Four ways to start an online business

Don’t underestimate the importance of giving your customers a sense of control. You may think you know better than they do about your market – you probably do – but allowing them to assemble their own product makes it far easier for them to feel satisfied and more likely they’ll whip out their credit card.

Four ways to start an online business

Selling services

The second category of online business is selling a service, usually locally. When Google and the other search engines first rose to prominence a decade ago, they provided the opportunity to cheaply market your firm on a global basis for the first time, which made it profitable to sell niche products to a worldwide customer base.

The flipside, however, was that if you ran a web development firm, for example, you’d find yourself competing with the world’s big design studios, even though your target audience was actually local businesses. This is why it’s so important for local businesses to make sure they rank well when potential customers search by location – for example, if you were a web design company based in Hampshire’s county town, you’d want to appear on the first page of search results for the query “web design Winchester”.

As usual, Google is ahead of the others in its support for local search results. To get your own local business listing, go to places.google.com and complete the form. I particularly like the fact that you can add photos or screenshots, specify which areas you cover and your operating hours, and you can even add time-limited offers to your listing.

Once the form is complete, Google sends a postcard to the address you’ve registered at to verify you’re authorised to create and manage the listing. Contrast this with Bing: if you live in the USA, you get a dedicated business portal for adding and updating listings; in the UK, you’re stuck with registering your business with a third-party, which then passes your details on to Bing.

Don’t underestimate the important of giving your customers a sense of control

Within service businesses I’ve noticed a strong trend toward “roundtrip solutions”, whereby customers expect to be able to hand over the problem to the supplier and, as if by magic, have a perfect end result delivered for minimal involvement.

You might have spotted that this is the precise opposite of the “do it yourself” trend – and you’re right, it’s quite a different audience. The trick here is to work out what your customers see as “the complete service”.

In web design, it would probably mean including hosting and web mastering in addition to design and build – but even within the design phase itself you need to understand how much involvement they expect. Many businesspeople simply want to say: “I’ll have one like that”, and have it magically assembled while they get on with the bits of their business that interest them.

This trend has become increasingly obvious over the past few years, and I think this is because people – especially businesspeople – believe they’re much busier than they once were.

Whether this is in fact true doesn’t matter, because it’s all about their perception. Offering a complete package with minimal customer involvement (although leaving them complete control) lets you charge a price premium and differentiates you in a crowded market.

Selling access

We’re used to the idea of paying for access to the local gym, cinema and theme park, or buying a magazine subscription to receive access to valuable information in a convenient form. A third category of online business is similarly based on selling access to information or resources.

Membership websites are typically built on the WordPress platform using an add-on to control access, and the challenge for sites such as this is that your potential customers may believe information should be free (since mostly it is). For a membership site to make money, you must either have information or resources that can’t commonly be found for free elsewhere, or else you must offer something extra.

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For example, many people are prepared to pay a teacher to give their kids extra maths or piano lessons because they respect that there’s a skill in teaching above and beyond the raw information.

That’s why you can often charge for access to a coaching program or training course, even when the raw information on which it’s based could be found elsewhere.

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