online business how to start? online business basics and fundamentals


so you think you’ve got an idea for an online business and you’re excited right now well there’s a few things to consider and one is just how you are about growing your business are you agile now what do I mean by agile it’s a word that people bandy around a lot it is about being curious listening it is about responding and making sure that you’re making maybe minor adjustments that you’re listening and the third thing is to then keep doing it over and over again incrementally these are not necessarily massive changes but it’s a way of thinking it’s also this curious piece is very important when you’re starting a business you think you know everything or you absolutely the world’s expert in your product or service but when you bring it to market it’s a completely different thing in fact it’s probably more important to be agile online than even if you have a traditional business and that is because markets move customers move if you’re in a traditional business your major capital investment you’re setting up your shop you’re setting up your store you’re setting up your business and you won’t have done that unless you’ve listened deeply to what customers are wanting the beauty of being online is that we spend small about some money regularly adjusting listening and moving on and don’t be scared of the vernacular you know being angel is like what does that mean what does pivot mean what does that strapping me you need to know what these things are do not fear it agile is a way of doing business it’s not just a formulaic approach to change or upgrade some people think that starting an online business is really easy and they don’t really need a business plan in fact I think you need a business plan more than ever you’ve got to think about the fundamentals just this is online doesn’t mean that the business is any different you still want to make money I mean that’s what it’s all about so do you know where your customers are do you know how to find them do you know how many there are do you know why they buy from you in fact the question I want you to be able to answer for yourself is what job are they hiring my product to do and when you understand that you can work on your brand story now brand story is equally part of a business plan a business plan is not a set and forget document in fact the smaller the better I like a one page plan quite frankly in fact I think I’ll pull one together for you the most important thing is to keep reviewing it what are your critical numbers what is important to you and are you meeting those is it a viable business and there’s a difference between having a fabulous product and getting the product to market in a way that is going to be cost effective you might think that online is cheap it is not necessarily if you think that there is 1.5 billion websites on the planet trying to find people to attract them to yours can be really hard so planning thinking about what’s your unique proposition and staying agile and listening and responding and adjusting your business plan should be your guide it should be your scorecard it is something that you refer to regularly so there’s a reason why you think you’re going online and one is because you might have had your product at local markets you might be selling it on eBay and you’re getting a little bit of traction and you want to take the next step the next step doesn’t have to cost you a fortune I’m all about profitability I don’t want to just send your life savings on making sure that you get this perfect website when really you could build it in a day first thing is of course don’t be fearful that’s really important and do your research look for the tools around you your business might be a Content business so what are the right platforms for you look at the other people that other vendors and merchants that are using those platforms and get the feedback they’re not hard to use in fact I’m quite envious but really set your aspirations the first thing is to have customers who are paying you money and working out how you’re going to make a profit you I get us lots of questions about starting a business but one that I probably don’t get often enough is what about governance compliance legal responsibilities and even structuring your finances people kind of think if they’ve solved something they made a little bit of profit maybe they’re making money I urge you to take responsibility and make sure you understand how money flows through your business it’s really really important often people are doing what they call cash accounting which means they think that when the money actually hits their bank account but that’s when profit occurs it’s not necessarily so in many of the businesses that I work on with Shark Tank for instance they’re having to buy their stock way way in advance and they don’t get paid by their retail customers for a very long time they can be having to finance that stock for 60 90 120 days and that can do them out of business so they think they’re making a profit but it’s the cash that’s going to do them in take the time to understand the money money is not a dirty word it’s how business works the other thing is the legals you have responsibilities when you’re a business owner as a director of the business make sure you understand what they are so I want you to consider things I want you to consider your cash flow ask the questions you don’t have to do it all you can get somebody to help you but you really must ask their questions be financially literate it’s really important don’t be scared understand the differences make sure you’re complying with the laws of the land make sure you’re paying your taxes and you know what they are nice people for help it’s important I think one of the toughest things when you’re starting your online business is thinking you need to be the expert in everything you really don’t but it also doesn’t mean you necessarily have to recruit people either especially when you haven’t got a lot of income coming in so I like to think that there’s pretty much every job I have done in my business except cutting code I’ve never been able to do that so I’m pretty good at testing I must say I can find errors in things but I don’t actually cut code so think about what are your strengths what are you really great at and what is the value that you are adding to your business what is your unique energy one thing that a founder always brings to a business is pragmatism we are able to make decisions in ways that nobody else is am I going to spend my time on this or am I going to spend my time on that if we think back to your business plan this is a really really important document for engaging people around you you may choose to recruit somebody if so what are they in fact going to do so it’s about the return on time invested your most precious resource is your time I hear from a lot of startups that they’re spending money on marketing and they’re not getting return they’ll put a couple of thousand dollars behind a campaign or Facebook or Instagram and it doesn’t deliver them anything and they’re wondering why so it’s really important that you do have a budget but if we go back to basics weary customers where are they hanging out and what are they prepared to pay also sometimes people get really confused because their friends and family say oh this is amazing and so that so often what we need to do is just remind people and when you’re so urgent to sell something you’re not necessarily setting up the story in your business plan we talked about your brand story what is the job that people are hiring your product to do and that’s what you need to talk to you must build trust for your brand so one of the things that I did was get out and about and meet people I’d go to events I’d be the face behind the brand building trust online is so so important so what sort of marketing budget should you set aside is it a proportion of your sales well when you haven’t got these sales a proportion it’s not a really good thing and also how much does you spend on what particular area of your business truly it depends on what sort of business that you’re in I would argue that if you can get other people to endorse your product or use it it’s a really good idea to see it Institute is a really good thing people have a great sense of relatedness it’s that subtle influence that people have if I see Jane using it will I want to be like Jane and then they may buy your product at this very very early startup phase it’s about what can I afford and it’s about do analyze do spend a little bit see what happens it doesn’t really need to cost you much to build a video and people to laugh video content the describe that show that interview build rich content people will engage with rich powerful content there – teaches them something inspires them that shows them a different way so think about what you can do with your own resources ask lots of questions keep learning look at what others are doing in your business look at what others are doing in your industry and competition is not a bad thing you I love KPIs key performance indicators you know people kind of bandy that term around but what do we really mean I’m talking about benchmarking I’m talking about dashboards and scorecards I want to know if my business is doing well I want to know how its performing compared to other businesses in their similar sort of game so there’s certain metrics that I think every online business should look at one is the number of users the number of people who come to your website and looking at the proportion of a new each month it’s really important to understand the bounce rate because you might be attracting the wrong sort of customer and if your bounce rate is over 50% you need to work out that maybe you’re not telling people the right story to attract them you need to look at your average order size you need to look at your conversion rate and your conversion rate is likely to differ depending on what sort of device they are using if they’re using a desktop it’s going to be far higher than if they’re using a mobile or a tablet in fact mobile is about 25% of a desktop conversion rate in terms of benchmarking so if you’re doing better than that congratulations but if you’re attracting all of your traffic to mobile and you’re converting at such a low rate you really need to look at what you can do to get your conversions going and then you’ve got your average order value which is what people are spending other adding just one thing to their cart or are they buying more than one of course you tried to upsell people but ultimately the true metric for success is are they coming back are they loyal customers what’s the life time value of a customer the first time somebody buys from you it’s just a trial they’re testing you out they’re seeing if you’re real the second time they come to you they are a customer they believe in you and they know you’ll do what you said you’re going to do but the third time they’re an advocate that means they may well be telling other people how amazing you are so if you look at your marketing spend and if their lifetime value might be a thousand dollars over a 12-month period then it’s worth spending more to get somebody who’s going to come back over and over again the key metrics as far as I’m concerned for any online business is the number of users your bounce rate your conversion rate the average order value and the lifetime value of a customer do keep a little eye on the cost to acquire a customer – because if that gets too high you have not got a sustainable business then put them in a scorecard a dashboard keep them loud and proud I’ve got mine on my phone and can’t help myself I like to know what’s going on in my businesses I love a KPI you probably will too so you’ve probably heard about the ten traffic when it comes to online air but all traffic is not equal remember that each of them as people real people sent they’re not just numbers and you want the right sorts of people the right sorts of customers to come to your website this is not a quantity game it is a quality game making sure you’re attracting the right people with the right message at the right time in any given day there are two million blog posts published so you might think I’m going to stop blogging and talking about what I do and this will drive traffic to my website there’s some really critical things you need to do if that’s going to be your strategy moving forward yes I want you to build Authority yes I want you to have a clear story that you’re telling and blogging might be the way that you do it and you might promote those blogs but you need to make sure that those blogs are structured for search engine optimization seo and please don’t be scared of it just don’t be scared of it it’s another term that people use and you go I don’t understand this it’s this simple it’s about having the right key words and the right keyword density don’t just keep pushing in the same word over and over again because it won’t make any sense for humans who actually you really want to read this this should be no more than between one and three percent of keyword density so if you want to be world famous for pet food right pet food one or two times not that much more than that make sure that it is in the header so that the header is relevant how you write the header is materially important what we call the meta tags are also important they’re the descriptors of the page what we call H ones now I know I’m getting a little bit too technical but don’t be scared of this and h1 means it’s a header and and Google and Bing and all the rest love headers because that is what gives them relevance instantly what you put in the header and what you put in the content must align otherwise Google is gonna go really quickly as I’m not coming back here I was deceived I don’t like it another very important thing as I said in building Authority is to have your posts or your content elsewhere this does two things one it bills your authority and relevance secondly it’ll build your backlinks years ago there was something called backlink farms and they were awful and dangerous you know literally websites and all that we will listen less and less and less the bank links but that’s not what I’m talking about I’m talking about like-minded people who would be interested in your content would put a link to your post so that it’ll drive traffic it’ll also drive all thority you’ll find that there are websites that have more authority than others so anything that’s produced by the government or local authorities or associations in other words things that are not commercial universities schools has a much higher ranking than commercial websites so there’s a few of the tips on search engine optimization I’m happy to share our internal guide that we use on a dummies guide to SEO remember SEO is about being attractive to people it’s not just being attractive to Google make sure that what you write makes think sense to human beings it’s really important that’s really what you’re writing it for Google may or may not come to visit being may or may not come to visit so happy to make that available but you are in business for real people doing real things and make sure you look like people building it and thinking they are going to come is not the answer I see that time and time again people coming on set there pitching their fabulous idea they’ve built their product I think people are just going to flock to it and buy it’s not the way it works in fact building it and they might come in could be your downfall so yes we know you need to produce minimal Viable Product you need to have strategies for growing your business and backs about revenue it’s about finding customers and finding these customers there’s really only three sorts of customers there’s those who didn’t know they needed the product completely new have never purchased such a thing before but they do want it to solve the problem that they’ve got secondly it might be stealing customers from your competitors because they’ve already got the problem but you they you just want them to switch to you and the third thing is about bringing customers back to you very difficult when you’re at absolute startup but it’s how do you get people to buy your product more than once because if you have to find every customer one by one by one it’s very hard to grow and scale your business so sometimes people look at the business model they look it’s a subscription model that is that they you pay on a monthly basis and you get given a service or a product so it might be that there’s an upgrade across grade more things to add to the products but you do need to make sure you’re looking at other reasons for talking to your customers regularly what is going to be interesting and relevant to them is there more information that can bring you back the cleverest customers engage with their clients regularly so for us it’s about reminding people of all the things they wanted to do having a bucket list and also leaving the dates of the people who are important to them so that we can remind them of a birthday or an important occasion that’s coming why would anybody buy from you like really why that’s a question I ask myself all the time what do you want to be world-famous for what do you want to stand for what are you believe in and how are you gonna let your customers know that it’s really really important that you stand out people often talk about brand as if it’s an icon or a color but it’s not it’s the way people feel about you it’s it’s how you occur so when you think about your reputation in your online personality it will be everything from the colors you use the language the style of language the photography making sure it’s real the websites I love the best tell me a story they’re the ones that use real images real photography real video and not stock shots people not they feel the authenticity they want to know that they’re doing business with people and I think that’s really really important so you could do something similar with your website and how you present your content your product your service be consistent if there’s anything choose one and be consistent you might get bored with your marketing communications but it might be the first and only thing that the customer sees it can’t be all things to all people and and nor do you want to be quite frankly in fact focus niche can often deliver more powerful results but know who are you your personality what do you stand for what you’re believing why would people trust you are you a friend are you an authority are you the teacher making sure this is clear to your customers is really really important have fun with it enjoy yourself let your personality shine people do want to do business with people even if it’s online you so you’ve done the work you’ve lost your website you’ve sold a few things and now you’re getting product reviews it’s really important to have product reviews on your website ask people what they think listen learn respond we’ve been talking about that but even making sure that they’re giving you a star rating but what happens if they’re not good what do you do or even worse if it’s an independent website a product review website somewhere else and I promise you’ll I’ve come across many a grumpy customer doesn’t matter what we do they’re not going to write something nice in fact they kind of pride themselves on it the first thing to do is to make sure that you do answer them and respond in a very transparent way this was not our intention I’m disappointed that you were not happy we clearly got something wrong in our product description thank you for your feedback we can now edit it if you if you hadn’t let us know we couldn’t have fixed it value their contribution people just being who can make a difference to how they think about your brand don’t dismiss it don’t pretend it’s not there you gotta own it it’s part of being in the online space you live with you live every day as if you’re on a stage and you can’t hide the real challenge is when it might happen over and over again on an external website that you can’t influence if you’re in the travel business and it’s on TripAdvisor if you’re in products and it’s on product review whatever it is it can be really really challenging I’ve found though that also if you encourage people to write the positive things so if you like what you did could you add your voice to this external website you can never look if you’ve asked for it bought it or coerced them in any way they don’t get to enter a competition because they’ve done a prize because actually Google works that out really quickly and you get black band so you cannot pay somebody for a product review it doesn’t work but you can encourage people to say great things about you when you’re bigger and larger I’ve found that our customers come to our aid so if somebody writes something on Facebook or Twitter or something and our customers will see that in their feed logo that wasn’t my experience I found them really helpful so it’s wonderful when you get to that point of advocacy that your customers support you in the product you please don’t hide please don’t delete them it’s about being real in fact I’m almost suspicious of websites that are perfect because I know business isn’t perfect and your assistant – what a wonderful journey though minimal Viable Product finding some customers and have them all view your product we’ve got started you know online businesses have fun you

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