Running a business online gives entrepreneurs an incredible chance to expand and scale their operations. Where offline businesses require a physical presence, online businesses can operate entirely with virtual storefronts and digital real estate. Expanding online is also much simpler and bringing your business to new heights can be achieved without the need for expensive outlets and physical locations.
Still, there are a few major errors that first-time online entrepreneurs tend to make when they scale 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. These five strategies are designed to help you achieve worthwhile business optimization while taking 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 rather to achieve as much as you can. Focus on the ultra-profitable 20% of clients/customers, and eliminate as much of the fluff as you possibly can.
2. Whenever possible, add products to service businesses
Service businesses are a good short-term model, but as a long-term earning option on their own, they are not the best. 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 working from that alone. It is a more effective strategy to create a product and use your time to amplify its sales.
3. Package and sell your information
Informational products are a major hit, especially in the online world. From guides on mastering online business to simple how-to sets for learning a new skill, informational products make up a huge percentage of online sales. If you have skills that would otherwise only be valuable in a service business, why not package them into an informational 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 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 are invested in marketing before they expand, and you should be 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 you’ve started to earn over $100 a day. The only problem is that it is taking almost 12 hours to do it. There will be times, especially when running an online business, where 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.