If you’re like me in any way (If you’re reading this, you are), you’ve definitely experienced this.
You keep coming up with so many ideas which have the potential to be big businesses.
There’s only just one little problem- You don’t know which one to pick!
It’s like somebody opened your idea tap and the ideas are flooding out so fast you feel like your head is going to explode.
What? You haven’t experienced that yet?
Okay, let’s say you’ve come up with an idea for an online business, and you’ve heard me echo a Steve Harris quote one too many times.
You know the one- ” Imperfect execution beats perfect procrastination”.
So no procrastination for you. You want to launch and get going.
As much as it could be exciting to just do it and let the chips fall where they may, you also want to be smart about it.
I didn’t have the luxury of someone showing me the way, and I’ve had to learn most of what I know through trial and a lot of errors.
So I feel it’s my duty to pass it on to you.
The 10 Things to Do Before You Launch An Online Business
I’m a huge fan of the Nike motto- “Just Do It.”
But I’ve discovered launching any online business without doing these 10 things is almost always a recipe for disaster, heartache, and depression later down the road.
It’s better to deal with them now, than cry about them later.
Know Your Target Customer
Many entrepreneurs make the mistake of starting an online business without knowing who they want to sell to.
Raise your hand if you’ve been guilty of this. (My hand is up by the way)
Now, use that hand to give yourself a knock. (No, not really 😀 but you can do it if you want this to sink in)
Repeat after me: “The customer comes first!”
Many businesses fail because they don’t get customers. Don’t be one of them.
You need to answer these questions:
- What are the average age groups of my target customers?
- Are they men or women or both?
- What do they do for work?
- How much do they earn?
- Where do they live?
- Where do they spend time online?
- What are their pain points?
- What are their fears?
- What are their desires?
Using this information, you can create what Hubspot calls “buyer personas” (Granted, they talk about it in relation to content creation, but it’s the same thing).
Doing this will give you insight into what they want.
2. Know Your Industry
Whatever industry your online business falls into, chances are one of the 5 billion people on this planet is already doing it.
That is a good sign. Competition means there’s money to be made.
If you’re going into an industry, and there’s no competition, be very afraid. Proceed with the caution of a Firefighter stepping into a burning building.
About your industry, you need to know:
- What product or service does your industry provide?
- Who is currently providing those products or services?
- Is it a huge industry or a small one?
- Is this industry likely to grow or get diminished in the next few years?
These will give you an overview of the industry and whether it’s going to be worth your time.
3. Know Your Competition
When you’ve identified the competition in the industry, you need to grab your spy binoculars and go on a mission.
One that should you choose to accept it (and you should) will help you reap great rewards in the future.
While it’s pointless to just focus on your competition and don’t get shit done, knowledge about how your competitors currently handle business is an investment in time that will help you differentiate your brand.
You need to know:
- Who are the competition targeting? Who are their buyer personas?
- What products/services do the competition offer?
- How does their business model work?
- What are their prices like?
- What don’t they offer? Why?
Doing this can help you see where the opportunities in the industry lie, and where you can swoop in and start eating their lunch.
4. Know Your Niche
Let’s define niche here as “customer needs”.
In the industry you’ve chosen, there are a ton of needs that the big dawgs are running around and competing over.
Which is all well and good… for you.
Coming in fresh, you’re better off finding one that you can do better than the competition does it.
If you did No.3 , you should already have an idea where these needs are.
Pick one of these and figure out:
- The problem that lead to this need
- The available solutions
- How you can provide a better solution
If all the needs (niches) are taken, don’t get discouraged. Like my Dad says, “There’s always a better way.“
All you need to do is find it.
5. Know Your Unique Selling Proposition (USP)
I’ve asked some naija entrepreneurs, “What’s your unique selling proposition?”, and they shoot me the “Tomi-you’re-speaking-Swahili” look.
I break it down and ask “What’s your selling point?” and then they ramble something non-specific that shows me they don’t really know what it is.
When you’re done with No.4, you should be able to come up with a way to stand out in the industry you’ve chosen.
I sound like I’m speaking Swahili?
Okay, here’s the Sharp Guy definition of a USP:
” I’ll give you ‘this’ which you can’t get anywhere else. And you’ll pay me x .”
Maybe that’s an oversimplified version.
For a more technical definition, click here.
A unique selling proposition basically says, in exchange for your time and money, this is what I’m selling which is totally different from what everybody else sells and which will meet your needs better because of that.
Differentiate or Die. That’s where it begins for all businesses.
There’s a lot of competition for the customer’s attention. If your business just sounds like every other business in the industry, you’re not giving them a reason why they should choose you.
You need to answer this question: “Why should customers buy from me instead of my competition?”
Answer that question, then deliver.
6. Know Your Product or Service
” Sell what the customer wants to buy, not just what you want to sell.”– Steve Harris
Nobody buys a Bugatti for its specs. They buy it because it tells people “I have arrived”.
Nwanyiakamu’s company, Bubez Foods, sells flavoured pap, sure, but what they’re really selling is the idea that “Local food is cool and healthy”.
TOMS sells shoes, but they sell the idea of giving back to those who don’t have much.
I create content about online businesses, setting up websites, creating content and marketing. I also offer my consulting services… But what I’m trying to sell is the idea of freedom, and that impossible is nothing.
Don’t just get into business without an inkling of what you’re really selling.
Sure, know your products and services but also know what you’re actually trying to sell.
7. Know Your Costs
No, you don’t need an accountant for this one.
You just simply need to answer this question: “What will it cost me to make this online business work on a small scale?”
That last bit is important.
Fine, you need to know your costs, but you should know them on a small scale. Why? You ask.
Because your business needs to succeed on a small scale before you grow it up.
I haven’t heard of a single startup that started from scratch on a large scale that was successful. If you know one, please tell me in the comments.
- How much would it cost to create the product/ service?
- How much would it cost to run the business on a day to day basis?
- What would it cost me in terms of time, money and effort to acquire customers?
The answers to these questions should give you a rough idea of what your costs are, and you can then factor these into…
8. Creating Your Hypothetical Business Model
Yes, the “hypothetical” right there is deliberate.
In the beginning, you need to be flexible and adaptable. Starting small helps you do that.
Now, using all the information you’ve gathered up to No. 6, you need to come up with a hypothetical Business Model that answers the questions:
- What is your unique selling proposition?
- Who are your target customers?
- What products/service do you offer?
- What would it cost you to create and run the business on a small scale?
- How would you reach out to your customers?
When you’re done figuring out your hypothetical business model, then you proceed to…
9. Test your hypothetical business model
When you have your business model, you need to get out of your house and go test it… to see if it’s actually what people want.
You’ll be testing every single part of it- your buyer personas, your hypotheses about what the customer wants, and whether your product/ service actually solves their problems.
Pick a number, maybe even just 20 people, and try to see if they buy it, and if they don’t, figure out why.
“Is your price fair? Is it easy for them to order?”
These questions should be running through your mind as you do your tests.
10. Reassess your business model and Tweak it
Based on your findings from your tests, you would be able to see what parts of your hypothetical model work, and which parts don’t.
Use this information to reassess your business model, and make appropriate changes.
You’d also be able to quickly figure out if your assumptions about the industry and the opportunity were spot on, and make changes accordingly, or come up with a different idea instead.
And then… Repeat till you find product-market fit
Product-market fit – Do people actually want what you’re selling?
And the way you should assess this is by seeing how many people pull out their wallets to make an order.
So you basically need to repeat 1- 10 till you find this, and when you do, you can then launch your online business and put the work in to grow it.
I’m not saying you can’t start an online business without doing all these.
I’m saying you get a clearer picture of your business and the industry- what works and what doesn’t and this will help you avoid the heartache of spending a shit ton creating something, only to find out nobody wants it.
That’s my 2 kobos on this issue.
If you have any questions or comments, let me know in the comments section below.
Keeping it 500,
Author: Tomi Joshua
Tomi is a case.
A bit brash, at first blush. But ultimately, he means well. There are very few things he won’t say or do in the presence of tolerant company (especially when it could make for a good story later).
Tomi is a Doctor, writer, certified inbound marketer (Shout Out to HubSpot), Digital Hustler, and online business addict.
He is most likely to be found dancing to the beat of his own drum, even in accapella.