Whether you’re running your business online or offline, there are many preparations to do beforehand, for example, how to build your online shop, where should your physical store be located in, how to get your supplies, should you install POS system and more. However, besides all of this, the most important thing that should be prepared is your mind.
Starting a business means you could be giving up things in life, such as a stable job, a chance to move on the corporate ladder, and lose financial freedom and be in debt. Starting a business is no different than gambling and if you decide to do so, as you get started, your business will likely dominate your life so make sure that what you’re doing is stimulating and challenging, but not completely outside of your expertise.
1. Why are you starting a business?
Starting a business could be scary and intimidating, there are too many unknowns. But if you’re still considering to be your own boss, ask yourself these questions below and establish a clear vision for your business.
Why do you choose this industry?
Knowing the reason why you’re devoting time and energy to selling your product is vital. It helps you to stay passionate and strives to be better among your competitors. If you’re not that enthusiastic about your products, you’ll tend to give up easily when encountering difficulties.
Starting a business itself is a risk
Whether your business started off online or offline, the greatest risk to any business is that no customers will show up, the truth is – Nothing sells itself. So please be prepared to have careful planning of marketing, financial and more. The market and customers are fickle and tastes may change with a stronger competitor can start slicing your market share away, to keep your dream alive, do your best to anticipate risks and have backup plans to deal with them.
What’s your competitive advantage?
It’s important to ask why should customers buy from you instead of your competitors. It could be your products, service, reputation, or even your location. When customers buy from you, they are also buying the benefit that it gives them. It may be that your product addressed their problems or helps them feel better about themselves. Take time to think about how your competitor advantage benefits your customers.
2. Who is your target audience?
Who will pay for your products? This shouldn’t be vague in any way. When you’re in business, you serve a specific segment of the population, and the more clearly you can define your target audience the better chance you have of finding ways to reach them through marketing campaigns.
Take clothing, for example, the common categorization is men’s wear, women’s wear, kid’s outfit, and accessories. Moreover, we can further divide them by style. This should tell you how much defining your target audience matters.
If you’re still struggling with how to define your target audience, here are some tips for you to follow. The first step is to understand who they are on a demographic level regarding their age, gender, ethnicity, economic status, and more.
Once you have their demographics defined, it’s time to dig deeper into their identity of who they are, what’s their values, attitudes, lifestyle, interests, and more. Which is called “psychographics.”
Now you have defined and learned more about your key audience, you can tailor your brand message to ensure that your story will be relevant to each group. During this process, it can be helpful to check out the competition as well.
3. How do you support your business?
It’s obvious that different business costs differently. The needed preparation and cost of your business is also based on what kind of retail channel you intend to run, which are: Branded online store, online marketplace, and brick-and-mortar store. Besides the cost based on your retail channel, you also have to prepare a decent amount of cash flow. Moreover, you should outline your financial model in detail, including your startup cost, financial projections, and a funding request if you’re pitching to investors.
The cash flow you prepared has to be enough to support your business for at least six months because, in the beginning, stage, you’ll spend a lot of time on acquiring customers, modifying marketing strategies, and testing market reactions. Furthermore, your cash flow allows you to pay bills on rent, equipment, hiring staff, and more unforeseen costs before you make both ends meet.
4. Preparation and Management
You will be juggling different roles in the early stages of your business. Such as business registration, contacting suppliers, applying for business credit cards, and so on. However, things won’t get better after your business starts running. By then, you’ll have to deal with customer complaints, order refunds, inventory management, and more. Throughout the way, you will encounter a lot of business decisions to make:
Retail Channels: Physical store, branded e-Commerce, marketplace e-Commerce, and more.
Which suppliers and manufacturers are you partnering with
What courier services and payment methods are you providing to your customers
What website builder, store location, and equipment are you choosing
How to handle Inventory and store management? With O2O management system, POS system, or others
Make emergency protocols and SOP on how to deal with customer complaints, order returns, commodity replenishment, and such on
Legal matters, and more, you name it
Besides these, you’ll have to work on closing bills, calculating revenues and costs, and more on a daily basis. However, as time goes by, the process will move more smoothly and not as daunting as it was.
5. Sales and Marketing
With your business running, you’ll want more customers and orders. Regardless of the retail channel, advertising and promotions are great ways to expand customer reach. Finding your advantage and making quality advertising contents could make you stand out from the competition, here are a few things you can take into consideration while creating ads:
Who is your audience and what’s their preference?
Why should people purchase from you?
What makes you different from your competitors?
What’s your biggest advantage?
What kind of service and product do you offer?
What kind of brand image do you want to deliver?
These questions can also help you create a value proposition, which is a clear statement that describes the benefit of your offer, how you solve your customer’s needs and what distinguishes you from the competition. Your value proposition should appear prominently on your landing page and in every marketing campaign.
To get customers, product differentiation is vital. Think from the client-side and understand their pain points and needs. In general, customers prefer to buy from brands that offer cheaper yet quality products. However, lowering the price is not a long-term strategy for a brand, and would possibly damage the brand.