Planning your online business is the first step you need to do in order to start making an income online. The internet and digital technology have revolutionized about everything we do and also the way that we conduct our business.
However, the planning of your online business needs to take place in a world that is changing faster than we can learn. Indeed, concurs Barry Ritholtz in Bloomberg: “Creative destruction caused by technology is so rampant that it is practically a cliche. It is easy to ignore not only the speed at which disruption caused by technology is affecting society, but the acceleration in the pace of change. This acceleration and its effect on markets, companies and labor are astonishing.”
The offline retail sector took the brunt of the digital revolution. Hordes of retailers went out of business because they failed to adapt their business models to fit in the new online channel. They couldn’t better the value that online retailers offered to their clients. Online retailers had a cost advantage that enabled them to lower prices with the same if not better margins than offline retailers. Furthermore, they offered a wider selection of products; and increasingly better service because of personalization and interactive communication.
Although the pace of change around us seems to increase exponentially, you’ll still need to do the planning of your online business in a structured way.
Planning your online business in a structured way
Most of us want to be in business to win, to outperform our competitors, and most importantly to make money. However, before your register a domain and creating a website, you need to know where you want to be with your business and how you’re going to get there.
In other words, you need to have a vision, mission and goals.
A Vision for your online business
You have to be able to communicate a vision of what your online business is all about and where it wants to be in the future. A vision needs to describe the aspirations of your business.
Jeff Boss writing in Entrepreneur.com list the following eight ways a Vision Statement adds value to your business:
- A Vision statement offers guidance. It articulates what the company aspires to be at some point in the future.
- Vision statements set decision-making boundaries. Every decision that employees make should be governed by the company’s overall vision.
- Vision statements serve as behavioural boundaries. They may include the values that companies holds dear which, in turn, outline ethical – and subsequently, unethical – behaviour.
- A Vision statement instils emotion. It reminds us why we chose our place of work and give us reason to perpetually pursue the purpose for which the company stands.
- Vision statements spur growth. A compelling vision acts as a call to action for individual and organizational growth.
- Vision statements keep curiosity spurning. It is one way to keep the mental hamster wheels spinning because achieving a vision isn’t necessary the intent, but learning along the way is.
- The Vision statements allow difficult conversations. You can easily refer to the vision and ask, “How does your behaviour support our vision?”
- Vision statements enable leadership. It reminds current and aspiring leaders to fulfil their leadership responsibilities by adhering to the strategies set in place to pursue that vision.
Here’s the Vision Statement of eBay (Smart Insights):
eBay pioneers communities built on commerce, sustained by trust, and inspired by opportunity. eBay brings together millions of people every day on a local, national and international basis through an array of websites that focus on commerce, payments and communications.
And now for your online business’s Mission Statement…
Your online business’s Mission Statement
The mission statement communicates the overriding purpose of your online business. It’s also about how your business is going to get there.
Your online business’s mission sets the stage for the entire life of the business, and it should convey the following 1:
- It should clarify the reasons why that business exists;
- Which are the target markets for your business?
- What types of needs will your online business be addressing?
- With whom and where will you do business?
- Which are the products or services that will be provided to the markets?
- What technologies are you going to utilize to do your business? and,
- Which innovative and differentiated approach will you pursue in relation to the potential competitors?
The vision and mission statement of Amazon.com is the following: “Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online” (The Balance).
The vision/mission statement of Amazon.com communicates exactly what their business is about.
Business Goals – realizing your vision and achieving your mission
The mission statement sets a clear direction for organizational activities and establishes a focus that facilitates joint efforts toward predetermined long-term goals. However before you can pursue the long-term goals and objectives of your online business, you need to develop strategies to determine the course of action to take and the allocation of resources necessary for carrying out these actions 3.
Therefore, whether a firm is an incumbent or new entrant, it must formulate and execute an online strategy if it is going to have a sustainable competitive advantage. This entails answering four important questions 2:
- Where is the firm now?-that is, how well is it doing? What is the basis of its performance? What are its strengths and weaknesses? Are there any threats and opportunities that it faces?
- Where does the firm go next? Given the firm’s performance, its positioning relative to its rivals and competitive and macro environments, it may want to pursue different goals.
- How does the firm get there? Pursuing new goals usually means finding different ways to achieve them.
- How does the firm implement the decisions to get there?
The business plan – putting your planning together
After you have analysed your market research, set your goals and identified what you need to start your online business, you may write it all up in a business plan. A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them.
The structure of a business plan typically looks like this:
- Executive Summary.
- Business Description.
- Market Analysis.
- Organization Management.
- Sales Strategies.
- Funding Requirements.
- Financial Projections.
Visit eBizplan’s Business Plans page for more info and a quote…
If planning your online business is not done, or not done properly, you’ll be left with a bad website. According to Digital Impact (UK), over 70 percent of people claim they wouldn’t buy from or use a poorly designed website. A bad website isn’t just not helping, it’s a dead weight tied around your business, alienating your users and holding your business back.
And a poorly designed website is in most cases the result of an online business without a business model and business strategy.
1 Gandellini, G. and Venanzi, D. 2013. Strategy for action–II: Strategy formulation, development, and control, Springer Science & Business Media.
2 Afuah, A. and Tucci, C.L. 2001. Internet business models and strategies, New York: McGraw-Hill.
3 Andersen, T.J. 2013. Short introduction to strategic management, Cambridge University Press.