The current pandemic forced many companies to move their operations online and send their employees to work from home.
But even before that happened, an increasing number of entrepreneurs decided to start their companies in the virtual workspace.
The reasons for this are multifold, from reducing expenses, expanding a talent pool, to boosting productivity.
In other words, by starting a virtual company, you won’t have to rent the office space, buy equipment, or pay utility bills. Besides, you will be able to take advantage of geoarbitrage, that is, hire employees from places where living costs are lower, meaning that they charge less.
Here are some tips for starting an online business.
1. Choose the Right Business Structure
Choosing how to structure your business from a legal perspective is the first and most important step, as it will have a significant impact on the future of your business.
The two most common options that you can choose from are:
- A sole proprietorship
- A limited liability company (LLC).
Registering your business and operating as a sole trader is the simplest and most affordable way to set up your online company. If you plan on running this business on your own, then this structure could be a good solution. It doesn’t require too much paperwork, and tax reporting is simplified.
However, in case something goes wrong, you’ll be personally liable for the debts of your company.
On the other hand, an LLC comes with more red tape and requires a higher initial investment, but your personal assets will be protected from any debts your company incurs.
Thanks to its favorable tax policies, Ireland is a great choice for online entrepreneurs from all around the world who are thinking about starting and operating a virtual business.
2. Create a Business Plan
Every business needs a business plan.
As a matter of fact, having this document increases your chances of success by 16%.
Even though your company will be operating online, you still need to have your business idea in writing because it will help you focus on what’s important and allow you to think and plan long-term. It will serve as a road map that will help you stay on the right course.
Preparing a business plan requires detailed industry research and competitor analysis, meaning that you’ll be able to improve your business knowledge and skills as well as identify potential problems along the way and get ready for them.
Besides that, a business plan should contain a list of all the expected expenses and give you an insight into how much money you will need in order for your virtual company to run smoothly.
Finally, such a document is essential in case you decide to apply for funding – banks and investors want to see whether your business and sales strategy are effective before they make a decision to back you up.
3. Organize Your Business Finances
First of all, it’s crucial to have separate business and personal bank accounts so that you can monitor your income and expenses accurately. Besides, this will save you a lot of time when it comes to declaring income taxes and expenses.
Similarly, if you use the same account, it will be virtually impossible to distinguish between your personal and business expenses and claim all the deductions you’re entitled to.
As most businesses need some time to take off, determining how long you’ll be able to pour money into your virtual company until it becomes profitable is crucial. Given that poor cash flow management is the reason why 82% of small businesses fail, making sure that the money is rolling in regularly should be your top priority.
4. Hire an Employee
While doing everything on your own or with the help of your friends and family might seem like a good way to save some money, the truth is that it’s best to hire a regular employee.
First of all, if you spend your time completing some low-value repetitive tasks, you won’t be able to focus on growing your business. Besides, savvy entrepreneurs know their strengths and weaknesses, and they delegate certain tasks to someone who is capable of doing the job better and more efficiently than them.
The trick is in accepting your limitations and building a team of people that will contribute to the growth of your business.
At first, you can hire a part-time employee who will work on an as-need basis in order to cut your expenses.
5. Opt for a Reliable Hosting Provider
When you’re running an online business, having a reliable and secure hosting provider is a must, so don’t cut corners when it comes to this.
Since your website is your virtual place of work, it has to run smoothly and without any glitches. A good web host will make sure that your website loads quickly, which is an important factor for the success of your business.
Namely, your potential customers expect your website to load in 3 seconds or less. Otherwise, your conversions will suffer.
There’s another important thing to look for when opting for a hosting provider – an uptime guarantee. Reliable hosts offer a 99.9% uptime guarantee, which means that your website will be up and running (almost) all the time.
6. Promote Your Business
Relying on the quality of your products or services to bring you potential customers won’t cut it.
You need to spread the word and improve the visibility of your online business through different promotional efforts.
Leveraging social media, paid ads, email marketing, and search engine optimization will help your target audience learn about your business and bring you some much-needed traffic.
It’s a good idea to address your potential customers’ pain points in a helpful manner through relevant website content. Create step-by-step guides, how-tos, educational videos, and other types of content that offer a solution to these pain points, as that will attract high-quality traffic to your website.
Starting a business online has never been easier. Still, there are various hurdles that you’ll have to overcome on your entrepreneurial journey, and these tips can point you in the right direction.