Accountant GAIL FREEMAN explains the challenges of setting up an online business and why it’s important to plan for the unknown.

Nick and Jing called me for help with an online business they’re setting up.

“We’ve been operating out of a retail site, but with all the covid shutdowns we started to sell some products online and now we see that as a way to expand our business,” said Jing.

“We just aren’t quite sure what we are doing at the moment.”

I told them they needed a clear understanding of what they were offering to the market and that their product lines might have to be slightly different to those normally sold in their astore.

“At this stage it would be a great idea to review your business, your team and your products so you can make sure that you are really ready for this,” I said.

“I would suggest that the review examines such things as the business’ strengths and weaknesses and you can then come up with the relevant strategies to move you forward.

“It is also important to identify how your team works with online solutions; the quality of your website; your social media presence and how you’ll maintain that and keep it fresh; how your current customers will interact with social media; whether your hardware is able to cope with the increased traffic and the IT skills of your current team.

“Next thing I’d suggest is that you develop the price point for your products. You might need to do a survey and review your competitors to do this successfully. Sometimes others are selling products online for a cheaper price than you can buy them for, so it is not worth having these items in your on-line store.”

A little daunted, Nick said there was a lot to do, and that’s just the planning stage.

I replied that if they didn’t get the planning right, they ran the risk of failing.

“It’s worth taking the time to get it right in the first place,” I said.

“Also as things change so quickly in the IT space you need to make sure that you have plans afoot to change as the landscape around you changes.

“You will need to put action plans in place for marketing and how your online channels will integrate seamlessly. Think about how you will distribute the products; will you distribute locally yourselves or will you use couriers or the postal service? It is interesting to think how you will build trust in your products online. Next I would think about how you will grow your business and how you will manage that growth.

“This all leads into the long-term plan. Can you see the future with this online business? What are your long-term strategies? What changes in technology will impact your business and how will they impact?

“This all requires some crystal ball gazing and, of course; if you are wrong, the plans will need to change quickly. Once you have gone through all these steps, I recommend you encapsulate all these ideas into a one-page business plan. I look forward to helping you along the way so that we can watch the business grow from strength to strength.”

If you need help with moving online or any other aspect of your business, contact the friendly team at Gail Freeman & Co Pty Ltd on 6295 2844, email info@citynews.com.au or visit gailfreeman.com.au

Disclaimer

This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser.

Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.