Whether taking an existing business online or launching a new ecommerce idea, entrepreneurs must plan carefully to receive the best return on their investment. Forrester Research estimates that online sales could climb to $156 billion in 2009. Businesses can increase sales, generate increased exposure and facilitate customer service by building a successful web presence.
It may seem that starting an online business is easier and quicker than launching the same concept in the brick and mortar world. Operating online can cost less in overhead and staffing. However, the research and planning phase is still an important one. Self-employment expert and small business coach Karyn Greenstreet lists "poor planning" as the second reason small businesses collapse in her article (Why Small Business Fail (or Fail to Thrive).
Spend time on the following five steps in the planning stage of launching an online business:
Online Business Market and Competition Research
Online business requires that the entrepreneur knows who they are competing with on a much broader scale. Investigate businesses selling the same or similar products and services; their pricing, marketing, customer service, reputation and business processes. This ecommerce information, specific to your market and industry, is critical.
Try to identify opportunities to differentiate the new business from its competitors. For example, if most companies are shipping within the U.S., there could be a largely undiscovered market in Europe or Asia, if demand and shipping costs allow coverage of those areas.
Use Online Business Technology to Create an Online Business Plan
An online business plan can be a simple five page document, or a lengthy plan forecasting all kinds of scenarios and outlining methods of dealing with them. Regardless of the depth of the plan, cover at least the following sections:
Marketing and Advertising
Information on Owners and Management
Plan for Growth and/or Expansion
A Google search brings up several helpful, free online business technology tools to help new entrepreneurs create a professional online business plan. This is an important document in securing financing and attracting investors. Keep the business plan free of lofty projections and unlikely results; it should be as accurate as possible.
Finding Products and Services Suitable to the Online Business Market
There are several ways to sell and http://www.foxnews.com/sports/index.html make money online. Some ecommerce entrepreneurs already have a product or service and want to expand into the online business market. Many businesses are interested in drop shipping or wholesaling. Others still are happy with affiliate marketing, where they recommend the products of others and earn a commission.
Try not to be everything to everyone. Finding a niche product to target a specific market. E-commerce businesses should keep product and service offerings limited to that they can do well and make the greatest profit.
Choose Online Business Technology Solution for a Merchant Account
Ecommerce business owners need to decide whether they will use a true or third-party merchant account. Each offers specific benefits and has its own limitations. Generally, third-party merchant accounts are sufficient for new, smaller online businesses, while larger operations may need the customization of true merchant accounts. See Finding an E-Commerce Payment Processor for more information on these two different types of accounts.
Obtaining Accounting and Legal Advice for Online Business Planning
Even a small online business should seek the advice of accounting and legal professionals before launching. Spending this money to get set up properly can save thousands of dollars in headaches later on. An accounting professional sites to search at can help with tax planning, payroll, choosing bookkeeping technology, internal controls and more. Legal guidance is necessary for help incorporating, creating contracts, hiring employees, arranging financing, etc. After creating your internet business plan, free a few moments to have your tax and legal professionals review it and make suggestions.
Spending the time required to complete these critical first steps helps ensure the success of a new ecommerce business. When the goal is to make money online, the time spent planning is a smart investment with immeasurable returns.
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