Alternative online business structures

If your physical business is struggling to grow, you may have considered opening an online shop. After all, it pays not to put all your eggs in one basket. Perhaps you are already online but finding it difficult to achieve the sales results you had hoped for.

Has it occurred to you that the structure you would apply to a physical business may not be the best fit for an online enterprise? Increasingly, businesses, particularly smaller ones, are having to reconsider how they make money online. The small, local florist, for example, could be gazumped in search engine results by bigger players, leaving their online retail offer virtually invisible.

See also: How to set-up as a sole trader

All is not lost, however. One of the great things about the internet is that it gives businesses the flexibility to branch out and offer more. Online diversification is vital to the survival of many businesses, especially small or rural ones.

Extending your offer

Selling online offers businesses, even the smallest enterprises, the chance to extend their offer. Whether you are a one-man band or an SME (small medium-sized enterprise), you shouldn’t rely on just one outlet. And the internet is a cost-effective, quick way for you to branch out.

Unlike retail premises, where you may not have the room to display hundreds of products, the internet is different. So long as you have got a spare room or secure outbuilding to store stock, all you need is product photos and descriptions to put your goods in front of customers.

Related products

Selling products related to the ones you already sell is a great starting point. If you run a dog grooming business and take online bookings, for instance, why not sell accessories, such as shampoos and dog clothing. Your customers know and trust you, so why not introduce them to a few ‘extras’ when they visit your website.

By extending your online offer, you will promote brand loyalty and give your business the potential to grow without having to worry about overheads.

Diversification

We all know that businesses can successfully diversify. Take the Devon dairy farmer who now runs an ice cream factory from the farm. But working out how your small business can diversify online while retaining your existing business may not be obvious.

See also: Five key steps before diversifying your farm business

You can find ways to make even the most stagnant business grow by considering these ways to diversify online:

• Offer additional, related products or services to existing customers
• Find new markets for existing products
• Take new products to new markets

Non-retail options

Have you considered non-retail options such as offering training courses, consultations or expert content for other people in your sector? Instead of selling products, you could sell advice or ‘how to’ manuals. You could even earn a passive income from selling educational guides.

If you run a florist’s shop, for example, have you considered, perhaps, leading online workshops or starting an online directory in a niche area related to your industry, such as weddings or homes and interiors? You could make money from other businesses who want to be listed in your directory as well as from those who use the directory.

Implications of online diversification

Before you invest in additional stock or launch a new service, make sure you do your homework. Research is key to finding out whether there is a market for your diversification idea. Understand any cost implications and make sure your business can afford them. Don’t take risks, and work out a marketing strategy that you can deliver in a consistent, cost-effective manner.

See also: Online selling - be legal

While you may worry that diversification is not right for you, it is a vital consideration if you want your business to survive in a competitive marketplace. Successful businesses evolve to meet changing consumer needs. Why should your business be any different?

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