Technology has made it possible for aspiring entrepreneurs to launch businesses with ease and practicality. Now, you don’t really need a huge capital and a brick and mortar store to start selling. There are many tools available that even non-technical people can use to start an eCommerce business with just a few clicks of a button. There are also ready-to-use platforms that will allow you to start selling from day one.
While the process of launching an eCommerce business is much easier than in previous years, the incessant challenge of keeping it running and profitable still remains. The accessibility provided by the eCommerce industry has made this space quite competitive making it very critical for startups to run a tight ship, especially during the initial years.
If you own an eCommerce startup, below is a guide that could help you survive the first few years of your business.
Minimize expenses and overhead costs
It is quite easy to get carried away with spending money during the first few months of opening a business. While there are a lot of necessary expenses involved, it’s not unusual to give in to “wants” rather than “needs” during this time. Of course, who wouldn’t want to have a massive office space or that top-of-the-line piece of equipment? However, a smarter move is to limit expenses to what is necessary. This can make a huge difference during tough times.
There are many ways in which you can reduce overhead costs and expenses. For example, instead of buying a piece of expensive equipment, you can choose to lease this equipment instead to have a better cash flow situation. This will make it easier for you to make smaller payments instead of paying out a bigger amount in one shot.
Utilize innovative tech solutions
Many eCommerce entrepreneurs are either one-man shows or they only have a very lean team of employees. This is the reason why multitasking is very common in many eCommerce startups. While it may be ideal to have more employees to perform tasks, not many businesses have the budget to do so.
If you are overwhelmed with numerous tasks, investing in innovative services and solutions that can perform tasks for you is a great idea. There are now tech products that can automate various tasks in your business including marketing, customer service, accounting, report analysis, and many more. Using these services can help you boost productivity and save on costs because they allow you to focus on more critical tasks.
Outsource specialist tasks
Are you the type of entrepreneur who tries to do everything yourself, as much as you can? Well, you’re not alone. Many startup business owners are guilty of shouldering more than they can handle. The reasoning is because many of them think that this will save them more money or perhaps, they just want to be hands-on in everything that goes on in their business.
While there’s nothing wrong with being very much involved in the running of your business, there are times when you need to take a step back and entrust the task to an expert.
Keep in mind that your time is valuable so instead of trying to experiment your way on how to complete something, consulting a professional will be more efficient.
Outsourcing is also an alternative when you do not have the budget to hire a full-time employee. Most of the time, new businesses cannot afford to offer competitive salaries to highly skilled professionals so they tend to settle for mediocre employees. Instead of doing this, you can outsource the task to still gain the expertise you need without the costs of a permanent hire. Examples of such positions that you can outsource are SEO specialists, marketing professionals, and IT experts.
Protect yourself from costly tech issues
When you have a new eCommerce business, being the victim of cybercrime and data theft can be seriously damaging. This can cause delays in our operations and can even hurt your reputation. The financial consequences can also be very difficult to recover from, especially if you maintain confidential customer data.
What many entrepreneurs do not realize is that no matter how small the business is, they are still vulnerable to cybercrime. Studies support that keeping computers and laptops secure is critical for small to medium businesses as they are often the target of hackers due to their loose security measures.
You can safeguard your business from cyber threats by applying data security best practices such as installing anti-malware programs, updating your software regularly, and using strong passwords and data encryption. Having a backup for your data using a secure cloud solution is also another way to make sure your data will remain accessible in case of unexpected issues o hacks.
Create different revenue streams
When you open a new business, there will be people who will try out what you’re offering just because you’re new. This could work in your favor especially if you can deliver a great customer experience. However, no matter how stable or strong your business is going, expect that there will be a new competition that could steal those customers from right under your nose.
It is then important to not become complacent and rely only on a single source of revenue. You can diversify your revenue stream either by offering new products or targeting a new market segment who can benefit from your current product.
For example, if you are selling camping tents, you can expand your product line by offering other types of camping gear to attract your current customers to buy more products from you. Alternatively, you can try to widen your market by not only targeting direct consumers but also by going into the B2B route.
Making it through the early years
The first few years of running a startup can be very challenging. Not every business is fortunate enough to maintain their operations and still remain profitable after the first year. Thinking ahead and having a concrete game plan on how to deal with potential problems can certainly help you minimize the risks and threats you can face during the first few years of your business.
Nathan is a business advisor and business writer at Biznas. He has helped many clients solve their business problems and now imparts his advisory knowledge onto others to help them improve their businesses too.