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If you want to get into the online business game, its a good time to start. The pandemic reshaped online consumer spending, including how people shop online and how they research products.
Today, 76% of Americans buy products online. Furthermore, roughly a third of people purchase items online weekly. From setting up an e-commerce business to offering web design services, there are countless avenues to explore as an entrepreneur. Below, we’ll walk through each step to building an online business.
- When starting an online business, comprehensive market research is critical for identifying your target audience and learning how to resonate with your customers and understand their needs.
- Creating a business plan is an important step for outlining your business goals. It also includes your product description, target market, and financial projections, among other core components.
- Building your website involves setting up a domain name, finding a hosting company, and designing a strong website with consistent branding that allows your customers to navigate it intuitively.
- Choosing the right product or service to sell is essential. It’s important to think about how you’re addressing an unmet need.
- Several digital marketing strategies can be utilized, from content marketing to paid advertising, to help your business grow.
Successful online entrepreneurs study hard in order to have a thorough understanding of their market. This is important for knowing exactly how to reach your target market because these are the people who will buy your products and drive your business growth.
At its core, market research is about understanding your customers’ needs, pain points, and solutions. It is designed to help your business better meet these needs.
Steps to Conduct Market Research
Market research involves understanding key aspects of your current and future customers. To get a clear sense of your target market, outline the characteristics of your audience—for example, age, location, gender, income, job title, and key pain points.
Once you have identified your target audience, conduct research on the following topics, which will tell you about how they make decisions and how you can better position your business:
- What are the challenges your target market faces?
- Where do they research a given product or service?
- What are their views on pricing for this product or service?
- What factors influence their decision to make a purchase?
- Who are your competitors?
To put this market research into action, there are a number of different avenues you can take:
- Focus groups
- Competitive analysis
- Brand awareness research
- Market segmentation research
Consider the following questions that may be asked in an interview or focus group to learn more about your audience: “How do you search for that product?,” “How useful was it?,” “What words do you use when you search on Google?”
When you have completed your market research, identify what you have learned as well as your next steps based on these insights.
Creating a business plan is a key step for all business owners. It is important for companies looking to secure funding resources. It also serves as a blueprint to summarize your key business objectives and goals.
To write a business plan, incorporate these eight main sections, which are often found in traditional templates:
- Executive summary: This is typically a one-page section that explains your objectives and includes your mission statement, core team, and why your company is positioned for success.
- Company description: Describes what you offer, your competitive advantages, and your business goals.
- Market analysis: This is where you explain your target market, market size, market trends, and competitive landscape.
- Organization and management: Here, explain who is working on your team and their professional background and experience.
- Service or product line: Describe the product or service you are offering, including any copyright or plans for patenting.
- Marketing and sales: In this section, discuss your marketing and sales strategy. Discuss your pricing, key metrics, and sales plan.
- Funding request: If you are a company looking for funding, here is where you outline the capital you are requesting and where it will be allocated.
- Financial projections: Include projections for your company’s revenue and expenses. Consider including an income statement, balance sheet, and cash-flow statement in this section.
A business plan is important because it helps clarify your action points, who you are, and what you offer, all in a coherent template.
Getting your business online is the next key step. In an ever-changing environment, it is important to know the tools, trends, and strategies for building a strong online presence to allow your business to grow.
Registering Your Domain
The first step is registering your name, or your website address. This can be in the form of your business name “.com.” To purchase your domain name, you can go to sites like GoDaddy or NameCheap. If you decide to build your website using WordPress, you will need to use a site such as these to host your website.
Web Hosting Companies
Alternatively, you can buy your domain name at a hosting company. These are companies like Shopify, Wix, or Amazon Web Services, that may also offer tools to build your website and release content on them.
A well-designed website is important for many reasons. Using a website builder, such as Mailchimp or Squarespace, can allow you to choose a theme, customize your pages, create relevant content, and set up a payment page.
Other key aspects of your website design include its functionality, simplicity, and ease of use. Allowing your potential customers to navigate the site intuitively will be key to their experience. Brand consistency—in your logo, colors, and typeface, for example—is also key to creating a unified brand.
Another essential part of website design is its mobile application. You’ll want to ensure that your website runs smoothly on mobile, that images load properly, the text is legible, and buttons are intuitive to click.
Product or Service Selection
This step focuses on how to choose the right product or service to sell. At the heart of this choice is the goal of solving a customer’s problem. But there are a number of strategies you can use to identify your product idea.
For example, you might consider analyzing companies with high-profit margins, products that align with your passion, burgeoning trends, items trending on online marketplaces, and/or customer reviews.
With this in mind, analyze how this product will get to your customers. Additionally, you may consider products that are not available in stores in your local market but are offered in communities such as Europe or Japan, for example.
Marketing and Promotion
Marketing strategy and promotion is an essential driver of business growth. As the digital landscape evolves, its important to have an effective marketing plan that resonates with changing consumer preferences and needs.
Here are questions companies can consider as they create their marketing strategy, navigating today’s environment:
- Impact, value, and growth: What are the goals and KPIs that will measure success for your business? How will you explain the value the business provides to its customers and/or society? Create an “elevator speech”, a 30 second description of what you offer and why it’s special.
- Customer need and brand promise: How does the brand meet a customer’s need through its products and services?
- Customer experience: How will the business deliver the best experiences at each stage of the customer journey?
- Organizational model: How will the business operate to serve the customer with the most impact?
These will help you understand what types of strategies can have real impact.
Types of Marketing Strategies
Consider the following digital marketing strategies that can be used for your online business:
- Email marketing
- Social media marketing
- Paid advertising
- Search Engine Optimization (SEO)
- Content marketing
- Influencer marketing
Each of these presents a different way to reach your target audience, drive conversions, or build brand awareness, depending on your marketing goals.
Is It a Good Idea to Start an Online Business?
That’s something you need to determine for yourself. But before starting an online business it’s important to assess the time, investment, and resources you’ll need to get it off the ground. While the barrier to entry can be quite low, it’s worth considering your goals and strategies for making it a reality.
However, compared to starting up a traditional brick-and-mortar business, the risks of launching an online business may be reduced due to lower upfront costs such as rent, staff, and materials, among others.
Can I Start an Online Business With $100?
The short answer: yes. While it depends on the type of business you hope to pursue, there are many ways to set up an online business at very little cost. You could offer your services, for example, doing freelance work, photography, bookkeeping, or personal training. The primary costs involved include setting up your business website, which can cost as little as $2-20 each year with companies such as GoDaddy.
What Are Different Types of Online Marketing Strategies?
There are a number of digital marketing strategies that online businesses can use, such as content marketing, email marketing, paid advertising, SEO, and influencer marketing. Each of these strategies can be useful, depending on your product and goals.
The Bottom Line
Starting an online business can be a powerful way to launch a new product or service while reaching a wider audience. With market research, a solid business plan, a strong website, and a digital marketing strategy, you can get started in growing your company effectively. As customers increasingly make decisions virtually, building an online business is vital to any business owner’s success.