There’s a lot to think about when taking a business online. Chartered accountant GAIL FREEMAN says the place to start is with a readiness audit.
Mick and Charli want to take their retail business online and came to see me because they weren’t sure how to go about it.
“There are some hoops you need to jump through before you are ready,” I told them.
“The first thing I recommend is an online readiness audit. The idea is to check whether you are ready. Looking at where you are now the audit will show areas of strength and weakness and it’ll suggest strategies that will move you to where you need to be.
“Importantly, we will examine how you currently use online solutions internally, the quality of your website, your social media presence, how you interact with customers and, of course, your organisational skill levels.
“It’s important to ensure your hardware is able to deal with this change as well as how this proposal aligns with your strategic and business plans.”
I told them that next we look at their product and service strategy.
“As retailers, confirmation of your online pricing compared to your current pricing is critical.
“Developing the price point becomes very significant, particularly if your competitors are selling the same product for less than you can buy it for. I have seen this happen and, if this is the case, there’s little point proceeding to an online environment.”
Charli looked concerned. “It’s a lot harder than it seems,” she said.
I agreed and said: “Now, you need to look at your marketing and sales strategy. Until you have some idea of how successful you are in an online sales environment, these plans must be flexible.
“You need to define responsibilities for all your staff and you need to make sure that the team is focused on the new direction.”
And distribution is next. I told them that, clearly, sending everything out through a warehouse was different to the current position where people came into the retail store.
“You need to be certain how you will get your product to the end consumer in a timely manner as this is what they expect,” I said.
“The next key step is to build trust and reliability, which is so important for success. However, this is harder to do online so you need a compelling offer and always under promise and over deliver.
“Remember that any simple mistake can end up with a bad report on Google so you need processes in place to deal with those mistakes speedily.
“This all takes time so when you are a name that people trust, you should be starting to grow. Growth, of course, creates its own problems and you need to be certain that you can manage growth, particularly if your products go viral.
“I always think it’s a good idea to start with a long-term plan. That is, imagine where you want to be in five to 10 years. What will it look like? Are there any obvious disruptions which could affect you? Will your product range still be as popular in 10 years’ time? Will you need to rejig your product range? This may need to happen frequently. So the technology impact needs to be accounted for in your long-term plan.
“And, lastly, all of these steps will need to be incorporated into your business plan so that you can ensure you are successful in taking your business online.
Charli was pleased: “Thank you so very much, Gail. You have raised so many things that we hadn’t thought of. Now we go back to the drawing board and the process begins.”
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.
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