Same, same… but different
Starting an online business is a lot like starting any sort of business, but there are important distinctions. Here’s what experts and owners have to say:
Pros of online business
Lower startup costs
“You cut the costs of bricks and mortar, so it’s much less expensive to get going,” says online business consultant, Marc McKeow of FortBrave
“It’s allowed me to create more products with different tiers of service,” says online business owner, Olivia Park of Olivia Park Coaching
“Online accelerated during the pandemic, even as other types of businesses struggled,” says online business consultant, Shaheman Farid of Boobooks Accountants
Cons of online business
Demands on marketing
“You’re doing well if 2% of website visitors buy, so you will need a lot of traffic,” says online business consultant, Marc McKeown of FortBrave
“People forget that merchant service providers and marketplaces take a cut of each sale,” says online business consultant, Shaheman Farid of Boobooks Accountants
Forecasting cash flow
“We could only do a 2-month forecast, our first few years. We had no idea what would happen on day 61,” says online business owner, Michael Yared of Echobind
Steps to starting an online business
Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.
Evaluating your idea
Lower startup costs and overheads make it easier to launch an online business, but you’ll still invest a ton of effort. “There’s no such thing as a side hustle,” says ecommerce consultant, Marc McKeown of FortBrave. You don’t want to waste energy on something that won’t work.
A little research can help avoid mistakes. You don’t need a maths major or a stack of cash to test your idea. Just figure out who your target market is and get in touch with them.
Help evaluating your idea
How to do market research
Get tips on how to understand your customers without having to hire a research firm.
How to do competitor analysis
Find out who’s competing for the same pound and build a competitive strategy.