I was recently asked if I could offer some tips on starting an online yarn store. I really wanted to help, as I recently jumped into my own online venture. So, here are some of the clues and pitfalls that this not-so-young player experienced in the wonderful journey that became my own yarn store!
These tips apply to all types of online business and are not intended to be a complete guide. I urge all potential business owners to use the many resources available both on the Internet and in the larger community. This is a very difficult and exciting step, but being a business of one person does not mean that you have to do it alone! So, here are my best tips for those who are thinking about starting their own online business and living their dream.
1 - Learn about business. This is not just buying and selling. Although you may have strengths in some areas, there are certain things you need to learn. No one can be an expert on every aspect of doing business. Take the course (local college courses, government funded programs, etc.) and make sure you have at least a basic understanding of all areas of business. I started my business with a program sponsored by the Australian Government called NEIS (New Business Incentive System). This is a program for people who are registered as unemployed and who want to start a business. The program offers training (Cert 4 in small business management, which is a national accredited course), a two-week payment that is paid for 12 months, and regular mentoring sessions. I found the learning process to be extremely valuable and opening my eyes, since I became acquainted with many business concepts that I did not know about. Without this training, my business dream would have remained so.
2 - Know what is involved. There are many aspects of doing business, and if you engage in this blind, you will almost certainly fail. Make a close friend of your local small business organization. This is one of the smartest things you will ever do.
- Startup financing. Do you have savings that you can make to create a new business? Or will you need to apply for funding in the form of loans or grants?
- Rules. Does your local government have rules for running your business, such as home business rules, insurance?
- Taxation is probably the most difficult of all. Get recommendations from your tax regulator. Their websites are usually filled with good information about starting and building a business and complying with tax laws. If this is not one of your strengths, an accountant budget will help you with this. Even if this is the case, you must have an accountant for annual reports.
3 - Website and support systems. Be prepared to spend time and money on the design and implementation of your site. Online business is booming, but that does not mean that they are easier to set up than traditional stores. You can't just hack a website and expect visits and sales from day one. You need to optimize your site so that all major search engines can find you, and customers can reach your site based on the search terms you choose. If you are using a website designer, ask them about SEO (search engine optimization). It can add significant assembly costs, so learn as much as you can and as much as you can if you can.
Know what you need from your business systems. You have a web design experience (which, I learned, is completely different from knowledge!). Do you know what you need on your website or in your shopping cart? Again, talk to people, visit web design firms and contact your customers for feedback. Do not assume that the website / shopping cart will have features that you think are standard, such as inventory management, e-mail, and newsletters.
The same goes for accounting and office software. If you have experience in accounting, you are ahead of many. If not, consider taking a short course or using an accountant. Yes, it will add to your running costs, but it will be stung by a huge tax bill!
Make sure that your computer skills are relevant, as you will be processing a lot of texts, to budget and send e-mail. You can also invest in a course of study, as you will be shocked by how much time you spend on the keyboard, responding to emails, social messages, newsletters and blogs.
4 - Do your market research. If you do not, you will not have a market for sale. Obviously, you go into business because you have a passion for something, be it knitting, gardening, or for any other reason. You can succeed in one or more areas, but don’t assume you know what customers want based on your beliefs.
I spent weeks exploring yarn sites, checking what they sell, and seeing what other services they offer (blogs, freebies, textbooks, etc.). I looked at their design and overall feel. I also visited local yarn shops to see how I can convert a physical store to a virtual one. The main message I drew from this was that I had to provide a friendly, easy-to-use and informative website with a wide variety of ways for the client to interact with the store.
You need to know who your competitors are. Direct competitors are those who sell the same type of product you want to sell. Indirect competitors may be retailers who sell high-performance knitwear or cheap unmarked yarns. Your business plan should include a general description of your competition and a description of how you fit into the current industry and how you will stand out from the crowd.
You want to offer a USP (unique selling proposition). This may be selling a product that no one else carries, who is in demand, or providing a service that is not available, such as a cafe, delivery service, classes, etc. This is all about developing your business as a brand. Think of some large companies and notice what comes to mind when you hear their name. This is as much as they do business as the products they sell.
5 - Develop a business plan. This can be done on your own or with the help of Business Support Centers. A business plan is important for getting finances, and is also your “bible” that you often talk about to see if your business is working according to plan, and also remind you why you did this crazy thing in the first place. !
A well-prepared business plan gives you an edge when you negotiate and start financing, as it shows that you are serious and professional in your approach. It should include marketing research results, your biography related to your intended business, and a set of initial and predictable financial indicators.
6 - Develop an effective marketing strategy for your business. Mailbox packages may not be the most effective way to promote online business, but well-placed posters and leaflets in shopping centers, libraries, community centers, nursing homes, hospitals can work well. Print advertising should not be limited to yarn magazines. Think of parental, craft, and imaginative magazines.
Use social networking sites. I have a Twitter account and a Facebook page. Of the 2, Facebook was the most valuable, as it offers the viewer a look at my business and its core values. This is about building your brand. I did not realize the relevance of this at the beginning, but after attending several business seminars and conducting my marketing research, I realized that my “brand” was the core of what I was doing. My goal is to help knitters of all skill levels, but especially new and inexperienced knitters who may be afraid to come to a high-class store for advice. It becomes my “brand”.
Identifying your brand is a key feature of your business plan, so try to establish it as soon as possible. And remember that your original business idea can evolve and change when you meet customer requirements.
7 - Be prepared not to receive income for at least a year. Although I receive benefits during the first 12 months, I still have to rely on my savings to survive. You may have to think about how to manage your business on “real” work for a while. I haven't saved it yet, but I feel that the time may run out pretty soon. In the meantime, I am doing my best to prevent it, but I have to be realistic.
8 - Network. Talk to people! If you want to view insider information about the type of business you want to start, talk to someone who works with the same. Obviously, you can scare some operators who see you as a potential threat. Why not talk to someone who runs a non-competitive business, for example, if your business knits yarn, talks to crowbar, or another owner of an artisan store. They are usually happy to answer questions and show interest. You can also contact the same type of business in a completely different place, as they are undoubtedly a direct competitor.
Participate in forums and subscribe to newsletters and magazines to keep up with trends and get feedback from people who use the products you want to sell. When I first started the business of yarn, I wanted it to be a physical store, which has a cafe and a playground, as well as an extensive selection of yarn. I asked the question: “What would your dream yarn store look like / eat?” To a local group of forums, and they came up with exactly what I had foreseen. It was really encouraging, but after much deliberation and searching for the soul, I realized that I was not ready to challenge such an ambitious operation. Starting up online is by no means a compromise or practical experience, but this may lead to the opening of a retail store in the future.
9 - And last but not least: stay positive and passionate in what you do! Most people who dreamed of opening their own yarn store (or any business for that matter) are focused on one aspect of this business. For us, yarn is a dream to be surrounded by beautiful fibers every day! While this will always be the case, there are so many other aspects of owning a business that can outrun your dreams.
The daily pressure of a small business will always be there, so keep reminding yourself why it is so important to you. And if you sometimes forget that it made you want to do it, remind yourself, picking up your needles and yarn and running into the world of your dreams even for an hour - you will soon remember what madness led to opening your very own yarn store!
