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Business

How to Start an Online Business: Driven by Your Customers' Needs

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It happens so fast.

An initial idea that germinates and grows. Or a sudden epiphany that strikes like a bolt of lightning. 

Your new product or service idea begins to have legs, showing future promise after some basic research and counseling.

The problem is, there’s no clear path to getting over the startup hump. How do you take your online business concept from that nascent idea-stage to fully fledged, revenue-generating website?

Here’s a detailed guide to getting your new venture up and running online in no time (while avoiding potential pitfalls along the way). Let's look at the process of how to start an online business—one backed by a vetted idea and driven by customer need.

how to start an online business
How to start an online business and put your customers first.

Identifying, Vetting, and Crystallizing a Customer Need

You’ve got an idea.

But does it solve a real problem?

Many times, first-time entrepreneurs see the lack of competition as a good thing. But counterintuitively, it’s not.

Here’s how you can go through a quick vetting process to see if your idea has the legs to make it to the starting line.

The first step is to jot down a few notes about your initial concept, which will begin to give it shape and context. For example:

  • Purpose: Why do you want to do what you do (beyond money)?
  • Principles: How are you going to do it (based on standards, values, etc.)?
  • Vision: What’s the long-term outlook or plan for success?
  • Areas of Focus: What specific things or categories are you going to be responsible for?

This exercise, if completed thoughtfully, can help give you some direction or bring up additional questions that will need to be sorted through before firing up a new website (which we’ll get to in a little bit).

Another resource that might help in this initial brainstorming period is the Lean Canvas, which is a tech startup oriented resource that shortcuts a traditional business plan and keeps you more focused on action than writing. Another popular variation you can work with is The Business Model Canvas.

If you’re still in need of additional business planning resources, look no further than our Online Microbusiness Learning Guides, and our flexible business plan tutorial: 

Develop Your Customer Personas

A new business won’t succeed if people won’t purchase your new product or service.

That is the most obvious statement in the world. And yet, many first-time entrepreneurs set out naively thinking, “Of course people will want this new widget. Why wouldn’t they?!”

Only to go forward, investing tons of time, money and energy into something that they haven’t properly tested with the market, and unfortunately they fail miserably.

If you’re going to fail, or at least struggle initially, you should (ideally) find that out before investing too much, too soon.

To find this out, you’ll need to get clear on (a) exactly who your ideal customers might be, and (b) why they’d buy from you (instead of all the other options out there).

The most basic part of this is simply understanding basic demographic information. In other words, identify who your ideal customers are and what they look like. This information includes basic background info, gender, age range, household income (if appropriate) and personality characteristics of your target customer.

Plot this information in a spreadsheet, as you’re going to want to come back, revisit, and revise it frequently in the future. Here are some details to make note of as you build your customer persona(s):

  • Who are they?
  • What key information is important about their company or organization?
  • What is their gender?
  • What is their age range?
  • What is their household income?
  • What personality and characteristics are important about them?

For more relevant questions and a template to use to build your customer personas with, jump over to our comprehensive guide on the subject:

Once you’ve got some of the basics down, you need to drill further to uncover the challenges they’re facing, if your new product or service can help, and if there’s a good match.

What do you do next? Get outside of the office, as serial entrepreneur Steve Blank likes to say about doing customer development. The goal here is customer discovery, not sales. So you’re trying to uncover the big goals your customers are trying to reach in their day-to-day life. The obstacles they might hit along the way. And how they might like something to help them overcome these issues.

If you rush straight into your pitch at this step, it’ll likely fall on deaf ears because they might not know if they even need something similar to what you’re offering at this point, and you won’t know them well enough to communicate it effectively.

Get on the phone, LinkedIn, Facebook, or simply send cold emails at this point to people who might be a good potential customer one day, with the simple goal of getting to understand what they’re facing better.

Again, you’ll want to jot these notes down as you speak with more people, noticing the trends and patterns that keep popping up from your interviews. As you're speaking with potential customers and probing, here are a few of the types of questions to find answers to: 

  • What are their goals?
  • What main challenges do they face?
  • What are their pain points (the symptoms of the obstacle)
  • What are their common objections?
  • How can you help them (outcomes provided to relieve their pain points)?
  • What marketing messaging should you emphasize to them?
  • What is a pitch that would possibly resonate with them?

For each consideration point, also make note of the strategy that you could use to solve their issues and how you could reach these potential customers effectively.

After you’ve started working on customer development, next you'll want to get a lay of the land. Specifically, it's time to go out and find all of your direct competitors (or companies offering exactly the same thing more or less) and indirect alternatives (not the same, but similar enough that your future potential customers could go to them instead of you).

Craft Your Market Positioning

The first mistake many make is believing that no competition for your new business is a good sign. It’s not. It means you probably won’t have customers, either.

Realistically, your new fledgling business (which probably doesn’t even have a name yet) will have many, many competitors. That’s OK!

The trick is to understand what the majority of them are doing, and then figure out how you’re going to fill a void or gap in the marketplace that they can’t (or won’t).

A brilliant (theoretical) model to follow comes from the book, the Blue Ocean Strategy. Instead of competing in oversaturated ‘red oceans’, the goal is to find open ‘blue ones’ where you can compete on different levels from the competition. For example: 

  • Instead of competing in an existing marketplace, build an uncontested marketplace. 
  • Rather than exploiting an existing demand being filled by your competitors, create and capture a new demand. 
  • Instead of trying to beat the competition, make them irrelevant. 

So how, exactly, do you make your competition irrelevant?

You raise, create, reduce or eliminate certain parts of your idea to find a unique angle and spin on delivering a better, faster, or cheaper alternative to the customer.

Positioning Excercise
Positioning factors
  • Raise: Which factors should be raised well above the industry standard?
  • Create: Which factors should be created that the industry has never offered?
  • Reduce: Which factors should be reduced well below industry standards?
  • Eliminate: Which factors that the industry takes for granted should be eliminated?

Going through this exercise is kind of a theoretical experiment. But it forces you to think through all of the interactions and compare them to the new-found knowledge of your customers' problems that they’re struggling with.

One easy, concrete way to get this process started is to go through the competition’s websites, noting what features or unique selling proposition (USP) they’re emphasizing, and to which customer segments they are marketing.

After some basic research, turn your attention to your new product or service idea. Jot down the different compelling characteristics or features of it, and how to ‘frame’ those in the mind of the customer with concrete examples or outcomes they should expect. 

In a spreadsheet, answer these questions to discover your competitors' market positioning: 

  • What is their company name and website address?
  • What is their USP, and what features do they emphasize?
  • What customer segments are they targeting?

Once you have this information in hand, you can craft your USP to stand out competitively. 

Consider what features you'll offer, what is unique about them, and what benefit they offer to your target customers. Also, clarify the outcome you're aiming to accomplish for your potential customers, giving concrete examples of the results you'll deliver.

Here is an example of the types of fields you'll want to add to your spreadsheet, so you can track competitor positioning and craft your USP competitively against them:

Market Positioning Excercise
Market positioning sheet

Going through this research phase doesn’t sound very fun. It's a bit of work. But it does help you hopefully avoid any painful marketing mistakes that could hurt you down the road.

If you want to go the extra mile, consider even doing a basic financial model now that you have some detailed industry information.

And the good news is that we’ve now arrived at the fun part: putting your website together.

Creating Your New Website

Putting together a website for your new fledgling enterprise isn’t just a simple, thoughtless task. It's a critical step in starting an online business. 

The first step for customers today, upon hearing anything remotely related to your business, will be to go to your website.

You need to plan, design, and then launch your website. 

Sure, information gathering is a huge piece. But your site needs to go way beyond an ‘online brochure’ if you’re expecting to start making any money from this new online venture.

Instead, your site needs to instantly deliver credibility, have an aesthetically striking design, and be simple to use, if you want customers to come back and visit again. It also needs to provide essential methods to capture new lead information and process basic transactions.

The good news is that there’s a plethora of simple, affordable options to choose from. WordPress is the most popular and powerful of the three top Content Management Systems, while Shopify is ideal for eCommerce ventures.

Design Your Website

Many equate design with visual aesthetic. They’re not wrong, but it does go a bit deeper.

Steve Jobs put it best, once saying, “Design is not just what it looks like and feels like. Design is how it works.”

With that in mind, consider how the layout of your new website might help (or hinder) people from finding what they’re looking for. That could mean everything from the general layout of the homepage to how you’re structuring the main navigation and pages underneath each major section.

Our ThemeForest marketplace also has a bunch of high quality WordPress themes and Shopify themes to choose from. A professional theme gives you not only the features and built-in options your new website needs, but also a great design to start with.

For example, Savoy is a minimal, elegant option with a beautiful design for WordPress and WooCommerce sites:

Savoy WooCommerce WordPress Theme
Savoy - WooCommerce WordPress Theme

While HandMade is a more contemporary, full-width site design:

HandMade WooCommerce WordPress Theme
HandMade - WooCommerce WordPress Theme

On the Shopify front, Material includes a host of special features specifically to help eCommerce sites sell more:

Material - Responsive Shopify Theme
Material - Shopify Theme

Your design should also take into account elements of your site which will assist sales. Trust is a key component in sales, and building it can be a high hurdle when nobody yet knows who you are.

Credibility indicators can help, though, which include everything from your address and phone number to interesting statistics that bolster your claims, press mentions or customer testimonials.

For example, the Primally Pure website uses testimonials from other notable bloggers in their niche to highlight the quality (and credibility) of their natural skincare products:

Primally Pure
Primally Pure - website

Marketing Your New Website

Yes, SEO can be extremely valuable for businesses, as search is one of the top drivers of new customers. However, it’s nearly useless for brand new websites as algorithms are designed to reward sites that are popular and authoritative on relevant topics (which your site isn’t yet).

In time you’ll want to focus more on it, but for now, you should put your limited time and money into more proactive forms of traffic (instead of just sitting around, hoping the SEO gods will smile upon your site one day).

First and foremost, start with your personal network. Beyond the obvious friends and family, LinkedIn’s prospecting features make it easy to reconnect with past colleagues. You can also use it to find which of your connections are connected to influential people who might be able to help you with exposure.

Other forms of referrals include top bloggers and journalists in your new niche. Try to partner with them in a variety of ways, including:

  • product/service reviews
  • contests
  • guest posts (and other forms of content marketing)
  • cross-promotions
  • affiliates or revenue sharing agreements

The aforementioned Primally Pure does a great job working with bloggers on product reviews, as a quick Google search shows:

Search results
Product review search results

Advertising, if done correctly, is also a wise investment. For example, if you pay $100 and you make back $150, then you can take that profit and keep reinvesting into your online business marketing.

Direct response-style advertising, like Google AdWords and Bing Ads, can be great for reaching people expressing intent in your product or service (i.e. typing in exactly what they’re looking for).

Google Shopping Campaigns and Facebook’s Dynamic Product Ads are perfect for eCommerce companies.

And of course, social advertising through Facebook, Twitter, LinkedIn, and StumbleUpon is a great way to increase brand awareness and distribute content.

Which brings us to social media.

The best social marketing strategies blend content publishing, community management and customer service (which isn’t always easy to pull off).

Before diving head first into the deep end, take a look at brands you like and reverse-engineer what they’re doing. Contrary to popular belief, the big brands with the most fans are not always the best examples to learn from.

Instead, look at small, independent online business examples (because that’s what you are, after all) who have a unique sensibility with a caring, engaged community supporting them.

Little Baberham is one such example, where their Instagram successfully highlights and promotes their products through interesting and engaging content (without being overtly pushy or too 'salesy').

Little Baberham on Instagram

You might even want to combine techniques for best success. For example, increase the reach of content by using Instagram’s new advertising options. Check out these 37 Instagram ad examples for more.

Starting an Online Business: Your Journey Forward

There’s no map to successfully getting your online business off the ground. But the journey is part of the process; learning, growing, and iterating along the way.

Start by researching who your potential customers are, and getting an overview of the new potential marketplace to understand where you’ll fit in.

Choose a flexible but professional website platform like WordPress or Shopify to make your life simple, and focus on what’s most important. And explore a variety of marketing or promotional methods to figure out which ones work best for you. 

Here are showcases of popular WordPress themes and Shopify templates to find the best one for your online business: 

Starting a new business online is never easy. But that doesn’t mean it has to be risky or impossible either.

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