Starting your own business can often be seen as a very distant dream. There are so many running parts that you need to think about, and you might often be oblivious of some of the steps to starting or running your eCommerce company. What’s more, owning a successful business might seem attractive, but you might believe you do not have the capital to cover the initial costs. But what if we were to tell you that it does not need to be so? In this article, we share some of the best tips for running an eCommerce business on a budget
1. Develop a thorough understanding of what it is that you want to do
Before you even start your eCommerce business, you will need to have a good idea of what you want to do. Think about solving a problem for someone – this should usually be the basis for your business. If you have many ideas – or none at all – you will want to start researching different niches. If you do have an idea, you should start exploring the niche in which that idea falls. Nevertheless, one of the first basic steps of starting a business is to perform market research.
This applies both to the “real world” and the eCommerce one. The decisions you make in this process will be similar or the same as starting a brick and mortar business. The problem-solving we mentioned above is a perfect example of this. Think about what your business will offer. Are you selling something to the clients, or do you have services you want to share? The eCommerce business will split from a regular one by asking whether or not the products and services you are offering are digital or physical.
Then, you will want to expand your line of thinking. Consider what other businesses in your niche are doing right now. What are the things that they are doing well, and are there things that you can do better? This will usually make you stand out from your competitors – which can be a good thing in the eCommerce world. If there are no businesses in your niche, consider why it is so. Maybe people who try running a business are failing every time because they are doing something wrong. Conversely, you might be the first person with this idea, so you can be a frontrunner in the industry.
These are some of the questions that you will need to toy with – but there are many more. You need to think about the legalities of your operations, your website, and your internet presence, marketing, etc. Put all of these on paper and try to gauge the budget you will need for it. From there, you can start shaping your budget to suit your needs.
2. Add sustainability to your business plan
The next thing you will want to work on is your business plan. This is the foundation of your business – the model on which you will shape your whole operation. However, you do not need to take this too seriously. Usually, you will want to make your business plan to be as flexible as possible – especially when working in eCommerce. Things keep changing every day, and only the businesses that change with them will succeed. And, in order to do that, you will want to adapt your plan as soon as changes happen.
This is easiest when your business plan is not a 100-page tome of wisdom. Revisiting it week by week will become tedious, and going through all of it becomes a chore. Instead, try to make your business plan as short and as concise as possible. Think of it as your elevator pitch (because, at the end of the day, that’s what it is). You will only have a minute or two to present it to investors (if there are any). Often, this means you will only want to have a one-page business plan with the most essential details in it.
What should you include? These following are often the right answer:
- Your business name and niche;
- The problem you are solving – and your solution. What makes your solution unique and/or cost-effective when compared to others?
- Your business vision, statement, and goal. What do you stand for, and what should people think about when mentioning your business?
- A short plan for the next few months. What do you want your business to look like, and how is it going to develop?
- The budget you will need to run your operations.
Of course, you can shape this to fit with your affinities, but the above are some of the basic things investors will want to read about when getting to know you and your business. Make it clear and easy to read, and you should not have too much trouble presenting your ideas. Limiting your format to one page, though, will force you to only think about the essentials – which is what you want.
As you may have noticed, a business plan does require you to think about budget. This can be scary – especially for new entrepreneurs. Luckily, you do not need to do it alone. If you are uncomfortable thinking about a budget, then make sure you call an expert or get a business planning tool that will help you with this task.
3. Figure out ways to reduce business costs
Once you set up your plan – and your budget – you will want to work on cutting costs. After all, running an eCommerce business on a budget is all about cutting as many costs as possible. So go back to your budget and start thinking about each cost. Try to think outside of the box and come up with alternative solutions to some of the problems you have.
For example, you might have planned to spend some money on your logo and branding. However, the internet offers a huge array of tools and programs that do this for you cheaply – or even for free. Take some time to explore your options and try to plan around these tools to design your own logo, and save a lot of money by doing so.
There are many other tasks that you can do yourself. Another example – at the start of your business, you will probably not need a marketing expert helping you develop your company. Instead, you can tackle social networking yourself. Explore various options that you have – and do not be afraid to experiment. However, the point to take from this is that you should always keep learning and exploring. You never know what you will be good at! Only if you repeatedly come up short should you consider expanding your team.
4. Try different channels to sell your products
Finally, another thing that will help you run your eCommerce business on a budget is finding the right balance of how much you will expand – and how much you need to do it. At the start, you might be tempted to stick to only one channel for selling your products – like your website, for example.
However, by joining a bigger seller as a third-party seller, you can not only expand your client base but bring a lot more income into your business. Amazon looms as a huge example for all eCommerce businesses. Usually, people just see it as a huge, unbeatable competitor. But listing yourself on Amazon will help you cover the market more than you could possibly have done alone.
And while it is true that they will take a small percentage of your sales, you will reach far more people – thus making more money in the long run. There are people who only use Amazon for shopping, for example, and you would not be able to reach them any other way. But that’s not the only benefit you will get!
Bigger outlets will help you test your product-market fit. You can make predictions on your product, and then just see how it does.
You can also get lower shipping rates if you are a frequent Fulfillment by Amazon user, as well as the name recognition that comes from working with a bigger platform. Once a familiar name vets you, you will be able to work with people who may not trust every online vendor.
Running an eCommerce business on a budget does not need to be a nightmare. What’s more, nowadays, there are so many ways in which you can cut down your costs. Whether you are using bigger vendors to expand your market base or learning some of the necessary skills yourself, you are sure to find a way to save money and still keep your business running. Just remember to be brave, persistent, and do not be afraid to take chances!