Online Business Planning: Basic Principles
It’s easy to think the fundamental rules of business planning and operation have changed with the rise of social networking, apps, smart phones that do everything but prepare dinner, music and books delivered electronically, and viral marketing. They haven’t. In fact, the cycle of booms and busts that we’ve seen over the past decade reinforce some of the following well-worn truths:
Profits matter. Not long ago, investors evaluated e-businesses based on how many eyeballs or clicks they’d attract — how many people visited and took action at a website. That’s still important to advertisers. But today, the measurement is back to basics. What are you selling? How much revenue will you generate? What costs will you incur? How many dollars will make it to your bottom line in the form of profit?
Costs matter. In the aftermath of the Great Recession of 2009, as it has now been dubbed, business owners are once again spending money as if it were their own — because more often than not, it is.
Customers matter. Just look at the reviews on Amazon or TripAdvisor, and you’ll see how much customers — and customer satisfaction — matter to Internet-based companies. The chief way web-based retail companies have been able to win trust, in fact, is by providing top-notch customer service.
Your value proposition matters. Your value proposition is also called your core-marketing message or your unique selling proposition. When figuring out your company’s value proposition, ask yourself the following questions.
Who’s your ideal customer?
What problems or challenges does your product solve for your customer?
What results or benefits can your customers count on?
What makes your product a better and more valuable solution than any other offering on the market?
How does your offering deliver value beyond the time and money customers will spend to obtain it?
Service matters. This is one of the big lessons of the technologically centered 1990s. Today’s customers demand double doses of customer service, which means that you have to know your customers. Here are some tips for knowing your customers and anticipating their needs:
Know what they want from your website.
Know what kind of equipment they use so that your site is compatible.
Watch for user responses and reply immediately.
Set up 24-hour, toll-free phone lines for live help.
Send customer comment cards with product deliveries.
Send thank-you notes or gifts.
Remember that online customers are like all other customers: They value prompt service, clear communication, and proof that you appreciate their business.
Expertise matters. If you plan to run a billion-dollar enterprise, be sure that you have people with billion-dollar expertise onboard.
Your business model matters. The lessons don’t get more basic than this: To stay in business, you need a business model designed to bring in more money than the combined total of your costs and expenses.
Some businesses manage to earn enough from click-through ads. Others sell products or services via their websites. More and more businesses are combining a variety of revenue streams to make their web businesses profitable.
Patience matters. The newer your new business concept, the longer it takes to win market acceptance, so you need to factor the time lapse into your business plan.