What you need to know before starting any online business
Planning to start an online business? Get these quick tips and knowledge factors that you must know prior to starting just ANY business online.
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Starting an online business seems simple, however, it requires a comprehensive research on several aspects of running a successful business.
Lets go through the following aspects & factors that you must know prior to starting any online business. These knowledge factors are really helpful and act as a ground in defining abstract online business scope document for your online business.
This defines in which market you’re going to sell your products. You must be cleared what exactly your product market will be.
Please don’t take it that simple. People really get confused when they see tons of categories on online marketplaces. Picking the right market niche from the hierarchy of market niches is important.
When you sign up on online marketplaces, it is not like every market shall have same category. They might be using another name or similar name for that. Do a good research on all online platforms to find right business categories or market niche where you’re list and sell your product or service.
Example: If you plan to sell dog food online, don’t pick the categories like organic food, or food items, food store, or related directly. Read the categories carefully and check if Animal or Pet category is available separately or not. If yes, check the hierarchies and choose the right one that best match your business.
Product or Service Scope
What exactly and at what level you are going to manufacture or source or provide? If you plan to sell chocolates online, what is the size, ingredients and quantities, and related scope those chocolates shall have? Or if you going to just dropship, write down which set of products you’re going to pick.
If you plan to provide service, what will your service shall cover? Lets say you are offering cleaning services online, clearly write down what you’ll clean and what not. In what circumstances, you’ll ask for more price or just say out of scope to that.
Why defining scope is important?
Brain storming and defining product/service scope is important to save time, cost, and energy on out of scope activities. Sometimes many beginner business service providers end up with scope creep. This way, instead of making profit, they loose.
Product Example: Someone purchased a water bottle product from your online listing. After somedays, the lid of the bottle breaks or needs replacement. Will you provide another lid only? Will you provide bottle repairing service too?
Service Example: You designed a website. The customer wants revisions. How will you handle that? How many revisions, of what type, and at what level will be included in the initial service scope? Many people need unlimited revisions for free and this is an absurd expectation. So it is better to define and clear the scope initially rather late.
Estimation of Investment Factor
Once you know what market you will target and what is your product or service scope, it is time to estimate the investment factor.
Following cost factors contribute to estimating investment factor: –
Legal Side Costs: If you plan to sell white label or own label products, consider the cost of business and trademark registration. If you’re not tech-savvy, consult a local lawyer and ask about registration and then renewal costs.
Production or Purchase Costs: If you’re going to sell a new product or manufacture the product yourself, consider the material, labor, machinery, or related costs. If you plan to just buy directly from suppliers and distribute it with your labelling, contact suppliers and get estimates of product units.
Product Shoots or Service Demo Costs: Once the product is ready, it is important to have high quality photos of it to present online. Professional photographers have high rates. Get some rates in a way like
Packing and Branding Costs: How well your packaging is going to be. Based on that, calculate an estimate for each product packaging cost. It may include a box, wrapper, sticker, etc. branded with your business name.
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