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The more thoughtfully you implement your ideas when starting your online business, the fewer actions you’ll need to undo or redo later.
It’s easy to get paralysed by fear or indecision or to be too perfectionist though. So, be ready to test your ideas, learn and try again, aiming for the happy medium between planning and doing.
Do put some thought into risk management and intellectual property protection though by being aware of the issues, examining them and then doing what’s feasible and desirable to reduce them so you’re not gambling with your future and take calculated risks.
You have to start to be great so do commit to starting your project, spending as little as possible in the testing phases.
Find your starting point
To reach our goals in life we need to be at the right starting point for the steps we’re about to take.
Where you start on the journey when setting up your online business impacts the actions you’ll take towards your desired end goals. For example, if you haven’t yet worked out how to position yourself in the market you’ll need to do that first before spending money on branding and expensive designs.
Being mindful of where you are right now will help you to reach your end goal faster and more effectively because you can more properly plan how you will get there.
If you have chosen your niche and decided who you want to serve your starting point will be different from someone who has yet to identify what product to sell.
How to unpack your knowledge and skills, work out what to offer the market and who to serve is a large subject which I’ll cover elsewhere.
In this piece, I’m going to assume you’re ready to set up your online business and start selling.
Even then your starting point would differ from someone who has already tested their concept. Testing the market response to your ideas is so important.
Online businesses can be set up very inexpensively, so it’s easier to test your concepts first, and it’s extremely important to do so.
If you invest too soon in a name, branding, logo, designs and website development etc, and haven’t sorted out basics like what the market reaction to your offering might be, you may be wasting time and money.
As they say in Maine USA when you ask for directions “you can’t get there from here”, This is an observation of the impossibility of traveling a direct route between many places in that state. It has something to do with lakes and the organization of roads in the vast rural areas of the state.
Business is similar. It may be impossible to get to where you want to be from where you’re currently located. The quickest route depends entirely on your starting point.
Structuring the business
When you’re at the proof of concept stage many of the decisions you will be taking will be temporary in nature. Perhaps don’t use a name you’ve set your heart on yet, as everything involved with names adds to your expenses, and the aim during the testing phase is to spend as little as possible. However, it does depend on the business model of what you’re creating. For example, if you’re setting up a fashion label, the costs of branding, naming, trade marking, and design work are unavoidable in the testing phase.
Once you’ve tested your concept and have a viable business opportunity to pursue, the next step is to decide on the structure for your business and to create your brand.
Incorporate or not?
The first decision is whether to form a company and trade with limited liability or whether to operate as a sole trader.
It’s cheaper and less complex if you don’t incorporate. You could simply trade using your chosen brand name and later, once your revenues justify it, set up a limited company.
If you’re not intending to use a company as your trading vehicle yet then there is no need to form a company to claim your desired name. The way to claim rights over a name is through trade marks rather than company formation. So you would trade under your desired brand name, and then once you form a company later when you’re ready, you would still be able to continue trading under the same brand name. The name of the company does not have to exactly match your brand name.
On the other hand, if you do want to trade through a corporate entity (for example, to limit your liability even if your profits don’t justify the cost of incorporation) then it’s very cheap and quick to form a company using company formation sites online. Note that your running costs will be higher than trading as a sole trader but that might be the price you’re willing to pay for limiting your liability.
For more information and advice about structuring your business, speak to a lawyer and accountant. Questions you will need to address are your tax position, and where to locate your business if your home base is in more than one country. Online business gives you the freedom to work from anywhere so there may be advantages in locating your business in a particular jurisdiction. The position does depend on how long you will spend in each country.
Names and domain names
One of the earliest considerations for any business will be its trading (brand) name.
It is not widely known that it’s not possible to use whatever name you like. Just because a domain or company name is available to register does not mean it may be freely used for whatever type of business you like.
It’s necessary to identify a suitable name that
- Firstly, can function as a trade mark and
- Secondly, is legally available, meaning that someone else doesn’t have rights over it.
There is a lot to learn when it comes to naming so I recommend taking the time to focus on the Intellectual Property dimension as this is key not just to naming but to branding your business as a whole. IP is highly relevant for online businesses as there are many copyright and trade mark considerations to address.
One to one consultancy with a lawyer tends to be expensive and isn’t the best way to get the information you need on IP to create your digital product or set up your online business. Instead accessing Legally Branded Academy 2.0 gives you affordable, comprehensive information
This provides the advice any business needs whether at a startup stage or later as it grows and develops. There are essential templates to use included which ensures your online business is protected.
Branding is a large subject. To come up with a brand proposition that’s compelling and unique involves working out your purpose, positioning, brand personality, values and more. You’ll need to have a clear vision for your business and mission.
Do take time to think strategically about how you want to position your brand to get noticed. This might involve an ongoing process revisiting your ideas, particularly in the face of feedback from the market. So, if you’re thinking of engaging a designer or agency to “brand” your business and create your logo consider using some temporary designs initially until you’re very clear about your future direction. Possibly find a name you’re keen on and then get help from a branding agency.
There are a few other key areas you’ll need to focus on when setting up your online business, such as your website and contractual documentation which I’ll briefly touch on now.
Website and Documentation
Unless you’re getting a low-cost website with little functionality do take legal advice before engaging a web designer or developer. This is especially so if:
- your website involves complexity
- you are paying what represents a substantial sum of money for you.
- You have strict timescales to meet.
- You’re engaging web developers in distant locations sourcing them through platforms like Elance or People Per Hour.
To set yourself up for success make sure your formal agreement secures the necessary rights you need in the resulting website.
Buyer beware is the law’s approach. So, when it comes to websites and any other software development project the buyer has a lot more to lose than the seller if there is no written agreement in place.
As well as the basic contracts any online business needs, such as terms of business, website terms and privacy policies, there may be other contracts you need depending on your business model.
In conclusion, avoid doing things in the wrong order and your path to success will be much swifter.
Some people tend to waste time and money because they focus on branding and expensive designs and a website, before they’ve thoroughly thought through their product offerings and nailed their business model.
Setting up an online business is relatively straightforward and cheap to do. You can have a basic website up and running for very little cost. That’s why it’s ideal to focus your money and energy on testing the market and properly thinking through your proposition.
Starting your venture on the right footing and developing your ideas correctly will enable you to get ahead far more quickly.
You should get Legally Branded Academy 2.0 or an equivalent way of understanding what you’re doing from an IP perspective from the very earliest stages because how to develop your concepts involves addressing intellectual property correctly from the outset of projects. That’s the way to ensure success and a valuable business.