Amidst the Covid-19 pandemic, many businesses have decided to shift online while other new players in the market have infiltrated the online sphere. One may think it is simple to set up an online business in Singapore due to the reduced overhead costs from the lack of a physical unit.
However, a successful e-commerce brand is much more than that. It requires careful yet deliberate planning, as well as, a high level of commitment to remain in this competitive market. In fact, an annual growth rate of 14.7% in the e-commerce market is expected, till 2023.
Here are things to consider before entering the online marketplace:
Brainstorm on product of choice
Firstly, it is important to decide on the product or service you want to sell and be clear about it. What does the product entail? What are its key features? Who would be its target market? Does it solve any problems in the market? These few questions are examples of questions to consider, that will allow you to effectively brainstorm on how viable the product will be in the market.
After outlining these key points, it will give you a rough idea on what you wish to sell, which then allows you to proceed to the next step on defining how suitable the product is in the market.
Conduct market research
Secondly, market research is vital to determine if the product or service of choice will fare well in the market. It is important to analyse the existing competitors and how your product compares to them.
If your product can bring an added value that current firms do not have, it will definitely help in setting your product apart. This will also allow you to have an idea of how to price your products and what kind of added services you wish to offer.
Furthermore, it is vital to anticipate any problems you will face and plan your business strategy. For example, with regards to financial problems, it will be beneficial to conduct a cash flow analysis to see if the business will be profitable. By factoring in the expected cost of goods sold, revenue and profit, it can give you a clearer picture of which areas you can reduce your expenses on.
Register your business
The next step is to incorporate your business, under any of the 4 main types of business structures: Sole Proprietorship or Partnership, Limited Partnership, Limited Liability Partnership and Company. This table by ACRA provides a list of the different features across the 4 business structures.
Different business structures would suit firms differently depending on your business needs. Some factors to consider are:
- How much capital do you have to invest?
- How much risk are you willing to take?
- How many owners are there in the business?
- What liabilities and responsibilities are you prepared to assume?
For example, choosing to incorporate as a company will be useful for businesses that require more funding as it will be easier to raise funds. Furthermore, a company has limited liability, which means that owners are not personally liable for losses of the business.
Build necessary business infrastructure
Necessary business infrastructure may refer to the staff, IT systems, departments and tools needed to ensure your business is functioning smoothly. Depending on the product, a certain type of infrastructure will be more suitable for some companies and less for others.
Additionally, the key chosen platform to market your product on will determine how complex your infrastructure has to be. For example, if products are to be ordered from a website, choosing a website domain name that is easy to remember and representative of your business will be the first step.
You may also choose to improve on customer experience by elevating the IT system to include a chatbot function that allows customers to easily submit their queries. Similarly, web design will also be crucial to allow an easy user interface, encouraging customers to return to your website.
Do proper bookkeeping
When your business operations have begun, managing your finances will be key to prolong the success of your business. Bookkeeping is a daily commitment that one can either learn themselves, or choose to simplify processes by outsourcing it.
Managing the cash flow of the business is particularly important due to the ongoing operational costs that are incurred daily. This would also be needed to accurately draft your financial reports nearing the end of the financial year.
From incorporation and bookkeeping, to tax filing, Counto is the all-in-one accounting service your online business needs. Talk to us today.