How Do I Start an Online Business?
A student asked me: “I want to start an On-line business. Some of my friends can set up websites for me so I want to know how much money I should spend on technology, what type of servers and computers do I need? What are the basic things that I need to start an online business?
Answer: Before you think about investment in technology for your business, you need to know who your customers are. How do you make money? How do you get people to go to your website? These are questions that you must have answers before thinking about the website technology. On line business is a serious business and you must think about the business first, not the technology.
The common mistake many people often make is to build a “fancy” websites to satisfy the owner rather than meeting the needs of customers. Customers do not care about “fancy” website but about what it provides and how easy to get what they need. If you are selling products, you need a website to handle e-commerce transactions and you must pay attention to your competitors (Similar websites selling the same things). You must determine how do you compete with them? Your success is dependent on the number of people visit your website and BUY from you, not from them.
To make money with on line business, you must know how many people visit your website; how many of them buy from you; and how much money you will make to reach your business goals. Since you are a new business, you need to get people to come to your website by advertising and marketing as well as set up certain way to get people’s attention to your website such as using Search Engine Optimization (SEO) etc. There are costs to generate more visitors that you need to consider.
Online business is also a customer relationship building. You must make sure that you can get product to customers at the fastest way possible and of course get paid as quickly as possible. (You will have to work with the credit cards company on this). You must make sure that your customers are happy with what they bought so they will come back and buy more. You must think about how to satisfy customers and how to recommend them to buy other things from you, that means you must know what customers are looking for and what price they are willing to pay.
A website is just the beginning, just like open a store. You need to have scenarios on how customer enters, checks merchandises, and selects what they want, then buys and pays. You need go over each scenario carefully to make sure it flows seamlessly without any problem. For example it should not crash, else you will lose customers. Before building the website, draw out on paper all processes on how your website could serve customers along your business operations. Only when everything is clearly defined then you can discuss the functionality with your friends who will build the e-commerce application for you.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
