Do I Know My Industry?
How Is My Business Different?
Am I Ready for the Web?
Have you ever considered starting an online business? Many of us have dreamed of turning an idea into reality. But as time goes by, these dreams often fade or get put aside. Those who persist and dedicate themselves fully have the potential to build a successful venture. However, only some will achieve significant success with the right strategy and knowledge.
The Rewards of Owning a Startup Business
- You’re the Owner: It’s your idea, and you have complete control over the entire process.
- Freedom and Flexibility: You can do what you want, how, and when.
- Profit Potential: Let’s remember one of the most important reasons you started this: you get the majority of the profit.
- Excitement of Building Something New: Starting a business is an exciting time filled with possibilities.
Many people (myself included) experience a surge of enthusiasm during the initial phase of a startup. Whether creating something better than what’s already out there or introducing a new idea, it’s an exhilarating journey. However, most of us don’t have the funds to drop everything and devote 100% of our time to an untested venture. It can be a considerable risk with significant implications for your life and your family’s well-being.
Planning and Research Are Key
Take your time. Do your research and think everything through. Plan your strategy and work your plan. Don’t quit your job just yet. It’s better to get all your research done and start while you’re still employed. This way, you have something to fall back on if things don’t go as expected. Once you’ve gained expertise, assembled the necessary talent, developed your vision, and started generating income, you can consider leaving your job when the process runs smoothly.
Getting Started: A Real-Life Example
Let’s dive into a story to illustrate the journey.
Amber and her partner Art came up with an interesting idea to start a business. Both had regular jobs—one in the film industry and the other in web design—and over 10 years of experience in their respective fields. They always wanted to build a profitable business that would eventually allow them to work from home and live off the new venture’s profit.
Finding a Unique Niche
A startup that offers something unique is much more likely to gain interest than simply copying what others have already done.
Their idea involved manufacturing and selling their own brand of 3D glasses. While they had industry experience, this particular niche was new to them. They spent the first year researching everything—from different types of technology and manufacturing processes to market competitors and what it would take to produce their designs.
The concept seemed feasible until they discovered tooling and initial production runs would cost around $75,000. They explored various funding options, including loans from banks, friends, and family, but managed to gather only $10,000.
Pivoting the Plan
Knowing there had to be another way, they reconsidered their approach. They devised a business plan, consulted a lawyer, and started thinking about funding differently. Perhaps they should bring on a partner?
Through their research, they found a company that had everything needed to manufacture the glasses. All they needed was lenses made to fit existing frames, which this company was already producing and selling worldwide. After creating and testing samples, they felt optimistic. Art’s background in manufacturing was a significant asset in finding a company to make the lenses. However, their potential partner pulled out at the last minute. Not fully understanding the industry’s nuances ended up derailing the idea.
Learning from Setbacks
When you fall off the horse, don’t give up. Get back on.
Amber and Art did just that. They decided not to reinvent the wheel. Several companies around the world already manufactured 3D glasses. Why not buy wholesale and resell high-quality glasses that were ready to go? All the groundwork was done, and some of these companies were already profitable in other countries. They ended up making deals with six companies and were backed by RealD, the licensing company for all the product lines they planned to sell.
Had they started in this direction, they could have launched almost a year and a half earlier.
Experience Matters
Experience: Your Most Valuable Asset in Business
Consider your skills and background if you’re thinking about starting something independently. Before diving in, you need to be sure you completely understand the full scope of your business. Having professional experience in the industry will reduce stress, provide more insight, and shorten the startup time.
Tips for Your Startup or How to Create a New Online Business
The Power of Uniqueness in Your Startup
Whether it’s a product or a service, offering something unique will make it easier for people to take notice.
To excel in a new business, think of a unique idea or an improvement on an existing one that hasn’t been considered before. Starting a business in an already crowded market means dealing with many competitors. Make sure that your offering is different. Achieving profitability in the first or second year is challenging, especially if you don’t stand out from your competitors.
Here are a few things to keep in mind:
- Avoid Direct Competition with Established Players: Don’t go head-to-head against larger competitors already establishing a solid following in your target niche. For example, if you want to start a stock photo site, photographers won’t submit to your site if you have no traffic. Marketing to your audience would also be difficult without a sufficient photo library that meets their needs. You would need a substantial catalog to compete with existing stock photo sites.
- Ambitions to Dominate the Market: To become a market leader, you’ll need significant capital and excellent marketing skills. Even if your product is superior to your closest competitor, it could take years and substantial resources to come close to making a profit.
- Find an Underserved Market: It’s better to find a market that isn’t already saturated. Thoroughly investigate the market and build a solid marketing and business plan. Change your goals and direction until you have a viable path to profitability.
Over the years, we’ve helped many clients create new online businesses. 50% do not conduct enough industry research before starting a website or e-commerce business. That same 50% do not budget enough or understand how long it takes to reach the break-even point. I’ve seen fabulous ideas fail simply because they gave up. The notion of “build it, and they will come” is a myth. Creating an online business requires around an 80% marketing and SEO effort.
This is the first of a five-part series about your new online startup business. Don’t miss the upcoming articles:
- Marketing, Marketing & Marketing. Did We Say Marketing? – Starting Your Internet Business, Part 2
- Are you not a developer or lacking in another vital role? The Art of Hiring a Partner – Starting Your Internet Business with a Partner, Part 3
- Remote Team Management 101 – Starting Your Internet Business, Part 4
- The Wrong Way: Lessons in Getting It Wrong (and Maybe Why You Should Try It, Too) – Starting Your Internet Business, Part 5
Starting an online business is a challenging but rewarding endeavor. You can realize your dream with careful planning, thorough research, and a unique offering. Watch for the following articles in this series to continue your journey toward a successful online startup.