What are digital businesses and how to start them
As you already know, business trends are leaning more and more towards online. So surely logic will lead you to undertake in this area. But before you make any move on Hispanic Entrepreneurs we think you should know what are digital businesses and how to start them.
Differences between the digital entrepreneur and the traditional one
The differences between one and the other are minimal, they will go through the same processes and phases when starting the company. But digital will have fewer risks, greater opportunities to attract customers and implement new business models. In this way you will be able to get to know users better to obtain valuable information.
It poses new challenges and will have to face challenges such as fighting in a larger and more competitive market. Apart from applying digital strategies to reach the audience and achieve good results. They must be constantly updated to face technological changes. In both cases there is the risk of failure.
Skills to create a digital business
To start a digital business we have to have certain skills than just buying a computer and having access to the internet. To stand out from the competition in the online world, you have to have a passion and curiosity for new businesses.
Try to search for information to know which market is untapped and verify that new options can be offered. You have to be able to analyze, observe and interpret the data and adapt it to the needs of the consumer.
It is essential to have instinct to investigate everything necessary to come up with the idea of a solution that adds value and sets trends. This has to be done constantly because the internet is constantly changing as well as customer preferences.
Likewise, try to enhance your talents in online communication. It is essential that digital entrepreneurs have the facility to connect with the audience. In this way they will sell more and better. Most of the time you will have to be in communication with consumers to attract them.
Adaptation is as important as all of the above. The digital environment demands that you adapt to the appearance of its new trends and platforms. Remember that with these tools you can promote your company, products and services. Understanding all the elements involved in this is key.
What are digital businesses and how to start them
All activities that involve the use of information technologies and the internet to sell goods, products or services are called digital businesses.
In other words, companies must have a digital platform that is their engine to grow and generate income. All through channels connected to the internet. The main difference with traditional businesses is that digital ones do not require a location. This represents the opportunity to save costs.
Digital businesses are distinguished by having reduced operating and administrative costs compared to other models. This advantage appears because most of the platforms on the internet are free.
They have a greater reach by reaching a larger number of their target audience. It is based on the use of payment gateways facilitating the sales processes. Generally, the user uses his smartphone to buy products or services in a few steps.
They tend to form large communities where they interact with their customers directly. In addition, they benefit from telecommuting by reducing office expenses and at the same time giving comfort to employees. They do not need a large investment to start it, only a business plan, a defined strategy, clear and measurable objectives are essential.
We must remember that they are not tied to being only digital, they can offer physical products. Examples of digital businesses are companies such as Mercado Libre, Uber, Airbnb, Amazonn, Netflix and Shutterstock.
Netflix is a good example of switching from e-business to digital. It first used the technology to manage inventory and ship DVDs to customers. But they realized that the service was similar to movie rental stores. Then he bet on streaming video on demand, revolutionizing the way people watch movies and television.
Many associate it with E-commerce, but digital business goes beyond marketing and customer relations. It encompasses all brand relationships, including contact and requests to suppliers, employees and partners.
Sometimes it focuses business processes by distributing demands and tracking results. In addition, it can facilitate the interconnection of various systems from different sectors such as finance and marketing.
Digital business models
1-E-commerce
They are the most popular, they are based on the purchase and sale of products or services through a website or mobile application. They do not need to have a physical store.
2-Online distributors
It is the sale of manufactured products that a distributor buys and resells online to retailers or the general public.
3-Content businesses
They are the companies that inform or entertain a certain audience in a virtual space according to their tastes and interests.
4-Digital Retailers
Through this, businesses sell products and services directly to consumers after obtaining them from a distributor or wholesaler.
5-Hybrid Ecocommerce
This model, also known as Bricks-And-Clicks, works when the company has a website to order products and a physical store. The customer has the option of going to the latter to pick up the purchase.
6- Software as a Service (SaaS)
They offer services that can be consumed online under the pay-per-use or subscription modality.
7- Platform as a Service (PaaS)
This option develops and provides a space on the network with various tools for users. Through these they will be able to create, host and share virtual products, which is why it is associated with graphic design, software development and marketing, etc.
8- Subscription Model
Establish a long-term relationship with customers by inviting them to sign up for the service or products. It involves monthly, annual, semi-annual or quarterly payments.
9- Marketplaces
The well-known online markets are virtual spaces in which they connect supply with customer demand. They do it in different consumer niches. Currently some social networks include this model.
10-Affiliate Marketing
With this you join a company and earn money by promoting the purchase of certain products or services. Ebay and Amazon allow their users to use this model to create their own digital businesses.
The digital business models Freemium, Data Licensing, Infrastructure as a Service (IaaS), Dropshipping, Crowdsourcing, among others, also stand out.
Advantages of digital business
Building a digital business brings various advantages to the entrepreneur, both in terms of income and professional growth. It is about making it grow over time because they are easy to start and scale. They give the opportunity to compete with large companies while spending less money.
We reiterate that they do not require a physical space, it can even work in the comfort of your home. It will teach you to handle many marketing areas, communication, sales, design, programming and more.
By relying on services and platforms you can get additional functionality at low cost to grow faster. You undoubtedly have access to a world of possibilities that the internet provides and that traditional models do not have.
They are a great alternative for people who intend to start a business from scratch.With little money and an attractive idea, they offer the possibility of covering a specific need in a market. What is mandatory is having the desire to learn and work to stand out and get clients.
Today, online presence is essential as millions of people connect daily to the Internet and social networks. In addition, you will be available all the time for your customers.
How to start a digital business?
If you plan to jump into this universe and you stop wondering how to start, if it will be safe or if you will find a viable idea. Do not worry, here are some tips for you to achieve it.
First, define the project and the market niche. It is important to clearly know what you are going to offer and what needs you are going to cover with your product or service. Apart from establishing what characteristics your ideal client has in order to focus on this one.
Decide what services or products you are going to sell and what their added value will be. You can get this differentiator by giving a lower price, quality, customization or delivery time.
Do a market study so you know who you will sell to, their interests and what affects the segment you chose. For this, it also analyzes the competition. These data will be used for the preparation of advertising, content and sales strategies.
The next step is to specify the pricing strategy.How much do you want to sell it for? To know this, factors such as the cost of the product or materials must be taken into account. As well as labor and additional expenses that include transportation and packaging, plus the profit margin. The most convenient thing is that the profits are above 30%.
Make a plan that the potential customer has to go through to make the purchase. Specifically, it is the way to illustrate how the customer interacts with the brand. During this cycle you must define the key moments and apply strategies in each one, then analyze the results. If necessary adjust it and try again.
Choose the sales process. It covers the phase of customer attraction, lead qualification, approach, presentation, follow-up, negotiation, closing and post-sale. Then define the ecommerce platform that best suits your digital business, which is the one that grants the most benefits, the lowest cost and the most ease of use.
The most famous are Shopify, Woocommerce, Prestashop, Magento, Wix, BigCommerce, among others.
Create the sales website. To take this step, you need to know who your audience is, have more than clear objectives and the selected products. Likewise, set up the virtual store, buy a web domain, integrate the payment and shipping methods, plan the promotion campaign. Additionally, connect it to social networks.
Final steps
By having everything mentioned above, start selling online. Enable the Online store,do paid advertising on Facebook, Instagram or Google Ads. Promote the launch and carry out dynamics on social networks and connect the store with other online sales channels.
Do not forget to make sure that the website looks reliable because this will be decisive in generating trust in the user. You will achieve this by designing a great home page, maintaining good spelling and detailed product descriptions.
It is also important to add quality photos, provide contact options, respond in a timely manner, publish the brand story and what makes it different. As well as obtaining the SSL (Secure Sockets Layer) certificate and having a secure ecommerce platform. Add legal notice, purchase conditions and publish user experiences.
Be careful with the legal aspect, some think that it is a territory free of norms, but it is not like that. There are laws for online marketing, as well as taxes. You should review the legal area in detail so that you do not get a surprise such as fines and other serious consequences.