Owning a business is not as rare as it used to be. In fact, many people are quitting their day jobs to find themselves founding businesses based on their lifelong loves and passions. For people who have created their own product, this could not be truer, which is why they may choose to open an online store. Making any business grow is a difficult task, but ensuring your store stands out from the crowd is essential. Ideally, you should take note of some important advice if you want your start-up to grow into something brilliant.

Keep an open mind

Many business owners feel as though it is their way or no way. Although it is true that you may be an expert in your field, it is also true that you should be open to suggestions from other people. This could mean taking advice from a larger company that you were once inspired by, to listening to consumer feedback when you want to promise a better product. Although it can be hard, inviting creativity and innovative thinking into your company means your products will stand out from the masses, even if you are competing in a saturated market.

Attract investment

When an eCommerce business grows, it is never just due to sales. The more investment you have from people, the more able you are to funnel funding into creating new products, and bettering existing ones. Investors can come in the form of anyone interested in the stock market, to finding an angel investor. In any case, you should make sure that you are using this investment wisely. If you do, you can watch your business slowly grow, and investment begin to build – a process which becomes a wonderful cycle when you get it right.

Increase sales

It may sound obvious, but without sales, your eCommerce business will slowly plummet to the ground. Whether you are selling to businesses or consumers, you should focus on reaching new sales profits year after year. Having a great product is the first step, but there are luckily many more ways you can maximise sales. From selling your goods online to promoting them in social media campaigns, your marketing and sales teams can explore the various options you need to increase sales extensively. You should also make sure to use the correct platform to process these sales on; as Magento is falling in popularity, you can find a reliable Magento enterprise alternative to sustain your sales when you are both starting out and growing bigger.

Think globally

In the traditional world of eCommerce, many companies were limited to attracting sales from their local area. Thanks to social media, you can reach into the global markets to sell your products. Without the need for travelling far, you can even interact with international employees over video calls to ensure global sales are going well. You can also market your products to people on the other side of the world after you have considered shipping costs. Opening your business to the world will have a huge impact on your growth, but you should only make sure to delve into it if your business can handle it.

The easiest way to set up payments on your e-commerce website is with the use of open source e-commerce scripts. Typical examples of these are zen-cart and oscommerce shopping carts. You can quickly get these scripts set up with your web hosting and thereby have the opportunity to collect credit card payments.

You have two choices for accepting payments. You can receive these payments directly from your website, or you can have your customers routed to another site (called a gateway website) where they will make their payment. The option you choose has a lot of dependency on your budget. But if you are trying to reach a broader target and you have the capital you will want to start out with both options. If you are concerned about your budget, then a third party merchant will be the most affordable option as well as it will be one of the most comfortable options for you to choose from. The most popular third-party currently is PayPal, but they are not your only option. You can also select from 2checkout payment processing or VeriSign payment processing. There may be other options as well that will meet your needs better and help you to reach an international target market as well.

When you choose a third-party merchant, the customer is provided with a link that takes them to the third party. They then make their payment on that third party website before returning to your e-commerce website. When choosing third-party merchants though you may want to pick a merchant that will help you reach a target market in a different part of the world you want to ensure that you choose a trustworthy provider. If you are finding no fee or low fee options they may not be the best options at all. Stick with more reputable providers to keep yourself safe and to keep your customers safe; an evil third party merchant can ruin your reputation so beware.

If you haven’t started your e-commerce website as yet, you may want to find a web hosting provider that provides you with a package that includes a merchant account to be integrated into your e-commerce store. One such option is ixwebhosting. This is especially true if this is your first venture into the world of website creation. Get the experts to design your website from start to finish and to have your payment integration done as well. This way you can be confident when you start to market your store knowing that customers will be able to pay for their products and services in the most convenient manners for making payments online.

There was a time when I would have scoffed at the recommendation to use a template to create your website.

As web DESIGNERs we believed that each business was unique and deserved an individual online expression of its snowflake-like beauty.

Nowadays I wouldn’t build a site without one, so what has changed ? Do we no longer consider ourselves web DESIGNERs?

The fact is the focus has changed and people who use websites have changed the way they enjoy the web. It’s now the information orientated observer who is visiting your website, with less time to smell the roses in a much, much more crowded online world.

But it’s a template it will look like everyone else’s website!

Don’t worry you are still unique and beautiful; now there are thousands of templates to choose from, for every software platform, all incredibly customisable leaving plenty of room left for self expression.

But the key argument is due to the (up to) 40% of visitors viewing your website on a mobile or tablet, this being the case design needs to be RESPONSIVE.

RESPONSIVE DESIGN

The key argument for the use of the website template is responsiveness(ness). The modern website has 5 faces; desktop, mobile portrait, mobile landscape, tablet portrait, tablet landscape.

It will essentially shuffle the content around to make sure the font size is readable, the images fit on the screen and the most important stuff is emphasised on the small screen where attention spans are reduced.

It also means you don’t have to pay for 5 individual designs., which leads us to:

PRICE

A separate design for Mobile, Tablet and Desktop screens is not unheard of these days, but it is rare. The simple reason is cost, as well as having to pay the designer for 5 screen layouts (per page style) you will need to pay the front end developer to code the CSS for all of the different formats.

If you have the money there are some advantages to it and because you are reusing elements it won’t be 5x the cost realistically, but expect to pay at least twice the design and programming costs if you forsake the template.

FLEXIBILITY

It may sound counter-intuitive, but a template actually allows you to be more flexible in the long term with your website.

Finally got the photographer in and you want to add a gallery page?

Starting to get a good Facebook following and want to add the latest comments onto your homepage ?

As you business grows so should your website and with a template you have the ability to add new elements in to the layout and have them responsive to the different screens without having to run back to your designer every time you need a new feature added.

GOOGLE HAPPINESS

Rumour is that Google will rank your site a little higher if it’s responsive, this may be propaganda spread by the template makers but I can believe it.

What is for sure though is that you will have your SEO managed from one place and have the same URL for your mobile and desktop websites for easy crawling.

BUT WONT MY SITE LOOK LIKE EVERYONE ELSES?

Not with a little imagination and some key elements, there is an art to working within the framework and still standing out.

And as mentioned there are hundreds of options and all of them are pretty flexible. Let’s take this website for example Brown Paper was build on the Jupiter template by Artbees (one of my personal favourites) take a look at the demo and see if you would have picked it.

http://artbees.net/themes/jupiter-demo/

Our favourite one-page-one-product client Coffee Berry Tea was sculpted from the backbone of the Apollo Shopify theme, check them out side by side to appreciate the level of creative expression in the execution:

http://www.coffeeberrytea.com.au/

http://apollo-theme.myshopify.com/

To conclude, if you have a few hours to spare duck on over to Theme Forest and wander through the endless options, all categorised and catalogued and be confident in the knowledge that every dollar you invest in a theme will save you at least ten in design and programming.

Valuation Methodologies

Traditional business valuations can be broken down into the following methods:

• Asset Methodology – Book value or liquidation value methods
• Historical Earnings Methodology – including debt-paying ability, capitalization of earnings or cash flow and dividend-paying ability methods
• Comparable Sales Methodology – sale of similar businesses, industry rule of thumb, and p/e ratio methods
• Future Earnings Methodology– Discounted cash flows of the business

Generally a business valuation would use a discounted cash flow methodology, however because ecommerce businesses are slightly different to traditional, mainly their high reliance on goodwill, the accepted valuation method used is a multiple of earnings method. This uses the historical earnings of the business to determine a valuation. If you were going to categorise this valuation method in the above framework it would come under the historical earnings tab.

How the multiple of earnings valuation methodology works is that the net profit of a business is determined for the last twelve months. Then a multiple of that profit is applied (generally between 1.5 and 3.5 times) to determine the valuation. What multiplier is used is based on a number of factors about the business, most notably the level of risk for future earnings. Let’s use the example below to explain how the multiple of earnings valuation methodology works.

Let’s Use James Business

Eric (hypothetical real world example) has a website called Beard Brand where he sells beard oil products. The business is 4 years old and what started out, as a hobby is now a thriving successful business. The following financials are relevant to James business.

• Year 1 – Sales of $22,678 and profit of $1,088
• Year 2 – Sales of $59,831 and profit of $12,456
• Year 3 – Sales of $175,698 and profit of $49,736
• Year 4 – Sales of $350,128 and profit of $108,082

James business is reliant on a combination of traffic sources, namely 15% direct, 40% search, 25% paid and 20% referral websites. Most products are drop shipped from a reliable provider that has been working with James since day one.

Now because of the growth of the business, the diversification of traffic sources and stability of the supplier the multiple that would be applied to James business comes out at 3.1X. This means that his business is worth $334,000 ($108,082 multipled by 3.1 = $334,000)

Where does your site sit?

The following data shows some stats based on the analysis of 150 transactions of the value of ecommerce businesses. The below image represents the sales multiples paid for sites valued at different levels. How to interpret the graph is to take sites sold in each column and the average multiple paid. So for example let’s take the $75-$200k column. This is websites that sold for values between $75,000 and $200,000 the average multiple sold for ecommerce businesses (blue) was 2.4X and the average multiple that dropship based businesses sold for (red) was 2.2X. What his means is that if your business sold for $150,000 then on average you were making $68,181 in profit per year ($150,000 divided by 2.2). You can use this data to give yourself a rough valuation on what your business is worth depending on how much profit you are making.

How To Improve Valuation

• Sales – Diversified revenue decreases the risk of the business for a new buyer. That means multiple ways that they business earns money. This could mean different revenue types or selling multiple products.
• Traffic – A good range of traffic sources improves valuation. Just like the table analogy. If you take out more tan two legs of a table it will fall over.
• Payments – One of the biggest challenges we have is transfer recurring subscriptions through paypal with an online business make sure you have the right payment system that is a processor not paypay setup originally because this completely devalues a company.

Resources

Below are a handful of resources that I would also suggest checking out if you are interested in learning more about valuation of ecommerce businesses:

• What makes a million dollar ecommerce business
• Case study about selling an ecommerce business
• Tips on choosing a website broker when you sell
• Valuations when buying an ecommerce business
• Buyer who buys websites

Who Is the Best Business Broker To Sell My Ecommerce Business?

We recommend Digitalexits.com to sell your ecommerce business. They specialise in selling ecommerce businesses.

Go to www.google.com/alerts

Type in the first box the news that you want to receive (i.e. Online Fashion News). Then select the result type, how often you want to receive an email update, and how many results. Then in the second box enter your email address.

It doesn’t have to be a Gmail email address. Click the red box ‘CREATE ALERT’ and it will set up the news alert so that it emails you news for the topic you have entered. To do this for multiple topics simply click on the ‘Return to Google Alerts’ link and enter in a new topic.

2. Set a routine to email your abandoned shopping carts

One study revealed that 67.75% of all shopping carts are abandoned (http://conversionxl.com/shopping-cart-abandonment-how-to-recover-baskets-of-money/#.). So of the customers you get to your site initially, then those who add things to a cart, almost 70% leave the page before purchasing. It is evidently worthwhile to send through a reminder to customers to encourage them to fulfil the purchase. Whether they left by mistake, ran out of time, couldn’t be bothered or decided they didn’t want the product, you should aim to reduce the number of people leaving your site.

It is worth even looking at what distractions there are on your check-out page. Are there unnecessary links which will draw people to other areas of your site whilst they are attempting to complete a transaction? Make it as simple and easy for customers to make a purchase.

An example of an abandoned shopping cart email from ProFlowers:

“10% off to Finish Your Order!

We noticed you were close to sending [product name], but didn’t! Maybe you didn’t notice weekday shipping costs less? Come back for a 10% Off discount plus a free glass vase with any flower order.”

Depending on your shopping cart platform you may be able to set up an automatic emailing system so that after a cart is abandoned the user is emailed within x amount of days. If you are using a shopping cart platform such as Shopify or BigCommerce this will either be part of the interface or an app will be available to integrate with your site.

3. Make a list of keywords

Make a list of keywords that correspond with your website and products or services for sale. Once you have a list of keywords and additional phrases you can use Google Keyword Planner (found in Google Adwords) to see what people are searching most for in Google. It will also tell you whether there is a lot of competition surrounding these words. To build your site’s SEO and ranking select words which have high search rates but low competition.

4. Set up FAQs page

This is something a large number of businesses forget to put on their websites. Add a touch of humour when writing it and check similar websites for ideas on which questions to include. Some examples are shipping costs, returns, sizing, international shipping, gift wrapping etc.

As the FAQ page is content, it will add to SEO so make sure to use good keywords when writing it. And do try and help your customers find the answer to their questions otherwise you’ll get an inbox full of questions which will take up your time.

5. Set a 404 page (error page)

Rather than have your customers quickly hit the back button when they hit a blank white page with “Error 404”, create a customised page which apologises and has a few links to redirect them to other areas of the site and even some contact info for the site administrator.

See if your website (either hosted or self-hosted) has an .htaaccess file. If you can’t find one it’s easy to create one. It’s worth calling your provider and asking them what the best way to do this is. Once you have the .htaccess file add ErrorDocument 404 http://www.domain.com/404page.html. This is where you put the entire URL (of your website) directed to your newly designed 404 Error page. Save it and if you found the .htaccess file in your shopping cart platform then it’s probably turned on. If not, to turn it on you need to telnet into the server and type in chmod644.htaccess when prompted.

Here is a kick-ass Error 404 page created by yours truly (Brown Paper):

If integrating with Bigcommerce try the following webpage for html for a 404 page http://storecoach.com/bigcommerce-tutorials/how-to-create-a-custom-404-error-page

6. Get a blog

It sounds so simple, yet you’d be surprised how many websites don’t have one. It is a great connection for strategic alliances with other sites, and a way to build a relationship with customers beyond the sale. You need to view relationships with customers as long term if you want to give your business a great chance at success.

The blog could either be closely aligned with your website or loosely attached, whichever you prefer and what you think suits your market demographic. For example, For a website selling maternity wear they might have an attached blog that has posts about breastfeeding and all different tips for new parents – an online community where they can ask questions and get advice. They’re going to be more likely to come to your website when they need it if there is helpful information as well as products on offer.

Another example is a website selling travel gear. They might have a blog which has lots of travel tips and which liaises with YHA and suggests backpacking hide outs and social nightlife in various places. Brainstorm for your website right now. Be imaginative and know your audience. Get them involved too, posting pictures or adding their own ideas/knowledge to a topic. It’s an online community not just an online shop.

7. Submit a sitemap to Google

A sitemap is a list containing the pages (i.e. About Us, FAQs, Contact Us) that people can access on your site. It is not for the customer to see but for Google (and other search engines) to categorise pages based on relevance to each search. It’s helpful as it puts you more on the radar of search engines so your website is more optimised for searches.

To set up a sitemap for your website (or blog) all you need to do is:

1. Sign in to Google Webmaster Tools (it’s the same username and password as other Google sites, i.e. Gmail, Google+ or YouTube). https://www.google.com/webmasters/tools/
2. There is a box at the bottom where you enter your site:

A close up shot:

So once you have entered your website, hit the red button “ADD A SITE”.

You should then see the following page:

So either upload a HTML file to your site or else select one of the alternate methods (includes: sign in to your domain name provider; add a meta tag to the site’s homepage; use your Google Analytics account; use your Google Tags account.

I verified my website by signing in to my domain name provider. So I selected the domain provider from the drop down list and there are specific instructions on how to set it up.

Then hit the red button “VERIFY”.

If it has worked the following screen should appear (which brought a smile to my face):

Then click “Continue” and it will take you to your new site dashboard which will inform you of sitemap errors or viruses and search traffic stats.

8. Have you set up social media accounts and are there links on your website?

There are certain social media websites that you need to be a part of in order to get traction in the market. They are useful as a way of not only staying in contact with customers but also providing alternate routes of getting to your website or finding out about your product. This is especially crucial as you can reach people who aren’t specifically looking for your product.

There are the well-known social media sites which you should definitely consider getting if you don’t already have them:

• Facebook
• Twitter
• Instagram
• Tumblr
• YouTube
• Pinterest
• Google+
• LinkedIn

The first three are essential as most people at least have an account with one if not all three. You can reach larger global audiences through these mediums than just classic Google search.

Applying for these accounts is as simple as going to the web page and following the steps to create a new account. From here you can enter in your business and website info as well as links for them to reach your website.

All the above social media sites are able to be integrated into your website so that icons or news feeds appear on your site. For example having a Facebook icon which when clicked either opens a new window which directs visitors to the Facebook page or which enables them to like your Facebook page. Or you could put a twitter feed on the side of your site so that visitors can see recent tweets and posts.

This allows people to circulate your products and also builds a network and relationship with visitors and customers. It is a great marketing and promotional strategy and you can integrate sales strategies and competitions into these social media channels.

Once you have social media accounts rather than posting individually on each channel, you can synchronise them so that if you post on Facebook it links to all the other pages (Twitter and Instagram etc.). This not only saves time but also ensures that all followers are up to date and informed of your latest news and deals.

One such program is called IFTTT (If This Then That). It is an app you can download (both for apple and android devices) and enables you to manage social networks easily.

9. Set up an autoresponder

Whether you are going on holidays, want to wish a customer happy birthday, want to send a welcome email to new subscribers; an autoresponder is the perfect companion.

Rather than type out individual emails to customers and spend excess time and effort, set up an autoresponder as it saves you the trouble. Type out a generic email and have it automatically send to the customer depending on the occasion.

There are many different ways you can go about this.

MailChimp is one of the largest and easiest email marketing programs so I’ll use them as an example. You can use MailChimp as an add-on to websites whether it’s hosted or self-hosted.

You’ll need a MailChimp account if you don’t already have one and it’s well worth getting as it covers all things to do with email marketing. Not only does it cover autoresponders but you can also use it to email out blog posts or e-newsletters to update customers regularly.

Go to www.mailchimp.com to register or sign in and then click on the “Autoresponder” tab. Then click on the button in the top right which says “Create Autoresponder” and follow the instructions and select the details of the autoresponder (i.e. content of email, which days to send it out, frequency etc.).

For more detailed information on this check out: http://kb.mailchimp.com/article/how-do-i-create-an-autoresponder