Many people believe that running an online business is much easier than a physical one. There are plenty of stories of people getting rich fast from an online business with zero inventory, and next to no cost – and this creates unrealistic expectations. Setting up and running a successful e-commerce site takes time and effort. If you’re thinking of starting your own online business, you’ll need to understand your market and be equipped with some basic business and financial skills.
Benefits of an online business
There are many benefits to running an online business. These include:
- Having lower startup costs. It is usually cheaper and faster to set up compared to a physical store, and you don’t have to worry about expensive rent and fit-out costs. There are also plenty of DIY website and e-commerce platforms available at affordable prices to get you started.
- Having a business that is always open and accessible by your customers regardless of where they are.
- It is more flexible. Your business can fit in with your family commitments.
- You can work from any place in the world as long as you have access to the internet.
Things to consider before starting an online business
Starting a successful online business begins with thorough research. This will provide deep insights into the industry you plan to operate in, your target audience, and your competitors.
Here are some questions to ask yourself before starting your online business:
- What are you offering?
- How will you deliver your products or services?
- What is your unique value proposition?
- Who are your customers?
- How will you market to your customers?
- Who are you competing against?
- What are the startup costs? There’ll be expenses incurred from business registrations, insurance, buying inventory, website costs, delivery costs, just to name a few.
When your business is just one of many businesses on the web, how do you stand out from the crowd? You’ll find narrowing your focus and serving a very specific segment of the market can give your business a competitive advantage.
Doing the proper ground work ensures you don’t waste your time and resources. It’s better to find out there is no market for your product before throwing money into your idea.
Setting up your online business
Below are 6 essential steps to setting up your online business.
- Decide on your business name and the structure your business will operate under. Search ASIC’s register to make sure your business name has not already been taken. Also, check if the domain name you want is available.
- There are 4 types of business structures in Australia – sole trader, partnership, trust, and company. Each structure has its advantages and disadvantages in terms of control, responsibilities, tax implications, and level of personal liability. You can change your business structure in the future as your business evolve.
- Apply for your ABN.
- Work out if you need to register for GST. If you anticipate your business will make over $75,000 per annum, you will need to register for GST.
- Register your domain name.
- Find a web designer to help you build your e-commerce site, or you can look into DIY options.
The steps above are just the beginning. As with any business, you need to have a good accounting system in place, engage with the right financial advisors, and develop good money management skills. Poor cash flow is a common reason why businesses fail. A lack of cash means you won’t be able to keep your business running smoothly. Get professional guidance early to avoid costly mistakes later down the track. We can help you develop a budget and offer you advice on how to manage your cash flow.
The decision to start an online business is exciting, but it can also be stressful at the same time. The process of setting up a new business is confusing for many new business owners. If you are thinking of starting your own online business and need professional assistance, feel free to contact Moiler to discuss your needs.
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This document has been prepared by Manoeuvre Wealth, an Authorised Representative of Count Financial Limited ABN 19 001 974 625; AFSL 227232 (“Count”) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124 and is for general information only. The presentation has been prepared without taking into account your personal objectives, financial situation or needs. You should assess whether the information is appropriate for your needs and consider talking to a Count Authorised Representative before making any investment decision. The relevant PDS should be considered before making a decision about any financial product. The information is provided as an information service only and does not constitute financial product advice and should not be relied upon as financial product advice. 8 July 2019.