Online Business FAQs
It’s perfectly normal to have a lot of questions when starting an online business. And, you will have more such questions as you run it. Getting so many doubts and queries is a good sign that you are trying hard to make your business work and grow.
How else can you know that you are doing the right thing?
Don’t be afraid to explore new territories and include better business strategies and develop your existing business models. Roll with the changes in the world and keep innovating new practices that build your business.
We know that you are bursting with so many questions on how to run an online business. That’s why we have collated a list of online business FAQs that will give you much-needed clarity.
Online Business FAQs Answered
Many of us may have some doubts about the basics of running an online business. So, let’s start from the fundamentals and go on to more specific topics. Dig in and get all your online business FAQs answered here!
1. What is an online business?
Online business is a generic term that denotes any business that performs transactions online. It can be as simple as receiving payments from customers through an online portal or sending out digital products online.
To break it down in lay man’s terms, if you have an online presence, either in the form of your own website or a separate space on any platform where the people can visit, know more about your business, place orders and pay, then it is an online business.
You may sell physical products, have a physical store; but you can still conduct a part of your business online.
2. What are the common advantages of having an online business?
When you run an online business, you can reap so many benefits like:
● Keeping your online store open 24X7
● Immediate customer grievance solutions no matter where your customers are
● Cost-effective advertising
● Opportunity to manage your online business from anywhere
● Streamlined business operations and customer interactions
3. How to register my business?
There are few requisites you need to follow to register your business with the central authority like having a bank account, mailing address in the country, business insurance, a name for the company, business contact number and register with the tax department as a business.
For businesses in Canada, you can register your business with the government here or use Ownr Services. For businesses in the USA, here is a guide to know more about where you have to register your business.
4. What are the basic types of businesses?
Based on the number of people who get together to form a business or run a business, there are three main types of businesses.
● Sole proprietorship – This is the most common type of business where you are the single owner and the decision-making authority in the business. You will be getting all the profits and the losses from the business.
● Partnership – Partnership is when the business is started by two or more people as partners. Sometimes, a person can also join as a partner after the business starts and share the profits and losses among all the partners.
● Corporation – This type of business is generally for large organizations where the owners are the stockholders. The stockholders elect a board of directors who will decide on the business operations.
5. Do I need to invest money to make money?
Well, this is one of the common challenges that many new businesses face today.
If you have a great idea that you want to implement, you can get some investors on board. So, they will be the ones investing in your business while you will be running them. However, since the investors have put their money into your business, they will have a say in the business operations and may also expect a certain percentage of returns in a short time.
Sometimes, you can get investors to pitch in for a share of your business value and put some of your own money in too. So, it is not compulsory to invest your money in starting your business and make money.
6. What is passive income?
Imagine, sitting in the comfort of your home and binge-watching on Netflix and your online business making money for you. This is exactly what passive income is.
You put in the seeds today and you will reap the benefits in the form of continuous money flow without any more added work. Great examples of passive income are eBooks, affiliate marketing, influencer marketing, stock market investments, dividend stocks and many others
7. What is market research?
Market research is a vast field by itself, which is often required by businesses. It is the process of finding a solution for a specific problem through extensive study of the company, customers and market situations. This process of market research also includes the formulation of the solution as a plan of action.
The main job in market research is to gather the relevant data that will be the answer to your problems. You require market research at the start of your business, during the implementation of new products, during the times when the business runs into a dead-end during any other complex issues and many more.
8. What is a business plan?
Let’s not go by the theoretical definition. Practically, a business plan is a set of actions, more like a step-by-step roadmap designed to achieve a specific goal within enforced timelines while being profitable.
A business plan is crucial for any business at any stage. You can have long-term business plans to attain a big goal and several other short-term business plans as a stepping stone for it.
9. Why my website is very important?
As an online business, you cannot do without a dedicated website just for your business. A website increases the credibility of your business and gives the users a place where they can learn more about what you do.
It is entirely your space where you have full liberty to project your products in any way you want. You can create multiple conversion channels on your website through which you can increase your revenue by folds. With a website, you can make good money with minimum investment.
10. What is SEO?
As a website is crucial for online conversions, Search Engine Optimization (SEO) is vital to get users to visit your site. SEO is an integral part of online marketing where a set of processes working together to increase the ranking of your business on search engines. The higher up your rankings are, the better visibility you get in front of your audience.
Through strategized SEO practices, you can divert more traffic to your website, which means more leads and customers.
11. What is social media marketing?
While SEO is for the website, social media marketing is for the social media profiles of your business. Every business should have a social media profile. It’s completely free to create and is not a complicated procedure to manage it.
When a lot of your target audience is on a specific social media platform, it makes sense for your business to have a profile on it, post interesting content and get conversions from there too.
12. What is email marketing?
Like social media marketing, the purpose of email marketing is to increase conversions but through emails. In email marketing, you will send out clearly crafted, attractive emails to the mailing list of leads and customers. It can be to announce a new product, discounts and offers.
You can also use it for retargeting the leads and keeping your business alive in the minds of the customers. There are several software available in the market to help you with email marketing.
13. What is website analytics?
You would have heard of the term website analytics in various discussions on marketing, website optimization and website design. Website analytics is the combination of data collected from the website, optimized and analyzed to understand the website working.
You can get a lot of information from website analytics like:
- Reasons for bounce rate
- The factors that the customers like on the website
- The pages that perform the best and worst
- Analyze and understand why a webpage works and why some don’t
- Find out engagement on desktop and mobiles
- Understand the channels that drive the conversions
- Understand the visitor’s online experience
14. What is Google Analytics?
Google Analytics is a website analytics service offered by Google for free. You can analyze the website traffic, analyze individual webpages, track the conversions and perform various other marketing operations.
It also aids with SEO and online advertisements. All you need is a Google account and you can start using Google Analytics right away!
15. What is Google Search Console?
Google Search Console is all about the technical aspects of the website. You can check and maintain your website’s healthy state with Google Search Console. You can check the user-friendliness of the website on various devices, monitor the indexing of the website on Google, crawl new webpages, setup site maps for easy analysis by search engines and different other monitoring purposes.
If you have the basic knowledge of how search engines work, then you can use Google Search Console and check for your website’s health.
16. What is digital advertising?
See those ads that crop up on the top of Google search results and when using some websites? Well, those are all digital ads. You can also advertise your website on external websites and on search engines too.
Digital advertising is better than physical advertising as you can choose the type of people to whom your ad needs to be shown. Therefore, you will make good revenue per dollar of investment in digital ads.
17. What is Google Ads?
Google Ads is an online platform that facilitates you to create and publish ads on Google search results. You can choose the type of demography for the ad, the nationality, the age group, the gender and various other customizations. You will only pay for the ads that are clicked on and therefore, you can earn high profits for the money spent.
Further, you can track the performance of your ads from the Google Ads, run multiple ad campaigns, check the relevancy of the ad, reconnect with lost leads and get real-time insights into the performance of your ad.
18. What is Google My Business?
If your business is local to an area, then you shouldn’t miss out on setting up a Google My Business account. It’s a free tool for companies to set up the details of the business and drive engagement through Google Search and Google Maps.
For example, you provide cake delivery services all around the Algoma district in Ontario, Canada. So, you set up Google My Business by specifying the locality and your services. When someone searches in Google Search or Maps for cake delivery shops in Algoma, your business will be one of the search results which could mean high conversions.
By setting up Google My Business, you get more leads at literally no cost at all!
19. What is Google Trends?
Google Trends is yet another free tool by Google that lets us search and understand the search queries. It’s of much help for SEO purposes. When you include keywords for SEO, you can analyze the performance of the keywords, the websites that are ranking for the keywords, the volume of search results, the geographical locations with the volumes and much more.
You can create and compare graphs based on the search queries to get a better understanding of the search queries and their competition.
20. What is marketing automation?
For all the various methods and tools of marketing we have seen until now, it can be difficult for a small business to manage all of it aside from looking after the business operations. Marketing automation is where you automate a part of the marketing work through software. There is various online marketing software you can use like HubSpot, Active Campaign, Zoho Campaigns, Campaign Monitor and many more.
21. What is a business niche?
A business niche is a focused area on a broader market. To put in simple words, it is a specific product or service that your business concentrates on in a huge market.
For example, the manufacturing of labels to stick on bottles is a niche and so is the niche of providing delivery boys for online deliveries.
When starting a business, it is more vital than ever to pick a niche, stick to it, establish oneself in that niche before branching out to more niches.
22. Why do online businesses fail?
This isn’t quite an easy answer as there can be thousands of reasons why online businesses fail but here a top few:
- No clarity in what they are selling
- Inability to learn about how the online world works
- No proper online presence
- Suffocating oneself with multiple responsibilities
- Lack of maintenance of the website
- Lack of profitability
- Poor leadership or management
23. Why do online businesses succeed?
When an online business succeeds, it is mostly one of these below reasons:
- Exemplary customer service
- Bringing out that ‘wow’ factor in their business name, the online content, and/or marketing
- Online presence over most places wherever their target audience is
- Providing high-quality products or services
- Delivering promises
24. What is website traffic?
Website traffic is the count of the number of people visiting the website. It can be counted per day, per week, per month or even per hour. This is a critical parameter for calculating the conversions, bounce rate and lead elements.
25. Will I require a physical office or space?
It depends on what your business is. If you are working as a single person or when your business doesn’t need face to face interaction with customers, then you don’t need a specific office space. However, as your business grows and as you hire more employees, you may need a space where all of you can work together.
26. Will I require employees?
Again, it depends on what type of business you are in and on the expertise you hold. If you don’t have any sales/business/marketing knowledge, then you need at least one person at the beginning to work with you on it. If you are providing online services, then you may manage on your own. But, when it requires lots of physical efforts, then you need employees from the beginning.
Make sure not to overwork yourself and hire employees as your business expands.
27. When can I start making money?
For any business to start making money, you need to get that visitors to your website to make the sale. If you already have some online presence, you can divert the traffic from there to your new business. Else, if you are starting a business like an affiliate marketing, then you may need a bit more effort to make that first revenue.
28. What are the common marketing channels?
For online businesses, the common marketing channels are
- Your website and its presence on search engines
- Your social media profiles
- Your online advertisements
- Third-party websites with your website links on it
- Direct sales through face to face marketing
29. What is revenue?
Revenue is the amount of money that you have generated from your business minus the amount of business operational costs. It is the sales made, including the offers and discounts from which the price went towards the sales is deducted.
30. What is ROI?
Return on Investment (ROI) is the measure of the profit made with comparison to the cost of investment. This is generally used to determine the efficiency of the investment made based on the returns generated by it.
31. What is ARR or Annual Recurring Revenue?
ARR is generally used by subscription-based businesses where the recurring income for a year is calculated based on the average investment and annual profit. It is the forecasted revenue for the coming year by taking into account the monthly revenue. The actual revenue will generally vary above or below the ARR.
32. What is the Cloud?
Instead of having storage devices and database equipment in separate physical spaces to store and maintain your business information, the cloud is an online space where you can store on servers. Cloud is best for new businesses and even for organizations of medium scale. With minimum investment and responsibilities, you can store and access your data from anywhere with ease through the cloud platform.
33. What is cloud business?
Cloud business is a platform that provides cloud storage services to customers in exchange for a small fee. These businesses maintain storage devices at physical locations in which you can store your data.
You can choose from some of the top cloud providers like Microsoft, Google and Amazon for secure storage options.
34. What is dropshipping?
Dropshipping is the method of running an online business without storing any inventory. As soon as the customer places an order online through your platform, the order will be sent to the warehouse maintained by the seller and shipped directly from there.
So, as a business owner in the dropshipping business, you don’t have to manage the physical aspects like warehouse maintenance and shipping.
35. What is a trademark?
Trademarks can be any word, phrase, image or symbol that is associated with a specific company or sometimes, a product. The primary purpose of having the trademark is to avoid the competitors from using the particular elements that are established and connected with the product.
Many companies trademark their slogans, their company logos, designs and many more. The best example of a trademark is the half-eaten Apple logo. If you are using any symbol or slogan, make sure that it doesn’t clash with any other’s trademark. If you have come up with something innovative that has never been used, then trademarking it is the best move.
36. What is copyright?
Copyright laws define that a specific work belongs to a particular person. It legally protects the creation and can only be shared by others with the permission of that creator. You can copyright songs, ideas, stories and other content.
As a business owner, you will have to worry about using copyrighted images, songs and any other elements like the trademark. However, you can still use it after getting permission.