When starting an online business, there is a multitude of things to consider. Most often overlooked among those things are the USP (Unique Selling Proposition) and the ROI (Return On Investment).
It may seem funny but many people believe that the product that they sell has a USP, while others cannot for the life of them figure out how to create a USP. For example, if you were selling Teddy Bears online, what would make a customer buy them from you? The Teddy Bears alone have no USP. In this case, you can create a USP by offering customization. From customized colors to clothing and even personalized gift-wrapping, anything that you can use to put a spin on the product can create a USP. At the end of the day, whatever makes the customer buy from you is your USP. If you fail to address this issue, all the money you spend in setting up and marketing your website will be an utter waste.
ROI is actually very crucial in the normal business world, but in the online world, it is often missed by the would-be-entrepreneur. ROI refers to the gains you make on the amount of money you spend. Generally, ROI is gauged on time, i.e. how long before you start making a profit. For example, if your entire online operation costs $10,000 to setup and $2,000 per year to maintain, you should have a target of six months in which to recover your total spending. If you do achieve this, everything after that is a profit. If you make $6,000 in 6 months it is not a total failure, but you have not achieved your ROI. This is also related to another gauging of ROI, the profit margin. If the business does not have the potential to generate enough profits to cover your investment and running costs in an acceptable amount of time, you end up with a negative ROI. This must be avoided at all costs and can be generally identified at the feasibility study stage.
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