As the saying goes, “business is business”. But as more and more enterprises diversify into e-commerce or even switch over or start up in a pure online setting, it’s worth highlighting the specific issues around setting up your business online. After all, an online business doesn’t need an actual storefront, or a team of salespeople, maybe not even premises of any kind – your costs remain relatively low compared to more traditional business routes and that’s a tempting option whether you’re simply testing the market for your particular product or service, or planning on staying virtual long-term.
First of all, though, let’s dispose of the similarities between setting up an online business and setting up in a more physical world. You need:
your business idea (i.e. the product or service you will be supplying);
to establish/research the market for your product or service;
to decide on a business structure (options include sole proprietorship, partnership, limited liability company (LLC), corporation, nonprofit, etc.);
a name (and will almost certainly need to register it);
to register for state and federal taxes (and obtain a tax identification number);
possibly to build your supply chain;
to comply with whatever legislation and regulations apply to your type of business; and
a good relationship with your bank.
Wrapped up in all of these common steps are the usual issues around due diligence and being a responsible business owner. Now, let’s focus on the specifics of setting up an online business…
Given that the main difference between traditional and online business is the method of interaction with the customer or client, it makes sense to have a marketing strategy that is focused on online engagement – you may well use ‘offline’ marketing too – such as press, flyers, network events, etc. – but the focus is still on bringing visitors to your website. And it is the website that is at the heart of your online business. Whether you design and build it yourself or hire a professional to do so, it must a) be easy to understand and use, and b) receive a high volume of traffic – don’t forget, no traffic equals no customers.
Traffic generation can be achieved through a combination of tactics. Search engine optimization (or SEO) is all about writing clear reader-friendly content that also appeals to search engines such as Google; ideally, you need to be showing up on the first page of results when potential customers search for your key words and phrases.
Another method of bringing in the visitors is pay-per-click advertising (otherwise known as PPC). This involves having advertisements for your online business on relevant sites, blogs, search engines and so on for which you only pay when someone clicks on them (that click taking them straight to your website).
The third traffic-generating method is, of course, social media marketing. Any online business must leverage Facebook, Twitter, and relevant lesser known networks to build a brand profile and presence that engages, entices and actually generates sales.
Finally, having lured the potential customers ‘through the door’ of your website, you want them to make a purchase and that usually means you are involved in some form of e-commerce and there are some key differences from traditional business here too. On a practical level, your website will need some type of shopping cart application and also be enabled for payment to be made online. It may be as simple as a PayPal account to start with but your needs may grow beyond that.
Either way, financial transactions (i.e. customers’ personal and credit card details) should be protected by secure socket layer (or SSL) encryption; you may be able to share in the protection afforded by your hosting company’s certificate. And there are still those who draw the line at payment via the internet for whom you may want to obtain a toll-free number so that you can accept payment and orders via telephone. Whichever options you choose, the Federal Trade Commission regulates online advertising and consumer privacy and compliance with relevant rules and regulations is a must.