With the world encouraged to stay at home and truly be digital, plenty have taken the opportunity to start a online business. And while these uncertain times can make anyone wary, primarily due to the turbulent economy and closing of several companies, experts are encouraging startups to be formed.
“Downturns or challenging times are seen as good times to start a business for two reasons,” remarks Rashmi Menon, an entrepreneur from the University of Michigan’s Institute for Entrepreneurial Studies. He cites several reasons why now is the best time to start a business—from less competition for resources, to new customer needs. In fact, big companies like Disney, Microsoft, Slack, Uber, and Airbnb were all formed during a time of economic crisis.
In June, when consumers have more-or-less adjusted to the new normal, a report listed on Forbes found that online sales jumped 76%. With revenue a little bit over $73 billion, this is nearly double of 2019’s total online sales, which was at $41 billion. And it continues to grow.
And so, whether you need the extra income or simply have been interested in creating a business for a while, there’s no better time to explore the entrepreneurial field than today. But where do you start? Today, we’ll be discussing the steps you need to consider when starting a successful online business at home.
Step 1: Figure Out Your Skills and What You’re Good At
Businesses are easier built with a team. However, with the current state of the world, you’re likely to find yourself working alone for much of the beginning stages. As such, it’s important to discover your strengths as an entrepreneur.
Don’t worry if you don’t have a background on the subject. After all, there’s a wealth of resources online that can help. Many of today’s best entrepreneurs learned their trade through online degrees and courses as they cover many different facets of business. There are a wide variety of courses available for every budget and skill level so shop around to find one that works for you. If you don’t have much time to spare or want to learn while you work, you can choose short online classes instead.
By discovering, honing, and utilizing your entrepreneurial strengths, your business will already have an advantage in that aspect.
Step 2: Think of a Good Business Idea
For a business idea to be good, it has to answer the question: “What customer need does my product fulfill?” Take a look at what other businesses are doing. Is there a market for the idea that you’re currently pursuing? How tough is the competition and can you afford to go neck-and-neck against them? Alternatively, you can also turn to social media, friends, and family to hear about what people are actively looking for.
To successfully compete, think about the unique factor of your product that will make it stand out against the others. This could be anything from its affordability to design choice.
Of course, for a business idea to be good, it also has to be feasible with your current budget. Aiming high is okay, but remember that you need resources to build a business. This leads me to the next point.
Step 3: Secure Finances
To start a business, you need working capital. If you have extra savings lying around, that’s great, but know that there are other ways to fund a business. A recent post published by Inc. highlights three methods in particular: small business administration (SBA) loans, traditional term loans, and alternative financing. A SBA loan is ideal, as it has one of the lowest interest rates available on the market. You do need a good credit score to benefit from it, though. Term loans are good if you need big money (for your equally ambitious idea), but most terms will require your assets to be used as collateral.
Alternative financing refers to other methods that are “designed to deploy capital very quickly” and offer more flexibility than loans. Some examples include purchase-order financing (or paying your suppliers after customers have purchased your product) and merchant cash advances (or immediate cash in exchange for a portion of your future sales). Carefully think about what type of financing your business needs and look into the option that works best for you.
Step 4: Establish Your Business
Much like building a brick-and-mortar store, you need two things to establish your business: a business permit and a definitive address. The first is self-explanatory. You need it to operate legally and pay taxes. Check in with your local county and state to get the paperwork that you need to fill up for this to happen. It also pays to have a physical address listed on your website, as one of ‘4 Benefits of a Virtual Business Address’ is that you’re naturally seen as more legitimate and trustworthy. Plus, it can be used to receive mail and packages from suppliers and clients.
After you’ve done both, then you’re ready to procure and sell your product.
But That’s Only The Beginning
A business’ goal is to grow. After everything has been said and done, it’s important to plan your next steps. Look into building a team that you may divide your responsibilities with, expanding your offerings, and more. Work on your social media presence to reach a broader audience. If you have the extra revenue, definitely look into paid ads and other marketing campaigns to advertise your products.
Running a business is no walk in the park. You’ll constantly be competing for your market’s attention, be affected by industry trends, and run into a couple of challenges along the way. But as long as you continue to make plans for every business decision, adapt, and hire the right people, you’re well on your way to true success.
Ready To Start Your Business?
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