Starting a Business Online? How to Address 10 Key Challenges.
Whether it’s economic opportunity — having the right product or idea at the right time — or the desire to take a leap of faith and become your own boss, starting a business online can be a challenging undertaking, especially if you are just beginning the process.
The good news is that online shopping is a growing trend, rising from 209.6 million U.S. online shoppers in 2016 to 227.5 million in 2020. Due to the events of 2020, there has been a huge push to shop online and maintain social distancing instead of visiting physical stores. Ecommerce sales in quarter two of 2020 were 10.8 percent higher than quarter two of 2019.
If you’re wanting to start a business online, the customers are there. Before getting started, take a look at these 10 common challenges for online businesses and how to best solve them.
10 Challenges of Starting a Business Online
1. Creating a Business Plan
Many new business owners skip this step because it can be a lot of work. But now is not the time to wing it. Having a good idea of what you plan to do and how you intend to get there is common sense. You’ll also need a business plan if you are looking for a bank loan or investors to support your business. Important points that should be included in a successful business plan include:
- Information about your target market
- The mission of your business
- A realistic plan to meet your goals (sales and growth)
- Details of day-to-day operations
There will be enough uncertainty ahead for new business owners. Having a plan will help provide direction, anticipate pitfalls and provide you the opportunity to learn and adjust your course of action as you move forward.
2. Building a Professional Website
Your customers will know you by what they see online. Your website will need to be visually appealing, convey professionalism, be easy to navigate and accurately reflect your business and service.
Look at your competitors’ sites and strive to make your web presence better. Is there any information missing from their site that you can add to yours? Is it difficult to figure out how to make a purchase or search for a product? Keep these pain points in mind when building your own website.
Luckily, you don’t need to be a professional web designer to create a great website. Services such as Wix, Squarespace and WordPress make it easy to build a website on your own. Additional things you can do to give your website a professional, trustworthy presence include:
- Showing that your business is formed as an LLC or corporation — this can build trust in the customer that your company is official and legal
- Using and displaying your trademark, if you have one, whether it’s for your company name, slogan or product
- Having a business email and dedicated phone number connected to your business
- Creating an appealing company logo and adding it to your website and letterhead, including all of your correspondence, invoices, stationery, business cards, etc.
3. Getting Traffic to Your Website
As an online business, your sales will be driven by people visiting your website. The best way to gain high volume, quality traffic is by utilizing SEO (search engine optimization). The content on your website, including product and service names and descriptions, will create your keywords and associate them with an online customer search. Depending on how you rank in a search, you may be on the top of the customer’s screen or buried on page 14. Utilize Google keyword tools to learn more about the keywords used by online users and how to boost your standing in a search. Other ways to increase traffic to your website include advertising, using social media and blogging.
4. Dealing with Cybersecurity
It’s not just large corporations that need to worry about cybersecurity. Online hackers and cybercriminals also attack small businesses. It is important to protect your business against cyberattacks by investing in security software, updating to the latest operating system and browser and running anti-virus software frequently. In addition:
- Have a firewall up and running.
- Secure your Wi-Fi with a password.
- Back up your data either on an external drive or in the cloud.
- Set up dual authentication.
- Change your password frequently.
- Know who you are giving access to your system, including an employee or a technician.
5. Standing Out from the Competition
One of the best ways to stand out from the competition is to ensure your product or service is better. Are your competitors not meeting customer needs somehow? Can you add a component to your product that’s missing from other products already out there? Can you provide a better return policy or customer service? Learn what the competition is doing right and doing wrong in order to better position yourself.
Another way to stand out from the competition is to offer promotions and discounts to new and returning customers. Some ideas for these types of deals can include:
- Free shipping for new customers
- Coupons included in newsletters or text communications
- Instant discounts for orders above a certain amount
Offering more than the competition is a surefire way to attract more business.
6. Choosing the Right Name
Coming up with the right name for your business can be a challenge. It’s the name you’ll use to represent your company and it’s how customers will recognize you. There’s a lot to keep in mind when choosing a name: you want it to be short and distinctive, easy to understand and remember, and something that showcases your business values. You also need to ensure the name isn’t already in use by another business in your state, isn’t trademarked and is available as a URL and social media handle.
Incfile has a free Business Name Generator tool to help make this task easier. By entering a few keywords related to your business, such as the niche, the types of products/services offered, your target audience and your business goals, the tool will provide you with dozens of possible business names.
7. Finding the Right Online Tools
Finding the right online tools to manage your business can tricky — there are many options out there with varying features and pricing. Knowing your business goals can help you choose the right tools. Put in the time to research and discover what types of tools are used by others in your industry. The following are some business tools and apps that can help you with day-to-day tasks, save time and boost efficiency.
- Content management systems (CMS), such as WordPress and Squarespace, are easy-to-use platforms that will help you build your website.
- Customer communication apps like Weave and Mailchimp will help with texting, sending out reminders, newsletters and managing growing email lists.
- Social media management tools, such as Hootsuite or Buffer, can make it easier to consistently post and share on social media.
- Shopify and Woocommerce allow ecommerce sites to implement a shopping cart and receive payment from customers.
- Upwork can help find a freelancer to give you a hand with specific tasks.
8. Marketing Effectively
Don’t neglect this important part of how to start a business online. Marketing can be difficult, and if your budget allows, working with a marketing pro may be your best bet. There are a few things you can do yourself as well to get the word out about your business. Social media, blogging, Google Ads and Google My Business are all solid options to promote your company.
These potential customer engagement outlets can be ideal to help you market your business and find new customers. Reviews and testimonials posted by satisfied customers are another free way to attract new clients and expand your target audience. And there should always, always be a link to your website and contact information on any marketing materials to help people find you.
9. Moving from Casual Browser to Customer
It’s one thing to get browsing traffic to your site, but the goal is to close the deal and make the sale. For an online business, gaining or losing a customer can be just one click away. Take advantage of online tools that can help showcase your product, whether it’s an online demonstration, customer feedback and endorsement, or even special sales, deals and discounts. Offer a newsletter or digital catalog or send out information about new products that your customer may be interested in. Even if they are not ready for the next purchase, it’s good to remind your buyer of other items that may be of interest, increasing the odds of making your one-time shopper a returning customer.
10. Focusing on Customer Service — and Satisfaction
Know your customer. Be responsive to their questions, concerns and feedback. In an online setting, you don’t see your customers face to face. Customers want to be heard — don’t make them feel like your online business is a black hole. Don’t ignore comments or questions posted to your site. Respond to emails in a timely manner. Respond to social media comments and posts. Do not shy away from criticism or dissatisfaction. Instead, use it as a learning opportunity to improve your product or service. It is important to also recognize positive feedback and ask that these testimonials are shared on your website or through social media. A recommendation from a satisfied customer is a great way to attract new customers.
Running an online business is a lot of hard work. Incfile is here to make it easier for you. We can walk with you as your trusted partner. We’ve helped over 250,000 business owners get started. No matter what type of business entity you choose, our online formation services will ensure your business gets started on the right foot.