How to set up a successful start-up online business
talk among youth today is how soon they could begin running their own online business.
Many start off with brilliant ideas to sell their products to as many people online and make as much money as they could almost immediately. This is a myth as many have come to experience.
What has drawn them into taking the first step? The hype in the social media is one such influence. Then, there are the many success stories about the exploits these start-up entrepreneurs have gone through in growing their online businesses. The reality is nothing close.
Speaking to these Online Business Youth (OBY) over the past weeks has enabled me to piece together a tale of missed opportunities, untold heartaches and a lot of hard work.
Not only were the “wannabees” required to fork out their own money and resources, they were also shunned by friends and colleagues, who objected to being roped in as customers of the online businesses.
OBY “A” did just that. He started an online business with several colleagues. They had discussed and perfected an excellent business plan that they wanted to implement. What they did not anticipate was that it would take a much longer time to amass information about potential customers, suppliers, product, delivery time and market size.
They had focused on getting a core of “riders” to deliver most of their products, but the numbers had fallen far short of the target.
They reckoned that they could easily get their “friends” to join the effort, but they could only manage 1,500 instead of the 5,000 planned for the first week. Larger numbers are necessary for online businesses, be they customers, orders, deliveries or product lines.
OBY “B” had wanted to sell fashionwear and she had identified a supplier abroad who could supply them the products on favourable terms. But, midway, they could not agree on the payment terms and supply scheduling. Their contract was aborted. It is important to lock in reliable suppliers of products, otherwise, customers who have placed orders would have to be turned down. This is not the way to start a business.
It is to be noted that for an online business to succeed, reliability of supply and timeliness of delivery are the essential prerequisites.
OBY “C” had thought out an idea to start an online business to supply medical products to customers. But soon after he had finished his planning and was ready to go, he was approached by a “biggie” in the pharmaceutical business who expressed an interest to buy out his would-be startup for a sizeable sum of money. This caught him by surprise. But he was advised not to go ahead with his plans. In the world of business, be it online or offline, be on the look-out for the big “fish” out to devour the “small” fish.
Keep your ideas to yourself. Once you have made a name for yourself, only then you should team up with others.
Future OBYs may want to note this.
There are four things that an online business must have before it can take off:
database; business content; product line; and, customers
It is important to begin with developing a comprehensive database before proceeding with the rest because an online business is only as good as its database. It provides good insights into market identification and segmentation. The rest will fall into place soon.
Start by getting to know everything about your future market from your “business riders” and amass the data first, then the rest will follow suit automatically. Viva OBY.