Is It a Good Time to Start an Online Business?
COVID-19 has affected businesses, economies, and lives all over the world. What does it take to start an online business now? Or better yet, is it a good time to start one? In this video, we dive into the factors you need to consider before launching your own dropshipping store.
Video transcript: The ongoing COVID-19 pandemic has turned the world upside down. More than half of the world is currently under some form of lockdown. That means people like you and me suddenly have a whole lot of time on our hands. There are still 24 hours in a day. Nothing has changed about that.
A lot of people are seeing this as a golden opportunity to start some sort of project and that project being an online business. It's totally normal, though, among this current pandemic to be wondering, "Is this really a good time to start an online business?"
If you've always dreamed of starting an online business, but are wondering if this really is the right time, then stick around.
I'll discuss how to assess your financial situation to see if it is the right time for you to sell, what exactly you should sell or start thinking about selling during this pandemic and beyond that, and how you can set realistic goals.
Ready? Let's dive in.
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Assessing Your Financial Situation
Hi everyone. I'm Magda and I work at Oberlo with Jessica. Normally, I'm on the other side of the camera. But since we are also working from home, I'm actually filming this in my living room. Now, the first thing that I'm gonna touch on is how to assess your financial situation to see if this really is the right time to start a business. It might sound obvious, but it needs to be said.
You are going to need to spend some of your hard-earned money to help your business grow and succeed.
So think about the initial costs that you'll likely incur when you're getting your business off the ground. If you ever need help with budgeting, we have an entire budgeting tutorial on our YouTube channel and we'll make sure to include it in a card as well as the description below.
First, you'll need to spend money on a platform to actually run your online business from. You'll need to find products and you'll also need to pay the cost of those products, even if you are just dropshipping them. Most importantly, you'll need to spend money to actually market your business.
This is where the biggest variable is because some people spend a lot of money on marketing and that helps them to increase the speed that they're getting traffic and sales, or you can go down the path of building an organic social channel and find your audience from there.
These are pretty much a given when you're starting an online business. But there are definitely alternatives that you can consider if you want to start growing your business, but don't necessarily have the financial needs to get it off the ground and running just yet.
For platforms, you've got none other than Shopify to consider. Shopify is an ecommerce platform where you can set up your online store, whether it be for dropshipping or selling your own product.
If you have products to sell, that's great. And if you don't, there's no problem at all. That's where we step in. Oberlo is an app that helps you dropship products from other suppliers, meaning you can import products to sell and you don't have to ever see them or touch them. When a customer orders a product, you'll just ship it directly from the supplier to your customer.
So, using Shopify and Oberlo takes off a few costs straightaway. But you're still going to need to figure out if you're willing to commit your money to other aspects of your business.
For example, your domain cost. This isn't a huge cost, this is normally around $10 to $20 for the year, but it is something important to consider. Also, you wanna think about marketing costs. Are you going to be thinking about running Facebook ads or rather are you thinking about growing an Instagram account for your store?
Free Marketing Alternatives
We completely understand that money can be a little bit tighter right now than normal. You need to be completely honest with yourself and really look at your finances to see if this is the right time to start your business.
Ask yourself, "Am I willing to risk my money right now? Will I still have enough money to sustain myself, pay my rent, and make sure that all my bills are paid?" They're very serious questions, so I want to be transparent and make sure that you ask yourself them very seriously as well. But don't forget, there are a lot of budget hacks and shortcuts that you could take if you don't have a lot of money to invest right away.
If you're worried about the cost of Facebook ads, hold off on it.
You might not have even built your store, thought of what you wanted to sell yet. There are a lot of alternatives that you can use to get your product in front of customers.
For example, TikTok and Instagram. Don't feel that just because you can't afford Facebook ads right now, you can't get started on your business. Starting a business means a lot more than running Facebook ads. If you open up a store on Shopify, even with the free trial, you're already working towards building your business.
Also, if you don't even wanna do that yet, if you just wanna go on Instagram and start building an audience before you ever even sign up for the Shopify free trial. That's still growing your business.
You're laying the foundation so that when things are back to normal, you'll be able to hit the ground running. So really look at your situation and your finances and think, "What can you do with what you have?"
Focus on What You Can Do Now
Don't focus on what you don't have because you'll be able to figure out a solution to that problem when you get there. If you're worried about Facebook ads, that's way further down the road.
Focus on what you can actually do now.
Pro dropshippers Kory and Rodney spent a long time growing different Instagram accounts before they ever set up their store. And once they grew those Instagram accounts and found one that really, really worked, they've built a store around that.
Even when they were building an Instagram account and growing their audience, that was still a huge step in building their business, so don't forget that. Just because you can't run Facebook ads right now doesn't mean you can't start your business.
Here’s Kory and Rodney's interview so you can learn more about how they succeeded without Facebook ads in the beginning. If you're a beginner with a tight budget, you need to watch it.
The Time Factor
The next thing I'm going to talk about is knowing how much time you're willing to commit to your business. Here's the cold hard truth. You need to commit time to your business to actually make it work.
This is especially true in the beginning when you're just getting started with ecommerce and there is a lot to learn. Not only is there a lot to learn, but there's actually quite a lot that you need to set up and prepare your store before you ever actually open it.
So it's important to sit down and actually map out how much time you're going to be spending on your business every single week.
Sure, in theory, we all have a little bit more time, especially if we're working from home or at home because of the COVID-19 pandemic. But you need to be honest with yourself about actually using that time effectively towards your online business. If you need to look after your children or family members or have other responsibilities right now, make sure to be completely honest with yourself about how much time you'll have to invest in your business goals.
Just because most of us have a lot of free time right now, doesn't mean that we're actually using it effectively. It's important to distinguish the difference between having time and using it. I'm sure there are a lot of people that during this pandemic have thought, "Okay, I'm stuck at home. Well, at least I can do home workouts all day. I'm gonna be so healthy and fit after this is over."
But thinking it, looking up how to do home workouts on Google, shopping for workout wear, isn't actually the same as working out. So it's important to make that distinction and really commit to putting in the work that you need to do to get your business off the ground.
What To Sell
The next thing that I want to talk about is focusing on what you can actually sell right now. I mentioned earlier that people are being more careful with their money in this current climate. That might make you think that people are actually spending less time shopping right now, but the opposite is true.
Statistics have shown that ecommerce is booming right now. It turns out that when people are stuck at home, they have a lot of time to do online shopping. That's because even though shoppers are stuck at home, they still have needs and desires. The only difference is they can't go to their local Walmart to pick up what they normally would before. They now have to do all that shopping online.
They definitely won't be afraid of discovering new brands right now, either. Also, for the benefit of dropshippers, they'll be a lot more forgiving about shipping times. Even Amazon Prime right now is taking a lot longer to ship products.
To give you an example, I'm an Amazon Prime member, and some products I've ordered took two weeks to arrive to me where normally they take one to two days.
So if you want to start an online business right now, focus on the type of products that people would be looking for at this time.
Clothing, fitness equipment, bread makers are all the types of products that have absolutely exploded in popularity due to people being stuck at home. The trick is to capitalize on these types of products and carve out a name for yourself in that niche.
We recently published a video that gives you 20 business ideas for the coronavirus economy. Make sure to give it a watch to stir up some ideas of what you can start selling right now.
Choose Your Goals Wisely
Next, it's extremely important to choose your goals wisely. It's really important that you have clear goals and outcomes that you want from starting your online business. Right now, becoming a digital nomad and traveling all over the world isn't really the most appropriate goal to set.
We need to stay home to flatten the curve. So try to focus on other goals to have. You can save those digital nomad goals for later when your business is really big and successful.
On the other hand, starting an online business to have a safety net for your family and be able to save for the future is a fantastic goal.
It's also a great idea to start an online business as a side hustle. You don't need to dive right into the deep end right away. Some of the most successful dropshippers started dropshipping on the side. They wanted to make maybe $100 a month just to help with a few things. Once your business is off the ground, it's a lot easier to scale it and grow to make huge numbers.
Set small realistic goals for yourself.
Whatever your goal is, make sure that you write it down and ask yourself, is this actually a goal that I can achieve right now? Even if your answer is no, don't worry. Those are goals that you can still set for your future business.
However, if you set small realistic goals now, it'll be a lot easier for you to hit milestones and then feel encouraged to continue to grow your business, learn, and start scaling up. Finally, make your decision.
Okay, I've gone through the things that I think you should definitely consider if you want to start an online business during the COVID-19 pandemic. Now, it's over to you. Make sure you make the right decision because you're gonna be the first employee in your business.
And remember, there's never going to be a perfect moment to start your online business. Whatever your limitations are, whatever your budget is, whatever your goals are, you can always start somewhere.
Opening up a Shopify store and running Facebook ads doesn't necessarily mean you've started your business. Starting an Instagram account, building a following on social media, thinking about what you want to sell in the future, those are all aspects of starting your business, and they're important ones.
They will lay the foundation for your business to grow in the future. So if you're dedicated to starting an online business, then get started, but make those steps small and make sure those steps reflect your current situation best.
If you have any questions or concerns about starting an online business during COVID-19, make sure to leave them below. If you have any ideas that you'd like us to work through and shoot for you, make sure to let us know. I'll be reading and responding to as many comments as I can, and I can't wait to see what you think. Stay safe and happy dropshipping.