In the last two decades, the Internet has dramatically changed the business landscape. Sophisticated websites, online shopping, seamless email communication and live customer service support have levelled the playing field and reduced the many of the startup costs associated with getting your business off the ground.
Indeed, with the proliferation of accessible and easy-to-use digital tools, launching a virtual business has become a fairly straightforward and more achievable pursuit. However, to properly assess whether or not it makes sense for your business to go virtual requires an assessment of some of the associated costs and benefits.
This blog post will examine some of those considerations so that such an assessment can be conducted.
Identify your target market
Are you targeting children? Baby boomers? Seniors? Young moms? If your entire business is going to run online, you need to make sure that your target market is digitally inclined.
According to a recent Canadian study, only 40% of baby boomers have placed an online order and only 38% of seniors made travel arrangements online (http://www.statcan.gc.ca/pub/11-008-x/2009002/article/10910-eng.htm).
Clearly, you need to evaluate the online activities of your target market and understand their comfort levels around the digital activities that will drive your business.
Anticipate the costs
While running a virtual business can often cost less than maintaining a brick-and-mortar operation, it isn’t always the case. Even a virtual business involves real costs that need to be considered. For instance, website design and development, customer service, sales and marketing, finance and logistics are still costs that you must manage. While there are significant benefits to going virtual, these can only be realized if the full spectrum of costs are anticipated and accounted for.
Consider your reputation
Arguably one of the biggest obstacles in establishing a virtual business is building a reputation as an expert in your field.
Without a tangible storefront or office, it is often hard to get prospective customers to take you seriously. This is particularly the case when your business first launches.
Make sure you develop a plan to offset this obstacle. Use social media to grow your reputation. Associate your business with a physical location on Google to give the impression that you maintain an office or storefront, even if you don’t. Showcase your executive leadership team to make clear that you are established and that you have true experts at the helm.
Understand the competition
Unless you have conceived of some entirely novel product or service, chances are, you will encounter competition out of the gate.
Virtual businesses need to be especially mindful of competition since the opportunities for differentiation are fewer. Only through a strategic and comprehensive marketing effort will a virtual enterprise be able to rise above the noise and distinguish itself from other players in the same space.
Not only do you need to know the competition, but you will also need to understand:
- What keywords are they using in their digital marketing strategy? How will this influence your approach?
- How much traffic do they get to their website and what channels are they using to drive that traffic?
- Who are they targeting? Is this the same target as you?
- What portion of the market have they captured?
- How are they positioning their product/service? And how do you differ?
A full competitor analysis will help to determine whether or not (and how) you can leverage your website property to drive the traffic you need to grow your business.
Going virtual is an enormous undertaking and one that should not be approached lightly. Speaking with a professional accountant can help you work through some of the considerations listed above to determine how best to roll out your virtual business to ensure success. Contact Miller Bernstein today for your free consultation.