How to Start an Online Business in South Africa

First Steps to Starting an Online Business

Starting an online business is not any easier that starting a business in the “real world”. It may require less capital and manpower at times but the process is essentially the same. The first obstacle to overcome is thinking that an online business is different from a “real world” business.

It is not.

In fact the Internet is very much a part of reality – people shop online everyday, even in South Africa. Even if you do not buy online, you do at least research products on the Internet and the Web is littered with advertising that influences your buying decision. An online business is nothing more than replacing the traditional brick-and-mortar shop or office with an Internet portal to find customers, conduct transactions and offer after sales services.

There are 4 key factors that have to be taken into consideration before you start your online business.

  1. Your product or service.
  2. Your website.
  3. Payment services to process online transactions.
  4. Marketing either online or in traditional media like newspapers or magazines.

Depending on the nature of your business, there may be other factors that need to be taken into consideration. For the average small business, however, these are the 4 fundamentals of starting an online business.

Your Product or Service

You cannot start a business unless you have something to offer to customer. It may be tangible goods (products) or services. Your product or service has to have some demand – in other words customers must either want or need what you have to offer. Although it is often said that “a good salesman can sell ice to Eskimos” the reality is much different. You can market your product aggressively but if it is not a worthwhile product or service, the reality is that you will not build a lasting business irrespective of your marketing campaign.

The business world is competitive and your product or service has to be unique, in high demand and/or cheaper than your competitors. The belief that “there is a sucker born every minute” may be relevant for confidence tricksters but for the honest businessman, you need a viable product or service to create a business, be it online or in the “real world”. Do not count on the large Internet user base to sell any product or service that would not sell in the “real world”. If you cannot sell it in a store, at a flea market or from your car boot, then don’t be fooled into thinking that it will sell on the Internet.

Your Website

You may not know much about the Internet but you should not be entirely ignorant about the online world. While there are hundreds, if not thousands, of website designers, developers and e-commerce service providers, you need to understand the principles of a website to ensure that you are not ripped off. This means understanding the fundamentals of the Internet, structure of digital properties and website marketing techniques before you even come to the core business activities.

Domain

Firstly you will need a domain name which many of us simply refer to as a website address. For example iwena.co.za is our domain. There are different domain extensions based on the purpose or location of the website. If you want to create a South African website, then you need to choose a co.za or org.za website. If you are developing an information resource on a specific subject then you may find the .info domain extension useful. Many people opt for a .com domain extension because it is popular. Domain names are very affordable – it can cost as little as R50 per year to buy a .co.za domain or about R85 for a .com domain.

Web hosting

Web hosting is simply a matter of renting server space to build your website. A server is like a massive hard drive where portions of the space is sold to different websites. It can cost as little a R30 per month. To put it simply, your domain name is your address but your web hosting is the actual property where your website will exist. There are servers across the world and providers offer different packages for the amount of space that you need and the amount of bandwidth that will be required. Bandwidth is the amount of usage that is allowed for your website. These days many providers offer unlimited bandwidth so it is not much of a concern.

You may want to consider South African companies like Bisnet who sell hosting for as little as R9 per month.

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