So you’ve finally managed to whittle down your list of ideas for an online business down to one or two potentials. First things first – well done you! Just getting to this stage is an achievement in itself!
Now the *really* tricky bit: digging a little deeper to see just how viable your online business really is. In other words ‘stress testing’.
Stress test to avoid a mess (er, later on)
How complicated or easy is your idea to explain? You’re customers are likely to be stressed, time-poor and have the attention span of a goldfish thanks to be being bombarded with scatter-gun, non-targeted and irrelevant interuptive ads. Every. Day. Of. Their. Waking. Life. (I’m one of them, clearly). With this in mind, you better make sure your idea or ‘proposition’ is as easy to understand as a Jack and Jill story. If it takes you five minutes to explain what you plan to do, then you need to think again.
Cashola. Moola. Dinero.
The real biggie is cash. How much money can you really make from this idea? If you’re selling smartphone covers, you’ll know that this is a highly competitive market to enter. The cost of making them will be low, but the profits will be too, given that the high level of competition will probably drive down your prices, meaning you’ll not make that much money – unless people buy lots and often (unlikely – if someone needs to replace their phone cover three times a year, something’s probably not right with the phone covers you’ve been selling them – meaning they won’t buy from you after the second one).
Talking of buying lots and often – just how many products do you think your customer will buy from you? Just the once or will they repeat purchase? If you can figure out how many times a customer might buy from you, it’s then possible to work out how much each customer is worth over time. Is it worth your time and effort if each new customer only spends £5 a year with you? If so, that low level of income per customers means you’ll need to attract 000s of customers a year to make any decent money. Marketing is expensive and you can’t sustain a business if it costs you £5 to get a customer to spend £5 on your website. On the other hand, if each customer is likely to spend over £100 over the course of a year, then you could be on to something.
If you want to find out more about setting up a blog, improving your social media campaigns or how to drive more sales online, get in touch.