September 1, 2021
8 minutes to read
Opinions expressed by Contractor the contributors are theirs.
At one point, some of us may have fantasized about being an entrepreneur and owning a business. The idea of having complete and total control over your schedule and becoming the CEO of your own business is a dream come true. – yet there are crucial steps to be taken in order to be successful.
Becoming a CEO isn’t just about money – it’s about building a career and a business from scratch, which requires skills, commitment, time management and energy.
With e-commerce growth of 40% over the past 12 months with no signs of slowing down, now is the time to become an online business owner.
Thinking about changing your career path and getting into online entrepreneurship? Here’s what you need to ask yourself first.
1. Are you adept at buying an online business?
Depending on the type of online business you choose, it can mean a lot of trial and error before it gains traction.
You may need a team to support operations, so it’s important to consider the skills you need to effectively manage a team and customers.
Any successful business owner will tell you the importance of building strong relationships with your employees. Creating a safe place where employees can enjoy a work-life balance and feel encouraged to share ideas, concerns and needs is what keeps a company’s system strong and sustainable.
Identify areas where you can feed and grow. It can be like taking courses in team management, attending a collaborative team retreat, or learning how to perform better on your own, away from corporate life and without constantly relying on others.
Related: 7 Ways To Work Better With Others
2. Do you want to start or acquire an online business?
Compared to starting a physical business, starting an online business can be convenient.
Without being limited to physical space, you can work from anywhere and don’t have to worry about long commutes, spending money on office rental and other overheads such as occupational safety, health and safety and property and casualty insurance.
Whether you are starting your online business from scratch or acquiring an existing one, the decision is yours. Whichever path you choose to become an entrepreneur, be sure to weigh the potential pros and cons of each.
Having full ownership of the stage of starting your online business can be exciting, and there’s this idea of nurturing your “baby” from scratch and seeing your hard work pay off.
However, it is important to be aware of the high start up costs such as legal fees, SEO optimizations, cybersecurity, website design services, etc.
Unlike starting an online business from scratch, buying an existing business can come with an already established brand with access to customers who love the business and customer service.
You don’t need to build your subscribers from scratch, and your post-acquisition responsibility will be to support your online business and find new strategies to increase growth. If done right, a business that has been running for a while has a solid brand reputation while starting a new business will take time and hard work to build a brand.
If you are buying an existing business, it is important to be realistic about how much time you will devote to the business, whether or not it matches your interests and passion, and whether you have the funds to invest in the business. .
Related: 21 Professional Growth Skills You Need To Master In 2021
3. What type of online activity is right for you?
From content sites and e-commerce stores to SaaS and apps, there are many types of online assets to choose from.
A popular e-commerce model like Amazon FBA allows your products to be stored in a warehouse, packaged, and delivered to your customers.
There are many pre-existing ecommerce businesses such as Shopify sites and drop shipping companies that can be purchased as well.
The good news is, you don’t have to buy physical space to buy and manage your inventory. However, it is important to keep in mind that any mismanagement of supplier agreements can hamper business operations and cause friction between you and your customers. The e-commerce industry is a very saturated market, so it is important to sell niche products at competitive prices to stand out from your competition.
Blogs are a great way to connect with your audience on any topic. Through programs like AdSense and Affiliate Marketing, you can earn monetization through consistent, high-quality engaging content. If you’re buying a pre-existing site, find opportunities to optimize its content for a quick return on your investment.
SaaS, also known as “software as a service”, is a rapidly evolving industry. You can sell products such as project management software, email marketing software, and CRM software.
However, it is important to note that maintenance costs can be extremely high and you need a high level of expertise and technical knowledge to successfully run the business. It’s important to keep in mind that a SaaS business only works when there is an ongoing need for your service, as the cost of customer attrition can be very high.
Like SaaS, the cost of building an application is high and requires compatibility across all platforms while keeping up with technology updates. However, it can be an extremely lucrative business that can generate a stable source of income.
4. Did you exercise due diligence?
If you are buying an established online business, be sure to do a thorough analysis of financial history, legal documents, marketing strategy, website traffic, and business operations.
For example, if you are acquiring an already established blog, you want to check whether the site’s traffic is paid or organic.
Get at least 12 months proof of income and expenses. This is an opportunity to discuss the financial history of the asset with the seller and assess your risk appetite. Think of it like a resume: you might want to ask about financial gaps, dips, or peaks.
There are many ways to exercise due diligence when buying a business online.
Preferably, call in the experts. There are fees that go with hiring someone to help you with the due diligence process; However, you will feel more comfortable in your buying decision knowing that you have an expert to guide you. Also, it will save you money in the long run if you identify blind spots during the early stages of acquisition.
If you are using a platform like Flippa to buy an existing asset, look for listings that are rich in detail with access to traffic data, financial reports and where there are clearly other buyer interests – this is usually a sign of a high quality asset.
Understand what the business needs to keep it running. Talk to everyone in the organization and understand the job responsibilities of each team member.
Learn from the business owner about the essential operations, key personnel or suppliers needed to keep the business growing and running.
If there are any binding legal contracts, be sure to read each document carefully and understand its terms and agreements.
Related: due diligence
5. Do you have the time and the funds to invest in performance and growth?
Online businesses require effective time management beyond the initial capital required to invest in an online asset. Many businesses will be very low maintenance, but it’s important to allow time up front to understand the business.
It is important to look for assets that match your goals. Consider whether you are looking to supplement your income, replace it, or start a large business.
Factor in any costs such as essential training needed to develop and maintain a team, maintenance costs, or paid marketing.
Allocate the necessary time that you are willing to devote to your business throughout the day and consider the demands of your day-to-day responsibilities. Think about the time zone differences between you, your suppliers, and your customers that need to be considered for questions, customer service, or shipping.
With the right advice, owning an online business can be rewarding. Successful entrepreneurship can take a lot of planning and a concrete strategy, but once executed, the journey is well worth it.