Our first lesson for this tutoiial will focus on the fundamentals of an online business. Whether you have a small home business, a successful enterprise with many employees or whether you are still thinking about starting a business, the internet can help you get going or grow your existing venture into a bigger operation.
We all know what a business means. It is an economic activity where products or services are sold for money. The owner of a business makes a profit from this activity while the customer has some need satisfied in the process. This definition of business applies whether you are operating a ‘real world’ (offline) business or an an online business.
Many of us are intimidated by the concept of an online business – it sounds confusing, expensive and difficult to start up. But this could not be further from the truth as we will explain in future lessons.
Don’t look at an online business as a different entity from a real world business. An online business simply exists on the internet. It conducts most if not all of its transactions through a website and has some distinct advantages over a traditional offline business.
Why an online business?
Here are some of the reasons why you should consider an online business if you are looking at growing your current operation or starting a new venture.
An online business is not limited by geographical restrictions. You can live in the Karoo but transact with customers in Johannesburg.
It is also not subject to time constraints. Your online business can continue to process transactions at 3AM while you are asleep.
For many people the appeal of an online business is that you can work from just about anywhere and at any time. You can work from home, while watching over your kids and never have to drive through peak hour traffic to get to an office. You can continue doing business even when on vacation..
More importantly though, an online business does not always require a large capital outlay. You can start a website for less than R200 and maintain it for less R50 per month. Your website is essentially the property from where you operate, albeit a digital property. That’s almost impossible to do with commercial property costs these days.
Probably the best part of a business is that there is no boss, no irritating colleagues, no office politics and your success depends on your effort. There is no fear of arriving at the office one morning and finding a retrenchment letter on your desk because the company is restructuring.
Success Depends On Effort
Remember that an online business is not significantly different from a real world business when it comes to making a healthy profit to sustain yourself. There is no guarantee of success but if you persevere then you will eventually make it a worthwhile venture. You just need to find the entrepreneurial spirit within yourself to make it happen.
There is no quick get-rich scheme. There is no secret to online success. If you understand the basics and you work at it, you will be able to secure your piece of the online pie.
Consider the fact that over 15 million South Africans use the internet and online economic activity will account for 2.5% of South Africa’s GDP by 2016. The business potential of an online business is obvious.
What is the best business model?
There is no single answer to this question. The internet is a dynamic platform. You could sell a product that you make, offer a service based on a skill that you have or even just peddle information. Yes, information is worth money online. After all, this is the information age.
But even if you don’t have any product or service to offer, you can still start an online business. Why? Because South African companies pay online business owners to sell their products or services for a commission.
Did you know that certain booksellers pay up to a 6% commission for any transaction that is referred by a third party website? You don’t need a bookstore. You don’t need to process credit cards. You don’t have to handle any packaging and shipping. They will do the work and pay you a commission.
Did you know that some insurers pay around R60 per lead if you refer a quote request to them? Yes, the person does not even have to buy insurance. They just have to request a quote and you will get a R60 fee. No need to phone customers. No need to follow up on whether they will buy or not. They do the work and you are paid a commission for the referral.
How about hotels that pay up to 10% if somebody books a room through your website? Or florists that pay from 5% to 20% for every sale that you bring?
Heard about Google? Did you know they pay website owners for displaying their clients’ ads? You earn every time somebody clicks on a Google ad. It can be anywhere from a few cents to several Rands.
We will show you how to sign up with these businesses and get paid directly by them to market or sell their products. You don’t need a shop or an office. You don’t need to have any qualification or industry knowledge. All that you need is a legitimate well-run website.
So if an online business appeals to you then you may be the type of marketer that some of South Africa’s biggest companies are looking for.
You don’t need to create your own unique product or service to start making money online. But you do need to have some business sense. You may want to read more on what South Africans want to get some insight into the business model that will work for you.
You Are Your Business
Our advice is that you stick with what you know when starting a new venture. Capitalise on your knowledge and talents.
If you have worked for an insurance broker and know the market, then an insurance website may be for you.
If you eat out a lot then you may want to start a restaurant and food review blog.
Maybe you love reading and want to promote certain books for a commission.
There are just so many options which we will run through in future lessons. Don’t be hasty in choosing the business model that appeals to you just yet.
Take some time to think of what will work for you and the people who you can reach out to, namely your future customers.
A business plan is a great starting point because it helps you make sense of your thoughts and ideas. It will also give you direction in setting up and growing your business.
Just remember that you are the cornerstone of your business. You are its greatest asset. You could have a great product or offer a phenomenally unique service but if you cannot steer the ship that is your business, you will be doomed to sink from the outset.
From Air Hostess to Multi-Millionaire
As we come to the end of our first lesson, here is an inspiring story for budding ‘ontrepreneurs’ (online entrepreneurs).
A husband and wife team, both of whom were former flight attendants with British Airways, started a mail order company supplying party items to the UK market. They literally ran their business from their backyard and eventually set up a website to reach a broader audience via the internet.
It was estimated that their business was worth £30 million (GBP) in 2011. This was the same year when their daughter married the Duke of Cambridge aka Prince William. Yes, we are talking about the parents of Kate Middleton who is now the Duchess of Cambridge. Her parents operate a successful online business known as Party Pieces that has made them wealthy.
Not every entrepreneur will be this successful. But if you do not try then you will never know your true potential.