How to build a business online
Fast and reliable broadband will make it easier for Australians to benefit from e-commerce – both as consumers and business operators.
An online business is any kind of business/commercial activity that happens over the internet.
Online businesses are also often referred to as e-businesses.
Running an online business usually includes buying, selling or providing a service online.
A wide variety of businesses can be found online, across a number of industries and sectors.
The growth of online businesses
Online businesses have seen continuous growth over the past couple of years.
According to NAB's Online Retail Index, all categories in online businesses – except daily deals – have recorded a year-on-year growth.
The fastest growth sectors were electronic games and toys, followed by media and home wares, appliances and fashion.
The beauty of an online business is that it often means the traditional requirements for starting a business, such as hefty start-up costs, setting up bricks-and-mortar stores and complicated infrastructure, usually don't apply.
There are even companies that specialise in getting online businesses off the ground.
These companies offer a variety of services including:
- Co-working office space
- Investment of funds
Another example is Startmate in Sydney, an incubator that offers $50,000 to start-ups for a 7.5 per cent equity in the business. They even throw in a trip to Silicon Valley!
Fishburners, a not-for-profit tech start-up incubator, claims it is Australia’s largest co-working space. Members have access to its network of mentors, investors, service providers, potential customers and more to help grow your start-up.
The hidden benefit of lower start-up costs is an increase in investors willing to back new online businesses.
Australia’s largest-ever tech venture capital fund, Blackbird Ventures, is launching with more than $200 million raised to support local technology start-ups. The fund will exclusively target homegrown internet-based companies that want to take their business global.
What makes a successful e-business?
Regardless of the industry, some of the qualities of successful online businesses include:
- Outstanding customer service
- A better (or less expensive) product or service
- Constant innovation
- Customer retention
- Relationship building
Many companies have used these qualities as a model for successful online businesses. Some of the hugely successful online retailers that have not only gone the distance, but also continued to expand and thrive include fashion companies such as The Iconic, Asos and Net a Porter.
Airtasker offers users the chance to outsource tasks like picking up the drycleaning and doing household chores but has also been used for such diverse tasks as paying someone to stand in a queue for six hours for a Game of Thrones exhibition!
Canva is an online graphic design platform that replaced expensive, complicated software with a platform that makes it simple to create graphics, presentations, posters and more.
Another method to create a thriving online start-up is to use a successful existing business in another market as a model. Australian retail start-up Buy Invite is a shopping club that was modelled on the French outfit Vente-privee.com in 2010.
The company was started by two young Australian investment bankers, who lost their jobs in the GFC, and was acquired by Oz Sale for an undisclosed sum in 2012.
So apart from an entrepreneurial mindset, hard work, talent and drive, the success behind this business started with using an existing model and introducing it to a different market.
Some other successful Aussie businesses using digital to drive success include the charming Alma Hotel in Willunga, South Australia, offering free high-speed internet over the nbn™ network to guests, and another South Australian outfit, Adelaide Winemakers, where fast data over the nbn™ network has opened doors to a new way of working.
The rollout of the nbn™ network means it will be easier for Australians to benefit from ecommerce – both as consumers and business operators.