Setting up an online business has become increasingly popular in recent years, offering would-be entrepreneurs the opportunity to reach a wider audience.
It is easier than ever for people who want to set up either a sideline or explore a new idea to launch their own business.
Websites are cheap and can be run from the comfort of your own home, and online shopping growth is strong.
Setting up an online business is a great way to reach more customers and can provide flexibility in terms of hours and location
But there are still challenges to setting up online. Not least because more and more people are launching start-ups and side hustles, meaning there’s more competition than ever.
We have a look at the pros and cons of launching your own online business and how you might go about starting it.
Why consider setting up online?
If you’re considering starting your own business, the first thing you need to consider is whether you want to be online or set up a bricks-and-mortar store.
Given the current environment, setting up on social media or a digital marketplace will have much lower starting costs and you’ll be able to test demand before launching your own website.
A survey of small business accountants by Xero, found that 56 per cent believed online businesses had a higher net profit margin, whole two thirds said they’re likes likely to fail.
Certainly, the pressure of launching online seems to be less than that of bricks-and-mortar business owners. Xero’s survey found that 13 per cent of those surveyed believed that online business owners experienced more stress, while 44 per cent felt that brick-and-mortar owners faced higher stress levels.
The main benefit of launching online is the potential to easily reach customers at home and overseas. You do not have to rely on footfall as you do with a bricks-and-mortar store, instead the internet and social media can be your shop window and High Street.
An online business can also offer flexibility in terms of working hours and location, meaning it’s ideal if you’re looking to make some money alongside your full-time job.
However, because of this, there is intense competition as more and more people launch and it makes the online marketplace highly competitive, with businesses vying for attention.
Setting up and maintaining an online business can also be time-consuming, and you will also need to understand some of the risks that come in the form of data breaches.
Tips to start up online
When you’re starting out, there are a few key steps to consider.
The first step to consider is identifying a viable business idea. If you’re stuck for ideas, a recent GoDaddy study revealed the top online side hustles.
Over a quarter of those who have set up businesses to supplement their income have taken to selling their own goods, whether its arts and crafts, or health and beauty products.
A similar number have taken to selling third-party goods, something known as drop shipping, which is when you sell goods but don’t keep them in stock. Instead, when an order is received, you send the orders to another company to ship the goods directly to the buyer.
Another popular venture can be offering your professional expertise in branding and marketing, or sales, accounting, and business administration.
Once you’ve decided on your idea, you can start to conduct some market research before committing time and money to the idea. This should involve scoping out what your competitors are doing, how well they’re doing and who their customers. From there you can work out the type of customers you should be targeting.
From there you can develop a business plan that outlines your goals, target market, marketing strategies, and financial projections.
Launching the website itself needn’t be complicated. There are plenty of providers like GoDaddy which offers web-building and hosting services as well as tools for email communications and order processing.
