Have you been thinking about starting an online business? Maybe you want to offer services such as marketing to clients. Or maybe you want to sell digital or physical products.
Regardless of your goals, running an online business isn’t easy. Before you jump into the fray, there are a few questions you need to ask yourself, such as:
Who are your target customers? How well do you know them?
There are few things more important for the success of a business than customer knowledge. The more you understand your customers, the better you’ll be able to tailor solutions and marketing campaigns to their needs.
Before you start any online business, clearly define:
- Key demographics for your customers, including age, gender, income, education, and location
- Key psychographics such as interests, likes, favorites, and other brand affinities
- Where your customers hang out online (specific forums, websites, social media platforms, etc.)
- Competitors, influencers, and media platforms that cater to your customers
A well-defined audience makes it much easier to create highly-targeted campaigns that help you reach your customers at scale. Consider it a key part of any business, not just an online business.
How do you intend to sell online?
Before starting an online business, you need to know exactly how you’ll go about the selling process. Will you need an entire e-commerce store? Or can you make do with a simple shopping cart?
“How you approach the selling process depends on what you’re trying to sell and how often you intend to run promotions”, says Ryan Harrell, a marketer and musician who runs MIDINation. “If you’re selling items in a one-off promotion – such as an e-course or music beats – an entire store would be overkill. Just use a shopping cart with a payment provider in this case”, he adds.
Broadly speaking, there are four options you can use to sell online:
- Complete e-commerce store
- Self-hosted shopping cart
- Hosted shopping cart or platform (such as GumRoad)
- Marketplace (such as Etsy)
Marketplaces and platforms give you access to an existing customer base, but they also take away a chunk of your profits. You also get less control, though you don’t have to worry about payment processors or hosting.
Self-hosted shopping carts and e-commerce stores give you better rates and more control. You also get to keep 100% of the profits – minus the payment processing costs. A downside is that you need significant technical expertise to run an online store.
Be clear in your mode of selling before you start thinking of your online business. Pick a method that aligns with your technical knowhow and fits into your budget.
Who are your key competitors? What makes them competitive?
Your success in any online business depends as much on what your competitors are doing as it does on your own actions. Unless your offering is extremely unique, you’ll have to wrangle customers away from competitors. Understand them and their weaknesses is crucial for a successful business.
For instance, if your competitors have a strong presence on social media, you might want to focus on non-social channels instead. If they have a well-loved blog with significant domain authority, you’ll want to keep away from SEO.
So before you start your business, do the following:
- Make a list of your leading competitors, their websites, social media profiles, etc.
- Run a marketing audit of all competitors, making special note of their offers, user-flows, and marketing campaigns
- Make a list of competitors’ product offerings and how they compare to yours
Once you’ve gone through this exercise, spot any weaknesses or deficiencies in their marketing and product offerings. Whatever they lack becomes an opening for you to assert dominance.
Over to you
It’s not easy to start an online business. Asking yourself these questions will make it much easier to find success. The better you understand your customers, competitors, and your selling methods, the stronger your business.