Growth strategies for online business owners
Monday, December 3, 2018/
An online small business can be an attractive option, with some online businesses having lower set-up costs than many physical businesses – not to mention the potential for a global audience.
Once you’re set up, you may need to grow in order to bring more people to your corner of the web. So the question is, how do you grow? And, without physical assets to use as security, how can you fund growth?
Start with online business basics
Co-founder and managing director of Australia’s largest online art gallery Bluethumb, Edward Hartley says focusing on business basics helped his business grow from a startup in 2012.
“Bootstrapping is an incredibly effective yet hard way to prove and grow a sustainable business, but if it works, you know you have the right foundations to potentially scale up,” he says.
While it seems obvious, Hartley says understanding your business and economics is something you must always keep in mind.
For example, Hartley asks: “Is it a highly scalable tech company, with smaller margins yet sticky customers, or do you have lower volume, less frequent buying activity, but higher cart sizes?”
For online businesses, creating functional and scalable technology, clean UX for a great customer experience and working on search engine optimisation might help you succeed in the long run.
Explore investment options
Growing a business often requires more money. Since many online businesses have few physical assets to use as security, an unsecured loan is one option to consider.
There is no risk to your personal property with an unsecured loan, and depending on the terms of the loan, you might have the freedom to invest the money in your business as you wish.
Another option is bringing investors on board. At Bluethumb, Hartley says “they never really thought an Adelaide startup could get funding”. However, inspired by ongoing growth despite lack of resources, they started reaching out to some successful founders and investors.
Initially, they were told they still needed to grow a little more before investors would look seriously at their business. Following this, they won a creative startup award and then found two investors willing to invest in the online art business. With a marketing and tech budget, the company then went on to secure more investor funding.
Attract an investor
Of course, attracting investors means competing against thousands of other businesses. So, how do you catch the attention of an investor – particularly when your business is in cyberspace?
James Spenceley is a Venture Capital Investor, Chairman at Airtasker and two-times EY Entrepreneur of the Year winner. He’s invested in a number of online businesses in recent years including Airtasker, Marley Spoon and Spaceship.
Spenceley often considers the following when deciding to invest:
- Product usability – Spenceley loves using Airtasker himself.
- Growth potential – he also believed the business “could be global and dominate in its field” if able to grow quickly.
- Future – Spenceley believes job sharing platforms like Airtasker are “the way of the future”.
- Business smarts – Spenceley was impressed by how the team had managed Airtasker and saw potential for its growth.
- Value-add – he was able to see an opportunity to grow that fit with his own expertise.
Starting an online business can be done on a shoestring, however growing requires a lot more dedication, and sometimes money. At the end of the day, it’s also important to remember this final piece of advice from Hartley: “it’s really important to know your core mission and stay true to it”.
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