The 5 Things Every New Business Must Have Before Launching
Launching a successful online business may appear simpler than starting a brick-and-mortar operation. Digital entrepreneurs have financial advantages, including not paying exorbitant rents and insurance premiums to cover slip and fall incidents or physical property damage. And the ability to conduct your operation from a laptop in a café makes the live-work lifestyle appealing. But people with niche industry knowledge would be well-served to learn from the failures of e-commerce ventures from the past.
During the 1990s, U.S. stock valuations skyrocketed based on the excitement of the so-called Dot.Com industry. The Nasdaq index surged from under 1,000 to over 5,000 in five years. People who put their money in the stock market during that period may recall the so-called “Dot Com Bubble.” It burst from 2000 to 2001 largely because these attractive upstart organizations were winging it. Few had done their due diligence, and even fewer possessed a serious business plan. Needless to say, the market crashed as online companies faltered.
Some 20 years later, online corporate winners have firmly established themselves. Amazon, for example, braved the Dot.Com crash by sticking with a slim niche, selling books. By staying with a frugal business plan and effective branding, Amazon is now the number one retailer in the U.S., bar none. Others, such as Etsy and Shopify, have followed suit and established their brand in the digital marketplace.
And, like the once prominent peripheral businesses with physical footprints, we are seeing influence marketing, freelance outfits, and companies that act as go-betweens. Yes, Uber and Lyft are facilitators between people who need a ride and gig workers with vehicles. These successful digital enterprises all have in common: developing the following building blocks before launching.
- Assess the Viability of Products or Services
If you think about the broad strokes of successful digital ventures, they all deliver a needed product or service. Amazon allows you to avoid crowded retail outlets and receive needed items. Of course, e-shoppers can’t help but add niceties and new devices to their cart. Companies such as Uber and Lyft effectively facilitate cab services where traditional companies do not operate. They also streamline the service with an icon app and a recognizable logo.
The critical point is for upstart business visionaries to review the hard data regarding their product or service. It’s essential to determine whether people will pivot away from current options and adopt yours. Companies such as Amazon, Uber, Lyft, and Etsy provide a traditional service at a reasonable cost. They are successful because customers enjoy a convenience benefit without paying extra. Take a deep dive into the financial data to verify whether your company can do it better at the same cost or cheaper.
- Choose the Right Business Structure
The type of business structure you adopt will have lasting ramifications regarding taxes and other requirements. There are several choices for startups with few, if any, employees. A sole proprietorship, for example, is widely considered the simplest structure. Entrepreneurs typically use sole proprietorships to protect personal assets and allow profits to flow through the operation to them.
A limited liability company offers greater protections without necessarily requiring complicated incorporation requirements. It has become a preferred choice for many small business owners with a modest employee pool. Partnerships establish the duties and benefits for multiple stakeholders if you plan to launch big. And corporations offer significant liability protections for larger ventures.
Unless you are a certified public accountant or a corporate lawyer, it may be a good idea to enlist the support of an expert. Choosing the best business structure before launching will save time, energy, and money in the long run.
- Choose a State to Register Your Business
It may come as something of a surprise, but you do not necessarily have to register the entity in your home state. It is common for an enterprise to select a state that provides corporate benefits.
The state of Delaware remains a popular choice for business registrations because it offers a unique perk. Called the Chancery Court, this judicial tract consists of judges with backgrounds handling business claims. Cases brought against a digital company can be expedited through the Chancery Court system. Entrepreneurs are more likely to make accurate decisions because business law is their niche.
Some entrepreneurs choose states such as Wyoming because it has historically low sales taxes, modest registration fees, and other benefits. States such as Nevada, Florida, and South Dakota do not collect personal income taxes. By contrast, few organizations register in California because it proves overly expensive. Before launching, consider conducting due diligence about the pros and cons of registering in these and other states.
- Create a Memorable Logo
The most memorable businesses possess an iconic logo that helps people identify the operation. The Nike swoosh, Twitter’s little bird, Kentucky Fried Chicken’s Colonel Sanders image, and the bitten apple of, well, Apple are engrained in our psyches. It’s entirely likely many of the popular logos were created by high-priced marketing firms. But living in the digital age has advantages, including using no-cost or relatively inexpensive logo maker platforms.
This platform allows people without a background in graphic design to input information, select artistic parameters, and build an eye-catching logo by following a simple step-by-step process. Entrepreneurs can also circle back and tweak the design until it fits the products and services.
The importance of having an alluring logo in place before launching a digital business cannot be understated. Its messaging, color scheme, and likability will all be part of your branding efforts. Frankly, a logo can make or break an online business.
- Brand Your E-Business for Pre-Launch Marketing
It’s important to remember that a company’s logo is typically the first thing customers see, which is what they remember. Although little consensus exists about what makes a good or poor logo, usage matters. In other words, creating a logo seamlessly integrated into your online platform, business cards, email, stationery, and equipment is mission-critical.
As you build the website, consider how your logo works on each page, customer-response messaging, and the bulk emails you craft to generate a pre-launch buzz. This will likely be a good test of its flexible capabilities. The process may also help you determine whether the logo you like can effectively brand the operation across multiple platforms. Ask yourself the following questions.
- Does the logo naturally deliver the message you desire?
- Does it work across platforms without needing to alter it?
- Would this logo be effective in non-digital spaces, such as sponsorship banners?
If you feel satisfied that the image and lettering will serve your long-term goals, it’s time to start the marketing launch countdown. If you harbor reservations that it may look awkward in other settings or not grab people’s attention, consider delaying the launch. Take the time to create the logo and branding infrastructure needed for success.
Why Preparing for Success Matters?
Having a great idea for a product or service is only half the battle. The other half entails conducting due diligence, business planning, and creating a brand people will gravitate toward. Small businesses fail at a rate of 20 percent during the first 24 months primarily because entrepreneurs leaped forward without having everything in place before their launch.
The good news is that today’s business visionaries have the benefit of hindsight the Dot.Com industry didn’t more than two decades ago. You also enjoy the benefit of user-friendly tools that reduce expenses and digital branding opportunities that were once sparse. If you know how to do it better and cheaper, there has never been a better time to launch an online business.