How much to invest in your online business?
One of the advantages of setting up an online business is the cost factor compared to setting up a traditional factory, shop outlet or a warehouse. Many users turn to the Internet as a starting point for their business or even to test the waters for something that they are looking to go into.
Is the Internet really a cheaper option?
It all depends on what your goals are with your business, and what you are looking to achieve out of your business. As many online business having running costs which are much higher than offline business, such as Amazon, Dropbox, eBay, all of these and many other companies are truly online based companies, but for them to provide services to their customers they have high running costs, which ofcource offsets in other areas.
When setting up an online business, many are under the impression that it’s something that one can do from home, or a spare bedroom. Yes this is generally the case when starting up and in the early days of your online business. But then you need to make the decision is your business just going to just be a home based business or are you looking to take it to the next level and expand and grow your business, if so you will want to hire staff, get more equipment and also maybe even cater for your customers at your premises. Now doing all this at home can be quite a task, yet possible.
Core things one needs to invest in:
Domain Name: First of all to make your presence online you need to register a domain name for your business. The costs of domain name usually range between $5 – $10. More info on the domain: The Domain – What you need to know about it.
Hosting: Once you have developed your website you will need to have it hosted somewhere. Now they type of hosting that you need will depend on what type of website you are having. If it’s a basic web presence with couple of pages you can do with a basic simple hosting service. If your having an ecommerce site or an interactive website you will need a slightly higher level of hosting.
Your hosting can generally grow with you as your business grows, as most hosting companies allow you to upgrade your packages. Also as your site becomes more and more popular you will need to look into having dedicated server to cater for your visitors and to ensure that they have a good experience on your site.
Website Design & Development: Again this comes down to what you are looking to achieve and have on your website, websites can range from anything between $100 up to even $100,000 +. As your business grows you will need to upgrade your website and add new features which you should keep in mind at the time of launching your online business and also keep in your business plan.
With the above you have presence online and you can start to even make few sales or generate leads, by referring friends and family to your online business. Comparing this to an offline business, you are at a stage where you have rented or purchased a business property, you’ve setup your desks and machines that you need, and done the decoration. These are the basics you need for your business, and again only people that know about your website or business would come to you.
Now you need to invest into marketing and prompting your business. You need to recover what you have invested so far right?
Investing into promoting your online business:
SEO: If you’re serious about your online business, one of the first things you need to invest into is getting some good SEO done on your website by a professional. Yes this can also be done in house, but ensure that you have adequate knowledge and know exactly what you are doing, as at the end of the day you want to see returns of your investment. Hiring a professional SEO to manage your SEO campaign and to work with you and your development team will pay off for your business, as you start to gain those rankings that bring in more visitors and conversions. Which will all affect your bottom line. On average SEO campaigns cost between $100 – $5,000 + per month
Social media: We all know how big social media is becoming, most of the internet users spend their day on social networking sites, and Facebook having over 800 million users, you’re business can’t afford not to tap into this. As part of your marketing and promoting your business online you need to look into Social Media, whether its managed in house or by a professional or even done by your SEO company. It’s a must for your online business to have a presence on social media sites.
Blog: Having an updated blog for your business, is part of your marketing campaign, and when designing and developing your website you can ask your developers to build you a blog as part of your project. Once you have a blog, the key is to post frequent articles written by yourself, your team, or even your customers related to your business. The whole purpose of having a blog is to build your reputation online, to interact with your visitors and customers and to have a solid web presence.
On the other hand a blog also works hand in hand with your SEO campaign, as you publish blog posts your website is growing, and more and more pages are being indexed by search engines.
A blog for your business has many advantages, which I will leave for another post, for now, put in your list of investments to do in your online business.
Optional Investment but recommended:
Videos: Creating videos related to your products and services and presenting them on your site, blog or even just on your YouTube channel. YouTube is the second largest search engine on the web after Google. Don’t you want to have your business listed on YouTube? I’m sure I would. Investing in creating some videos of your business, which you can optimize on YouTube, can bring in some extra traffic but on the other hand it goes down as building your brand online.
You don’t have to get your videos done professionally if you’re on a low budget, you can use your own digital camera, phone camera, or even your computer camera to record some small couple of minute vides and upload them. Of course having them done professionally just looks that much better, but to serve the purpose, you can do this in house.
Banner Adverts: To promote your business further, you can purchase some adverts online on high traffic websites, blogs, and forums within your industry. These adverts usually run for a month or couple of months depending on the packages available, by having your presence on these high traffic websites, will bring in some extra traffic and also build some awareness of your new business.
Business Stationery: You want to give a good professional image of your online business. From time to time you may need to write some professional letters, send something in the post or even go for a meeting. Having some business stationery for your business will give you that professional image, and also the other party will know that you are serious about your business.
What to print:
- Business cards – Recommended
- Letterheads – Recommended
- Compliment slip
- Leaflets / Booklets
- Presentation Folders
Other Areas of investments to consider:
As your online business starts to grow you will need to invest into other areas, and at times for your business to go further it would becomes necessary to do so, if not you’re business will not move forward and will just be what it is today.
Staff: Hiring good staff for your business is essential, you will probably comes across many during your business days that would love to work for you or send you their resumes, but finding the perfect candidate requires time and skill. You can outsource this to a job agency, or do this in house by advertising in relevant places about the job post available.
Once you have the staff, it’s also imperative that you treat them well, and invest in them, such as training, and offering them perks. As at the end of the day, they are working for you, and if you treat them well, they will want to work, and deliver good results. Having a good team around you can make your business successful, as you will not be able to do everything or be everywhere at one time.
Premises: Premises is also an investment and cost to take into mind, do you want to continue to work from home, or does your business require you to now move into a serviced office, or hire a warehouse. If you’re an online eCommerce store, are you now in a position to also have a local presence by having a store, these are some of the questions you would need to ask yourself related to your business. Overall having a good place to work whether it’s at home or outside home, will make sure that your are efficient, and will also give you a good balance between your social and work life.
Time: With all of the above, one of the main things that you need to invest in your online business is “Time”. Unfortunately things don’t happen overnight even online, and as some of my friends say “you have to graft for what you want to achieve” something, whether your business is online or offline, you need to invest the hours behind it. What you put in, is what you will get on the other side. If you are only working part time on your business, than your business would just be a part time business.
So yes setting up your business online can be cost effective, but there are many other areas of investment that you need to look into for your business to grow and to take it to the next level.
Image by: SXC