6 Reasons Why It Makes Sense To Start A Business Online

The internet has made it possible for people from all walks of life to start a business. Regular people can succeed online just as well as the big worldwide business that dominate the offline world. Here are 6 reasons why you can start a business online and be successful.

1. Anyone Can Do It.

When starting your own small business online, it does not matter about your age, your background or where you live. You can benefit from, or leverage off, other people’s knowledge, time, ability and experience. As long as you have access to a computer and the internet you are ready to go.

2. Low Set Up Costs.

The required funding to start a business online is considerably less than a conventional bricks and mortar business. You will need to purchase a domain name and some hosting for your website but you will not have the high costs of renting a physical building to operate from or the costs of inventory or staff.

3. You Can Reach A Huge Audience.

A conventional bricks and mortar business requires somewhere that potential customers within their regional area can easily get to. However, with the power of the internet, you can market your online business to customers from around the world to buy your products and services online.

4. You Can Operate 24 / 7.

A physical business can only function for the period of time that are able to keep the doors to your premises open. It’s not possible for one person to do this all day and all night. However a website is online continuously, and with automated systems you can sell products even while you are asleep.

5. You Can Expand Into New Markets More Easily

As your business becomes more established, you can start to diversify and sell products and services that will appeal to your target audience. This is much easier for an online business because you can source these other products and sell them as an affiliate without having to stock or deliver them yourself.

6. You Can Start It In Your Spare Time

Starting your own business is a big step for any new entrepreneur, especially if you already have day-to-day living costs, like a mortgage or other domestic bills, that all have to be paid. When you start a business online, you can do it in your spare time whilst still working at your normal day job. Then, as your online business grows and becomes more profitable you can start to work on it full time.

The Hidden Costs: 5 Key Considerations When Starting a Business

So, you want to start a business and are wondering where to begin and what it will cost… most would advise that you start with putting together a business plan, and I don’t contest that… you should, but it’s essential that you’re aware that most business plans, including all the research and financials that they include, do not give you an overall picture of what your start-up costs will be. This article gives an overview of the ways to determine, realistically, what the costs involved in setting up a business will be.

A solid plan? Probably not! A well-formed, flexibly applied plan? Absolutely!

It’s true that the usual manner in which businesses start up, is through an opportunity being identified, determining the ways in which this opportunity can be milked for all it’s worth, (carefully explained in the business plan), and figuring out how much capital is required in order to build the business as outlined in the above-mentioned business plan.

Whilst this is ‘the usual’ and can often work, there is one flaw with this model… It is all developed on the premise that the business will work out right, and as planned, the first time! The reality, is that it is exceptionally rare that everything goes exactly to plan, and most often, even if it does, it’s not first time around.

Often, between the time that a business plan is written, and the time comes to implement, it’s hardly worth the paper it’s written on. Harsh, but true.

In order to more accurately, and relevantly determine your start-up costs, it is essential that you reflectively review assumptions held within the business plan, and be prepared to adapt toward a more flexible approach. Now by no means am I advocating that you don’t need a business plan… I think they are immensely helpful for allowing us to consider as many of the elements required in starting and growing a business as possible… but the plan is only as good as the action you take, and to get the greatest return on action, having plans that are relevant and based on the most current context is key.

Part of your plan should always be to revise the plan… You may have to change things repeatedly as you learn more, determine the impact of what you’ve learned in your business, and then add it to the plan accordingly.

Consider Scaling Down and Pilots

I know what it’s like… you have a fantastic business idea, you see the potential, you see how great it can be, and you want to put in all you can to make that vision a reality. While this is the only way to go for some business concepts which are pretty much, ‘Go Big, or Go Home,’ this isn’t always the case.

Where it’s possible, consider the option of scaling down, and testing the concept. This will allow for you to start up, while saving money, learning from the pilot and being able to action changes, and raise more funds based on proof of concept. This approach not only reduces start-up costs but provides valuable insight around the business, in real terms. It may not generate much profit, but it will offer a wealth of verified information that will help you to determine the next steps… If you decide to proceed with expansion, it is a great basis for second stage funding.

Consider Realistic Timelines and Pricing

Part of calculating your start-up costs will involve figuring out your initial cash flow. Without having actually operated the business this can be tricky. It’s also not uncommon to fall into the trap of under-pricing products and services in order to stand a better chance of competing, and to ‘tempt’ in more business. Be aware that you don’t necessarily need to do this. If you do, raising prices to the market standard could become difficult at a later stage, and you’ll have to do a lot more work in order to break even. My advice- recognise your worth, and price it accordingly.

Consider a Realistic Time-frame for Starting-up

Time is always potential money, and when you’re starting in business, this is true even more. If you’re going to have fixed costs like property leases, if improvements or modifications are required prior to opening this impacts on both time, and money (quite directly). These additional costs add to your start-up costs, but also add to the time before you can start earning. Don’t fall into the trap of under-estimating when you’ll be ready to trade, and build in a good time cushion before you ‘need’ to see funds coming in from business activities. Failure to do so could result in a significant amount of stress, and in some instances, can even result in a business shutting down before it’s even had the chance to take off, simply because there wasn’t enough time allowed to give it a chance to get going.

Consider the Cost of Money

Many entrepreneurs who have a great idea that they believe strongly in, will make the decision to finance the business themselves. At times, this can be at great personal cost, using the credit on credit cards or loans, and tapping into equity from homes etc. While for some smaller ventures the impact may be negligible, for larger ventures, self-financing should be considered exceptionally carefully before committing to this option. If funds are in abundance and potential delays, changes, etc. will have little impact and will be offset by the return, however long it may take… then go for it! If this is not the case, and any delays and progress are not going to plan will cause a great deal of personal and financial strain that could jeopardise business success anyway, then definitely consider other options.

To Conclude…

As you can tell, starting a business does not begin and end with a business plan, but goes beyond that to wider considerations. This article lists some of these.

5 Things To Consider If You Want To Start A Business

If you’re thinking about starting a business you need to have a clear plan and strategy on how you will achieve your objectives. All too often new entrepreneurs jump in head first without any real plan on what they are going to sell, how they will sell it and who they will sell it to. Here are the 5 basic steps to starting a business in 2016.

1. Get Online

First, if you’re starting a business, you need to get that business on the internet. The growth in the number of people buying online is growing each year. Over 3 billion people has access to the internet and more people are coming online everyday. These are all potential customers. When your business is online you can be selling your products and services 24/7, 365 days a year.

2. Get Some Start Up Capital

Although the cost of starting a business in 2016 on the internet is considerably lower than starting a traditional ‘bricks and mortar’ business, you do still need some money upfront to start an online business. The main reason that most businesses fail is because of the lack of capital. Have a plan in place to allow for financial resources whether it’s from sales, external investors or your own personal funds.

3. Establish Your Unique Selling Proposition

What will make your business unique? The internet is big marketplace and when starting a business in 2016 you need to establish an unique selling proposition (USP) for your product or service. Why should people buy from you, rather than somebody else? If you don’t know, how can you expect your potential customer to know?

4. Know Your Ideal Customer

No business can sell everything to everyone. You need to be clear on who your ideal customer is so that you can create your marketing messages to appeal directly to them. What are their needs, wants, worries, problems or desires? How can your products or services help them?

5. Implement A Proven Business Model

Use a proven business model that will work in your market. If you don’t have one, look at your competitors and see what they are doing. Get a business mentor who can show you how to build your business and move a prospect into a customer. Very often you can learn a lot from people who have been before you in your chosen industry. They can help you to avoid the pitfalls and make your journey to success easier and quicker.

Top 5 Advantages of Starting Your Business Online

Starting a business is risky. It’s the reason why everyone doesn’t have one. It can require thousands of dollars of investment just to get off the ground. 9 out of 10 of all new businesses fail in the first year. Before any profit is made, things like product inventory, incorporation, advertising, employees, accounting, insurance, licenses, commercial space etc. have to be paid for.

Enter the internet..

The digital world has taken away a lot of the risk of starting the business of your dreams. There are still start-up expenses involved in the beginning but they are not nearly as high as starting a brick and mortar business. License and incorporation fees are going to have to be paid online or offline but most of the other expenses can be avoided in the early stages by starting with your online presence.

If it can be sold in a store it can be bought online and shipped to the customer’s home. At the very least it will add an additional revenue stream for the business. There are plenty of advantages to starting a business online but here are my top five.

1. There is no immediate need for full-time in-house employees.

What makes online business so powerful is its scalability; meaning you do a little bit of work for a greater result. With automation tools you can have a lot of your tedious data entry tasks done without you even thinking about it. With PayPal you can accept payments online through your website without you even knowing a credit card was entered.

If you are selling digital products that are to be downloaded then there is no need for pre-ordered inventory or commercial space, thus eliminating the cost of rent.

For when you actually need the assistance of a real human, sites like oDesk.com and Elance.com make it possible for you to outsource work to people on a for hire, monthly or even a full-time basis.

Things like insurance and security are needed for online as well as online but securing intellectual property stored online in the cloud is a lot less expensive than doing the same for merchandise in a store that is susceptible to theft or fire

2. You have the freedom to travel.

There is no need for a physical location in most cases so there is no need to stay in one place. If you need to pack up and move your company to another state where there is more opportunity, it can be as simple as packing up your laptop and accessories and leaving. With a physical ‘brick and mortar’ business, it would be a little more difficult to relocate. You will most likely be constrained to whatever lease agreement you may have in place.

As you know, business and tax laws vary from state to state. Having your operation online gives you the freedom to choose where you want your business to be incorporated. You would have to have some sort of address established in the state but it doesn’t have to an actual store. There are a few states who’s laws work best for the traveling internet entrepreneur. *I am not an accountant or a business lawyer so please consult one before getting started.*

3. The whole world has access to what you’ve got to offer.

You aren’t limited to your immediate geographical area anymore. You aren’t limited to ANY geographical area for that matter. Offering your products and services online opens your business offering up to the edges of the world. The internet doesn’t sleep and there are billions of people online looking for solutions to their problems, while YOU are sleeping.

4. You are at the fingertips of a growing online market.

The internet definitely isn’t going anywhere anytime soon as more and more people are gaining access to an internet connection or a smart phone every second. E-commerce is following the same trend as more and more people are becoming comfortable making purchases online and from their mobile devices. From a consumer’s standpoint, making purchases from the comfort of your own home can save you a lot of time, and for certain products, shame or embarrassment.

5. You can inexpensively test your market.

Not every brilliant idea translates into a consumable product or service. And as you know, the failure rate of new businesses is very high. Another advantage of starting a business online is the ability to gauge interest without actually having the product readily available for sale. One example of this that I’ve seen a lot is a preview or ‘beta’ page with a prototype of a product where people can sign up to ‘be the first to know’ when the product is made available. This can be done with a food product, a clothing line, an app, pretty much anything. It’s a great way to gauge interest before you go all in with a final product.

You don’t need $10,000 to start a business anymore..

There are hundreds of ways to make money online and frankly, who can afford NOT to open up shop to the billions of people on the internet. There are still a lot of traditional brick and mortar businesses that are not providing their products and services online, constraining themselves by business hours and management of on premise staff.

All you need is a website, a product or service and consistent potential-buyer traffic to that website. No permits, no city council meetings, no weather constraints and depending on where you live, no off duty police officer.

Recommended reads: ‘The Four Hour Work Week’ & ‘The $100 Startup’