Tag Archives: business start-up

7 Steps to Start an Online Business

Having your own online business is a dream that many of the readers of this blog may have. There are however important steps to start an online business that needed to be followed.

Starting an online business, although it operates in a different channel, is not that different from starting a Brick and Mortar business. In both cases you need no do certain things in order to get your business up and running.

The 7 steps to start an online business

Starting a business may be for most people a chaotic and emotional episode. However, if you have a guide to do the right at the right time, the process may be smoother that you think. So, here are the steps:

Step 1: Planning

A Business Plan is a detailed action plan or road map outlining every conceivable aspect of the proposed venture. The plan describes what, how, when, where and why with regard to the new venture. It is thus a structured guideline for achieving your business goals.

Therefore, if you want to start an online shop, you should at least ask the following questions:

  • What kind of products do I want to sell?
  • Are there any competitors that will be selling the same products as me?
  • What should my website look like?

Read more: Planning Your Online Business 

By this time you should already have an idea what your business is about. Also about a name for your business…

Step 2: Register a domain name and choose a hosting company

If you already have the name of your shop, it is time to start setting it up. The first thing to do is to register for a domain name. However, good luck! According to Tek Eye (2017), there were 330 million domains registered for over 1.8 billion websites last year… So I think all the obvious domain names is already taken.

In spite of all the best domain names already been taken, you should try to get a name that can best represent your products or services. Registering a domain name should not cost you more than $10 (R120) for a .com extension. Visit SA Domains to see if a domain name is available.

After getting the domain name, you need to find a good hosting company. Look for a hosting company that has good servers and that will be able to run your online store e.g. Texo Webhosting.

Read more: Choose a Domain Name and Hosting Company for your Online Business 

Step 3: Choose your E-commerce package

You can build your online store through hosted solutions or self-hosted solutions

Hosted solutions:

Many hosted solutions provide a good experience to users with you doing very little on your end. However, when you use a hosted solution, you should be prepared to lose a lot of opportunity for customization.

The following three are among the top solutions:

It’s easy for anyone to set up an e-commerce site with Shopify. Some of the features you will enjoy by setting up a store with them include a custom mobile template, unlimited server bandwidth, SSL security, and a personal app store. You can try it for free for 14 days or choose a package that will suit you. Pricing starts from $14 to $179 (R180 – R2300) per month depending on the features and functionalities you are looking for.

Yahoo! Merchant Solution. The layout of Y!MS is fairly straightforward and can be easily customized. Y!MS ecommerce plans start from $19.98 to $224.96 (R260 – R2925) per month depending on the package and features you need.

BigCommerce is similar to Shopify but has limited features. The website has a clean interface, making it easy for users to sign up. You can easily add users, products, features and take payments online in just a few minutes. BigCommerce pricing ranges from R325 to R3900 a month depending on the features your need.

Self-Hosted Solutions:

If you do not want a hosted solution, you can make your own e-commerce scripts or use other open source or commercial shopping cart scripts.

Zen Cart is a popular open source script that will work in most web hosts. The script is free to download. The only downside of using the script is that your website will feature a “Powered by Zen Cart” message at the bottom.

Magento is another good script you can use for your e-commerce website. The script is written in PHP and is frequently updated. As is the case with Zen Cart, you will feel more comfortable using Magento if you are well-versed with HTML and CSS.

If you are comfortable using WordPress, you can easily set up an ecommerce store using various free and paid plugins. Examples of popular plugins that will enable your WordPress site and have ecommerce capabilities include WooCommerce, WP e-Commerce, Cart66, and others.

Read more: Choosing an eCommerce Platform for your Web Store

Step 4: Taking Payments Online

Credit cards provide customers with an easy way to make payments at your store. Apart from credit cards, customers may also wish to pay through other methods such as PayPal. You will want to accept payments through the methods that your customers trust and use. To accept credit cards online, you will need a merchant account.

Read more: Starting Your Web Store – How to Receive Payments Online

Step 5: Add Content and Products

After you have set up your domain name, hosting and shopping script, you are ready to start selling online. You now need to add your content and products. From this point onwards, you will also need to do some maintenance and tune your website design to match the needs of your customers.

Indeed, “The quality and relevance of the content of a retailers’ webpages can mean the difference between a sale and a bounce” writes Douw G Steyn recently in Bricks2Clicks.

The next important step is to get the product that your customer has paid for, to its destination.

Step 6: Shipping and Fulfillment

Like a physical retail store, you need to maximize the visitors at your store. However, you cannot simply hand over products over the counter. Also, shoppers expect a seamless shopping experience — no matter where they are, what device they are using, or how they choose to shop. Order Fulfillment – taking the right product, putting it in the right box, shipping it, and gaining the customer’s approval – is a demanding task (Bricks2Clicks).

Step 7: Marketing your online shop

One of the biggest challenges you may face as an e-commerce store owner is generating traffic that converts on your store. There are a number of digital marketing channels that retailers can use in the online channel:

  1. SEM (Search Engine Marketing) consists of SEO (Search Engine Optimization) and Paid Advertising (e.g. PPC – Pay Per Click advertising).
  2. Content Marketing includes Blogging, e-Mail marketing, e-Books and video marketing.
  3. Social Media Marketing is marketing on social media websites such as Facebook, Twitter and Pinterest.

So these are the seven steps to start an online business…


Just as with Brick and Mortar shops, there’s no easy way to just star and make money. If you follow these steps to start an online business, you may soon identify your strengths and weaknesses as well as opportunities and threats that exist in the marketplace.

Good luck with you new venture!




Getting Money for Your Business – Other Individual Investors

Prospective business owners may approach other individual investors to get money for starting their businesses. A large number of private individuals invest in others’ entrepreneurial ventures. They are primarily people with moderate to significant business experience but may also be affluent professionals, such as lawyers and physicians 1.

These other individual investors are collectively known as venture capitalists. A venture capitalist is a person who invests in a business venture, providing capital for start-up or expansion (Susan Ward, The Balance). Venture capitalists are sometimes flooded with business ideas and business opportunities from entrepreneurs that need investment in their ventures.

Let’s have a closer look at venture capitalists.

Other individual investors – venture capitalists

The majority of venture capital (VC) comes from professionally-managed public or private firms who seek a high rate of return. Therefore they (typically) invest in promising start-up or young businesses that have a high potential for growth but are also high risk (The Balance).

Venture Capitalists usually are heavily involved with the businesses that they have funded. Although money is important to VCs, they must also protect their investments. Therefore they engage in activities that help give each company its best chance to succeed 2. However, the over involvement of VCs may result in entrepreneurs losing their autonomy…

What make a ‘good’ venture capitalist?

As VCs usually chooses the most promising business ventures to finance, so should prospective business owners identify the best of them. Quora.com listed the following characteristics that good venture capitalists have:

  1. Being a great net-worker. Having the right people to talk to during the diligence process and making the right introductions (to potential employees, customers and acquirers) is a major way that VCs can add value.
  2. Being a great listener/being able to read people. These are the key characteristics to becoming a great VC. The ability to truly understand where an entrepreneur is coming from helps in evaluating entrepreneurs.
  3. Ability to predict the future. Everyone has access to the same basic market research data but taking that data and interpreting it and turning it into actionable investment ideas is a good skill to have.
  4. Sales/persuasion ability. Being able to convince entrepreneurs to work with your firm versus another. Also, convincing a key employee to join a portfolio company and convincing a potential customer to work with a portfolio company. These are all examples when sales and persuasion skills come into play.
  5. Negotiation skills. To help negotiate a top-dollar acquisition for a start-up in your portfolio and being able to negotiate the lowest possible price when it comes to making an investment.
  6. Experience – there is definitely a learning curve and many lessons that can be gained with time.
  7. Luck – venture is an extremely hits based business. One great investment can make a whole fund successful. It is impossible to know if making an investment was luck or skill but there is definitely an element of both.


Other individual investors will fund your business only if the potential rewards outnumber the risks by far. They want a return on their investment and, if they are shareholders, they will involve heavily with your business. Failure to receive funding from a venture capitalist, however, does not indicate that the business plan is not a good one. More often, the venture is simply not a good fit for the investor.

Read also:

  1. Start your Business: Borrow Money from Friends and Relatives;
  2. Using Personal Savings to Start Your Business


1 Longenecker, J.G., Moore, C.W., Petty, W. and Palich, L.E. 2005. Small business management: An entrepreneurial emphasis, South-Western College Publishing, A Division of International Thomson Publishing Inc.

2 Kressel, H., 2007. Competing for the future: How digital innovations are changing the world, Cambridge University Press.



Start your Business: Borrow Money from Friends and Relatives

If you don’t have enough funds for your start-up business, you may ask friends or relatives to borrow you the money. Interesting, however, although the majority of informal investors, family and friends, is often willing to supply funds at negative returns, most prospective business owners will only as a last resort consider borrowing money from them 1.

Nevertheless, to borrow money from friends and relatives is after bank loans the biggest source of small business financing in the UK 2. There is however a certain way to approach friends and relatives to borrow money from them.

How to borrow money from friends and relatives

Tony Armstrong suggests in Nerd Wallet the following do’s and don’ts when you want to borrow money from friends and relatives to start your business:

  1. Know what you’re asking for – Do you simply want a loan, or are you offering your family member a stake in your business for their investment?
  2. Provide a business plan – That means you should provide your family and friends with a thorough overview of your company in the form of a well-crafted business plan.
  3. Don’t hide the risks – When pitching your business idea, be open and honest about your venture. There’ll be risks involved for anyone extending you money, and it’s up to you to explain that to them without bias.
  4. Put it on paper – Even if you’ve come to an agreement with your parents, and regardless of the sum of money involved, be sure to put everything in writing.
  5. Don’t let relationships suffer – It’s up to you to make sure that your business partnerships don’t hurt your relationships with family and friends.


Involving friends and relatives with your business can be of huge advantage for you as prospective business owner. Not only may they be a source of start-up capital, but they may have business skills and knowledge or other entrepreneurial characteristics that you haven’t been aware of. For that reason it is important choose your friends and relatives wisely…

Read also: Using Personal Savings to Start Your Business


1 Lee, S. and Persson, P. 2016. Financing from family and friends, The Review of Financial Studies, 29(9):2341-2386.

2 Basu, A. and Parker, S.C. 2001. Family finance and new business start‐ups, Oxford Bulletin of economics and Statistics, 63(3):333-358.



Using Personal Savings to Start Your Business

You, the aspiring entrepreneur, frequently have three sources of getting money to start your business: (1) personal savings, (2) friends and relatives, and (3) other individual investors. Personal savings to start your business will now be discussed.

Personal savings to start your business

Using personal savings to start your business is most frequently used by prospective business owners. However, most of us probably don’t have enough savings to start our business properly. For that reason you need to do a thorough inventory of your assets. You are likely to uncover resources you didn’t even know you had.

Assets you may have can be savings accounts, equity in real estate, retirement accounts, vehicles, recreational equipment and collections. You may decide to sell some assets for cash or to use them as collateral for a loan.

There are a number of ways that you can consider to generate start-up cash to open your business (Entrepreneur Press):

  • Investments – low-interest-margin loans against stocks and securities can be arranged through your brokerage accounts;
  • Your home – consider getting a home equity loan on the part of the mortgage that you have already paid off. Depending on the value of your home, a home-equity loan could become a substantial line of credit;
  • Life insurance policies – you can use the value built up in a cash-value life insurance policy as a ready source of cash;
  • Your retirement plan – some retirement plans allow members to borrow up to 50% of your vested account balance. However, the loan has to be repaid in a short period of time;
  • Moonlighting (if you’re employed) – ensures you’ll have some steady funds rolling in until your business starts to soar.


Lastly, before investing all your savings and collateral in a new business, you need to know that the business has the potential to survive and grow. Therefore you need a business- and marketing plan to give you direction and to get customers to your business.

Read also: Why do you want to start your own business?



Bootstrapping – Starting a New Business with Your Own Money

One of the first and most important questions that most of us ask when considering to start our own business is where the money would come from? The answer for more than 80% of start-up businesses is bootstrapping. Indeed, according to Lahm Jr and Little Jr (2005), the overwhelming majority of entrepreneurial companies are financed through this highly creative process.

Bootstrapping typically involves the use personal savings, credit-card debt, loans from friends and family and other non-traditional forms of capital.

The risks and advantages of bootstrapping

The biggest advantage of bootstrapping is that you are the boss. For this reason, self-funding your business means you only answer to yourself. You are free to do as you wish with the direction of your start-up.

Some advantages of bootstrapping that are mentioned by Schinck and Sarkar, (2012):

  1. Easy way to obtain financing – you have full use of your money;
  2. It’s convenient – you can start your business whenever you are ready;
  3. Bootstrapping is associated with minimum requirements – no need to report quarterly financial results to investors or financiers;
  4. It doesn’t require the preparation and presentation of a business plan or collateral.

Disadvantages of bootstrapping:

  1. Bootstrapping may constrain revenues – because as the business starts to grow, more capital is needed;
  2. Personal risk – the financial risks to bootstrapping are huge, so owners must have a plan for moving forward advises Lloyd Martin (Escalon);
  3. Lack of networking – you may miss out on valuable networking connections;
  4. You will likely not be earning any money for quite a while.


Lastly, the advent of the internet and e-commerce has given thousands of people the opportunity to start an online business from home with little capital or financing needed. However, since about anyone can start an online business, the competition for visits and clicks are immense. Therefore you need a well written business- and digital marketing plan to get your business on the way…

Read also: Every Business Needs a Business Plan


Lahm Jr, R.J. and Little Jr, H.T. 2005. Bootstrapping business start-ups: Entrepreneurship literature, textbooks, and teaching practices versus current business practices? In: Allied Academies International Conference. Academy of Entrepreneurship, Proceedings 11(2): 15. Jordan Whitney Enterprises, Inc.

Schinck, A. and Sarkar, S. 2012. Financial Bootstrapping: a critical entrepreneurship skill, Centro de Estudos e Formação Avançada em Gestão e Economia da Universidade de Aveiro, 20:1-24.



Deciding on the Form of Ownership for your New Business

One of the first issues facing any entrepreneur who wants to launch a business is choosing a form of ownership. Indeed, this decision can have a tremendous impact on almost every aspect of the business. Therefore different forms of business ownership in South Africa are:

  • The sole proprietorship – is owned and managed by one individual and is by far the most popular form of business ownership.
  • The partnership – a contractual relationship between two or more persons (called partners), but usually not more than twenty who operate a legitimate business to which each contributes something, with the purpose of making a profit which is distributed amongst them.
  • The company – (which functions in terms of the Companies Act 61 of 1973, as amended). It’s developed to meet businesses’ needs to obtain more capital than they could through a sole proprietorship or partnership.

However, before taking the different forms of ownership into account, you should consider the following factors before deciding on one:

Factors to consider in choosing a form of ownership for your business

  1. The legal personality of the business. Can the business, from a legal point of view exist independently of its owner(s) and have its own assets and liabilities (possessions and obligations)?
  2. The liability of the owner(s).This is linked with the first point. Are the owners liable for outstanding debts and claims against the business?
  3. Owner control and authority. The degree to which the owner(s) has/have direct control and authority over the activities of the business. Also, the application or use of assets and the distribution of the business’s profits plays a role.
  4. The capital acquisition potential. The capital acquisition potential of the business when it is first founded, and in the event of expansion later on, should be considered. Here factors such as the number of owners permitted, their liability and their say in the management all play a role.
  5. The possibility of change of ownership. In other words, the ease with which an owner can transfer his or her interest in the business to someone else. Related to this is the lifespan or continuity of the business.
  6. The legal requirements. Legal requirements regarding the establishment, management and dissolution of the business should be taken into consideration.
  7. Tax considerations. Tax payments to the government differ depending on the form of ownership.


After all, it doesn’t matter what form of ownership you choose, as long as you can live with it, and also make some money!


Cronje de J, G.J., Breebaart, H., De Klerk, A., Old, S., Swanepoel, E. and Van der Merwe, M.A. 2001. Introduction to Entrepreneurship and Small Business Management, Only study guide for MNE202-V, Department of Business Management, UNIVERSITY OF SOUTH AFRICA, PRETORIA.



Read also: Questions about your business that you should answer before starting your own business

Questions about your business that you should answer before starting

Now that you’ve made the decision to start your own business, the next step is to answer questions about  your business. However, before starting, you must get your mind in order. Here are some questions that, if you answer them honestly, will help you to make the right decision.

Entrepreneur Bob Adams suggests that before starting your business, you should answer the following questions about your business:

  • How much cash will I have at risk? Most start-up businesses do not have a positive cash-flow from day 1. You need enough cash to cover the costs of running the business as well as for your own use.
  • How much time will it consume? As a business owner, you’ll be your own boss. The days of working nine to five are gone. Little sleep and lots of time management will be your daily routine, especially when starting your business.
  • How much energy will it take? Starting you own business may quickly drain your energy. Take care of your physical condition and try not to start when you aren’t feeling well. Otherwise, involve other people to share the workload.
  • Do I currently have other obligations that will prevent me from giving the business 100 percent? Monies you owe, legal disputes, prosecutions and extraordinary family obligations my take too much of your time and drive to start your business successfully.
  • Would there be a much better time for me to start a business other than now? The timing of starting your business has to do with your own readiness and how long the business opportunity in the market will exist.
  • What are my alternatives if I don’t start a business now? The answer many of us have to give to the people closest to us. Your family is probably battling with the same aspirations and concerns as you – and are likely to support the status quo.
  • What are the chances of success? If starting a new business will realise a ‘lifelong’ dream, or you’ll be doing something that you enjoy and are good at, then changes of success are higher. However, success will still require a lot of work and sacrifices.
  • Am I looking at starting a business from a position of relative strength – feeling good about myself and feeling I am relatively well off – or am I looking at starting a business from a position of relative weakness – recently laid off from a job and being behind on my bills? Losing your job is difficult for many of us. However, finding another or better job may be sometimes even more difficult. Starting an own business is for many people the last resort to get an income. The big challenge will be to change from desperate to positive and thinking success like an entrepreneur.
  • Can I test-run the business part-time before quitting my job? Having the luxury to test-run your business is the prerogative of only a few. Market research and a business plan may answer most of the issues regarding your new business.
  • Should I choose between a higher-risk or lower-risk businesses? It depends on whether you love the challenge to take risks or if you rather avoid it. A new business owner is by definition a risk-taker.
  • Suppose my business provides less income than I expected. How long should I stick with it? Unless you’ve made an obvious disastrous decision by starting the business, it is best analyse your business’s current situation and find a strategy to turn it around.
  • If the business doesn’t work out, how easily will I be able to pick myself up and move along to the next endeavour? I suppose for most of us, it won’t be easy. However, by doing the right things (planning, leading and controlling), the chances of failing may be lessen.


It’s a “hell” of a decision to start your own business. You should sell your business idea and your own capabilities to those closest to you. But more importantly, you must believe in yourself. Asking these questions about your business will help in this regard. Good luck with your new business!

Read also:

What is keeping you from starting your own business?



The Reasons Why Start-up Businesses Fail

It seems that start-up businesses fail more easily than established businesses. Many good business ideas have been vacated by entrepreneurs because of the fear of failure. Furthermore are venture capitalist and banks hesitant to fund start-up businesses because of their perceived high failure rate. But what are the reasons that  start-up businesses fail?

Reasons why start-up businesses fail

Barry Singer has used the development of a human embryo as a metaphor to describe the battle that start-up businesses face to stay open. He mentioned the following potential hazards that a new business face:

  1. Entry barriers – it is generally not possible for a new firm or product to successfully enter an already crowded, stable market where competitors are strong.
  2. Density of developmental hurdles – any new entity must establish, as it is maturing, a well-ordered office, a functional sales channel, etc. Failing to do so is potentially fatal, and that is unfortunately what happens with one in three businesses.
  3. Amplification of maturational error – any complex system that grows rapidly and is unable to predict the future perfectly is going to accumulate structural errors that become very difficult to remedy.
  4. Sequence and control in development – start-up businesses may lack structured control mechanisms that warn owners if their businesses go awry.
  5. Smallness and the asymmetry of luck – because new ventures typically start off with scarce resources, a bad bounce can sink the company, and the probability of at least one such bad bounce is high.
  6. Costs of organizing – a new company must learn through experience much of what it means to be mature. Costs associated with learning arrive just when the firm is most vulnerable and distracted by other challenges.


A start-up business that has done its ‘homework’ before opening has a much better change to stay open. Therefore a well written business- and marketing plan is essential to start your business the right way. Good luck with your new venture!


Singer, B. 1995. Contours of development, Journal of Business Venturing, 10(4):303-329.




What is keeping you from starting your own business?

The factors that may keep you from starting your own business can be found at two distinct places – in your head and in the environment. Although managing the situation at both places demands hard work, it especially requires learning. Learning about yourself and learning about your environment. The psychological battle starting your own business will now be discussed.

The biggest obstacle starting your own business – yourself

People generally like stability and don’t want to take unnecessary financial risks. Indeed, people are more sensitive to the possibility of losing objects or money than they are to the possibility of gaining the same objects or amounts of money 1. Don’t we all just like a good job at an established firm with some vacation time? Maybe it’s our fear keeping us from starting a business.

Tina May, co founder of Institute of Code has identified six fears that might keep you from starting your own business:

  1. Fear of failure – we really don’t like to fail. However, we may overcome this fear by thinking again what success mean for us. For most of us just starting our business will be a huge success.
  2. We fear that we are not good enough – many of us may feel that we don’t have the skills and knowledge to start a business. For this reason it is important to research your business idea thoroughly and to formalise it with a business plan.
  3. The fear of humiliation – some people don’t even tell others they are starting a business because they don’t want them to know if they fail. Ironically, the best way to spare yourself humiliation is to communicate your idea to those close to you. They will feel involved and probably start supporting you.
  4. Fear of separation – starting your own business will change your life radically. Some people are just not willing to let go of the tried and trusted way of living.
  5. Fear of poverty – this fear goes hand in hand with the ‘risk/reward’ equation of your business idea. Again, with a proper plan and sound financial management action can be taken in time to prevent disaster.
  6. The fear of success – being overly successful is not for everyone. Once successful, the fear to remain there may stop prospective businesses owners from opening their shops. It is imported for you to mentally prepare for the success scenario as your business grows.


There are many reasons why you would start a business. Many people have no other choice than starting a business. However, whether the decision is your own or not, you need to be aware of the psychological battles that you need won.


1 Tom, S.M., Fox, C.R., Trepel, C. and Poldrack, R.A. 2007. The neural basis of loss aversion in decision-making under risk, Science, 315(5811):515-518.





Why do you want to start your own business?

Every one of us that has consider to start your own business has been triggered by something to do so. Normally, the trigger changes our behaviour. Here are some triggers that may call us to action in opening our own business.

Reasons why to start your own business

  1. To improve your self-esteem – maybe you are the best in your job, but you don’t get recognized. Or, perhaps you are bullied. Maybe they expect you to do something that’s against your values and beliefs? By starting your own business, you can do something that you can enjoy and be good with. You are in charge of your own destiny and can choose the people that you want to work with. There is nothing more satisfying than to be a successful business owner.
  1. To be successful – “No one goes into business with the intention of failing. I am grateful and proud of my successes”, says Ennin Black in American Express. The drive to be successful is a strong emotional trigger for first-time business owners. The success of their business is instrumental for prospective business owner’s next goal, to be autonomous.
  1. To be your own boss – you want to run a business yourself instead of working for someone else. According to Van Gelderen and Jansen1 (2006), a large majority of small business starters like to be responsible, to decide on strategy, to decide on working methods, and to regulate their own time.
  1. Displacement – according to Krueger, Reilly, and Carsrud (2000), displacement precipitates a change in behaviour where the decision maker seeks the best opportunity available from a set of alternatives. When you’ve lost your job, or are forced to relocate, you may not have any other choice but to start your own business.


The four reasons that prospective business owners may use as discussed here are motivational of nature. However, three of them are internal motivations, whilst with the last reason, external factors triggered the behaviour. Next time we will discuss what resources you’ll need to start your business. Good Luck!


1 Van Gelderen, M. and Jansen, P. 2006. Autonomy as a start-up motive. Journal of Small Business and Enterprise Development, 13(1):23-32.

2 Krueger, N.F., Reilly, M.D. and Carsrud, A.L. 2000. Competing models of entrepreneurial intentions. Journal of business venturing, 15(5):411-432.