Starting An E-Commerce Business

Choosing the right industry and product is the foundation of any successful e-commerce business. There are several starting points you can choose to begin at.

Identifying a market gap or a problem that you yourself have faced, and then research the demand and competition for products that can solve that problem. If you have experienced a problem that no one else could solve it’s likely that other people would have faced that exact same problem. You could also ask family and friends as a basic form of market research.

Consider your own interests and expertise when choosing a niche, as it will be easier to market and grow your business if you’re passionate about what you sell. If you have a hobby or interest that you feel has a large enough user base to support a business you’ll likely have knowledge of what customers like you want and need giving you a great start. Knowing the community also means that you’ll have a great insight into how to market to them.

Using your own work experience is another strong avenue to pursue. If you’ve been working for several years you’ll have a wealth of knowledge of your industry, how it works, what customers want and how to operate successfully in that area. Now you can use that as a platform for your own business.

Conducting market research is crucial to understanding your target audience and competitors. Start by identifying your ideal customer and their needs and preferences, and then how you can fill that need. Understanding your customers and who they are is a vital part of setting up any marketing plan. For some companies they will only need one customer profile if the market is a narrow fit, for example a plumbing supplies company that supplies independent plumbers in the local area. Other companies will have several different customer bases that all must be considered, supermarkets for example need to cater to several different age profiles and lifestyles in order to maximise their revenue.

Analyze the market demand and trends: Is the industry growing, shrinking or maintaining a solid base over a number of years? Growing markets offer obvious opportunities to add a new supplier into the mix and possibly to establish yourself as a name in the market. Mature markets can leave a place for new businesses to come in and offer something new, particularly if the established companies are stagnating and not innovating. Whereas shrinking markets should generally be avoided as competition among the existing players for market share will be fierce.

Once you have this information you can then, if budget and time allow, do some proper market research and speak to your potential customers and see what their thoughts and feelings on your proposed business and pricing structure are. If you do this it is vital that you take their feedback on board and not disregard it because it doesn’t fit with what you expected. Even at this stage you still have the opportunity to re-assess, pivot or avoid the trap of continuing down the wrong road.

A well-written business plan is essential to the success of your e-commerce business. It should outline your business objectives, strategies, financial projections, and operational processes. A good business plan will help you secure funding, make informed decisions, and stay focused on your goals.

Financial projections are one of the most important parts of this process. Most new companies in Ireland (and across the world) don’t fail because they can’t make a profit, they fail because of cash flow issues. Many businesses that close in their first year are in the unfortunate position of showing a profit on paper, but because they couldn’t keep the money on hand to pay their bills and suppliers were forced out of business. If you can’t work in some slack in your business projections to account for unforeseen costs or slow payment on sales then it’s going to be very difficult and stressful to keep the business afloat.

Sourcing funding for your initial start up might come from some places you hadn’t considered. While your own funds are always available there should be some serious consideration given to other methods.

Partner(s): While it can be an attractive idea to go it alone, reap 100% of the benefits and answer to no one this is not always the best option. The old adage “If you want to go fast, go alone. If you want to go far, go together” can apply. Partners can not only offer capital and working cash to operate the business with, they can also add new perspectives, halve the work commitments and be a valuable sounding board for your own ideas.

Government Grants: Local Enterprise Offices are a great resrouce for SME’s and offer several grants to set up and grow your business. Micro Finance Ireland also offers loans to businesses with less than 10 employees and sole traders. If you feel you have a business that could be a fast growing and high value company Enterprise Ireland can offer a range of supports.

Private Grants: There are a few private grants for new companies particularly companies looking to improve their online presence. These can also be paired with government grants at the same time allowing you to reduce costs further.