The 10 most important first steps BEFORE you start your online shop

You’ve decided to take the plunge and open your own online shop. Great news! But where should you start?

Don’t panic! Read on to find out the right way to launch your new online business. We’ll revisit all of these topics in future blogs, but for now here’s an overview:

1. Choose the perfect name

Selling shoes? Here’s a pro-tip: Don’t use the word “shoes” in your shop title; It will limit you to selling only shoes, forever. Right now you might think you’re only going to sell shoes forever, but trust me a lot can change in 5 years. I rebranded my first company after 18 months. I rebranded my second company after 24 months. I’ve changed the nature of my business several times, but with the new names for these companies I’ve not had to rebrand.

Businesses aren’t static! They keep changing and evolving as time goes on and yours will be no different. So choose a name that will allow you that necessary flexibility.

2. Choose the perfect logo

You might be tempted to design your own logo or get your friend’s daughter’s boyfriend’s sister to design one for you. Unless you – or your friend’s daughter’s boyfriend’s sister – is a designer, STOP. Even if you or they design a great looking logo there are more considerations to the logo than just whether it looks pretty in the graphics program. It needs to work well when printed, and it needs to scale well on the computer, and it needs to be legible at smaller sizes on a computer screen. Hire a designer to do the job properly or your logo will become a sore point sooner or later.

3. Plan out what you’re going to sell

This might sound obvious, but it’s the step most people forget! It’s not enough to dream about having a shop, you need to know precisely what it is you intend to sell and you need to sit down and write the descriptions for each of those items. Doing it as you go along once the website is in place will prove a hard slog. You need to have some great copy written and ready to go for each product, know how many products you will sell and in what variations (if any). You need to have high quality product photos ready for each and you need to have collected all of these things together in one well organised place for ease of insertion into the website when it’s ready.

Success depends upon previous preparation, and without such preparation there is sure to be failure. -Confucius

4. Don’t forget about shipping

One of the first questions I ask when building an e-commerce website is “what are the shipping costs going to be?” And invariably the answer is “we’ll figure that out nearer the end of the project.” In turn that invariably becomes a nightmare for me at the end of the project, when it transpires that the customer hasn’t really given this matter any real thought and I end up having to create a complex solution to their shipping cost dilemma.

I am a huge fan of “KISS”: Keep It Simple, Stupid, and in my eyes there are two very simple ways to set up shipping: Flat rate, or “free”. Sure there are many other shipping models, but they’re generally not easy to set up. Sometimes they’re very expensive to set up. Sometimes they’re close to impossible to implement on a small-scale shop. But flat-rate or “free” are both very cheap and easy to set up.

“Free” shipping

Now keep in mind that, really, there’s no such thing as free shipping. “Free” here really means “we’ve shifted the cost of shipping onto the price of the product”. It might not work for every shop, but should work nicely on the vast majority. Simply take the £3.50 you were planning on charging in shipping costs on that £35 product, and shunt it onto the product cost to make it £38.50: Job done. Every time you upload a product you simply add the shipping cost to the product cost. Customers don’t have to worry about shipping costs, you don’t have to worry about the effort of setting up shipping. Everyone’s a winner!

Flat-rate shipping

Alternatively charge a flat-rate fee regardless of your products’ sizes and shapes. Work out what the average shipping cost per product is going to be, add a bit, and then make that your flat rate fee. Let’s say that your shop is mostly going to sell items that will cost about £1 to ship, but the occasional item might cost £4. Work out the ratio of items you expect to sell (you can always change your shipping prices later if you get it wrong) and then work out what the average shipping cost is going to be. If your average shipping cost weighs in at, say, £2.50 then add a bit to be on the safe side and make your flat-rate shipping fee, say, £3.50.

5. Understand your legal requirements for reporting income to HMRC

Many people assume that they don’t need to report their online earnings to HMRC, but an online business is still a business like any other and you are still required to inform HMRC of your income. HMRC has a whole bunch of information on how to get started:

HMRC – Working for yourself

If you fail to register as self employed you could be liable for some hefty fines and criminal proceedings, so make sure you get it right. Hire an accountant if you need to!

6. Work out how much to charge for each product

Pricing is sometimes considered a black art, and there are a great many ways to price your products. But the main criterion to keep in mind is:

How much does it cost me to create or buy the item I am selling?

“Cost” here does not always refer to the transfer of cash from one place to another. Cost includes time, materials, lost opportunities, etc.

Once you’ve worked out your base cost for the product you can then work out what sort of margin you want to add. And from there you can add on any costs of sales you need to concern yourself with.

If the figure you arrive at is too high to sell the product then you need to consider how you can reduce the amount it costs to produce the item, or whether it is worth selling. If you can’t compete in the marketplace then you’re not going to last in the marketplace. But remember that a quality product is worth paying more for and a great many companies sell products on the basis that they are more expensive than the competition’s cheaper alternatives. Take Apple products for example. Apple sells products on the premise that they are of a higher quality and therefore worth paying a premium for.

Are your products higher quality than your competitors’? Or are you selling the exact same thing at an inflated price? Give this some serious thought as the future of your business will depend upon it.

7. Learn how to take great product photos

Great photos sell products. Bad photos will be a barrier to a sale.

It’s as simple as that. If you’re not providing good quality, high resolution, large images of your products, then you’re not going to sell your products. Too many times have I been told by a customer that they just have to “make do” with their poor quality images because that’s all they have. No! You can pick up a digital SLR camera for next to nothing these days, go second hand if you have to, and take the photos yourself. There are generally two schools of thought on product photos:

Plain background

Some people love the cleanliness of the white background, or “isolated”, product image. Rows and rows of clinically laid out products stacked together. The uncluttered, unfussy look helps to give your product photos the limelight ensuring that the customer isn’t distracted by items in the background of the image.

However some argue that the plain background has become too clichéd, too sterile, too boring and even a little passé.

Lifestyle product photos

Currently gaining traction in the online retail world in a big way are “lifestyle” product photos that show the product actually in use in a relevant setting. A company that sells dresses might show a lady at a party wearing the dress. In the photo is not just the dress, but also the model, jewellery that enhances the dress, other models wearing different clothes, wine glasses in their hands, and a table of canapés in the background.

A company selling dog leads might have a picture showing a lead on a dog with a cheeky face who is covered in mud, a tennis ball at his feet.

Someone selling soap might show the soap adorning an ornate bathroom.

A seller of soup might show the soup in a fancy bowl in a rustic kitchen with cream being stirred into it and a hunk of crusty bread next to it.

Which should you go for?

The choice is yours! But I’d recommend studying what your competition are doing. If your competitors are all using lifestyle photos then there’s a good chance that they’re doing that for a very good reason.

And never forget that you can always upload multiple images showing the product isolated on a white background as well as having lifestyle photos of the item in relevant settings.

8. Learn a little about search engine optimisation

If you don’t know what “SEO” or “search engine optimisation” is, then stop right now. Go read up on it, get an idea of what it is and how it works. It’s simply too complicated and broad a subject for me to cover here! The take-away here is that your shop is not likely to succeed without SEO and SMO (“Social Media Optimisation”). It’s not just a buzz-word, it’s absolutely essential stuff. Remember that there’s a lot of bunk out there that has been written about SEO. There is also a lot of outdated content on the topic, since SEO is a science that simply keeps evolving.

The one fact that has never changed in SEO is that “content is king”. It’s a phrase you will hear endlessly for a single good reason: It’s correct.

Write good content, lots of it, and keep promoting that content to the right people for your sector, and your site is bound to do well. It’s as simple as that.

9. Consider other marketing strategies

Often, and especially in the early days of a new business, SEO alone is not enough. It takes time to get noticed by Google, so in the meantime you need to consider other marketing strategies. Some might be free (word of mouth, networking events, asking for referrals from friends and family), some might be very cheap (attending fayres and conventions, leafleting), and some might be expensive (Facebook or Google AdWords advertising). You need to have considered the options and decided which are right for you and your shop.

If you’ve not given some thought to marketing, or not prepared a budget for marketing, then your shop is most likely doomed to fail. No business has ever succeeded without some form of marketing.

10. Make sure you’ve got the cash

Starting a business of any kind is an expensive endeavour. There are many expenses along the way: Try to consider all of the costs you will incur, find out how much they will cost or estimate them as best you can, and make sure you’ve got at least that much cash available. Ideally you want a nice big buffer of cash to eat into after the initial costs. And keep in mind that you won’t be making hundreds of sales from day one. A business plan can help you estimate how much cash you will need in the bank before day one.

11. [BONUS!] Decide on your exit strategy

The majority of businesses don’t succeed, that’s the honest truth. Should that be a reason not to try? No! Many of the success stories out there were try number 2, 3 or 4.

I have not failed. I’ve just found 10,000 ways that won’t work. -Thomas Edison

However in order to turn a failed business into a second attempt you need to be prepared with a robust exit strategy. This should allow you to be able to close down your business should it not go according to plan without losing your house or your car.

When I started my first company my exit strategy was simple: Minimal investment into the company, boot-strap it from my limited resources, and ensure that the company was registered as an LTD to limit the risk to my personal finances if anything should go wrong. That way the biggest loss I could incur was to simply lose the limited investments I had made into the company to begin with.

In the case of a shop a lot of your assets will probably come in the form of stock. This should definitely feature in your exit strategy! Can you sell the stock on? Where would you go to sell the sort of stock you are holding? Who would potentially be interested in buying it?

Consider all of your options. Hopefully you will never need it, but having it there will make you more confident going into the new venture and give you the strength you need to throw yourself into the day to day running of your new business opportunity.

These are just my thoughts. Your thoughts may differ. Let me know in the comments section if I got anything wrong or missed anything out.

Leave a Reply

Your email address will not be published. Required fields are marked *