When you’re starting an online business, one thing you should always keep in mind is that thanks to technological updates, the business world is constantly changing, adapting, and growing. Even well-established businesses need to change with the rest of the economy to stay relevant.
In a world where small businesses very rarely survive the first year, you need to get it right from the get-go. While there are many things you’ll need to get your head around when starting a business, the key is to just do it. So, here are some quick tips on starting a small business to help you out:
1. Plan properly
Ever heard the saying that if you don’t plan, you plan to fail? Well, in this case, it’s true. Start by identifying where you want to be with your business and then plan how to get there. Planning ahead provides you with vision, goals, and an effective way to measure your success or failures.
2. Choose the best business model
Choosing the right business model is pivotal to the success of your business. A business model refers to how a business creates, delivers, and captures its value. Within these three aspects, how the business relates to the economy, its services or products, and the method of providing these all add to its business model.
The online business sector is a particular field that changes business models quite regularly. Now, let’s take a look at some of the most successful business models this year.
E-Commerce
E-commerce has been around for quite a while but is still booming more than ever. It’s essentially about businesses selling products and services online directly to customers. The global e-commerce market was valued at around $10 trillion in 2020 and is projected to grow to $27 trillion by 2027. This includes large companies like Amazon and Alibaba, which not only sell their own products but also host marketplaces for other sellers. There are also thousands of smaller and specialised businesses that operate on platforms like Amazon, Shopify, Etsy, and Alibaba.
E-commerce works so well because it provides a convenient and cost-effective way for nearly anyone to start selling products worldwide without the need to invest in physical stores. It also makes shopping super easy for buyers, who can just go online and purchase what they need and get it delivered to their front door. This simplifies the process of owning a store, making it suitable for one person to run.
Freemium
The freemium business model offers a basic version of a product or service for free while charging for access to premium features. For example, Spotify limits music streaming for free users but offers unlimited access to subscribers. Google and Apple allow for a limited amount of storage before you have to purchase more as well. Microsoft needs you to purchase the Windows licence before you can have its full features. These are just the same examples of how Freemium works.
Marketplace and Platform
This model includes major e-commerce players like Amazon and Alibaba, which have evolved into massive marketplaces where anyone can start their own shop. It also includes more specialised platforms like eBay, Uber, Bobshop, Temu, and Airbnb.
The big win for the platform or marketplace owners is that they don’t have to offer any products or services themselves; they simply take a percentage from each sale made through their platform. This category also encompasses big economy sites like Fiverr, Freelancer, and Amazon’s Mechanical Turk, which provide spaces for individuals to offer their services directly to businesses.
Subscriptions
Subscriptions have been used to create a successful business model. This entails providing a service to people for a monthly fee. A good example of services like this would be Netflix, Disney Plus, Amazon Prime and other online services that require a subscription to use their product.
Crowdfunding
You might find it surprising that this one made it here. Crowdfunding is when businesses utilise the money that’s voluntarily given to them by others. A good example of companies like this is Kickstarter and Indiegogo. These go-fund-me projects will usually be for something towards a good cause or an investment into producing new products.
3. Work Smart
These modern business models don’t need tons of capital to get started. All you need is a laptop, a small pocket of capital and the knowledge to get started. Build a client basis first. Take it slow; there’s no need to rush into spending too much. Do a bit of testing to see if your product or service will sell first, and then go with it if it takes off.
4. Enhance your Knowledge
In these kinds of business models, you’re your biggest asset. For that reason, you need to make sure that you know what you’re doing and that you can perform to the expected level. Studying further is a perfect way to do this. While there are a lot of courses out there related to these topics, nothing beats a good old business degree. Consider getting a grad certificate in business admin or something along the same lines to give you a better foundation from which to start your business.
Final Thoughts
The business world is full of opportunities, and with new improvements in technology every day, we’ll see more effective ways of doing business spring up often. Watch the market and learn where the need is. Who knows, you might invent the next business model.