This article describes the approach based on the best experience and practices of how to start a small business online. First, I want to mention that this article is mostly a practical guide. It represents the sequence of steps, which can help you to evaluate a business idea. These steps may seem a bit complicated, but I’ll do my best and provide you with many examples and explanations as possible. The approach in this article answers the question of how to start most of any businesses. It can be a business online, a youtube channel or you are planning to start a lipgloss business, and want to run your business at home, or you want to know how to start cleaning business from scratch and even the answer for the question of how to start a wine business can be found in this article.
The sequence of steps we have to pass to know how to start up a business is next:
- Know your small business Ideal Client.
- Determine Market Size.
- Analyze Competition and Niches.
- Generate Marketing Ideas.
- Write a Business Plan.
Know Ideal Client, Customer Profile, and Buyer Persona Examples of your Small Business
What is a customer profile of a small business?
The definition of customer profile says that it’s a set of characteristics that describes a person or company of a target audience. These characteristics can vary depending on the type of small business,but most common of them are location, language, age, gender, habits, education level, income level, etc.
How can an ideal client profile help you to start a business?
If you are planning to start a business, have an idea, and ready to invest some money, there are always lots of questions come up (How to promote goods or services, How to write a business plan, How much money do I need to start a business, What should the Logo look like). We have to research to get answers to these questions. The starting point is an ideal client profile. The profile of an ideal client is like a basement, on top of which we can make some logical conclusions of market capacity, level of competition, marketing ideas, advertisement strategy, etc.
How to create a customer profile for a small business?
It is not that difficult to determine age, gender, and location, but most important is to focus on the behavior of a customer. We have to keep in mind that we want to reach our customers, tell him or her about our product or service, and do that at the right time and in the right place. That’s why we have to think of customer’s interests, what actions they take, what habits they have. These small business customer profile examples will help you better understand what I’m trying to say:
- Office workers are one of the common customer profiles for restaurants. They come for lunch, their time is limited, because they have to go back to work soon, and their office located somewhere around.
- Parents can be ideal clients for confectionery when they are looking for a birthday cake. One of them every day drives children to school.
- A couple of people can be the target customer profile for photo agency if they about to marry and recently were in the bridal salon.
As you see, these simple examples tell us that under some circumstances, people are looking for particular goods or services and creating market demand for them.
Determine your Market Size before Starting a Small Business
When you know the target audience for your small business, you can start to measure the size of it. This indicator will help us to make the first step to understand the potential revenue of the business that we want to start. We can use different tools and methods for that:
- If you want to start a business online and customers supposed to find you on the internet, then the best idea is to go to look for average monthly searches for the product or service in a particular state or region. Each search is a potential customer. Using this number, we also can get the percentage of the population that is interested in the product across the country and apply it for a region, city, or town.
- If you want to start a business at home and your customers are neighbors. You can easily count the number of homes or apartments and suggest how many potential clients live in them.
Competition and Business Niche
When your know the target audience and the size of the market, you can suggest a market share and potential revenue. Forecast of the revenue of the business that is not started yet depends on many factors. They are very common, and most logical of them are the relation between quality and price, marketing promotion budget or brand power (if you want to start a franchise business), and of course level of market competition. A big budget for advertisement and promotion can boost sales up in the beginning. However, the product quality will come to the fore in the long term. Thus, when you are starting a small business, you need to make an expert judgment about the target market share and potential revenue you want to achieve.
Please note that strong competition is in a large market. For example, you want to start a business online and deliver flowers. There are a lot of bouquets sellers in almost all cities, and most of them have a delivery option, and those who big enough can pay a higher price for internet advertisement. But competition is generally lower in a business niche. If we talk about flower delivery, we can look for a niche of specific flowers or bouquets for special events. It would be easier to find first clients and to start a small business in these business niches, rather than target a large audience where it will be hard for a client to find you among other companies.
Small Business Marketing Ideas
Marketing for small business will be more effective if it is based on marketing research that we’ve done in previous steps. This information can help to target specific clients that have a higher conversion rate. It means that between people who saw the product will be many of those who will buy it. Take a look at these marketing ideas:
- Online and digital marketing for a small business can be built on top of a niche with a specific keyword. This keyword can be used in a domain name or product name, and it also can be used for internet advertisement and promotion.
- Social media marketing for a small business can be based on your target audience interests, and you can buy specific posts or social media promotions. Some of them can be very effective and inexpensive.
If you are planning to use digital marketing for a small business, pay a bit of attention to the logo of your company. It should be well suited for websites, applications, social media, and internet advertisements.
Write a Business Plan
When all information is collected, it is time to put it on paper and write a business plan for a small business. The plan will help you to look overall business model and evaluate its critical points.
It is a good practice to start a business plan with a market forecast and your expectations about it. You can multiply it on your target market share and get a first revenue forecast. You can add website traffic and sales conversion rate to the business plan template if you are planning to start a business online. The main purpose of doing that is to get the most objective business model and analyze the risks it contains. It is not necessary to go deep and calculate measurements like NPV or IRR. But business plan with revenue and profit targets can help make the right decisions on how to start a business.
You may need an accounting app for small business to write a business plan, track expenses and income, and analyze them.