Starting an online business may be a very good idea and a very lucrative one at it as well given the fact that the use of the internet is rampant. However, all your effort, money, time, and expectation can prove to be futile if you do not have a proper plan and budget in place. Both these will ensure that you make the right decisions without prejudice or unnecessary extravagance.
Lack of a detailed plan and budget is often the cause for online businesses to fail and not even pass an initial couple of years or even months of their business.
Planning and budgeting for an online business is not very difficult and is not much different from any other project. All you need to do is:
- Know and look for the minute details
- Know the market and its prevalent trends
- Know the needs and expectations of the consumers you target and
- Know the best ways to provide them with exactly the desired product or service.
All these factors considered will ensure that you come up with the best plan crafted and a more realistic budget to follow. No wonder budgeting and planning is called an ‘art form’ rather than just a process.
The processes are complex as there is no way you can be exact in it. You can be calculative and be as realistic as possible but you can never plan or budget to the letter or figure! A lot of math, careful consideration of different influencing factors and a lot of time and patience is required to come up with the best plan and a holistic budget.
Ask questions and find answers
With so many online businesses already exiting and with so many others being planned, you must make sure that your focus is only on your customers’ requirements and the current market trends.
The only way to make sure that you are heading towards the right goal during the process is by asking relevant questions and a lot of it just as you do when you choose between a debt consolidation loan and any other alternative to deal with your debt issues.
These questions will help you to understand the essential factors that will facilitate proper planning and budgeting. A few of these factors are:
- All those critical things to include in the first stages of your online business plan
- Important aspects to include in your budget especially the expenses depending on the available resources and
- Design all website assets including tools and products that will ensure a Minimum Viable Product or MVP.
This is tough as every little thing included or excluded can make a lot of difference. Therefore, you should consider these factors essentially when you make a plan and budget for your online business.
The cost factor
Since setting up an online business is done with intent to earn money and involves money, you will need to make sure that the business is high yielding as far as the return on investments is concerned.
Therefore, to start with, you must identify the cost of the entire process, especially for the setup. When you do so you will need to make sure that you consider the three main things that will make the three angles of a project management triangle. These are:
- The scope
- The time and
- The resources.
These three angles will not only determine the first stage of planning and budgeting but will also ensure the degree of success for your online business.
- The business scope will help you to documents the outlines and the requirements of the entire project very clearly. You will know what specific tools are required for analytics, crash reporting and push notifications. This will prevent any scope creep and will tell you exactly what you need to do. This will, in turn, help you to plan how long a particular goal will take to achieve with the available resources. This eventually will give you an idea about the cost requirements for this particular time period.
- If you know the scope and time, you will know the resources required. You will know the number of staffs required, money required and to make the proper plan of actions. You will know the working sped and ability of your staffs which will help to come up with a more precise evaluation for the man-hours. All these will help you make a plan that will help you to monitor the workers that have an exaggerating working speed and those that needs a bit pushing up from time to time.
- Make sure that in your planning there is no ‘just in case’ aspect at all. This will ensure that you emphasize, evaluate and be knowledgeable about the common risks associated with the initial business set up stage and asses the consequences of it both in the short as well as in the long term.
- When it comes to the resources aspect, you should not concentrate on the capital and its raising only. Though this is the most important aspect of a business to survive, this should not be the only one. You must also include other important things in your plans such as developing a website and a mobile app, its useful and strategic deployment along with publishing fees and other relevant factors.
- Use a free or premium version of the tools and software according to your initial budget, you should also make proper plans for their integration, debugging, updating and quality control.
All these things are typically overlooked during the planning process and therefore become a major problem for the survival of online business in no time.
Therefore, include all these elements right from the start to make sure your budget and plan are as realistic as possible.
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