A few months ago, I wrote a blog post on “Why you need a strategy even if you’re small” highlighting the fact that I see many MANY online retailers that lack a core focus or strategy on how to achieve their objectives (business and marketing).
That said, since writing that post, I’ve personally seen many online shop founders that don’t even set objectives (financial or otherwise), let alone have a vision for their business.
Having a vision is critical for ANY size of business.
Imagine this. You’re planning a road trip across the United States. You know you want to go on a road trip, but you decide not to pick specific cities or towns to visit, and not even an area of the country to focus on. Instead you just start driving.
So fast forward to your road trip, and you’re driving. You may feel a bit lost. Why? Well, for one thing you have NO idea where you are going, what you are doing, and lack the clear purpose of your road trip. You may accidentally drive to a few cool places, but not on purpose. You’re essentially driving around the country aimlessly.
Take this back to your business.
Maybe you’ve discovered a hidden passion and talent for creating bejeweled bobby pins.
You open a shop on Etsy and start selling.
Easy right? But, what do you do next? How do you know when you haven’t determined why you’re selling what you’re selling and what you want your business to be? As well as how much you need to sell to be 'successful'?
This is a fundamental question that one must answer before (or soon after) starting a business.
Do you want to be a big business…. Selling your goods at Nordstrom, and other national department chains? Do you want employees? Do you just want to keep it as a hobby? How do you envisioning your business scaling?
For example, if your goal is to be like many clothing brands that sell mostly wholesale to department stores and specialty retailers, you’ll need to setup your pricing with enough margin to be attractive to retailers.You’ll also need a distribution and supply chain that can manage large orders from production to picking/packing and shipping. You’ll also need likely a line of credit or financial strategy to manage the upfront cost and cash drain of producing and managing the cash flow (as many larger wholesale accounts will want terms).
Once you’ve laid out what you see for the future ideal state of your business, you need to set some objectives to help measure or milestone against them.
For example, if you want to be a wholesale-focused business, perhaps an objective for you is to secure 3 major wholesale accounts of $100k within the first 12 months. However, if your business model is set to go direct, maybe a goal of securing $100k in direct sales online is more aligned.
So, next steps:
1. Set your vision. Grab a green tea. Shut off all the noise, and take a few deep breaths. Now, think. Where do you see your business in 5 years? Do you want to be on the cover of Forbes? Or on the front page of Etsy?
2. Define your objectives. What key goal(s) do you need to fulfill this year to map to your broader vision? Is it Revenue? Profit? Traffic? Number of accounts?