ways to promote your online
business and develop a brand identity without spending a lot of bucks. The big
strength of social media is that it enables you to actually engage both
potential and existing customers and interact with them, as if you were the
old-time corner grocer or clothing salesman who chatted up whoever walked in
the door.
But building an effective
presence on social media isn't necessarily easy.
First off, you've got to
create content about your business area whether it's stereo headphones, skydiving gear
or collectible troll dolls that's both
interesting and authoritative enough to draw people in and keep them coming
back. You've got to have the deftness to do it without too conspicuously
touting your own wares. You've also got to be gregarious enough to engage
people in conversations. Ideally, some of those people should be online
influencers bloggers or Twitter users with
big audiences, for example with whom you
can develop reciprocal relationships, in which they link to your content.
Fulfilling
Orders
In conventional retail, your
customer picks the merchandise up off the shelf, or else you go into the back
storeroom and get what he or she wants, and conclude the deal at the counter.
With e-commerce, of course, you don't have a counter, or possibly even a back
storeroom, and the customer pays for the product first. But you've still got to
get the goods into his or her hands by shipping it. That part is called
fulfillment, and if your startup business is really small, you'll do most of
the work yourself, by hauling your goods to the post office or UPS store.
As your operation gets
bigger, though, you'll eventually need to outsource the fulfillment. One way to
do that is to work with a manufacturer who offers dropshipping, which we
described earlier. Another option is to use an e-commerce fulfillment provider
such as Shipwire. Basically, you send your inventory to them, they store it in
a big warehouse and pack and ship it whenever you get an order. Not only do you
save yourself the trouble of doing the legwork, but you may actually lower your
costs, since these providers are able to negotiate bulk shipping rates.
Customer
Service
If you're selling shoes at a
department store in a mall, your people skills obviously are an invaluable
asset not just for making sales, but for
making your customers feel so satisfied with their purchases that they'll come
back to you the next time that they need another pair of wingtips or pumps.It might seem as if that
sort of charm and attentiveness doesn't matter online, when you're selling your
wares to a lot of people you'll never meet face to face. But don't be fooled.
Look to the example of successful online shoe and clothing retailer Zappos, which
focused on customer service including
easy returns to differentiate itself
from the competition .
One way to further a
friendly customer experience is to fill your website with good self-service
tools, such as an easy to navigate user interface, plenty of detailed product
information and images, and a good search function so people can find what they
need. But it's also important to provide people with options for contacting and
interacting with you to solve problems whether it's through Twitter or a toll-free
phone number .
Knowing
When to Go
You might think that e-commerce
is a big wave that's going to wipe out brick and mortar retail, and that
inevitably, shopping malls are destined to be turned into skateboard parks or
golf courses. But don't count on that. According to a recent report by the
business research and consulting firm A.T. Kearney, about 90 percent of retail
sales still occur inside the walls of physical stores, and if you include
transactions done by physical retailers with an online presence such as stuff that's ordered online but held
at a store for pickup the share
increases to 95 percent.
As a result, some
online-only retailers, such as beauty products seller Birchbox and eyeglass
boutique Warby Parker, have actually opened physical storefronts. Even online
retail giant Amazon has experimented with "pop-up" temporary stores
where customers can actually touch and feel some of the products before buying
them . This trend seems to be just starting, but it may be that in the future,
you'll need to judge whether you should also sell your wares in physical
locations, becoming a true "omni channel" retailer.
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