Running an online business gives entrepreneurs an incredible chance to expand and scale their operations. An online business can operate entirely with virtual storefronts and digital real estate while an offline business requires a physical presence — offices, retail outlets, and kiosks in every location. Expanding the online business is simple, and scaling businesses to new heights can be achieved without the need for expensive outlets and physical locations.
Still, there are some major errors that newbie online entrepreneurs tend to make when they grow their businesses. From expanding too quickly to moving in all the wrong directions, the road to running a large-scale online business is paved with potential potholes and speed bumps. These five strategies are designed to help you achieve worthwhile business optimization, and take your business to new heights without endless difficulties and setbacks.
1. Stick to the 80/20 Principle.
Pareto’s Principle — known as the 80/20 principle — dictates that 80% of your returns — in this case, business profits — will come from just 20% of your actions. Your goal in running an internet business is not to do as much as you can, but to achieve as much as you can. Focus on the ultra-profitable 20% that contributes to your business, and eliminate as much of the fluff as possible.
2. Whenever you can, add products to service businesses.
Service businesses are a good short-term model, but as a long-term earning option alone, they are not good. The main issue with service businesses is the lack of scalability and long-term earnings potential. By running a service business, you are essentially tying a value to your time and trading hours for dollars. It is an effective use of your time to create a product, and use your time to amplify the sales of that product; which leads to the next strategy.
3. Package and sell your information.
Informational products are a major hit, especially in the online world. Informational products make up a huge percentage of online sales, anything from guides on mastering your online business to simple how-to sets for learning a new skill. If you have got skills that would otherwise only be valuable in a service business, why not package them into an information product that you can sell online?
4. Focus on marketing before you start your business.
The make-or-break component of any online business is that marketing. The internet is crowded, especially for small online businesses, and there is no chance to survive without a large customer or client base that knows how to find you. The world’s most profitable companies invested in marketing before they expanded their businesses, and you should too.
5. Set a value for your time, and don’t waste it.
You have set up your online business, invested in some manual and paid marketing presences, and have started to earn over $100 a day. The only problem is that it takes almost 12 hours to do it. Especially when you run an online business, there will be times you will rack up a reasonably impressive daily earnings total. Ignore it. Daily totals are deceiving and are not an accurate metric for judging online business success.
What is much more valuable is the amount of time that goes into that income. Set a minimum value for your time, and create an online business that gives you options on where to spend it. Sometimes services might be worthwhile, other times product-based work might be the best solution. Either way, set a minimum cost for an hour of your time, and design a business that allows you to earn above it.