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How to start an online business? 5 tips for young entrepreneurs

We all know that running your own business online is no easy task. This long and often bumpy road discourages many entrepreneurs from developing, continuing, and making their business dreams come true. At first, it may seem that eCommerce will immediately replace brick-and-mortar businesses. After all, anyone is able to sell on the Internet: all you need is a good idea, and the company will surely start to bring the expected profits in a short time, right? Unfortunately, be prepared to be brought back to earth very quickly.

 

It turns out that conducting business online is at least as complex as traditional commerce. It is true that free platforms, knowledge bases, courses, software, and many other necessary tools are within reach and continue to improve, but this easiness of access means that  pioneers and visionaries remain a few steps ahead. So how to deal with competition, changing environmental conditions, and the  dynamic development of the technological world? In Scaleity, we decided to share the advice of our team in order to guide the young and talented in their first steps in the online business world.

 

#1 Idea

Whether you’ve been working on your product or service for years and now it’s time to share it with the world, or your idea was born in the last few days, the most important rule is: stand out. Creativity is an invaluable trait of an entrepreneur. Conduct detailed research, carefully research who your competitors are and what your market advantages are. Thanks to this, you will be aware from the very beginning which features of your business should be highlighted, which aspects should be refined, with whom you can race, and who you should not treat as an opponent in business.

 

#2 Business plan

Many start their online business without being well prepared. They believe in their solution so much that they forget about the preparatory stage at which they should define their capabilities (technological, financial, production) and goals (development, financial, investment). Which means that they start an online business without a specific plan. After a short time, problems arise with evaluation, optimization, and setting directions for action.

 

#3 Your audience

Often in business, there is a contradictory assumption that our product or service is unique on the market, and on the other hand that everyone is the target group. Correct identification of your potential customers in the first stage of running a business is the key to success. Of course, the target group may become narrower or wider, but this must be supported by the natural development of the company or the increase in the popularity of your business among a new segment of people.

 

#4 Communication channels

Knowing your market advantages, knowing who is potentially interested in a product or service, and having a specific action plan and set goals, you should consider where it is best to reach interested people with information. Incorrect selection of communication channels will make your budget not be spent optimally, your investments will not bring profit. Even the most creative, polished, and most interestingly written message will not work if it is published in a medium that does reach your audience. Ask your friends, create an online survey, join thematic groups on social media to check if and where your potential customers are.

 

#5 Funding and cash flow

While all the previous points are part of good planning and analysis, the problem of cash flow and budgets is often insurmountable for online stores. Money for IT implementations, translations, photo sessions, advertising campaigns, OOTB activities are necessary to develop your eCommerce, and the lack of them can seriously complicate the achievement of your goals. At a time when the store does not bring so much profit as to accumulate capital for investments, the entrepreneur faces a difficult choice of how to get money to grow continuously.

 

Possible solutions

A bank loan for an online store is associated with complicated formalities, a long waiting time for funds, and the loan instalments have to be repaid even when the store does not earn money. Loans from friends or family are, of course, a solution, while our relatives are not an institution on which our business should be based, and private matters are better not to mix with business ????

 

Revenue-Based Financing the ideal solution for eCommerce?

In addition to using banks’ offers or seeking capital from private sources, companies operating online can choose Revenue-Based Financing (RBF). It is an easy, flexible solution in which the funds obtained are repaid via revenue share with a small additional fee. It is an alternative to other sources of financing. It allows companies operating online to develop freely without disruptions and on fair terms.

 

See a sample Scaleity calculation here.

 

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