Establishing your online presence offers your business great visibility. The online market is global and this means that you will be accessing a wider audience beyond any specific boundary. Taking your business online could also cost less in terms of operational costs compared to a brick and mortar store. Once you do the initial setting up, your business should be able to function on that foundational basis without the need for a large budget.
While building your business online offers immense benefits, it also presents various challenges. The online market is highly competitive due to the low barriers to entry. Other than building an website and an online presence, it is important to have in place an online marketing strategy that will allow you to face the competition and rise above it.
HOW MUCH DOES IT COST TO START AN ONLINE BUSINESS?
As with any business, there is no fixed cost of starting an online business. The amount of money you spend will entirely depend on factors such as your business goals and objectives, the type of product or service you are looking to sell, and the size of your business.
Other factors include promotional and ad costs, shipping, levies and taxation for international transactions. You also want to take into consideration factors such as the cost of designing and creating your website or e-commerce store as well as the cost of setting up a payment structure.
While an online business may have low entry barriers, you must not overlook the inherent costs of setting up. After all, the total cost of starting up will determine your return on investment as well as your efforts to source for external financial support. If you are looking to distribute your goods to people in different countries, you may need a larger budget or require financial assistance. Possible sources of financial help are angel investors, venture capitalists and traditional financial institutions.
HOW MANY TYPES OF ONLINE BUSINESSES ARE THERE?
The best thing about doing business online is that you can work with one or several models at the same time. Some common types of online businesses include:
Affiliate marketing entails selling other people’s products to earn a commission from every sale. Most online marketers are drawn to affiliate marketing because you do not have to develop a product of your own, create a large website, offer customer support and establish a payment structure. All this is done for you and all that is required of the marketer is to generate traffic to the merchant’s website and to encourage consumers to purchase a product. When the consumer buys a product, the affiliate marketer earns a preset commission. Digital products attract higher commissions when compared to tangible products.
Some online marketers offer free, high value information on their websites. The main source of income for online informational marketing is affiliate products, content network advertising and the AdSense program. For example, if you were looking to set up a basic website about caring for pets, you would create perhaps 100 articles covering tips to care for pets. You would then include relevant AdSense advertisements in the website. The information would generate a significant amount of traffic; site visitors would then view and click through the relevant AdSense ads and this would earn you some money. The key here is to provide information that is highly sought after by a significant niche that is looking to purchase related products.
Selling Informational Products
This can be a lucrative business if you target the right niche and you are selling a product that people want. This type of online business entails selling mainly ebooks that show people how to do something. The great thing about info-product marketing is there is no limitation to the type of informational products you can sell. In addition, people are increasingly looking for advice about a wide range of things. To be successful at info-product marketing, you need to have a strategy for generating traffic to your site, the capacity to create great content in a specific topic and the ability to persuade people to purchase your product.
You can also generate an income by creating an ecommerce site where you sell products. This would require you to establish an online store and then ship products to customers who make orders. Ecommerce businesses usually use drop-shipping companies, which handle the shipping bit of ecommerce. This way, you do not need to keep inventory or to incur the costs of storage for the products.
HOW MUCH TIME DOES IT TAKE TO BUILD AN ONLINE BUSINESS AND MAKE MONEY?
The truth is that setting up an online business is not a one-day affair. The length of time it will take depends on the type of online business you choose to pursue, the size of your business as well as the logistical aspects such as setting up a website, optimizing and localizing it, establishing a payment and shipping method. This can take you anywhere between two to three months to get things rolling. In terms of how long it will take before you can start to see monetary results, there is no guarantee for this. Like other businesses, no one can guarantee that you will make a profit even when you have a great niche and a strategic plan in place. However, a factor that can determine how long it will take to make money is the type of business model. Most online marketers will begin with affiliate marketing due to the low costs of starting up. It will also depend on the type of product you sell, the demand for the product and most of all, your ability to sell the product.
DO I NEED TO BUY A BUNCH OF STUFF?
This too will depend on the type of online business you choose to pursue. As an affiliate marketer, you do not need to buy anything; the merchant will provide the tools you need including a website and the marketing tools to drive customers to the merchant site. If you choose to go the way of an ecommerce storefront, you might need to have the actual product you are selling. You can either create the products or buy them from another person in wholesale and sell the products as a retailer. If you want to have you own website (not hosted by a third party) you might have to buy a domain name from a domain service provider and to register it with the ICANN organization, although for a minimal fee. Beyond these basics, you do not need any merchandise to get started online.
DO I NEED TO BE A COMPUTER EXPERT?
No, but you need to understand the basics of operating a computer. Importantly, you need skills such as:
• The ability to write great content
• The capacity to engage with your customers on social media and blog platforms. While you do not need to be a social media expert, you should know how to effectively use social networks such as Facebook, Twitter, LinkedIn, Google Plus and YouTube.
• You should also know how to set up a simple blog where you can distribute content and interact with your customers.
• You might also want to learn how to use web-editors to help you create simple websites for your online businesses. Web editors are simple to use and you do not require being an expert to create the simple websites.
WHAT SHOULD I INCLUDE IN MY BUSINESS PLAN?
An online business plan will serve as your blueprint; it will help you stay focused on your business goals, it will also help you to determine which direction you need to be going in terms of your marketing efforts, financing and your return on investment. When writing your business plan be sure to include:
• The objectives of your online business
• Your target Audience
• An analysis of your niche market
• Start up costs
• Metrics you will use to measure success
• Website layout
• Shipping and payment infrastructure