3 Things You Should Know Before Starting An Online Business
Perhaps one of the most popular paths for the modern entrepreneur is starting an online business. Although most of us know that we probably won’t be the next Mark Zuckerberg or Evan Spiegel, we tend to envision ourselves at owning a company that’s both profitable while giving us the freedom to work anywhere and do anything.
While it can be a fantastic experience to go through, it’s also one you need to have the perfect approach to be successful at. However, that’s why I’m giving you a few helpful tips for planning out your online business. Check them out below:
The Structure Of Your Business
When starting an online business, your structure is everything. This will dictate the foundation that you’ll be growing from, with scalability being the main factor. And whether that be a new service, eCommerce store, or even media platform, having everything drawn out will serve you best in the long run.
Another important factor to your structure is how it will define your ability to raise money. For example, if you’re going for a new service or app, then fundraising might be advantageous to have some capital while in development. One popular strategy in this route that’s been huge in 2017 was offering an ICO, or Initial Coin Offering, which as noted by Coinschedule, had a $3.7 billion year.
Basically, these operate like an initial public offering would, only with a coin/token for sale instead of a security. I’ll note that as regulations behind ICO’s are changing, you should be wary of this being a quick way to make money. In short, your product or service needs to prove it’s not a security, completely built off a decentralized platform.
Brainstorm what type of structure your business has, as well as what you might need to start building this thing out. Because while fundraising or seeking out lending can be great, you’ll most likely need to be in a solid financial standing personally before you really get off and running.
Where You Stand Financially
Believe it or not, your personal finances are going to play quite a big role in starting an online business. No matter if you’re facing a lender or angel investor, people are going to want to know if they can trust you with their money, which as an unproven entrepreneur, will be an uphill battle. And whether it be going after a credit repair or bringing on a partner with more expertise, you’ve got to find a way to present yourself in the best light financially.
Start going through your current standing and see if there are any glaring errors on your credit report or public record. While every lender or investor will do their due diligence differently, you need to be prepared for any angle they might go out. Additionally, make sure you have a safety net saved, giving you enough runway to live off of for a few months; because as noted by GoBankingRate, with 69 percent of Americans holding less than $1,000 in their savings, most people aren’t truly prepared for when things go south, especially when starting a business. And finally, don’t be afraid to try any and everything to make this happen, because although getting a loan or investment can be amazing, plenty of businesses have been founded with nothing at all.
How Long You Have For Development
As we mentioned above, there might be a period in founding your business where you’ll need a safety net to live off of. This is a pretty standard practice for most entrepreneurs, which you’ll need to address to give yourself some breathing room. Because while some eCommerce shops can take 30 minutes to set up, other websites might take an average of 14 weeks (according to Bill Erickson).
Sit down and start to draw out a development schedule, making room for any delays that might occur, as well as any incidentals. Although every entrepreneur can get eager during this time to say something will be done quickly, that’s not always the best practice. In fact, most people would estimate that when it comes to developing something new, it almost always will take twice as long than anticipated. Additionally, don’t make any public announcements on your product or service until you’re absolutely certain of delivery, as delaying things could make you lose trust that you’re trying to build. And finally, make sure to add in some time to test and do outreach, as feedback will be one of the biggest cursors of success you’ll have.
As starting an online business can be a fun and exciting process, it’s also one that requires quite a bit of patience and determination. What strategies are you most intrigued to use during in your development? Comment with your answers below!