So, you’ve got a few weeks off work, and you like the idea of starting an online store as a bit of a ‘side hustle’. Nice. I reckon every third person I speak to has had the same idea at some point – and why wouldn’t you? asks eCommerce expert Paul Waddy.
eCommerce is a behemoth of a beast that’s destined to more than double in size and demand over the next decade. Think about it; if we think we love shopping online, imagine what our kids and their kids will be doing, and how much they’ll be spending, by the time they’re working and earning money?
So, here are a few ways to get your creative juices flowing over the summer holiday and plan your side hustle or your future empire.
What problem are you solving?
Too many businesses fail because they believe their business is the solution, not their product. In other words, you need to be able to identify in one sentence what problem your product solves.
So, try and ponder this over your summer break: Does the world really need another women’s fashion brand? Perhaps you could target a solution for a problem you’ve faced. For example, the day someone finds a solution for the hideous amounts of plastic that is used in those little soy sauce bottles you get with your sushi, someone will become a very rich person.
Opening an online store is the easy part (perhaps you could read my book, Shopify for Dummies) – finding a product that makes people’s lives easier is the harder part, so focus on the product.
Paul Waddy explains the basics of eCommerce for small business:
Ask Santa for some cash
Another common question I get is: How much money do I need to start an online business? The answer really depends on how far you want to go and how fast.
Remember two golden rules:
- You should aim to always hold three months’ worth of your monthly operating expenses as a cash reserve or float.
- The wider your product range, the higher the chance you’ll win sales. A busy store is a good store, and a skinny store means skinny sales.
In other words, you need a bit of cash. Even if you read my book and start a Shopify store for next to nothing, you’ll need some money for stock and advertising, as well as other costs like delivery costs. I think if you can get $20k together, that should be enough to make some decent sales. Any less, and your sales are likely to be very low due to a small product range and a tiny advertising budget, and with small sales, you’re likely to begin to fall out of love with your business.
Maybe I’m biased, given that I wrote the book – but Shopify has made more millionaires than any other platform, system, or thing that I have ever seen. The best part? It’s super easy. You could pick up my book, and by the time you close the last chapter, you’ll be clicking ‘go live’ on your brand new store.
For those that don’t know, Shopify is the engine room behind many of the world’s best online stores; it’s the platform you’ll use to build your online store.
Stock for days, not years
You should aim to carry no more than 12 weeks’ worth of inventory cover. In other words, enough stock to sell for 12 weeks. Any more than that, and you’re likely to run out of cash, and any less, and you’re likely to be leaving good money on the table through out of stocks.
There’s no need to make your suppliers rich; you’re in this to make cash, not just sales, so 12 weeks is your lucky number.
Don’t be a quitter
Avoid the temptation to quit on two levels:
- Don’t quit just because you’re not making $10k a week in month three – it takes time. What you want to see is growth each month, or every second month. If your sales are heading north, the millions can come down the track. Think long term – your side hustle could pay off, and your future self will thank you.
- Don’t quit your day job – yet. Avoid the temptation to go all out on your new side hustle by quitting your nine-to-five. Why would you give up a perfectly good income when you can spend twelve months getting paid and building up your side hustle, without taking money out of it? In the first year, you want to put all your money back into your business to give it every chance to succeed.
I’ve seen more than enough side hustles turn into $20million a year monsters, and you have to start somewhere.
So, this summer, get yourself a little something on the side, dive into my book, and let me know when you’ve made your first sale!
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