9 Answers to FAQs About Opening An Online Business | BPI AIA

Because of the COVID-19 pandemic, many businesses have shut their doors due to immense loss. If it's not a permanent closure, some shifted their operations online, taking advantage of everyone's prolonged time online. Meanwhile, individuals who were laid off or lost their livelihood due to the health crisis tried to find new ways to earn money.

Despite many employees returning to work and businesses resuming their operations, there are still physical limitations and safety precautions in place. That's why during this time, it's wiser to put up an online business. But, how does one exactly open an online business?

Whether you're turning your passion into a business or simply starting one as a source of income, this post will answer all your questions regarding how to open an online business.

1. What do I have to offer?
   
   The market is saturated, and the competition for online businesses is tough. What do you have to offer to customers that neither your competitors nor any other related business doesn't have?
   
   You must identify the problems that consumers have that your business can solve, determine if what you can offer will come with specific benefits no other business can provide, and find something unique about your business and products. Whether you're helping small businesses find their voice online or you're offering chunky cookies, you have to define your unique value proposition (UVP).
   
   
2. Who is my target market?
   
   Your target market pertains to the consumers whom you think will buy your products and services. Your branding and marketing efforts should be based on the interests of this group. You can start identifying them by conducting surveys, looking at your analytics, analyzing your competitors' audience, and forming a conclusion based on the insights. You can create your target audience or persona based on these.
   
   
3. How do I price my products or services?
   
   When it comes to pricing your products or services, consider the materials you used, equipment, packaging, and the total cost of producing your goods. If you find credible suppliers that sell quality materials at reasonable costs, you can set your prices competitively. However, you need to figure out how much shipping costs (if it applies) will dwindle your margin.
   
   
4. How much will it cost me?
   
   The cost of starting an online business depends on what type you plan to run and the products or services you're going to sell.
   
   For instance, opening an online food business would require one to shell out for packaging materials, inventory, business registration, and basic online marketing skills like social media ads. Usually, these businesses don't need web hosting since it's more ideal to boost visibility through social media.
   
   On the other hand, if you're a web designer and you're starting your own web design services, coupled with other disciplines like graphic design, you'll need to consider the costs of web hosting, marketing, and the tools you use for the job. Everyone's business is different, but the good thing about online business is that you don't need to invest in a physical store, which will undoubtedly rack up your costs.
   
   
5. Where do I source my products?
   
   You can make the products yourself or purchase them from a third party at a wholesale price for more savings. If you choose to create the products yourself, you'll need to source materials. When picking this route, you have to know how much the raw materials are, how to store them properly, how shipping works, and how much time it takes to make the product.
   
   If you prefer to source from a third party, you must be more careful and do research. You need to find products that are of excellent quality, so you have to sample them. Similarly, you need to consider how long before the products get to you and if there's a minimum order required.
   
   
6. What are my online selling platforms?
   
   Naturally, you'll have to put your business on social media platforms—but not just any social media site. It wouldn't be right to create a TikTok account if you're selling food, would it? The best channels for this are Instagram and Facebook.
   
   If you're selling items like home decor products, clothes, shoes, or phone cases, you can sign up as a seller on ecommerce platforms like Lazada and Shopee to tap a broader market.
   
   
7. How do I deliver these products to my customers?
   
   While you can do meet-ups with customers when you're just starting, you must establish your delivery methods to cater to a larger audience and get competitive against other businesses in your field.
   
   These days, delivery apps like Lalamove, GrabExpress, and Mr. Speedy can help you send goods like food and plants to customers in a couple of hours. On the other hand, you can explore different shipping companies, such as LBC, JRS, Air21, 2GO Express, and J&T Express, for other products.
   
   
8. What are the legal requirements I have to process?
   
   People think that just because your business is online, you wouldn't need to register for it. But it is necessary to secure the required permits and licenses to ensure you are legal to operate. These documents also identify you as a certified seller, which means more people will trust you, including customers and wholesalers.
   
   Here are the government offices you need to go to for the legal documents:
   
   ● Department of Trade and Industry (DTI): register your business name (for sole proprietors)
   ● Securities and Exchange Commission (SEC): registration of partnerships and corporations
   ● Bureau of Internal Revenue (BIR): to be issued a business tax identification number (TIN) and authority to print official receipts and invoices
   ● Local government: obtain a mayor's permit or municipal license in your location
   ● Pag-IBIG, PhilHealth, and SSS: register as an employer if you're hiring staff for your online business
   
   
9. How do I effectively promote my product/service online?
   
   Since many people are on Facebook, it's recommended that you create a Facebook Business page, regardless of the type of business you have. Facebook, along with Instagram, are excellent platforms that help build your online presence, promote your products and services, and reach your target audience.
   
   Once you've set up your accounts, make sure to post regularly to boost your followers and interact with them to retain their interest in your business. If you have a Shopee or Lazada store, you can put the link in your bio or promote it through your social media so customers can easily find and browse your shop. You can also use social media to get feedback and improve your products, services, and processes.
   
   

Final Thoughts

Starting an online business isn't only about money. You need to have a good idea of your target market, how you're going to promote your products, where you'll sell them, and so on for your business to be successful.

Funding your online business can be a challenge, but with BPI AIA's Insurance and Investment offering, you can have peace of mind knowing that you have an alternative income source to grow your existing funds. If you're interested in finding out more, you can schedule a virtual appointment with our Bancassurance Sales Executives.