Maria Peloponisiou~ 7 min Reading time | 04. Nov 2019
A lot of people have that one business idea lingering in the back of their mind—the one that they always talk about, but gets left on the back burner. Fortunately, the proliferation of ways to grow a business online means that starting your own business is easier than ever before, reducing the amount of money and time you’ll need to get your idea off the ground. Starting an online business is still a lot of work, but now it’s easier than ever for an online business to be a side hustle or hobby until it takes off, instead of a pipe dream. If you’re wondering how to start an online business, this guide is for you! Here are the 10 essential steps:
1. Decide What to Sell
Chances are, if you are thinking of starting an online business, you have some idea of the product or service you’d like to offer. If you’re passionate about the business itself and don’t know where to start, think about what products or services you know a lot about or can already offer. If you’re a great manager, you might be qualified to start a consulting business, or if you know a lot about sports, maybe you’re interested in setting up a retail platform for used sporting goods. Whatever it is you decide to sell, make sure it’s something you have a passion for, so you’ll be committed to making it work!
2. Conduct Market and Competition Research
The second and often overlooked step in starting your own business is market research. Take a look at what others in your industry have to offer, and try to see how your own business might fit into the market:
Is there a demand in the market that isn’t currently being filled?
What is the demographic of your average client or customer?
Who are your larger competitors, and why would customers choose you over them?
You can look at information such as keyword analytics, industry reports, and online searches for businesses in the area that offer the same thing, or conduct more direct research like questionnaires and focus groups. This will help you narrow down the specifics of what you’d like to offer and how much you’d like to charge for it.
3. Find a Niche
After you’ve conducted market research, try to decide on your niche in the market. Often, those who have a specific take on a common product or service will do much better than those who offer a more generic product. For example, maybe you’re interested in selling cupcakes—but there’s a lot of other people out there doing the exact same thing! A cupcake business entering the market now might stand out by offering unique or odd flavours, large-scale batches for weddings, or themed decorations. What does your market research say about what people are looking for from your business type? If you can tailor what you offer to specialize in the services that your target market needs, you’re likely to have a much more successful online business.
4. Choose the Right Ecommerce Platform
You’ll need an ecommerce platform if you’re selling goods online—a way for people to add items to an online shopping cart and pay via your website. Shopify is a popular platform, but you can also add this feature to other popular platforms as well, like Wix, WordPress, and Squarespace. For a more hands-off approach to selling goods, you could also consider registering with Amazon, or selling things on eBay. Do you want people to be able to subscribe to content or will you have a retail store online? Or will you invoice people for services rendered? Decide how you’ll charge people, then compare the pricing and features of different ecommerce platforms to decide which one is right for you.
5. Choose a Brand Identity
Now that you have a niche and know who your target customer is, it’s time to develop your brand identity. Your brand identity will ideally be consistent in your marketing efforts and across social media platforms and will give your customers a particular impression of what you’re selling. A common mistake is to think that if your product or service is good enough, it should stand on its own. But research confirms this isn’t true! Just as people’s opinions about products are partially informed by their packaging, their opinions about your products or services will be partially informed by the appearance of your website. If you’re providing accounting services, for example, its probably best for your website to have a clean, professional look—but if you’re selling felted puppets, you’d be wiser to go for a more playful, fun theme!
6. Develop a Marketing Strategy
Now that you have a brand identity, it’s time to start thinking about what marketing strategy you’ll use to draw in customers. The most fundamental marketing tool for any online business is its website, but once you have a website in place, your next step should be to draw traffic to your site. You can do this for free on social media, but it’s also important to consider things like making a Google Business page so you’ll come up in local searches, or creating an email list for your customers to subscribe to so you can send out notifications for updates and special offers. If you have a budget for ads, you can consider placing ads on Google, Facebook, Reddit, and other sites to help people find you.
7. Build a Budget
Once you know what you’re selling, it’s time to estimate what your budget will be. If you are borrowing money from a bank to start your business, you’ll need a formal business plan—but even if you aren’t, knowing what you’re expecting to earn and spend will give you some idea of whether or not you’re hitting your projected targets later on. Estimate the costs you’ll need to start—licenses, supplies, software, etc.—and the amount you expect to make from sales down the road. Online businesses often require subscriptions to software, so knowing how much you’re spending per month on them will give you an idea of how much you will have to sell in order to turn a profit.
8. Get a License
If you earn more than £1,000 in a taxable year in the UK, you’ll need to register your business, and some businesses like taxi driving and childcare require special licenses. When you register your business, you’ll also need to decide whether you’re operating as a sole trader or a limited company. If you’re a sole trader, will you do business under your name or under a different name? If you’re successful enough, you may be required to begin charging VAT as well, which means you’ll need to register with HMRC. Take some time to do your research on the requirements for setting up a business, since failure to do so can result in fines later if you’re not careful.
9. Set up Accounting Software
Whatever business type you choose, it’s important to manage your finances properly. At a minimum, you’ll be required to keep track of your income and expenses for tax purposes. Although administrative work can be a headache, having proper software like Billomat in place will help ensure that you’re keeping track of everything you need to and that you’ll be prepared when it comes time to do your taxes. For example, in the UK, there are legal standards for what information is on business invoices—having software will help you keep them consistent and viable.
10. Make a Production/Project Management System
Once you have everything set up, it’s time to make sure it keeps running smoothly. A production or project management system can be a lifesaver when it comes to keeping track of your time, projects, or special requests. If you’re offering a point of sale product, it will still be important to ship promptly and to make sure you have enough inventory in stock. Keeping a schedule for things like checking inventory, shipping, and completing projects, will help ensure that you’re keeping up with demands. Making sure you’re on top of things is a key part of professionalism; how you offer your products or services is just as important as what you offer.
Whatever your online business ideas are, there’s no reason to let them stay on the back burner! Although this list might seem daunting, remember that you don’t have to do everything all at once—even one day of your weekend each week to developing your business idea will help make it a reality. And with new online platforms to help you, it’s easier than ever before.