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How to Start an Online Business

Nathan Finch——Last Updated on April 1, 2022

how to start an online businessBecoming an online business mogul has always been a tempting venture for many ambitious wanna-be entrepreneurs.

The world of online trading of goods and services has grown significantly over the past decade, with more and more businesses choosing an online-only approach in favor of expanding their physical market presence.

Research suggests there are approximately more than 20 million e-commerce websites online and operational as we speak, resulting in fierce competition on the market.

NASDAQ predicts that almost 95% of all purchases will be conducted via e-commerce by the year 2040. The message is clear: online businesses are the future of business!

There are a plethora of ways to profit online. However, contrary to what you might see in advertisements or commercials, online entrepreneurship demands more than just staring intensely at your Macbook Pro while sitting in a fancy café, drinking overpriced coffee, and waiting for the money to roll in.

What follows next is a thorough, step-by-step, and all-encompassing guide to envisioning, creating, and maintaining a profitable online business. Regardless of expertise, this guide will prove useful to any e-commerce enthusiast willing to successfully put his (or her) profitable ideas into practice.

#1 Have a Business Idea

business idea iconA journey of a thousand miles begins with a single step - or in this case, quite a leap! Before you jump into researching best eCommerce platforms and marketing tools, you must first think of a plausible and profitable business idea to pursue.

Whether it revolves around selling goods or providing services is irrelevant at this point, as long as they are either commoditized or niche enough to cover a substantial number of potential customers.

Podcasts, blogs, web design, social media management… the list is ever-expanding. If you’re still drawing a blank in the ideas department, check out our guide on how to make money online that might help kickstart your noggin!

#2 Validating Your Idea: Test The Waters

business launchNow that you’ve chosen your path, it’s time to plan out your journey. Even if your idea seems bulletproof, you’ll start seeing chinks in its armor if you don’t do your homework beforehand.

Thorough research, a multitude of tests and analyses are key to making a successful business launch, both online and offline, and it will give you the upper hand over your competitors.

Market Assessment

Speaking of competition, try to avoid crowded market/business branches as much as possible. Your best bet is to research your idea in order to evaluate your soon-to-be rivals and make sure your idea isn’t already taken.

Several intense Google search sessions will give you a rough estimate of how well your competition is doing so far, the number of businesses occupying that specific branch, as well as their customers’ reviews and ideas on how to improve upon their services.

Analyze Your Opposition

Customer/user feedback is a double-edged sword for any business, let alone up-and-coming ventures. If the customer isn’t satisfied with the service provided, and if the service provider fails to acknowledge their feedback, the said customer will undoubtedly go looking for any alternatives to fill in the emptied slot.

If you’re quick enough to spot these faults and implement optimized solutions into your idea, there’s a good chance that you’ll be the one to fill in the aforementioned slot. Remember, your main goal is for your product to solve a problem, whether by fulfilling a need or by topping an existing fulfillment.

Revenue/Expenses Forecast

Revenue Expense Profit graphOftentimes, you’ll hear great stories of billionaire entrepreneurs who were able to grow their business empire from scratch, fueled by passion alone and with zero investments to start with.

These stories, though inspiring, are more often than not highly improbable.

Supposing you’re already passionate about starting a successful online business. Your next priority should be evaluating investment costs and potential annual profits. Using that as your main criteria for ranking your ideas. In plain English: do the math.

Survey Feedback

After you’ve made thorough estimates of your future investment costs and potential profits, your next focus should be getting direct feedback from potential clients.

The most proven method of doing so is by creating free surveys via Google Forms, SurveyPlanet, or SurveyMonkey. After which you should be sending them out to friends, family, and anyone you might deem a potential client/customer.

Your survey should be both sufficiently thorough and as little time-consuming as possible. Studies have shown that subjects tend to choose answers at random should they find the survey too arduous and overly extensive. So keeping it simple is the name of the game.

Through these questions, your aim is to gather information about your target demographic (age, gender, profession, etc.). Along with questions regarding pricing, likes, dislikes, and any concerns that potential customers may have regarding the product/service in question.

These surveys will yield valuable guidelines on not only the type of demographic you appeal to the most but also how to approach building your product or service, what they would or wouldn’t like to be added or removed from your product or service, and the price range they’re able to afford. Homework: done!

#3 Create Your Website

web design iconWith ‘homework’ out of the way, it's time to deal with the aesthetic side of things.

Finding customers online is a process very much similar to finding a date at a nightclub.

The key is to look sharp, clean, approachable, and user-friendly… okay, minus the last part.

Choose A Web Host

Your business goals will be a significant factor in choosing the ideal web host for your online business. To avoid repeating ourselves, our thorough guide to the wonderful world of hosting goes into detail on recommended web hosting providers, as well as one you should stay clear of as far as possible.

Choose A Domain/Brand Name

Your product’s and/or business’ name should resonate with your target audience, and this is where letting you should let your imagination run wild.

Naming your website/product is all about striking the right balance between seriousness and some good ol’ relatability. If you’re lacking on the creative side, you can always give domain name generators a shot, at least as a placeholder until you decide on the right name for your brand.

SEO and Web Page Optimization

There’s no point in learning how to create a website if no one will be able to see it pop up in their search results.

On top of getting your website Google-friendly, knowing how to reduce loading time is another huge factor to keep in mind, as slow-loading pages are the most effective way of driving away any potential visitors (un)fortunate enough to stumble upon your clunky webpage. Yuck!

Design Your Website

Chances are, you’ve already stumbled across plenty of ads talking about top website builders and designing your website with ease.

There’s plenty of fish in the sea when it comes to web builders, but regardless of which website builder you choose, there are a few guidelines to follow in order to create a perfect, user-friendly, and intriguing home page.

WordPress.com is a world renowned website builder known for a plethora of different themes you can choose from to design your website. It might be worth checking out if you are in need of inspiration.

Your choice of fonts should be limited to two plain, basic, non-eye soaring fonts. Helvetica, Times New Roman, and Arial should do the trick, as they’re both plain enough and go along nicely with any type of background you choose. Speaking of backgrounds, follow the motto: if it’s white, that’s quite alright!

wordpress.com-themes-featuresLimit the number of pop-up messages, both audio and video, or better yet, remove them altogether! Videos or loud audio that automatically play upon entering a website will drive visitors away faster than you can say Adblock.

Focus on crafting your home page in a way that makes it pleasant to look at and easily navigable, sporting clearly visible buttons that will lead visitors straight to the segments of their interest, without any hassle.

Make It Mobile-Friendly

This is one of those pieces of advice that should go without saying in the year 2022, but alas, a significant number of people still fail to take smartphone users into account. Moving on!

Monitor Your Website

Regardless of your web hosting platform of choice, you should always keep an eye on how consistent your website is in terms of uptime, server health and overall performance. The longer your web store takes to load, the higher the chances the visitors give up on their planned purchases and continue their search elsewhere.

If you need help choosing the best website monitoring services for your type of business venture, our guide is just one click away!

Update Your Website

This one should go without saying. Besides keeping your website spick-and-span on the technical side, you should always try to keep it fresh content-wise.

By creating a habit of adding good copy, enticing products and offers on a weekly basis, you'll generate more traffic and keep your newly-acquired visitors coming back to check in on new content.

Your content should be crafted with target demographics in mind if you wish to maximize website visits, as opposed to going the general route and trying to appeal to the general audience. A sure-fire way to keep the traffic flowing!

#4 Plan Your Online Business

legal iconSo, you have an idea of what product or service you’re willing to offer to your customers/clients.

You’ve analyzed the market, figured out your potential customer demographic, and have a rough idea of how much you’re willing to spend, as well as how much you’re expecting to earn.

In military terms: you’ve gathered intel. What’s next? Creating a battle plan!

Legalize Your Online Business

There are 3 ways to go about registering your business and getting it legally up and running:

Sole Proprietorship

You are the company and the company is you! Setting your business up to operate as a sole proprietorship is the most basic type of business structure, and generally requires next to no paperwork, making this option the fastest one by a significant margin, and the best choice for small businesses.

By the way, when we say that you are the company, we mean it: you ARE the company. You are the sole holder of any financial responsibilities of your company, which of course includes any potential debt that your business might stack up.

Forming an LLC (Limited Liability Company)

company iconIf you wish to create a safety barrier of sorts between you and your business, registering it as an LLC is the way to go.

As opposed to registering all income as personal income, which is the case with the sole proprietorship model, the LLC model lets you separate your personal finances from your business.

Should you wish to open bank accounts, acquire licenses, hire (and fire) employees, and such, you are free to do so.

Thanks to a pass-through taxation model, you will not be double-taxed, and you get to choose whether you’d like your company to be managed by its employees or by its manager. This option is pretty much smack-dab in the middle.

Founding a corporation

Ambitious entrepreneurs only! If your future plans regarding your brand involve foreign investors and breaking into the stock market, this business model is for you.

Choose to limit the number of shareholders, types of stock (common or preferred), and decide whether you’d like to limit taxes to your shareholders or include business taxes. This option is reserved for veteran entrepreneurs who would like to take their business to the next level.

Product Sourcing

product sourcingIf you intend to sell any products online, you have to determine where your products will be coming from.

Who manufactures them, and how much they require for their services.

There are 3 main types of sourcing to choose from:

Partnering with a manufacturer/wholesaler

If you don’t wish or don’t have the means to manufacture your own products, or if you simply plan on expanding your business and increasing revenue, having someone manufacture and distribute products to you (or for you) is the best option.

This business model does require more investments in advance but is an efficient method of having someone do the bulk (or all) of the production for you, while you retain the ability to control the products’ quality.

Finding the right manufacturer is tricky: there is plenty of fish in the sea and lots of them are out there to trick you. Be careful and do your research!

After evaluating and choosing your manufacturer, it is time to assess the financial and practical aspects. Production costs, shipping costs, inventory management, etc. These numbers will give you an estimate of how much your profits will be affected by your expenses - do your math!

Making products / delivering services on your own

Sometimes, if you want something done right, you have to do it yourself. From handmade cutlery and toys to jewelry and art, there’s always a market for those creative enough to make bank based on their talent.

Most successful entrepreneurs started their journeys by going solo, and opting for expanding their business when they felt it was time for an upgrade.

In order to successfully go through with manufacturing and delivering products on your own, there are a few things to consider.

Since you’re going solo, you’ll have to source materials on your own. Luckily, regardless of the type of product, there are plenty of options to choose from! Your local shops and flea markets might have just what you need, so feel free to snoop around!

Once you’ve chosen your material sources and made the first batch, your next priorities should be finding the best delivery service, calculating production and delivery times. After that, you’re good to go!


Though some would say that the dropshipping ship had already sailed, the truth of the matter is that it remains a highly popular method of delivery among online businesses. If you're planning to sell higher amounts of lower-priced goods, then dropshipping is the way to go.

Still, that doesn’t change the fact that, due to low profit margins and an overcrowded market, it's hard to recommend going down the dropshipping path.

#5 Market Your Online Business

Tips for marketing iconSpread the word! In the world of e-commerce and online business in general, marketing your venture is one of the key pillars upon which any online entrepreneur worth his/her salt should build his business.

SEO can significantly improve your chances of getting more clicks, no doubt about it, but if you want to get ahead of the competition and stay ahead, dipping your toes into marketing would be a wise investment.

Email Marketing

Let’s kick things off with the most cost-effective and the most time-saving method of the bunch.

Via email you’ll be able to reach a wide audience of potential clients and create valuable connections, and all it takes is for you to set up an automated email marketing service, specifically catered according to your type of business, sit back and enjoy the show.

It comes as no surprise that email marketing has been becoming more and more relevant throughout the years.

HIghly affordable, time-effective, and did we mention it’s highly affordable? Speaking of no surprises, the sheer number of email marketing services available today is mind-boggling - high competition yields a higher quality of service, but it can also lead to lots of confusion and indecisiveness.

To alleviate this issue, we’ve composed a list of top email marketing services for you to take a look at. Regardless of your type or type of business, we’re certain you’ll find something to cater to your needs.

Search Engine Marketing (SEM)

Search Engine MarketingSimilar to SEO, SEM refers to optimizing your website’s visibility in Google search results.

Unlike SEO, however, which focuses on increasing website traffic from organic searches alone, SEM combines both organic and paid searches to maximize the website’s reach.

Lately, SEM has become a go-to way for many up-and-coming businesses and companies to advertise their products and services, thanks to its high efficiency and rapid-fast results. Google Ads and Bing Ads stand as 2 of the most popular search ad networks, with the latter being nearly twice the size of its Microsoft competitor.

The advantage in size comes at a slightly higher price range, but nowhere near enough to ignore the fantastic reach offered by Google Ads.

Webinars & Virtual Events

Sometimes the direct approach is what you need to get some attention going towards your business.

Hosting live Q&A sessions, webinars and streaming in general tends to give your potential clients an opportunity to interact with you on a much more personal level, thereby strengthening your bond and gaining their trust in the process.

Whether it be facing criticism or receiving praise, being able to talk to your customer base face-to-face (or webcam to webcam) shows that you care about their experience with your product or service, and a good word of mouth goes a long way!

Social Media Marketing

Facebook, Instagram, LinkedIn, Twitter all share one thing in common: enormous user bases.

Many start-ups and online businesses managed to build up a significant customer base by relying solely on social media as their primary marketing outlet, so it would be wise to use these to your full advantage.

If you had to choose only one, we would recommend choosing Instagram ads. Although Facebook sports more than twice the number of active users, research has shown that people are far more receptive to ads they see on Instagram, which likely has to do with its rather streamlined and less aggressive approach to publishing ads.

On the other hand, Facebook’s demographic encompasses a more mature user base compared to Instagram’s predominantly younger audience. If your product fares better with users age 30 and up, you should consider choosing Facebook as your primary social media outlet.

LinkedIn numbers around 750+ million users, a third of which are active on a monthly basis. This platform is catered towards making business connections and getting in touch with potential partners open for cooperation, meaning you won’t have much use advertising your product here for sales purposes.

Key Demographic on Twitter

And last, but not least: Twitter: Arguably the most expensive out of the bunch, Twitter offers better targeted ads that cater towards users’ most recent searches, as well as gender, language, location, and even apps that are installed on their smartphone.

Furthermore, Twitter gives you an opportunity to interact with its users on a yet unprecedented level, favoring rapid and concise responses above all else.

The best approach you can take is to research key demographics of each one of these platforms and make a choice based on these parameters.

Regardless of your choice, these platforms in majority rely on PPC marketing as their main advertising model, which equals great efficiency and a near-guaranteed increase in visits to your webpage.

#6 Upscale Your Business

growing business iconYou’ve done your research, your website is up and running, your business is legalized and being advertised on various social media platforms and search engines.

You’ve chosen your methods of product sourcing and distribution or providing services. Your online business is officially underway!

With all that said, if you wish to maintain a steady and substantial flow of satisfied customers, your business must grow to accommodate their constantly evolving needs. Here’s what to do:

Build a Reputation

In order to keep your existing customer base coming back for more, and for more customers to keep coming your way, you must establish trust between you and your clientele. Remember, their satisfaction is the best marketing you can provide for your business in order to keep growing at a steady pace.

Deliver Great Customer Service

Good customer service is the best way to go about instilling confidence in your customers that your services are well worth the time and money spent.

In order to provide the best customer service possible, you must possess extensive knowledge about the product or service you’re providing. That way, regardless of circumstance, you’ll always be ready to troubleshoot for your customers if such a need arises.

Expertise goes hand in hand with fast response time, service personalization and maintaining a positive attitude. A customer is far more likely to recommend your services to their friends, family and peers if you offer 24/7 support and create a habit of offering solutions to them and compensating them for their troubles.

Upsell Your Customers

A visit to your web page could mean a lot more than virtual window shopping if you are able to recognize the visitors’ needs and provide adequate solutions to their necessities.

Once a customer has completed a purchase, you have an opportunity to use his/her interest to persuade them into making an additional purchase and increase your sales revenue even further.

amazon like frequently bought together appKeep in mind that the products or services you’re planning to upsell related to the customers’ initial needs.

A prime example of this business practice is Amazon’s ‘frequently bought together’ product recommendation algorithm.

Which is subtle enough to entice their shoppers to make purchases they never thought they needed to.

On top of simply offering additional products, product deals and added extras such as free delivery for purchases above a specific amount are also great methods of alluring customers into spending even a little over their initial budget. Think outside the shopping cart!

Use Analytics

Competitive analysis, SWOT analysis, and A/B testing are just some ways you can conduct research on both you and your competition, thereby having an estimate of how well your business has been doing and a rough idea of what segments require your attention.

Google Analytics is your best friend here. This free powerful program can provide detailed insight into various segments of your website’s performance. Contrary to what it may seem, this program doesn’t have a steep learning curve, regardless of whether or not you’re familiar with the basics of analytics.

Through segmented data results, you’ll have the opportunity to spot any website compartments that don’t drive enough traffic, and through competitive analysis and comparisons you’ll find ways to improve upon them.


We hope that this guide will prove useful on your quest to launching your online business. No matter how prepared you think you are or how much research you’ve done, the best way to evaluate your ideas is through practice alone, and nowhere does this hold true as much as in online business.

The most important thing when it comes to leading an online business is to keep faith in your practice. Every beginning is hard, and the same goes with building a profitable online venture from scratch.

Chances are you won’t see the numbers rolling in for weeks or months on end, and this is where patience and resilience come into play! If you’re certain your product or service is up to the standards, then it’s only a matter of time before revenue starts flowing in.

If blogging is more up your alley, we offer a guide to finding the best WordPress web hosting based on our thorough research, as well as tips on how to improve your WordPress website security. Good luck!

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