How to Start a New E-commerce Business and Stay Out of Debt?
Most entrepreneurs have not shortage of ideas, but what they do have is a lack of funds to start a new E-commerce business without going into tons of debt.
When trying to start a new E-Commerce business, most entrepreneurs do not suffer from lack of information; they suffer from excessive information that is more often than not irrelevant. This phenomenon is infobesity, and many business owners are falling victim to it over the last couple of years. If you are trying to get your own business started, what you need is the correct information at the right time.
It is particularly challenging for today’s businesses since they are starting from debt. Most startups have great ideas, but they do not have the necessary funds. Therefore, you will find them in the offices of creditors, bank loan officials, and business loan companies even before they make their first dent in the business world. Starting out from debt is a great challenge, but with the right information, nothing is insurmountable.
The right plan of action
Before you invest in your office space, merchandise, and business card designs, do your research thoroughly. Research your prospects, competitors, and marketplace before making a financial commitment.
Run Google searches
It might sound overly simplistic at the moment. However, a simple Google search can save thousands of dollars of bad investment decisions. You can get to know about your target market, your competitor, rival campaigns, and the latest ways you can promote your products online for a wider audience.
Check with Google Keyword Planner and Google Trends for keyword ideas. Include your product names and product descriptions to check which ideas are in an uptrend. You can use other free keyword tools to do the same including Ubersuggest, KWFinder, Google Correlate and IMforSMB. Google Correlate is ideal for generating long tailed keywords for your site, and IMforSMB is perfect for producing keywords in bulk. It is great for local companies that are focusing on a geographic location and a local audience.
Customer service optimization
Amazon is a great example of good customer support. Along with a few funny reviews, you will find answers to almost all questions and helpful reviews on all listed products. A study shows that around 45% of people will abandon a site if they do not find adequate support and attention. It may be in the form of a comment thread, forum Q&A or live chat.
Our study shows, most sites fare better when they have a live chat for their customers. Here, the potential buyer can directly ask questions to the customer care executives. Live chat support can increase customer retention.
Almost 68% customers have engaged in a live chat as of 2016, and the margin keeps growing by 10% each year.
It improves customer retention and cuts down service cost considerably.
Optimize your conversion procedure
While some customers bounce immediately after not finding the products they desire, a few may load products in their cart and then clear out. Shopping cart abandonment is a huge challenge for almost all e-commerce sites. You will need to overcome this conversion optimization problem as well.
You may find almost 69% of your total traffic leaving your site without making a purchase. One way to handle this is to offer subscription forms for the customers. You can always get their contact details including emails. Once someone abandons their shopping cart, you can reach out to them via push emails or via emails containing offers that are more lucrative. Maintaining a robust customer database is very necessary for selling well.
Upgrade your website Inventory
It is a step that may involve a good deal of money, depending on what you are selling.
Almost 50% of the potential buyers will talk about their buying experience on social media and private chat with friends.
You need to stay updated with the latest products and offers to stay on their good side.
Best sellers are always harder to monitor. You need to maintain a real-time inventory with excellent database options. You cannot rely on just a few products to drive your sales; you need to invest in the best sellers and new products to stay on top of the e-commerce popularity charts.
How to brace the finances and make it out of debt?
These are all fine when you have the investor for new campaigns, and you are running on profit. However, most startups start on debt and run on debt for at least 12 months before they break even. The time it takes depends on the nature of the business and the kind of debt, of course, but nothing will substitute your need for understanding debt program’s fine print.
Make it a slow start
Contrary to what most businesses think, you should start slow when you are starting from debt. Do not rush into investments just because they look profitable. You need to start with small, inexpensive tasks, which bring you a steady cash flow. Most marketing experts will recommend digital media campaigns, which are eye-catching, personal, yet not costly.
Keep a financial plan in place
It may include paying off creditors from your monthly profits after the first three months or an earn-as-you-pay deal. No matter how much you are profiting from your business, you need to divert a fraction of the profit towards your business creditors. In short, you need to instill a clear sense of purpose while borrowing money.
Reinvest in every way
You may be tempted to buy pretty things and upgrade your lifestyle a bit, but you need to pay off your creditors. You should not start spending the money you make right off. The smarter entrepreneurs always reinvest a percentage of their profits to their businesses, ensuring a steady flow of profit.
Getting out of debt within a couple of days of starting your business and staying away from more debt is not impossible at all. You just need a little refinancing and a solid financial plan to help you out. Sometimes, having a personal accountant does help. Otherwise, you can simply walk into the office of a reliable business loan counseling company and seek their expert advice. Make sure this company is BBB accredited before you divulge any business details.