Yes, You Need to Get on Board
If you’re considering starting an online store, this is your clarion call. The internet provides an unparalleled platform that allows you to connect with potentially 3/4 of the people in the United States.
Additional benefits include:
- Lower costs than other business models
- Easier to reach customers from around the world
- Easier for customers to reach back to your business
- Remains open 24/7
While there is growing competition in the e-commerce world, don’t let that stop you from reaching your goal of starting an online store. The rapid innovation in this space ensures that most of the incumbents are still trying to figure out the best way to carry out their operations, making it a prime time for you to launch and develop your business.
Where There’s a Plan, There’s a Way
It takes a clear plan to accomplish anything in the business world. Naysayers might point to the occasional example of people who stumbled into overnight success selling an unlikely product. True, there are stories like this. But the only way to prevent a flash-in-the-pan scenario is to chart the road ahead.
Most business plans begin with an executive summary. Think of this as the concise description you’d give your mom at Thanksgiving dinner if she were to ask what exactly your business does. Include in the summary what makes your business unique and why it will be successful.
Following this introduction, expand upon the plan with sections describing your product or service, financial projections, market analysis, management structure, marketing strategies, and funding ideas. List your goals and explain exactly how you’re going to make them a reality. The more details you include, the more actionable and trackable your plan becomes.
There are plenty of business-plan templates available online, but don’t feel obligated to use any particular option. You should find a style that matches your business rather than trying to shoehorn your plan into a format that isn’t right.
“When most of us think of business plans, we think of the starting-a-business kind: about 40 pages of detailed descriptions of every corner of a business—past, present and future—often with a funding request,” explains a business planning analysis from Forbes. “But that’s just one type of business plan. This critical business tool comes in a wide variety of styles, with different formats and content needs, designed to address various goals and stages of business development. To find the right plan for your business goal—startup, expansion, new product, self-assessment—you first need to understand the potential benefits and applications of each type.”
Once your plan has been written down, take the time to polish it. You’ll want it to be as impressive as possible because it will likely be shared with lenders when you seek financing.
Set Up the Foundation of Your Business
In order to do business in the US, you’ll need to have an Employee Identification Number (EIN). Just go to the application page on IRS.gov and you’ll find user-friendly instructions.
After you’ve obtained your EIN, you’ll be ready to create a business bank account. If there’s a bank offering a lucrative incentive for new accounts, you might consider taking advantage. Otherwise, you could just create a business account with your current bank, which is the most streamlined approach—they already know you and have your information.
Even if you consider yourself good with numbers, strongly consider hiring an accountant. These experts can help you identify cost-saving strategies and keep your finances in order.
Now it’s time to name your business. You might already have a killer name in mind, but don’t speed through this part. Workshop all of your ideas with friends and family, then verify that your favorite options aren’t already in use. Also, make sure that a corresponding domain name is available. It can be helpful to peruse the directory of the US Patent and Trademark Office (USPTO).
“Choosing a name for their new business can give founders more sleepless nights than anything else,” says business expert Alison Coleman. “Getting it right is crucial, but also very tricky, as a brand name can mean a lot to 1 person and absolutely nothing to another. The decision depends on a number of factors. For example, is it more important that the name is relevant and easy to spell, so people can find it via search engine queries, or that it communicates exactly what the company offers or sells?”
With your perfect name in place, it’s time to choose the legal structure for your business. You’ve probably heard of LLCs, but there are numerous other structures to consider. You’ll want to chat with your accountant to get an expert opinion on the matter.
Here are the most popular legal structures for small businesses:
- Limited Liability Company (LLC): This flexible structure gives your online store the opportunity to grow and diversify in the future. It also protects you from financial liabilities.
- Sole Proprietorship: Perfect for online shops with only 1 owner, this structure is also the easiest to set up.
- C Corporation: Like an LLC, this structure allows you to create your business as a separate entity so that you won’t be responsible for any potential financial liabilities. But the high setup costs and complex tax rules make it a poor fit for many small businesses.
- S Corporation: Unless your online shop is part of a bigger and more complex business, you probably won’t choose this route. S corporations are difficult and expensive to set up, but they offer benefits such as liability protection and the ability to have up to 100 shareholders.
- Partnership: If your online shop has multiple owners, think about setting it up as either a partnership or a limited partnership so you can properly share the revenue and the liability.
Create Your Online Presence
It’s time to create the look and feel of your online shop. You have the option of bootstrapping this step and designing the website yourself or hiring a professional to do the work for you. If you have the technical abilities to create the website yourself, it’s still recommended that you have a friend or family member with a design background check it out and give you honest feedback.
Your goal is to launch a website that looks professional and inviting. Not only will a well-designed website attract customers with its style and usability, but it also makes shoppers more confident about making purchases using their credit cards.
If you haven’t already purchased your domain, this is the time to do so. It’s advisable to set up autopay for your domain—otherwise, you run the risk of missing a payment and having your domain snatched away from you by a cybersquatter or competitor. If you don’t use autopay, at least put a recurring reminder in your calendar.
To bolster your online presence, you should also create social media accounts for your shop. Popular options include Facebook, Twitter, Instagram, LinkedIn, and YouTube. There also might be other channels unique to your industry that you could join. The financial stakes are low here, so you should create accounts on all the major social media channels to ensure your business name is available in the future if you choose to use them.
Everything mentioned in this section thus far has referred to forward-facing elements of your online presence. But there are also documents and details to organize that will largely exist behind the scenes.
Common examples include:
- Business terms and conditions
- Sales terms and conditions
- Services terms and conditions
- Articles of incorporation
- Employment agreements
- Contractor agreements
- Intellectual property assignment agreements
Getting these items assembled ahead of time reduces delays and issues as you establish your online presence. Perhaps your shop won’t require all of them, but it’s beneficial to consider each of them so you won’t be caught off guard in the future.
Figure Out Your Financing
Most shops carry inventory, and inventory costs money. Additionally, you’ll have to handle all the other expenses associated with running a small business. The business plan you created should have outlined how much money you’ll need for your online shop and when you’ll need to have it available.
In the past, many small business owners were limited to borrowing money from friends and family or going to a bank and seeking a loan. Both of these options brought their own set of challenges and risks.
The more streamlined approach for modern entrepreneurs is to seek financing from the countless lenders outside of the traditional bank system. You’ll find they offer higher approval rates and are more willing to work with your unique situation.
Here are 10 of the most common loans for small business owners:
- SBA loans
- Business term loans
- Short term loans
- Startup loans
- Business lines of credit
- Equipment financing
- Accounts receivable financing
- Business credit cards
- Merchant cash advances
- Business acquisition loans
Aside from these financing products, you can also check out the microloans available through platforms like Kiva, Accion, and Opportunity Fund. While the amounts aren’t particularly large, the qualification process can often be simpler.
One final financing route: business grants, which are advantageous because they never need to be repaid. The drawback is that they’re difficult to acquire. You can see if you qualify for any of the federal grants listed on Grants.gov. Other sources include the Halstead Grant, Amber Grant, Idea Cafe Grant, and National Association for the Self-Employed (NASE) Micro-Business Grants.
Marketing Your Shop
You can have the most amazing products on the planet, but if no one knows about them, your sales will struggle. Leverage the marketing tactics from your business plan to begin building a customer base. Here are 5 ways to attract new customers:
- Business collaborations: When you have a small budget and a smaller base, it can be helpful to partner with another business in your industry. This allows you to connect with their audience and benefit from their reputation.
- Share a perk: Introduce your products to customers by offering a free sample. Of course, there’s no such thing as a free lunch: recipients would provide their contact information on the online form in order to receive the sample.
- Send out a survey: Show customers how much you value their opinion by sending out a survey to get their thoughts on a current or future product. This is a great way to hone your marketing message and build a relationship with your base.
- Make it social: Find out where your customer base spends time online and then connect with them through social channels. It’s an affordable and reliable way to communicate with your customers.
- Start a club: It’s wise to acknowledge and reward the most loyal members of your customer base. Consider offering loyalty benefits or starting an email group for these elite customers. You could send exclusive offers, offer previews of future products, and even provide samples.
Choose Some Digital Tools
From marketing to project management, there are simply too many business obligations in your day. Digital tools are a powerful way to lighten the load. By automating many regular tasks, you’ll free up more time to focus on perfecting your online shop.
“Is the saying ‘Time is money’ true?” asks a small business guide from the SBA. “If your business runs out of money, you always have the opportunity to get more. More money is ‘simply a sale away.’ … Yes, poor time management can cost you and your business tremendous amounts of money. Realize, however, that the better you manage your time, the more money you can earn.”
The following tools can help you regain precious time each day:
- Mailchimp: Makes it easy to program emails and have them automatically delivered. Plus, you’ll also get robust tracking information on the back end.
- Hootsuite: When it comes to managing multiple social media channels, a tool like Hootsuite is crucial. It streamlines everything by posting on all channels from a single hub.
- Marketo: You can merge your social, email, digital, and mobile marketing efforts with this user-friendly resource.
- QuickBooks: Use this tool to create and track expense reports and other financial details.
- Deluxe: If you have employees, automate many payroll tasks and eliminate human error with a tool like Deluxe.
- Slack: Improves communication and project management within your business, as well as with partners on the outside.
- Quip: You can improve your workflow and track your business goals with this helpful tool.
- 17hats: By combining project management, contracts, invoices, and other workflow items into one place, 17hats helps you to get more done.
Sustaining Your Business Into the Future
A successful launch is essential for any online shop—but you should also keep your eyes on the horizon. If you’re serious about making this endeavor last, look for ways to continue building and solidifying your customer base.
One of the best ways to do this is by focusing on customer service. Good customer service requires a commitment of time and effort. Luckily, you’ll have more of both on hand once you make use of the digital tools that automate many of your day-to-day responsibilities.
“Good customer service is the lifeblood of any business,” says small business expert Susan Ward. “You can offer promotions and slash prices to bring in as many new customers as you want, but unless you can get some of those customers to come back, your business won’t be profitable for long. Good customer service is all about bringing customers back. And about sending them away happy—happy enough to pass positive feedback about your business along to others, who may then try the product or service you offer for themselves and in their turn become repeat customers.”
Simple ways to boost your customer service efforts include replying promptly to phone calls and emails, resolving issues diplomatically when they arise, and going the extra mile to thank your customers for their business. A good rule of thumb is to think of what you appreciate from the businesses you shop with, then provide that experience to your customers.
By focusing on treating your customers with fairness and respect, you’ll lay the groundwork for a bright future. Your positive actions today will always yield benefits down the road. And your business, customers, and bank account will be the recipients.