How Does an Entrepreneur Launch a New Business Successfully?
When launching an online business you want speed, efficiency and low cost. If you can get early to market with a good product, with a high margin, then you definitely have a viable business.
To achieve this you need an excellent set of tools that work well together, and a set of more than competent suppliers to whom you can outsource the parts of your business that are not best executed by yourself.
Music To Your Ears
My analogy is as follows: you are the conductor of your orchestra – maybe you’ve composed the music, but playing the instruments as well is too much. You need to assemble an ensemble.
Architecting the Business
So once you have defined your product or service, you now need to put together the organization and systems to market, sell, deliver and support the product.
The marketing and selling can be done online, the delivery can be online if the product is a digital one or you can use drop-shipping for physical products; and finally support can take place through an online ticketing system and later a call centre as your customer base grows.
How To Understand Your Market
The two fundamental questions are
- Is there a market for my product?
- At what price will my product sell?
How can you answer those questions? By market research and competitor analysis? This is useful in understanding the market but it won’t tell you how your offering stacks up against the competition in your prospective customers’ minds – (because your product isn’t in their minds yet!).
The approach I would propose is market testing. That’s right, take the product to market, run multiple scenarios and see what interest they attract. Then tune the product, pricing, placement and promotion.
Tuning the 4Ps of Marketing
Product tuning could involve how the product is packaged, what options are standard and what are extra, also what bonus items are given away with the product that makes the overall offering irresistible.
Pricing is generally something you should not try and compete on – you want to have a premium price because your product is different and of perceived high value. This delivers you more profit. Only compete on price if you have very deep pockets.
Placement is about where your product is sold – you may sell your product directly on your site, or through a network of affiliates, on a Amazon store, or on ebay
Promotion could involve Pay Per Click, Banner Advertising, e-zines, directory listing backed up with good old SEO on your product site.
So Where Does a Blog Fit In?
Free blogging software such as WordPress, provides a low cost method of building a web site that allows you to start market testing quickly.
WordPress has built-in content management which makes it easy for anyone to create and publish their own pages. What’s more there are plugins that allow you to add a simple shop so visitors can pay through Paypal or GoogleCheckout. Plugins also exist for contact forms so you can also use the blog as a means of supporting your customers.
Had you decided to pay a web developer to build your site you would likely be spending $5000-Â£10000 and it would take a couple of months to get launched.
With blogging software such as WordPress supplemented by the Thesis theme and half a dozen plugins, a WordPress developer could set up a rich featured blog for under a $500 within a week. If you want to go to town on the appearance of the site then add another $500 – Â£1000 and another week to the timeline but you have still saved a few thousand dollars and 4 weeks in getting to market over the traditional approach.
Alternatively, if you have the time and inclination to learn some new skills you could do it yourself for nothing, well almost nothing, as I would still recommend your get your logo done professionally and cost effectively either through eLance or 99 designs. There are plenty of free and commercial training courses available however it is likely to take you a few weeks to get up to speed.
Launching your business online
If time to market is the prime concern for you then a professional WordPress developer is the way to go and only a week later your web site can be live, with your sales page and your mini shop in place. You then publish a few articles on e-zines to drive traffic to your blog and start a Pay Per Click campaign to get some significant traffic.
Then you watch and wait and, using tools such as Google Analytics, you monitor performance: how much traffic are you getting, from what PPC campaign, what e-zine site, how well is the site converting that traffic to sales?
Next you start doing split testing which means different visitors see slightly different sales pages, packaging, pricing, etc, and you monitor all the results to see what is the best mix that leads to sales. Iteratively, you tune your product offering to increase traffic and conversion rates.
Upsizing Your Business To Make More Money
Once you have a winning formula, then you will need to scale up. You will have to spend more on e-commerce software, newsletter and autoresponder software, delivery systems, support systems, a payment gateway, a merchant account, article writing, pay per click, offline advertising, etc, but you will be doing it in the knowledge the product will sell. You should still retainÂ the blog, as it remains a useful repository for articles and will continue to drive valuable traffic to your sales pages.
What if the Product Does Not Sell
Your business idea may not succeed – maybe there are better products in the market. The good thing is that you have failed fast and not spent too much money doing it. The temptation to spend good money after bad is reduced when you have invested less – so it is easier to move on. You will have learnt a few things and be more ready to start a new venture.
Or maybe if you are getting good traffic to the blog, but not the sales, you might want to become an affiliate and sell your competitor’s product instead. This could be a smart way to recoup your investment.
So even when you lose, you can win!