February 1, 2015

Stairway to ... e-commerce

If you're, as I am, trying to start a business, you may find that in the mid way you'll need to take action to achieve the long term objectives. And that might be an e-commerce. Deciding what, when, how, where, and why could be a tricky process. Find out more:

The business idea process: 

From the moment you realize you have a good business idea, there are two possibilities: It's a good one, or not. You may think it is, but the answer will come from the market itself. Your customers have the last word on this matter. Anyways, your idea value is exactly zero. It will increase its own value once it becomes something real, and the business worth will depend on many variables, including the people who carry on.

There is no business, or idea, that will succeed, if there is no business plan. So if you don't know what I'm talking about, you better start learning about this. There are online courses to do it, or you can try the old fashion way (going to physical academies, college, etc). It won't be as simple as that, but it's a start.

I'd recommend a few platforms to help you achieve this step:

Google Actívate (Spain)

One of the best tools you'll get is a Business Canvas Model, that will give you the ability to see at first glance what, when, how, why, and where about your project. It's also a main step in order to convince angel investors that your project is viable, realistic, and goal driven.

Why should you do it? 

It's not (all) about the money, but about the great opportunity, qualification, means, resources, etc. You should wonder if you'd be wasting the chance if you don't, but more important, asking yourself what's the main reason that moves you to do it. Worst case scenario, you'll end up being the same person, but older, and much more experienced. Remember that any case is different, and you have to consider what age you are, if you have children or not... etc. It's never late, but everything must fit in on the project, even the personal situation you are in.

Whom will you sell to?

One of the most important basis of the project, if not the most, is your target. Even if it's modified along the unknown path, it'll start somewhere. Once you know whom you'll be selling to, you need to grow the business idea over it, and not the other way around.

For starters this will be a messy part of the project, since they'll think they know exactly what kind of person it will represent. But your idea, and your predictions will worth nothing at all. It's more a try and fail process. You need to "get out of the building" and ask around, get feedback, and start over and over again, until you end up with a "Minimum Viable Product" to a singular target. You'll understand more once you do the proper course in one of the platforms I recommended you to.

To get out of the building can be just making experiments in web analysis, or doing it literally, or both. You'll figure it out.

How long will this require?

In the past there was this idea about all businesses not having any profit for a certain period after the start. In fact, every business that showed this characteristic in its business plan, whenever they were looking for investment, was rejected for good, because it was unrealistic.

Fortunately, this mindset has changed over the time, as many people have successfully accomplished a positive outcome from a minimum investment enterprise. And I emphasize "minimum", not zero, because every endeavour in this field needs a basic amount of money, time, and resources.

You can get profit from the start, if you focus on this task by creating a clean environment in finances. It's simple: Reduce your expenses all you can, eliminate all the middlemen, and get the most revenue you can. Besides these, and even more important, create a trustful relationship with customers.

This process it's called: The LEAN STARTUP.

If you manage through all these advices you'll be positive balance within a year, if not months. You have to create a healthy economy, and surround yourself with a supportive kind of people.

Preparing the way:

At the beginning you'll be mostly all roles in one. So you need to set a few things: You need to know your business sector; you'll also have to manage your website/e-commerce; a proper customer service; of course you'll need a delivery system; and a product line whatever you decide to sell. But most important: A BUSINESS PLAN. As we discussed above.

So I guess you'll need a couple of months to prepare the whole thing, along with another few to create a first scratch of business plan (Canvas Sheet will be helpful, though). Once you have this figured it out, the creation process will begin. Oh, you wouldn't think you were all good to go, would you?

It means your v1.0 canvas will be much different from the final version once you reach a good MVP (Minimum Viable Product).

What's the MVP?

The Minimum Viable Product is the basic set of product or products, in the minimum costly or the simpler way, to start selling and therefore getting incomes. The sooner you can get income, the better.

Once you get some feedback from the first customers you sell to, you'll modify the canvas sheet, maybe the services, the products, or other parts of the business model, to please your new customers. In some way this behaves like the scientific method: Trial and error.

Starting the e-commerce:

Now you have done a few exchanges for your services, you'll earn some experience, modify some aspects of your business idea/model, and you'll have a modest, simple, working progress e-commerce.

But even if you're doing OK, you need much more than just sell: Web analysis, marketing, lawyer/s, business advisor, among other things. The position you show up in the web search engine (Google is not the main search engine in China and Russia, for example), the website itself (simpleness, efficiency, etc), the country's laws that will apply to you when selling in that country, etc.

As you can see in this chart, considering selling in a foreign country may be a good idea, but only if you have all this covered.

You will grow as much as you adapt to the market, you'll get better negotiation margins, more profits, and someday you'll consider getting an investment partner to escalate your project to bigger areas... or not. It's up to you.

Best luck! And thank you for reading!