When most people think of the American dream, many think of starting their own business. In fact, America is one of the most entrepreneurial countries in the world, with more than 4.35 million new business applications submitted in 2020 alone. This number shows a 74 percent increase from 2010 when America saw close to 2.5 million new business applications submitted to the US government. While small businesses have long held a place in both the American economy and culture, today, new eCommerce businesses are outgrowing physical stores. According to recent surveys, over 2.14 billion people worldwide are expected to buy goods and services online in 2021, with sales predicted to reach close to $5 trillion. In recent years, eCommerce has become the preferred shopping method for younger generations with the majority of Millennials and Gen-Xers in the United States stating that they preferred online shopping to shopping in physical stores.
Now that e-commerce has become the preferred means of shopping in the United States and various other countries, those looking to open their own business must now decide whether to open a physical store or join the growing number of e-commerce stores. While both physical stores and e-commerce sites come with their own unique challenges, entrepreneurs will first need to complete multiple steps before they can first start their business.
Choosing a Business Idea
When first starting a business, entrepreneurs must have an idea of the type of products they would like to sell, or at minimum, the market they would like to enter. Researching established businesses in a preferred industry will provide key insights for starting your own business and give entrepreneurs a better understanding of their future customer base. By learning more about different brand leaders, entrepreneurs can build a unique brand and deliver what other competitors do not.
One of the best ways to build a successful business is with passion, or more specifically, selling a product or service that you are passionate about. While selling a trendy product will likely make a large profit, it will not provide a stable foundation for a long-term business. When creating a business, look to your strengths and what suits your lifestyle; this will help to provide perspective during the business’s future challenges.
Once a business idea has been formed, the next most important step is financial planning. A break-even analysis is an excellent way to determine when or if their product or service will be profitable. The break-even formula is fairly simple and does not require consulting a financial expert.
Fixed Costs ÷ (Average Price – Variable Costs) = Break-Even Point
This formula will inform entrepreneurs on the minimum performance their potential business must achieve to make a profit. Suppose the break-even point is higher than expected revenues. In that case, entrepreneurs must decide whether certain aspects of the business plan such as suppliers or the number of employees can be changed. However, it is important to recognize that, on average, it takes a business anywhere between two to three years to become profitable.
One of the many ways a business’s success can be predicted is through its relationship with a third-party vendor. Companies in almost every industry must rely on third-party vendors for different aspects of their business; however, not all vendors offer the same quality of service. When searching for a B2B partner or third-party vendor, entrepreneurs are encouraged to take their time researching different vendors and see what their relationships have been like with past clients. Choosing a disreputable vendor can mean loss of potential customers, delays in production, and loss of sales and profit. Before agreeing to a business relationship, entrepreneurs should ask potential vendors what their experience in a specific industry has been, what growth they have helped their client’s achieve, their different pricing models, and if they have experienced any past delivery issues.
Marketing and Advertising
Understanding what customers want, how your customers develop trust for a product, or where your customers spend their time online can all be determined through marketing. Marketing is not only a tool needed for connecting with target audiences but can also be used to create and maintain product/service demand, improve reputation, increase relevance within the marketplace, and compete with the established competition. Without marketing, a business will likely lose out on a significant number of sales. Before selling a product, entrepreneurs must create a demand for it by building a demand following that will be there when the business opens its doors.
Company Website – Between 44-55% of small businesses do not own a company website. This is a missed opportunity, as recent reports have shown that a large amount of brand trust comes from a company owning a website. Company websites also provide a space for low-cost advertising in the form of SEO and pay-per-click advertising programs.
Social Media – Social media is an essential aspect of any marketing strategy and can help connect businesses with their customer, boost leads and sales, and increase brand awareness. When starting a small business, entrepreneurs are encouraged to create at least three social media accounts for their business.
How My Business Venture Can Help
From reading this article, you can see that starting your own small business is no small feat. From financial analysis to vendor selection, it can take many months before a business can be operational and even longer until it is profitable. However, another option removes many of the difficult steps of starting a business and can allow entrepreneurs to make a profit almost immediately. For over 27 years, My Business Venture has helped entrepreneurs create their dream e-commerce store by providing website hosting, custom logo design, administrative training, social media, and strategic marketing campaign services. My Business Venture’s turn-key superstore program offers entrepreneurs access to 24-hour secure hosting and over 5,000 top-selling products in various industries, including bath & beauty products, toys & games, electronics, gifts, office products, indoor and outdoor décor, and more. My Business Venture provides 100% free shipping for all website orders, savings its entrepreneurs thousands of dollars in vendor and shipping costs. In addition to website hosting and marketing services, My Business Venture also provides merchant account and secure payment gateways and encrypted shopping cart technology, essential security measures that small e-commerce businesses would normally pay additional fees for on top of other website expenses. It is easy to see why so many entrepreneurs have decided to partner with My Business Venture for building their next e-commerce business.