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Ten Steps to Establishing an Online Business

A computer lets you make more mistakes faster than any invention in human history — with the possible exceptions of handguns and tequila. - Mitch Ratliffe, Technology Review, April 1992, in Technology/Computers

Starting your own online business has many parallels to starting a bricks-and-mortar store or launching a consulting business. Even kids setting up a lemonade stand on the corner have to do a bit of planning. They have to estimate expenses and profits. They need a good location. They have to make passers-by aware that they have cool drinks available on a hot sunny day. And if they want repeat business, they have to make sure the product is delicious.

Disciples of the "if-you-build-it-they-will-come" way of thinking don't survive on the web. Your customers are out there, but they have to be able to find you.

The following are ten basic steps for building a successful online business.

1. Select and Register a Domain Name
Your business may already have a name and a customer base. If so, choosing your business name as a domain name may seem the most obvious way to proceed. On the other hand, if your business name says little about your business, you may want to reconsider.

For example, if you're in the business of selling patio furniture and your business is called Walker & Sons, Inc., walker-patio-furniture is more likely than walker-and-sons to attract customers who type what they need in the URL line. Having "patio furniture" in your domain name allows search engines to find you

By the way, the URL (which stands for "Uniform Resource Locator") will be something like http://www.walker-patio-furniture.com. While you're at it, you should also buy the domain name walkerpatiofurniture, even though it's a bit harder to read. Some folks who are looking for you won't remember the hyphens.

Once you've selected your domain name, go online to register it. The first step is to ensure that they name isn't already owned by someone else. You should also register your domain name with .com, .net, .info, .biz and .org extensions to make sure it isn't used by others in the future.

Consider purchasing a domain name that has great potential for online traffic. These are known as premium domains. In the above example, if patio-furniture.com is available for sale, build the cost into your business plan. It's easy to remember, highly relevant to your business and a popular search phrase.


2. Find a Web Host
Your web host is the service that stores, maintains and presents your web sites and provides internet connection to those sites.

Finding an appropriate web host isn't just a matter of choosing a service you can afford. You'll want reliability and good customer support. If you're business takes off, you may have to purchase additional server space in the future. You'll need appropriate bandwidth so that your web sites run quickly and smoothly. You should also check how often the web host performs backups of your site information.

Web hosts provide a wide variety of software options. For example, if you're selling products, you'll need database software to use as an online catalog of your products and a shopping cart setup for your customers.

Some web hosts offer free services in exchange for ad space on your sites. Resist this option vigorously as it subjects your customers to annoying pop-ups and flashy banners that may drive them away.


3. Design the Web Site
The do-it-yourself approach is tempting for new online entrepreneurs. It looks easy. Others have done it with some success. Hiring a web design professional is expensive. So is building a store. Would you really do it yourself?

A successful web site should look professional, with quality photographs and good writing, free of spelling errors. Navigating your site must be easy and fast, particularly downloads of graphics or other large files.

Again, avoid cookie cutter sites that are offered at no charge. You're stuck with their design and their advertising. Besides, your site should be optimized (more on that later) and you can't do that if you're not in complete control of its content.


4. Set Up Communications
One of the perks of a good web host is that e-mail is included in the service. Customers have to be able to contact you directly about pricing, special orders, returns, complaints and, of course, kudos.

Your e-mail address should be consistent with your site name, for the customer's sake. Walker & Sons might choose customerservice@walkerpatio.com.

Consistency and availability are critical to the success of your business. This is why reliability is so critical when choosing a web host. Imagine how your customers will react when you tell them your e-mail server was down three days last week!


5. Promote Your Web Site
Web site promotion may be among the most difficult and mysterious of processes connected with setting up an online business. While printing business cards, catalogs and flyers with your URL is relatively simple, making sure that potential customers browsing the web find you can be tough.

You won't be highly visible on the web unless search engines find you. And even when they find you, you don't want to be so far down the list of results that all your competitors' sites will be visited before your site. To achieve good placement with a search engine, you may have to achieve a numerical rating called a page rank.

The process of making your site visible to spiders and search engines is called search engine optimization, or simply SEO. Walker & Sons might do this by having plenty of text on their web pages that includes the phrase "patio furniture." Now, the process is much more complicated than optimizing on a single phrase. Suffice it to say that you'll have to study up on SEO if you want success online.


6. Provide Customer Tools
If your business is selling a large number of products, you'll have to provide a user-friendly online catalog for your customers to browse. The concept of a shopping cart is so well known that online catalog businesses can't survive without one. And at any time, your customers will want the ability to estimate shipping and handling charges.

Your site visitors will also want information such as your privacy and return policies. You'll need to set up a credit card system and a payment system such as PayPal.

The success of your business depends on rapid fulfillment of orders, timely response to inquiries and the appearance of professionalism. Clearly, a professional designer who can work with your web host to set up these systems is a valuable asset.


7. Build Your Brand
While the internet can give you access to fifty million potential customers, it also provides those same customers with thousands of competitors who've been annoying them for decades. In other words, you need sophisticated strategies to get name recognition while avoiding the many pitfalls of online marketing.

No one likes spam, annoying pop-up ads that won't go away, aggressive sales pitches disguised as information newsletters or promotions that promise everything from fee iPods to cash and then don't deliver.

Your marketing strategies should be based on thorough market research. You can purchase data or you can conduct your own surveys. Again, the services of a professional may be critical to the success of your online business. Building trust in your brand is your highest priority.


8. Sell Your Products or Services
Online selling requires another set of clever strategies. If a customer visits your site, you'll want to sell as many products or services as you can before the customer leaves. But you'll have to do this without annoying him. A satisfied customer is likely to return, particularly if he has a reason to flag your site.

Upselling and cross-selling are important strategies for online business success. This means that related products are strategically placed so that customers can see the need for related products. If you're selling shower curtains, you stand a good chance of selling shower curtain rings as well if you can remind customers that you have them in stock without putting on too much pressure.

Even the lowliest of fast food servers has been trained to ask, "Do you want fries with that?"


9. Generate Traffic
Attracting visitors to your web site is a lot like having mall shoppers drop into your boutique to browse. Once they enter your store, chances are quite good that they'll consider buying something if they're impressed with the appearance or utility of your products or services.

The trick to attracting customers is to analyze your traffic. What percentage of your site's visitors click on links to your products or services? Do you know the demographics of your visitors? Did a significant percentage of visitors reach your site in error? To return to the example of shower curtain sales, you may have failed to anticipate that many people who conduct searches on the word "shower" are looking for gift ideas for bridal or baby showers.

Traffic analysis is another service that a good web host can provide. Reports that 50,000 people visited your web site in a given month are useless if you didn't meet your sales goal. Effective software tools should provide the metrics that you'll need to check out trends and identify problems.


10. Maintain, Manage and Improve Your Business
An online business isn't a fire-and-forget venture. The information on your site must be current, correct and reliable. Catalog sites that sell products must have up-to-date prices and shipping charges. If the figures change, updates should be quick and easy.

A good accounting system is the backbone of a successful online business. Having expenses and income handled automatically saves you both time and money.

Finally, your business plan should include strategies for growing your business and timing its growth in increments. Adding new products or services is an obvious way to expand your online business, but improving cross-selling tactics or increasing traffic through strategic partnerships may be equally beneficial.

Your success as an online entrepreneur is a function of the effectiveness of your web site. Think of your web site as your store or business office. You wouldn't try selling wedding gowns off the back of a pickup truck just to save on rent and utilities. Putting up an amateur do-it-yourself web site would have the same effect.