These days, people are bombarded by success stories of people – even teenagers – who become millionaires just by running a YouTube channel or a Twitch stream, or those who become wealthy just by selling DIY goods at their home and selling it online for a huge markup. One has to admit that it is easy to feel jealous if you struggle at your day job, with no career advancement in sight and with nothing to look forward to but an irate boss who keeps nagging at you for the smallest things. One might think that if these teenagers, work at home moms, and retired seniors can become successful online entrepreneurs, there’s nothing that will prevent you from doing the same, right?
It shouldn’t be that hard. And rightfully so as studies have shown that the number of one-person online businesses that are making huge profits are starting to rise these past few years, with more than 2.4 million of them managing at least $100,000 per annum in income without even leaving the comforts of their own home. And it is posited that the growth will continue.
So it is pretty much a given that many people will want to try and get in on the action. If you are one of these people looking to tap the potential of the Internet for making money, you will have to understand that it is not as simple as people would have you believe. There are certain skills that you would need in order to build and manage a successful online business, such as:
Drafting an Effective Business Plan
Online businesses, by virtue of being reliant on cutting edge communications technology, may give you the idea that written documents are obsolete and no longer necessary – you can simply do everything on the fly, on your computer, without even changing out of your pajamas. You would be surprised how wrong you are.
Online businesses can be very chaotic and stressful, and you will be doing yourself a favor if try to organize using a simple business plan, which is a written document that contains a description of your core business concept, your strategy for growth and marketing, your market potential, your competitors, your projected profits, and other important information that can help keep you focused, motivated, and reminded of what you are supposed to be doing with your online business.
All businesses, even non-profit ones and even those that try to make money out of recycling garbage, will require some money to get started. It’s just the fact of the matter. You have to pay for the electricity of the computer you are going to use, you have to pay for the Internet connection, you have to pay your bills while waiting for the business to start earning a revenue, and you need money to cover the purchase of your first batch of inventory. Not to mention you will have to spend money to grow your business, as advertising, marketing, and expansion will cost money as well.
So if you are serious about starting an online business, one designed to be sustainable and profitable for the long term, you need to find a way to gather enough money to cover operations until the business starts to earn enough of a profit to cover its running costs. If you had the foreknowledge and the benefit of a lucrative dayjob, you might have stashed away enough money for the capital. But if you don’t there are other options such as getting loans from friends and family members or a bank, or by seeking capital funding from investors and partners.
The Internet in this case has been particularly helpful, as crowdfunding sites have become a great alternative that will allow would-be entrepreneurs to gather funding for their business ideas, provided that they are able to convince enough potential supporters.
On a brick-and-mortar shop, the owners would rely on attractive signages and window displays in order to catch the attention of passersby, in the hopes of turning some (if not all) of them into customers. An online business works pretty much the same, only instead of beautifying a physical storefront, you have to rely on a website.
Having a beautiful, visually appealing website is paramount, because Internet surfers don’t really linger on places that has not grabbed their attention. Entrepreneur magazine posits that a website has roughly five seconds to catch and retain a surfer’s attention. Miss that window, and the person will most likely move on to another website or do something else on his computer.
The good news is that there are countless resources on the Internet that can help even the most novice businessperson learn how to code and design a website. It takes time and effort, but it will be worth it. It’s certainly a lot easier when compared to running an offline business – there’s no way a single person can build a storefront on his own.
It is also worth noting that you need more than a website that looks and functions well on a computer, because many users these days access the internet primarily on their smartphones and tablets. You therefore need a website that is functional and aesthetically pleasing on both computers and small screen devices. It is a good thing that websites these days can be designed to be responsive, by which it means that the layout adjusts automatically depending on the size of the device’s screen.
Fortunately for people who really don’t have the time or the inclination to learn how to design a website, there is always the option of hiring a third party website designer. There are individual freelancers as well as agencies that will be willing to create your website for a fee. It is going to cost you, but the results will most likely be better than what you can produce on your own.
Whether you are selling a digital product or actual physical items, you need to learn how to source your products. For people who offer digital products, this might be easier but for people who craft or sell actual physical goods, you might need to learn how to canvass and pick the most cost-efficient suppliers. Some of the most successful businessmen are veritable experts when it comes to scouring thrift stores and flea markets for cheap and discounted, yet high quality products and raw materials.
Alternatively, you can also partner with a third party supplier and just sell their products with a markup. The dropshipping business model relies on this concept, and it is very friendly to novices with the catch being that your potential for income will be lower, thus you need to rely on volume of sales to earn a tidy profit.
Business Intelligence Gathering
No, you’re not supposed to resort to espionage or conning your way into learning your competitors’ trade secrets – business intelligence gathering simply refers to doing extensive research in order to get to know the market you plan to enter, as well as the competitors you are about to face. There are tools available, but something as simple as googling is usually enough to get you started.
Some of the things you will do include identifying your competitors by Googling keywords and phrases that you think people would use to find your business, then checking out their websites, social media pages, and online stores just to see what they are doing, whether they are successful with it, and how you can use said knowledge in order to get an advantage or at least compete with them. There are also paid tools that will make business intelligence gathering simpler, which is an option for individuals who have more money than time or gumption.
Marketing and Advertising
It does not matter how beautiful and user-friendly your website is, how low your prices are, and how good the products tend to be. If you don’t know how to market and advertise your products and brand, chances are you’re not going to get many sales, and your business could crumble due to lack of revenue. If you want your online business to succeed, you need to learn skills related to marketing and advertising.
The good news here is that the Internet makes marketing and advertising much more accessible to entrepreneurs. It provides global reach, and greatly levels the playing field by introducing alternative means of advertising that do not cost as much as traditional mediums. You will still spend money, but most likely only a fraction of what businesses used to spend on TV ads, radio airtime, and print ads.
Google AdWords, in particular, is the gold standard and the one you really need to learn how to use, once you feel ready to start investing in advertising your online business. It may require some copywriting skills, but you can always outsource to a third party or a freelancer. This skill will also benefit greatly from the business intelligence gathering skill mentioned earlier in this article.
Many online businesses flourish because they don’t require extra manpower. Business owners can effectively do everything on their own, including fulfilling orders. In a traditional business, this involves a customer picking up an item off the display shelf, and then bringing it to the cashier and paying. In some cases, the item itself needs to be retrieved from the storeroom. This all changes with online businesses. You no longer need to meet your customers face to face, but you still need to get their orders shipped to them. In most cases, this is even more involved because you have to manually haul the items to the courier, whether it’s the UPS or another third party service liked FEDEX.
Of course, you can no longer manually fulfill orders once your business grows. It’s simply not possible given that a single person can only do so much. In which case you have to hire extra people or look into alternative methods, such as dropshipping, where a third party will fulfill orders for you. All that you need is forward orders to the dropshipping company and they will handle the rest.
Another alternative is to secure the services of an e-commerce fulfillment provider, which is different from dropshipping because the items still come from you. You just forward all of your inventory to them beforehand, and they store it all in their own storage facilities and then handle all the packing and shipping when you have an order to fulfill.
This is one of the most crucial skills to develop or learn if you want your online business to succeed and remain in operation for a long time. No business is perfect and it is a given that some of your customers will have problems, either with defective products or products that do not meet their expectation. In which case your company should be ready to provide customer support. Failure in this aspect can spell doom for your business, as even the companies with the best products tend to struggle retaining customers if they gain a reputation as having poor or no customer support.
In an online business, you can improve your customer support by ensuring that the experience of a customer is smooth and hassle-free from the moment they click on your website to the moment they click on the checkout button, as well as when they return in case they have concerns. A live chat applet will do wonders, as well as various design choices that help make it easier for users to find what they want. Don’t follow in the footsteps of many businesses that hide their contact numbers and support links under numerous nested pages, and most definitely don’t follow in the footsteps of businesses that don’t have any aftersales support.
Knowing When to Expand to Offline
Lastly, don’t be too narrow-minded in the thinking that brick-and-mortar shops will be gone completely. Shopping malls are never going away, and sometimes customers are still willing to shop offline. So you should be ready to take your marketing and selling efforts offline, if needed. Join bazaars, conventions, and other offline opportunities to sell your goods as well as promote your brand.