Starting An Online Business From Scratch
It’s sometimes difficult to remember a time when we didn’t have instant online access to almost anything desired, from finding a phone number for a new business (no phone book necessary!) to buying a hard-to-find bottle of your favorite wine (even if it’s located in a vineyard across the country!). The Internet has replaced or supplemented trips to the library, grocery store, travel agency, bank, auto dealership … the list is almost endless. You name it; there’s little you cannot find, access, or buy online. Behind each of these unique and convenient online retailers are entrepreneurs that started out just like you — with a good idea for an online business and the motivation to turn it into a reality.
Of course, it doesn’t hurt that everyone from consumers to investors now recognizes the legitimacy of online businesses. It was once considered risky to shop online. But an Internet-based business model has proven to be a worthwhile investment time and time again, with the same potential risks and rewards as any other type of business. Add to the mix that technology has also come a long way, and shopping online using everything from a desktop computer or laptop, to a tablet or a web-enabled mobile phone (smartphone) is as easy as ever, And individuals are not the only ones spending more on online transactions. Increasingly, businesses of all sizes are also buying products and services online. Those same companies are also spending money to advertise on the Internet and reach their customers through traditional websites and social media sites. All these inter-actions represent a business opportunity by which people earn a living on the Internet. Why shouldn’t one of those people be you?
Online revenues continue to grow — for all types of products and services in almost every industry. Even during challenging economic conditions, when traditional retail stores have struggled with growth, online retail sales continue to surge. Increasingly, retailers are seeing more revenue come from their websites, accounting for more than 10 percent of total retail sales in the first part of 2019, according to the U.S. Department of Commerce. More than 270 million consumers are expected to browse and buy online by the year 2020, generating $523 billion in online sales, according to research and advisory firm Forrester. U.S. companies selling services online to other businesses (B2B) are also seeing impressive growth. Companies adopting an online software as a service (SaaS) business model are experiencing two times the revenue growth and three times the customer growth, according to research from management consulting firm McKinsey and Company. Even social media sites are providing an avenue for making and increasing online sales, with revenue from social commerce reaching $14 billion in the United States and $30 billion worldwide, according to eMarketer, an independent market research company.
Speaking of worldwide sales, consider that North America represents only a small portion of potential online consumers. The international market is growing, with Europe accounting for more than 20 percent of Internet users and Asia accounting for close to half, according to Internet World Stats. Some European countries continue to have double-digit growth in online sales, and $53 billion in online sales will come from Southeast Asia, alone, by 2023, according to Forrester. These statistics represent substantial potential from online shoppers around the world. Isn’t it time you join this generation of online entrepreneurs and take advantage of these rapidly growing markets and start an online business? In this chapter, we describe the kinds of businesses that exist online and motivate you to get started.
What Are You Waiting For? Start Your Business Now!
You might have dreamed for years about starting an online business. Or perhaps you woke up just yesterday with a brilliant idea. What are you waiting for? The truth is that the most difficult part of beginning a new endeavor is making the decision to do it. You can easily get bogged down with excuses for why your business won’t happen. To keep you motivated and on track, here’s a list of the top reasons to start an online business now:
- You can gain financial freedom. One major incentive for owning any business is the potential for a better income. The Internet offers the opportunity to create your own wealth you have unlimited customer reach. No geographical boundaries exist when you run a business over the Internet. You can choose to sell your products or services in your community, in your own country, or to the entire world.
- It’s affordable. You can now create a website inexpensively and sometimes for free. The cost to maintain your site, secure products, and cover related expenses is often relatively low. This low start-up cost is especially evident when you compare the start-up costs of an online business and a traditional bricks-and-mortar business (a physical building from which to sell retail merchandise).
- Your schedule is flexible. Part-time, full-time, year-round, or seasonal: Your schedule is up to you when you operate your virtual business. You can work in the wee hours of the night or in the middle of the day. An online business affords you the luxury of creating a schedule that works for you. (Of course, the more time you invest, typically the greater your earning potential!)
- Novices are welcome. As the Internet has grown, e-commerce (or electronic commerce, a type of business activity conducted over the Internet, such as sales or advertising) applications have become increasingly simple to use. Although you benefit by having experience with your products or services, the process of offering those items for sale online is easy to understand. You can set up shop with little or no experience under your belt!
- You can start quickly. From online auction sites such as eBay to storefronts powered by Amazon.com, the tools that can help get you started are readily available, essentially overnight. Many of these sites (such as Amazon) handle all the details for you — they set up the website infrastructure, manage the payment and shopping cart system, and even provide easy access to merchandise.
- No age barriers exist. You might be retired and itching for extra income, or perhaps you’re a teenager who’s only beginning to consider career opportunities. Online businesses provide economic opportunities for entrepreneurs of all ages.
- A variety of ideas qualify. As proven time and again, the Internet supports a broad range of business concepts. Although some ideas are better suited to long-term success, almost all your ideas have potential.
- Niche markets hold unlimited potential. Thanks to the reach of the Internet, unique or custom products and services have a potentially lucrative home in e-commerce. These products and services may not generate a large enough demand in a local market to sustain an offline business but can find a significant niche customer base through the broad reach of an online audience.
- Everyone else is doing it. Okay, maybe your parents wouldn’t approve of using this logic. It’s certainly true, though: People around the world are finding success and more financial freedom by starting businesses online. It’s one leap you should be proud to take!
If you’re still hesitant, consider this bonus reason: The information you need to take your business online is right at your fingertips – literally. This book gives you most of what you need to get started. Whatever else you require, such as information about conducting business in your specific state or regulations for your specific industry, is on the Internet (put there by some other enterprising entrepreneur, no doubt). You have no more excuses!
Choosing The Right Business
After you decide to start your own online business, you should look at the different categories of online businesses from which you can choose. In this section, we conveniently provide those categories.
Not all online businesses will explode like Amazon, eBay, Linkedin, or Facebook. But even if your business never grows into a megabrand, you need to plan for the long haul. You want your business to succeed and survive. Also, selecting the right type of online business is just as important. Losing interest or lacking an understanding of your chosen business area can hinder the growth of your new online business. Putting some thought into the type of online business you want to pursue pays off.
Creating online businesses for today and tomorrow
The secret to e-commerce success is to create a business that will stand the test of time. Sure, some people take advantage of relatively short-lived trends and make a mint (from Pet Rocks to Neopets, for example). The odds that you could create the same magnitude of buying hysteria with a product or service, however, are small. Instead, hundreds of thousands of entrepreneurs are quietly and steadily making a respectable living by using the Internet, and their ideas will find a market for many years. They’re not making millions of dollars a month, but they’re paying their bills and making a profit
The widely used term online business can be used in different ways. It sometimes refers to a company that operates only over the Internet and has no other physical location from which to sell goods or services. It can refer to a traditional bricks-and-mortar business that also sells over the Internet. And we sometimes use it to reference a segment of revenues generated from the web for traditional businesses or organizations. In this book, an online business is any entity (or person) using the Internet, in whole or part, as a source of income for itself, its business, or its organization (such as a club or a nonprofit agency).