Starting an online business is just like opening up a traditional shop, but with some extra steps. The internet has made it super easy for small businesses to pop up all over the world. You don’t need a ton of money to start an online business, but just because it’s easy doesn’t mean you should jump in without thinking.
It feels like every week there’s a new trend in online biz. Chatbots, virtual currencies, social media ads, Insta stars… the list goes on. How do you know what’s worth paying attention to?
If you’re looking for tips on starting a web-based biz in 2023, you’re in the right spot. Starting an online biz is simpler than you might think and we’ll break it down for you in this easy-to-read post. Think of it as an “online biz startup for dummies” guide, ’cause we’ll explain everything in plain English and give you a step-by-step list to follow.
How to Start a Business Online From Scratch
1. Develop a business plan
Starting an online business can be exciting, but it’s important to remember that jumping right into creating a website, choosing a company name, and designing a logo without a plan is setting yourself up for failure.
Before diving into the fun stuff, it’s crucial to take the time to create a plan for your online business.
A plan will not only help guide your decisions, but it will also give you a clear understanding of your target audience, competition, and goals.
In the next few parts of this article, we’ll walk you through the steps of creating a plan for your online business so you can set yourself up for success.
So, don’t rush into things, take the time to create a solid plan and you’ll be glad you did!
2. Select a business model
So you’re thinking about starting an online business from scratch, huh? That’s awesome! But before you jump into it, it’s helpful to know about some tried and true online business models. Here are a few options to consider:
- Affiliate marketing: You promote other businesses’ products and services online and get a cut of the sale.
- Freelancing: Use your skills to help other individuals and businesses with things like advertising, writing, design, and programming.
- Coaching and consulting: Share your expertise, advice, and guidance as a coach or consultant.
- Information products: Create and sell ebooks, worksheets, templates, and online courses based on your knowledge.
- Software as a service (SaaS): Build a piece of software or app and charge users a subscription fee.
- eCommerce: Set up a store using something like Shopify and sell physical products.
If you’re looking for more ideas, check out our guide on online business ideas.
3. Identify your target audience
Who should you sell your stuff to? Well, you’ve got to know your target market. Basically, it’s all about figuring out who your customers are and what they want. Sure, not everyone is gonna be the same, but you should have a good idea of your core customer base.
Knowing your target market is more than just guessing. It’s about understanding their needs and what makes them tick. Things like their age, job, and lifestyle can give you clues about what they need and what they’re willing to spend.
But it’s not just about the numbers, you should also think about your customers as people. What do they care about? What do they do in their free time? The answers to these questions can help you really get to know your target market.
Here are some tips to help you figure it out:
- Look at your own stuff: Think about what problems your products and services solve and who they might appeal to.
- Do some research: Tools like Google Trends can give you a good idea of the market and help you find new customers.
- Make some profiles: Break your customers down into different groups based on things like age and lifestyle.
- Check out the competition: See what other businesses in your market are doing and try to do it better. I’ll explain more in step 5.
Just a heads up, if you’re in a small market, it might be tough to go after the same customers as everyone else. So, try to find a niche and make it your own.
4. Find a problem to solve
so you’re thinking about positioning your business for success and reaching your target audience? That’s great! We all know that everyone has problems they want solved, and if you can help with that, you’re sure to make some money.
Take dishwashers for example, they’re popular because they save time on washing dishes. People prefer Velcro straps on sandals and pay for Netflix so they can watch movies at home. Even with LED light bulbs, people are willing to pay more upfront because they last longer. You see, cost isn’t always the biggest factor, it’s really about solving a problem.
Let’s take a look at some common problems people deal with:
- Physical needs like hunger, thirst or tiredness.
- Psychological needs like feeling frustrated, uninspired or unmotivated.
- Cognitive needs like lack of knowledge or insight.
- Missing parts or pieces for products they already own.
- Relational needs like finding the right gift.
- Time management needs like not being able to work as effectively or efficiently as they want.
- Loneliness is also a problem people deal with.
Now, even though most of these examples aren’t directly business-related, they all affect people’s feelings. And that’s true for businesses too. Business owners have feelings just like everyone else, and those feelings often revolve around how they can spend their time better or generate more revenue.
So, if you’re thinking about targeting middle-aged mothers with children ages 5 to 15, what kind of problems do they face? It’s no secret that moms everywhere are looking for activities to keep their kids interested and engaged. It could be something indoor like a game or creative project or something that takes place outside the home like a musical instrument or team sport.
Some people are also looking for more efficient time management strategies. If that’s something you can help with, why not suggest some time management techniques or even promote time management or life coaching services?
5. Analyze the competition
When it comes to starting an Internet business, it’s crucial to take a look at your potential competitors and figure out what they’re doing right (and what they’re doing wrong).
This kind of competitive analysis can give you valuable insights into the market and help you come up with a strategy that sets you apart from the rest. But where do you start?
Here’re some ways to get a better understanding of your competitors:
- Buy a product they sell: You can learn about their product quality, shipping time, and after-sales support.
- Abandon a product in their shopping cart: Find out how much discount they will give you when you return.
- Sign up for their newsletter: Get an inside look at their email marketing methods and copywriting styles.
- Follow them on social media: Check out how they use social media to promote their products. Did they hold any contests or giveaways? How often do they publish posts?
These actions will give you a good idea of what they’re doing to drive sales and engage with customers.
As you go through these steps, make sure to take notes and jot down any observations that you think are important. This way, you’ll have quick access to valuable information whenever you need it.
Additionally, studying your competitors’ customer service and the way they use content to connect with their audience can also give you an idea of their sales-driving strategies.
It’s important to remember that while you should definitely be aware of your competitors, it’s not necessary to copy everything they do.
Instead, use the information you gather to come up with your own unique strategy that sets you apart and makes your business stand out in the crowded online marketplace.
6. Cover Your Legal Bases
When starting an online business, it’s crucial to be aware of the legal requirements in your region.
These laws and regulations can vary depending on where you live and the type of business you’re operating, so it’s important to do your research and make sure you’re in compliance.
Here are a few key legal considerations to keep in mind:
Structure of the company
There are a few different options for structuring your business, such as starting a corporation or operating as a sole proprietor. It’s important to consider the tax implications and legal responsibilities of each option, and you may want to consult with a tax expert or lawyer to help you make the best choice for your business.
Licenses and permits
Depending on the type of business you’re running and where you’re located, you may need to obtain certain licenses or permits in order to operate legally.
For example, if you’re selling products or services, you may need to register for a sales tax permit. Be sure to check with the appropriate state agency to find out what licenses and permits you’ll need to acquire.
One of the most important legal considerations for online businesses is tax. You’ll be responsible for paying income tax on your business profits, and you may also be required to collect sales tax from customers if you sell products in certain jurisdictions.
It’s a good idea to consult with a lawyer or accountant to make sure you understand your tax obligations and are in compliance.
Copyright, patent, and trademarks
To protect your business and your intellectual property, it’s important to address issues related to trademarks, copyrights, and patents.
For example, registering a trademark can prevent competitors from using a name that’s identical to yours, which can save you time and money in the long run.
If you’re not sure what legal protections you need for your business, it’s a good idea to consult with a lawyer who specializes in intellectual property.
7. Choose a sourcing strategy
Starting an online eCommerce business can be a great way to make money, but it’s important to find reliable and trustworthy inventory sources. There are a few different ways to do this:
First, you can find product manufacturers on websites like Alibaba or directories like Kompass, Sourcify, and ThomasNet. These websites allow you to search for suppliers by product or industry, making it easy to find the right fit for your business.
Another option is to find product wholesalers in or around your state on Handshake. This platform connects you with local suppliers who can provide you with the products you need to start your business.
Finally, you can discover dropshipping suppliers on platforms like DSers. Dropshipping is a great option for those who want to start their business without making a huge upfront investment. With dropshipping, your supplier ships and fulfills orders only after a customer purchases your product. They take care of storage and logistics, while you handle marketing and customer service.
If you’re interested in dropshipping, be sure to check out this list of the best dropshipping suppliers. It can be a valuable resource to find partners you can count on for order fulfillment.
8. Set up your payment methods
So you want to make sure your online payments are quick, secure, and convenient for your customers, right? One way to do that is by setting up the perfect payment gateway for your business.
In the past, collecting payments online was a bit of a hassle. You needed a merchant account (kind of like a business bank account for credit card payments) and a payment gateway to connect it to your website or online store. But now, it’s super easy to set up a payment gateway in just a day or two with options like PayPal, Square, or Stripe. These all-in-one solutions make it a breeze.
When you’re looking into different payment gateway options, here are some things to keep in mind:
- What are the merchant and transaction fees?
- Are there different rates for debit cards and credit card brands (like American Express or non-major brands)?
- What are the rates or fees for back-office payments?
- How do they handle disputes and chargebacks?
- What type of customer support do they provide?
- What countries do they support?
- Are there any products or services that I can’t sell through their payment gateway? (like guns or knives)
Some of the most popular payment gateway options include PayPal, Stripe, Square, and Authorize.Net. And, if you want to give your customers even more options, you can include multiple payment gateways on your site. This is especially helpful if you have a lot of international customers.
9. Build a sales platform
Starting an online business can be an exciting and challenging endeavor. After you’ve come up with a business idea and made sure it’s legal, it’s time to start building your platform. One of the best ways to do this is by using Shopify to create your website and DSers to source your products.
Shopify is a popular e-commerce platform that is user-friendly and easy to customize. It offers a wide range of features and extensions that can be added to your site, such as Digital Downloads for selling digital products, ReCharge for selling subscriptions, and SendOwl for selling videos. This makes it a great choice for freelancers, coaches, and consultants who need a website that is tailored to their specific needs.
When building your website, it’s important to keep things simple. Your business is still in the early stages, so you don’t want to waste resources trying to create the perfect website. Instead, focus on creating a basic website that is easy to navigate and provides all the necessary information.
Before investing any money in your business, you should also conduct feasibility studies to see if the model is viable. It’ll help you figure out if your business is going to work and identify potential problems.
It takes a lot of work and planning to start an online business, but with the right tools, like Shopify and DSers, it can be a lot easier.
10. Choose a marketing strategy
Choosing a marketing method is the first step to promoting your online business.
There are a ton of ways to market your business online, but some are better than others. Here are four methods that can help you land sales pretty quickly:
- Social media marketing: This means using platforms like Instagram, Twitter, and Facebook to promote your brand and sell your products or services. You’ll need to have a plan and use social media management skills and tools.
- Content marketing: This is all about planning, creating, distributing, and publishing content on different channels like social media, blogs, websites, and more. The goal is to reach your target audience and increase brand awareness, sales, engagement, and loyalty.
- Paid advertising: This is where businesses bid to display ads to internet users. The business that pays the most gets their ad displayed and they pay for each click on their ad. It’s often called PPC (pay-per-click) advertising, but not all paid ads are PPC ads.
- Influencer marketing: This is when a brand teams up with an online influencer to promote their products or services. Influencers are people with large followings on the web and social media, they can be anyone, from a popular fashion photographer on Instagram to a well-read cybersecurity blogger on Twitter.
Wanting to start an online business in 2023? Cool! Here’s a quick rundown of 10 steps you can take to get your internet business up and running:
- First things first, make a solid plan for your business.
- Pick a type of online business that aligns with your skills, passions, and preferences.
- Know your target audience and try to put yourself in their shoes.
- Identify a problem your target audience is facing and come up with a solution.
- Check out your competition to see where you can improve.
- Get all the legal stuff sorted out with a business license.
- Choose a sourcing method that makes it easy to fulfill orders.
- Set up a way to collect money through payouts and a payment processor.
- Build a basic sales platform to test your business idea.
- Choose an advertising approach you like and start getting the word out.
Remember, building a successful online biz takes time and effort. Don’t get discouraged if your first attempt doesn’t work out – even the most successful biz people had setbacks before they made it big. Keep at it!