The fundamentals of starting your own online store

January 31, 2023

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The fundamentals of starting your own online store

So, you want to start your own online business. Anyone who’s tried and succeeded knows how rewarding this journey can be. To help you get started, this guide will take you through the processes step by step in order to get you up and running.

Define your niche

It all starts with defining your niche. Your niche is the segment of the market you want to capture. The more concise your niche is, the more successful your product will have the chance to be. The same can be said of offering a service. The more concise your service and clientele, the better your chance of success. But defining your niche is a lot more complex than just deciding who your customers are.

If you want to start an online retail store, you must first define who you want to target (your target market) and what kind of products you want to sell. Once you’ve identified your audience you need to delve even deeper into what influences your product.

Develop a business plan

A business plan is a roadmap to success; it’s your guide to taking your product from development to release.  

Ozow’s Head of Corporate Development and Strategy, Clayton Wiggill, believes that a business plan is important for several reasons: “First, it serves as a roadmap for the business, outlining the goals and objectives of the company and the steps that will be taken to achieve them. This helps to ensure that the business stays on track and that all team members are working towards the same objectives.”

He also mentions that “a business plan is often required when seeking funding from investors or banks, as it provides them with a clear understanding of the business and its potential for success.”

While there are many in-depth guides out there for you to follow, we’ve compiled some key takeaways:

An executive summary of a small online business

This will define what your business is and what is going to make it successful. Included in the summary would be a short description of your product or service as well as information about the leadership team. If you plan to use this document to attract investors, then you should include relevant financial information and growth plans.

a company description of a small online business

This more detailed description of your business explores the problem and solution you provide. It’s more specific than the one mentioned in the summary, as you also need to touch on the audience your product or service is aimed at. You also want to make mention of any experts you might have on the team, as this will boost credibility and allow your plan to be flexible enough to be used to attract possible investors.

Market analysis of a small online business

Research is a key pillar of your success. In your market analysis you must demonstrate why and how your business will be successful, while accurately describing your target demographic, the future potential, and the possible risks facing your business. While your research needs to be objective, use this section to reinforce the point that your product or company is necessary for the space it wants to operate in.

Competitor analysis of a small online business

Much like your market analysis, your competitor analysis needs to be thorough. Use this section to list all your competitors and any products they might have that are similar to yours. Also look at the value propositions of your competitors and discuss how you can out-compete them.

Execution plan of a small online business

This section explains how you’re going to do what you plan to do. List your operational team, the physical and digital assets that will help you execute your business plan, as well as more information on the leadership team, and whether you’re planning on filling any critical roles that might be outstanding. For smaller businesses it’s best to include how long you think you’ll take to become fully operational.

Marketing plan for a small online business

This section explains how you plan to promote your business, obtain new clients, and retain existing ones. A word-of-mouth approach isn’t enough, you’ll need to address the channels you’re planning to market on as well as how you intend to do so. You should also include branding imagery, logos, proposed website designs, and a detailed budget on how you plan to support your marketing endeavours. Contrast this with a marketing analysis of your competitors and how you expect to outperform them.

financial forecast of a small online business

Your financial forecast should include all the finances involved in running your business. Include your predicted income statement, which will outline your possible profits and losses. You also need to include your a cash flow statement which depicts all the money you’ll need to launch or scale your business. Lastly, you’ll also need to include a balance sheet that shows the value of all your assets and liabilities.  

Choose your business structure

As you’ll discover, your business plan lays out the way forward for your company and informs its structure. Whether you’re one person doing 100 roles, or a team of 100 people, you need a clear outline of your business. You’ll also need to discuss the total equity of the business and how it’ll be split up between those within the team (if you choose that route).  

You’ll also need to plan for future roles you might incorporate as your business grows and how they’ll fit into the overall structure of the company. If you’re a one-man band, you’ll still need to record your roles and responsibilities to ensure that they’re core to your business, and to avoid being pulled in too many directions.

Stay legal and compliant

Becoming legally compliant is a major milestone on your business’ journey to success, as it means you can start trading without worrying about the consequences of non-compliance.  

Depending on the industry you’re targeting, or the product you’re looking to sell, there are a few common threads:

  1. Protection of personal information: Any business, irrespective of their size or scope needs to have systems in place to protect their employees, clients or customers' privacy.

  1. Protection of intellectual property laws: As a company you need to keep your designs, artwork or any other inventions safe from theft or piracy. This can be done by registering any trademarks, patents or designs.

  1. Consumer protection laws: Your business needs to adhere to any law put in place to protect the customer from malicious transactions.

Berné Burger, Ozow’s Head of Legal, comments on some of the legalities that are often overlooked when starting a business: “People enter into verbal and gentleman's agreements very frequently when starting a business. As much as it is important to trust your business partners and service providers, if you are not putting things clearly in writing, if issues arise, it can blow things up or out of proportion quite early on.”

He also goes on to mention that a contract doesn’t have to be incredibly detailed and complex as long as there’s some form of agreement early in the partnership.  

“A trusting business partner should have no issue doing this as it provides you both with comfort and certainty,” mentions Burger.

Choose your eCommerce platform and create your website

Think of your website as the digital version of your store front. While it might only be on a small screen, it needs to look and feel on brand and of course be attractive to potential consumers. After all, the responsiveness and performance of your online store can be equated to the effectiveness of front of house employees such as your store manager or clerks.  

Building a beautiful, responsive website can seem impossible to those who don’t know how to code or design. But thanks to the availability of website-building platforms such as Shopify or WooCommerce, it’s now easier than ever to click and edit existing store templates to match your brand.

Ozow’s Head of Infrastructure, Heathesh Bhandari, touches on the benefits of using pre-built systems: “It’s easy for a layperson to do, without having any technical knowledge or a developer.” He also goes on to mention that “it’s also easy to integrate plugins to cater for payments and shipping, and plugins like Ozow are easy to setup and get working quickly.”

After your site has been built, you can then start looking at an effective payment solution. This is where Ozow comes in. Our platform integrates seamlessly with all the eCommerce platforms mentioned above and more, in order to facilitate the entire payment process. Simply design your store and select Ozow as your preferred transactional facility to get going.

To make things even easier for new SMEs, our products require no subscription and there are no fees for those transacting less than R1-million a month for the next 12-months of using Ozow.  

Marketing, marketing, marketing

It’s now time to get your business to the front of customers’ minds. Before you can though, you’ll need to research your competitors and their marketing. Through this you’ll be able to discern which social platforms will be ideal for connecting your product to your audience. For those with enough financial backing, hiring a competent marketing manager goes a long way.  

If you’re looking to DIY your marketing, there are resources out there that can help you understand marketing data, such as Google’s free analytics course. You could also take short courses through Udemy or Getsmarter to upskill yourself to the point where you can run your own marketing.

PJ Eales, Ozow’s Creative Director, had this to say about marketing: “It’s one thing to have an exceptional product or service, but if people don’t know about it, you simply can’t compete in the market. The importance of marketing cannot be stated enough.” He went on to list a few easy ways for you to market your business:

  1. Use social media: These days social media has become less of a nice-to-have and more of a business necessity. Social platforms allow you to actively inform, attract and engage with your followers. Best of all? It’s completely free to set up a business account on most social media sites, making it one of the more affordable ways to advertise your business. However, creating paid posts and other forms of social media ads will still require an investment.  
  2. Google reviews: Get customers who love your product to review your product. Google reviews influence search engine results by enabling your business to rank higher the more often your business is mentioned online. Reviews increase the brand trust your customers and potential customers have in your business.

Building a community from your audience is another way to make your marketing impactful. By interacting and engaging with customers on social media, you create a following which can be turned into a contactable database of users. This can be done by enabling your website to utilise cookies which in turn enable your analytics to track their patterns and behaviours.  

Those customers who’ve allowed your cookies can in turn be remarketed to (reaching users who’ve already shown interest in your business).

For added impact, you’re also able to enable commercial trade on your social platforms such as Facebook or Instagram. It’s an ideal way for your company to leverage the power of social media with a transactional functionality.  

Ozow’s Head of Digital Marketing, Chris Vermaak, also weighed in on the importance of having a good marketing strategy. “Traditional marketing and digital marketing can improve a business’ brand and credibility (building loyalty and retention), increase conversions and sales and increase engagements. This leads to ultimately increasing revenue.”  

He also added that, “with digital marketing a business can target specific audiences in a cost-effective and measurable way. Take note that in 2022 people spent on average 403 minutes per day on the internet, so there is no better way to promote your brand.”

Continuously monitor and improve

Your business will always have potential to grow, but to reach that point you need to continuously monitor and improve wherever you can. You can do this by conducting audits on your processes and departments so you’re able to find and implement better ways of working.  

According to a skills development company, AG5, “because continuous improvement focuses on making small, incremental improvements to your processes, it also boosts the market value of your products and services. By making your processes more efficient and reducing waste, you’ll also increase your profit margins.”

Congratulations on your new business

While this guide offers an outline on getting started, ultimately your journey as an entrepreneur is your own. It will be filled with unique challenges and experiences, and there are a multitude of ways to navigate the space. As a prospective business owner, you need to do your own research.  

Ozow’s products can help you reach your goal, whether that’s building your own online store or managing your funds digitally. Our seamless refunds process empowers merchants to refund their customers timeously, giving them the chance to shop again. It also gives you, the business owner, the comfort of knowing that the refunded amount won’t be more than the transactional value.  

On top of our Refunds product, Ozow’s Payouts solution gives customers a fast and efficient way to withdraw funds from merchants within minutes.  

Our platform integrations are an added benefit to our systems as they’re here to help you get paid easily and fast, well beyond just Shopify and Xero. For a full list of tools that can greatly aid your business, click here.  Good luck.

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Staff Writer

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