Starting any business and risking your normal monthly income can be a daunting task. Ask me, I have 3 kids and considerable monthly expenses. So what is required in order to start an online business with minimal risk? I’ll go through the basics below.
Evaluate your business idea
You may think your idea is amazingly brilliant but there’s a few tasks you need to perform in order to evaluate your potential business.
- How many competitors are out there doing what you want to? Is the competition extensive?
- Identify your competition and have a good look at how they are attempting to make money.
- Ask yourself: what is your unique selling proposition? Do you really have something to offer?
- Are you serious enough to follow this through?
Identify your market size
This is a critical step. You really don’t want to get knee deep in the business only to find out that no one is interested in what you have to sell.
Researching your market size is actually quite simple. There’s a few tools to help you with this but I would suggest using the Google AdWords Keyword Tool in order to find our just how many people are searching for what you want to sell. You can even filter down by the geographical area you are planning to serve. Once you have an estimated market size and the numbers still look promising enough for you to consider continuing, move forward to the next phase.
Validate your business model
This is the fun part. It doesn’t take a lot of capital to start an online business, unless your needing to keep stock but even then you can test your model before stocking up and spending all your capital on what could be a complete flop. Let me explain.
Suppose you want to start selling office chairs but you’re afraid that people may not buy from you. By following the below steps we can test your market quite easily.
Step 1: Set up the basics of your business
If you’re planning to sell products online, try uShop.co.za.
If you’re planning on selling your services online, try follow this tutorial on how create your own business website using WordPress. Remember to stick to South African hosting providers such as AmpleHosting and WebAfrica.
Step 2: Install visitor tracking software
You are going to need to know what your potential customers are doing on your website. Install free visitor tracking software such as Google Analytics in order to track visitor behavior This will be essential in the tweaking phase.
Step 3: Test the market
In an attempt to test the market you could either use Google AdWords or Facebook Ads or both. Spend no more than R1000 on either. Both have fantastic user interfaces allowing first-time users to be able to set up a campaign within minutes. Follow these guides while you’re at it.
Step 4: Tweaking
After a few days of running your ad campaigns, you should have a decent idea of the amount of people wanting your product or service. Pay close attention to what the data is telling you in both your ad software (Google AdWords and/or Facebook) and Google Analytics. This step is crucial as a small change can be the difference between you achieving success or failure.
Go forth and conquer or cut your losses
After two weeks to one month of advertising online you should have a very good idea of your business’s potential. Ultimately, there’s three ways your business validation project could have turned out:
Dismal: You received no leads or phone calls while advertising. Unless you completely got your web design or advertising wrong, cut your losses and move on to your next idea.
Moderate: You received some good enquiries. What now? Keep building on your product, advertising and website in order to increase the amount of leads you can acquire online.
Holy smokes, Why didn’t I do this earlier: Quit your day job and take over the world.