How to start an online business

Starting an online business can be an exciting and rewarding venture. With the rise of e-commerce and the increasing number of people shopping online, there are numerous opportunities for entrepreneurs to start and grow a successful business online.

However, it’s important to do thorough research and planning before launching your online business. This includes identifying your target audience, choosing a profitable niche, creating a business plan, setting up your website, and establishing a strong online presence through digital marketing and social media.

It’s also important to stay up to date with the latest trends and technologies in e-commerce to remain competitive and successful in the long term. While starting an online business can be challenging, the potential rewards of financial freedom and creative control make it a worthwhile endeavor.

In the past, businesses have often used online counterparts to generate additional revenue, but as time has gone on it has become a far more viable area in which to generate the main portion of a company’s profits.

In 2020, 87% of UK internet users made online purchases up from 78% in 2018. The online shopping penetration in the UK is quite high when compared to other countries. The penetration has also been steadily increasing over time. In 2008, only a decade ago, online shopping penetration in the UK was only 53%.

Starting an Online Business Venture

With any small business, the initial steps to beginning to exchange online includes conducting market research to distinguish your target market, survey interest, analyse the competition and response to your costs from potential customers. You likewise need to develop and deliver a detailed business plan.

Assuming that sales are likely going to surpass £85,000 in any year time frame, you should become VAT-registered. You’ll likewise have to pay tax, as per your status as a sole broker, restricted organisation, and so forth Online brokers should likewise observe data security regulation, obviously, while putting away significant data about clients.

Marketing will generally decide your business site’s prosperity and search engine optimisation (SEO) is crucial to this. Fundamentally, it implies utilising words on your website that guarantee high placing in results on search engines (e.g., Google) results pages. You could likewise use paid-for advertising services like Google Adwords, for which you’re charged on a pay-per-click basis.

Reasons You Should Start an Online Business

Starting an online business has become increasingly popular in recent years, and there are many compelling reasons why you should consider it too. For starters, an online business provides a flexible work schedule, allowing you to work from anywhere, anytime. This can be especially beneficial if you’re a parent, caregiver, or simply want more control over your work-life balance.

Online businesses tend to have lower overhead costs compared to traditional brick-and-mortar businesses, which means you can get started with less upfront investment. Moreover, the potential reach of an online business is virtually limitless, as you can connect with customers from all around the world. With the right strategy and effort, an online business can also offer unlimited earning potential, making it a lucrative and rewarding venture.

Starting an online business has several advantages, including:

It is fairly inexpensive to start

Starting a business can be an exciting endeavor, but the initial investment required to get it up and running can be a deterrent for many aspiring entrepreneurs. From leasing a space to purchasing inventory and budgeting for employee salaries, the costs can quickly add up. However, with careful planning and strategic decision-making, the potential rewards of a successful business can outweigh the risks.

While the fear of financial ruin in the event of failure is a legitimate concern, taking calculated risks and seeking expert advice can help mitigate the risks and increase the chances of success.

However, with an online business, all you need is:

• Computer.
• Domain name.
• Website builder.

To put it another way, you don’t need to risk your entire life’s resources in order to start an online business with £100 as the initial investment.

Creating a business website

All businesses that exist in the digital age which we are all currently living in need a website. There aren’t really any other ways to look at it; if you want to achieve a high level of success, you’re going to need to have an online presence.

The easiest way for people to find your company will be through a search engine such as Google, that’s how most people will attempt to find out more about your venture. Therefore, when people search for your company on Google and fail to find a legitimate website attached to the business, they’ll stop searching immediately and look elsewhere for other similar firms. You do not want to let this happen, so you’re going to have to build a website.

What you should include on your website

Your business’ website must include the following:

• your address and contact details
• privacy policy
• terms and conditions
• exchange and refund policy
• quality commitment
• information about delivery and payment

Stock availability and pricing ought to be updated consistently and you should state the VAT and postage and packaging per item bought.

To gather payments, you want to incorporate a shopping basket feature, just as a protected means by which customers can enter their credit card details when completing a transaction. Most online specialists give a shopping basket capacity and payment facility as a feature of their service. Online site building bundles will provide this service, as well.

You additionally need a merchant account to gather payments. Suppliers, for example, PayPal are well known, however you ought to likewise enquire at your bank. You pay a service charge on every transaction, a set-up and month to month administration expense.

Major potential and growth

When you run a brick and mortar business, you must contend with the constraints of the actual world, such as local demand and real estate expenses.

None of these restrictions apply if you operate an internet business. You may sell to anyone, regardless of where they reside, and as more people become accustomed to online buying, your potential customer base grows yearly.

E-commerce will make up approximately 25% of all retail sales worldwide by 2025. Moreover, the number of people using the internet globally is expected to increase to 5.6 billion by 2025.

If you don’t mind expanding your web business internationally, more individuals online means more potential exposure for your brand.

Always on

Online businesses have another benefit over brick and mortar establishments: they can continue to operate around-the-clock despite lockdowns and other disturbances.

Once your company website is live, you can always close a deal. You accept orders from customers at any moment.

Your firm can earn cash with less daily involvement because you aren’t required to be physically present to make a sale.

Determine Your Niche and Business Idea

Your focus area is a market sector and target customer base that you primarily serve. This can apply to amateurs, pros, or sports aficionados. You must choose a specialty for your new company. To find the ideal target market, check that they have:

• A problem no one else is solving.
• Willingness to pay for a solution to that problem.
• Sufficient discretionary income to afford the solution.

When you have chosen your niche, think about taking the following actions to develop your business idea:

Start an ecommerce store

Despite the fact that ecommerce has been around for almost 40 years, there has never been a better moment to open an online store than it is right now.

One-third of American consumers (32%) now receive one or more Amazon parcels each week, according to the “The Future of Retail 2019” report. 10% of consumers, meanwhile, receive three or more Amazon parcels per week.

Once you’ve chosen your niche, put up your online store on an ecommerce platform, attract customers to it, and then refine your strategy. Choose a dedicated service if you want to self-host.

As an alternative, you might begin selling on internet stores like Amazon, eBay, and Etsy.

Get into dropshipping

Using the dropshipping method, you may sell tangible things online without keeping an inventory.

This is how it goes:

• On your e-commerce website, a consumer places an order for a product.
• You send the manufacturer the order.
• The product is subsequently delivered straight to the consumer by the manufacturer.

For individuals who want to enter the ecommerce industry without taking on the financial risk of carrying inventory, dropshipping is a desirable choice. It should come as no surprise that the market for dropshipping businesses is expanding given that sales is expected to reach $557.9 billion in 2025.

Become an affiliate

If you want to launch an internet business but aren’t interested in creating your own items, affiliate marketing is something to think about.

It’s a well-liked method of earning money online. The SaaS Scout estimates that brands spend $12 billion annually on affiliate marketing. In the upcoming several years, the number is predicted to increase by 10%.

Here’s how affiliate marketing works:

• Join a programme for affiliates.
• Choose a product to advertise to your audience that belongs to someone else. This could be any kind of tangible or digital product.
• Get a commission for every purchase made using your referral link.

By developing SEO or social media material around pertinent keywords and then optimising it to receive organic traffic from Google, you can promote affiliate products on your site. By allowing your affiliate partners to host webinars for your audience, you can also market affiliate products to the members of your email list.

Affiliate marketing requires a very minimal initial investment. Only a domain name, web hosting, and email marketing software require upfront payment.

Offer web design services

Start by building a portfolio website to draw potential customers. Using online learning tools and practise, you can learn the fundamentals of web programming and design.

You can also sign up with a freelance marketplace like Upwork or 99Designs. Working for yourself can be difficult at times. While having a flexible schedule and being able to work from anywhere is a perk, you initially have less stable finances and less predictable income.

Regardless of the path you choose, once you have the necessary web design abilities, you can start making and selling your own items, which will provide you more independence and help you manage your finances.

Create a note-worthy blog

Possess you a talent for writing? – Perhaps starting a blog might be a worthwhile internet business venture. Although having a blog by itself is not a business model, it does enable you to grow a following.

You can get passive revenue while working on other business endeavours after you have an audience by selling your goods or services, promoting affiliate products, running sponsored campaigns with brands, etc.

Conduct Product Research

You should look at the following main product types when conducting product research:

Physical goods

Physical products are, as their name suggests, tangible items that need to be produced, warehoused, and sent to clients. Selling tangible things might be lucrative, but if you don’t control your operating costs efficiently, your profit margins may be minimal.

Digital downloads

You can also market and sell digital goods, which are anything that a buyer can download to their device, including eBooks, audiobooks, podcasts, online courses, etc.

Comparatively speaking, digital items have better profit margins than physical ones. However, because they are sometimes thought of as having less worth than tangible goods, pricing them can be challenging.

Services

Online sales are possible for almost any distant service. One of the quickest methods to launch an online business and make money is by selling services.

However you must keep in mind that this is a business model where you are selling your time. As a result, since you only have a certain number of hours in each day, your earning potential is constrained.

Conduct Market Research

The first step in launching your own online business is market research. It aids in evaluating the breadth, competitiveness, and profitability of any chosen company vertical.

Launching a deal that nobody wants to buy is the very last thing you want to do. You can find out what your target market’s needs, wants, and gaps are by conducting online market research.

How to begin conducting market research is as follows:

Check the SERPs

Analyze search engine result pages and look up variations of the terms that describe your goods or services (SERPs). What kind of material currently appears on page one of search results? Which companies are spending money to advertise above organic search results?

By doing this, you’ll be able to pre-evaluate your competitors and gather data for a rough SEO and digital marketing strategy based on the kind of content your target market likes.

Research competitors

Beyond SERPs, you should take a careful look at your top rivals. What are the largest business endeavours in your specialised field? What kind of income do they earn? What are their advantages and disadvantages?

You can determine what might give you a competitive edge over other market participants by closely examining them.

Track high-performing keywords

By keeping an eye on niche-relevant keywords, you may analyse how the demand for certain products varies in your niche and what content ranks well.

Quality tools to use include:

• Google Trends.
• Google Keyword Planner.
• Ahrefs.
• Semrush.

Define Your Target Audience

You may start the process of generating sales and expanding your business by knowing who your target audience is and what they want. These insights work together to create a full picture of the needs, interests, and purchasing triggers of your ideal buyer.

Be sure to conduct the following research to learn about their requirements and preferences:

Demographics

Demographic information comprises fundamental socioeconomic traits and models like:

• Age.
• Gender.
• Ethnicity.
• Income.
• Job title.

Psychographics

Many psychological traits are included in psychographic data, including:

• Values.
• Beliefs.
• Interests.
• Opinions.

Source Products to Sell Online

If your products are subpar, running a profitable internet business will be difficult. Even if your market or products finally become popular, it will probably be for the completely wrong reasons.

While choosing things to sell online, take the following factors into account:

Making your own products

This option is relatively easy if you plan to sell digital products. On the other hand, physical product manufacturing involves hard work in terms of design, interactions, material selection, etc. The financial costs are higher, too.

However, manufacturing will always give you an advantage over the competition in regards to quality, product range and branding capability.

Finding a dropshipper

Locating a manufacturer who will let you dropship their goods has the potential to be profitable. This is particularly relevant given that many small business owners bargain dropshipping agreements with foreign manufacturers to cover business expenses.

Working with a wholesaler

A wholesaler can offer your company a variety of goods to buy and collect for your online store. Some even provide a strategy to distribute your goods on your behalf.

Evaluate Product Viability

Before making a large order or purchasing your product, you should conduct an in-depth, comprehensive evaluation of its viability. To do it, enquire the following:

• Exists a successful internet shop that sells those kinds of goods already?
• Is there a long-term market for this product? Or is it just passing?
• Is the maths underlying this product reasonable? Can you make money off of it?

Never forget that a product can appear to be cool or intriguing at any time. It’s crucial that it makes sense from a business standpoint.

Define Your Brand and Image

Your company’s overall identity is reflected in your brand. Your company name, website design, and copy should all reflect a unified visual theme and set of concepts. The same holds true for your off-site presence, including your use of packaging, social media, and email newsletters.

Focus on your: when you develop your brand identity.

• Logo.
• Color scheme.
• Landing pages.
• Page layouts.
• Typography.
• Graphics and photos.

All these components should come together to create your brand image.

Learn About Online Business Laws

Small business owners could believe that because they operate an internet operation, standard business laws do not apply to them.

It is not true.

Although though an online business needs fewer licences and permits than a physical one, you still need to take care of a number of crucial legal issues. Specifically:

• What form of business licence is required before operations may begin?
• Which legal form— a sole proprietorship, limited liability company, or corporation—makes the most sense?
• Do you require any permits to proceed?
• Are you need to pass any inspections?
• Are sales tax licences required?
• Exist any particular rules that solely apply to online businesses?
• What regulations apply to both employing employees and contractors?
• Every country has its own set of laws. Always double-check information with regional authorities.

Find out more about the rules and laws that apply to e-commerce businesses.

Launch Your Online Store

You should be prepared to get your website ready for launch after a large amount of setup. Consider the following actions to make sure your website becomes successful and viable:

Choose your ecommerce platform

An ecommerce platform serves as the technical foundation for online sales. You get all the capabilities you need from a product catalogue to payment processing with this software.

Here are some of the most well-liked choices:

• BigCommerce.
• WooCommerce.
• Shopify.
• Adobe Commerce (Magento).
• Salesforce Commerce Cloud (Demandware).

Ensure that the platform you choose offers all the capabilities you require at a cost you can afford.

Add your products

Add items to your catalogue once you’ve selected a platform and a theme for your business. Do you, as you, pay particular attention to:

• Deliver high-definition photos of the product from various perspectives. For additional information, see our ecommerce photography guide.
• Don’t include features in product descriptions; instead, concentrate on the benefits the customer will receive. This article offers a simple method for crafting effective product descriptions.

The conversion rates of your product pages are heavily influenced by the product descriptions and photos. Take your time to ensure that they are done correctly.

Choose how you will do your shipping

The primary motivator for making an online purchase is quick and free shipping, which has a big impact on both the quality and volume of your purchases.

Make sure that there are no delays in the delivery of any of the products to your customers. You should have a variety of shipping tactics, such as:

• Local pickup.
• Delivery on the same or following day.
• Free delivery.

Make sure everything works

Triple-test every aspect of your e-commerce store after it goes live. Check that:

• All pages display properly on desktop, tablet, and mobile devices.
• The website works well in a variety of browsers, including Microsoft Edge, Chrome, and Firefox.
• Each button can be clicked and is linked to the appropriate apps.

If you have the money, it might be beneficial to employ a QA expert to do site testing for you and present the results.

Grow Your Business

Once everything is configured, you can begin directing customers to your online store. Give the following channels top priority:

• Paid advertisements: Set aside money for pay-per-click (PPC) advertisements on social media and in search engine results. One of the simplest ways to raise brand recognition for a new shop is to do that.
• Establish ties with social media influencers: to develop testimonials promoting your items through influencer marketing.
• Social media marketing: By creating audiences on sites like Linkedin, Instagram, and Facebook, you can supplement paid ads with free traffic.
• Optimization for search engines (SEO): Create a content marketing strategy for your written material and make sure that every page of your website is SEO-optimized.
• Email marketing: Create an email list by collecting visitors’ email addresses from your e-commerce website. Then, you can market your goods to your email list subscribers.

Financing your online start-up business

Financing your online startup business can be a crucial step in getting your business off the ground. There are various options available for funding an online business, including bootstrapping, crowdfunding, angel investing, venture capital, and loans. Bootstrapping, or self-funding, is a common way to finance an online startup, as it involves using personal savings or credit cards to cover initial costs.

Crowdfunding platforms like Kickstarter and Indiegogo allow entrepreneurs to raise money from a large number of people who believe in their idea. Angel investors and venture capitalists provide funding in exchange for equity in the business, while loans can be obtained from banks or alternative lenders. It’s important to research each funding option and determine which one is best suited for your business.

Additionally, creating a solid business plan and having a clear understanding of your financial needs and projections can make it easier to secure funding for your online startup business.

Frequently asked questions

What are some essential steps to start an online business?

Starting an online business involves several essential steps, including identifying a profitable niche, developing a business plan, setting up a website, establishing a strong online presence, and creating a marketing strategy. It's also important to understand the legal and regulatory requirements for starting an online business in your country or region.

How much does it cost to start an online business?

The cost of starting an online business can vary depending on the type of business you're starting, your target market, and the level of investment required to get started. Some online businesses can be started with minimal upfront costs, such as dropshipping or affiliate marketing, while others may require more significant investments in product development, marketing, and website development. It's important to create a budget and understand the costs involved in starting and running your online business.

Do I need any technical skills to start an online business?

While having technical skills can be helpful when starting an online business, they are not always necessary. Many website builders and e-commerce platforms offer user-friendly interfaces that make it easy to set up and manage an online business. However, having some basic knowledge of website design, search engine optimisation, and online marketing can be beneficial when starting an online business. If you lack technical skills, consider hiring freelancers or outsourcing to experts in these areas.

Conclusion

Starting an online business requires a specific set of skills and traits. Successful online entrepreneurs tend to be self-motivated, disciplined, and driven individuals with a strong work ethic. They are comfortable taking risks and are not afraid to fail, as they view failures as learning opportunities. Effective communication skills, both written and verbal, are essential when dealing with customers, suppliers, and employees.

Creativity and innovation are also important when developing a unique product or service that stands out in a crowded online marketplace. Technical skills, such as website design, coding, and digital marketing, are also valuable for online entrepreneurs, but can be learned or outsourced if necessary. Additionally, having a strong understanding of business principles, such as financial management and strategic planning, is crucial for the long-term success of an online business.