Online Business
But turning your idea into a successful business is about much more than launching a website, writing a couple of blog posts and using social media. Just like traditional businesses, business success online requires hard work and dealing with rapidly changing tools and processes. The low barrier to entry in owning an online business means that competition is intense; if you want to be a success, you need to plan carefully and execute well.
The question is, just where do you start?
Here at , we know the answer, and we’ve shared it with more than 1,000,000 people who we've helped in forming their business. Since 2004, we’ve supported online entrepreneurs just like you to get into business online, and we’re proud to have been a part of the internet business revolution.
Here is our simple guide to starting up a successful online business. From exploring the types of business you can go into through validation and research, to the legalities of setting up your business and the realities of your day to day operations, this guide is here to help.
Read on for some insight into creating your own online business and becoming an internet entrepreneur.
Why You Should Start a New Online Business
The internet has opened up new frontiers, created amazing technologies, and helped us connect with others around the globe. It’s made everything more accessible, allowing us to easily research and compare ideas, products, services, and more. Entrepreneurs who can take advantage of these trends can do extremely well — here are some statistics on the power of online businesses in the U.S.:
$300B
Spent on online in the U.S. every year
$100K
Fifth of full-time independent workers earnings a year.
Online retail is expected to grow by between 8% and 12% year-on-year, compared to just 4% for traditional retail
Over a third of Americans are now involved in the 'gig economy', providing independent, freelance and contract work through on-demand services
Online businesses are typically less expensive to start than traditional businesses
This is why online businesses are so exciting — how can you be part of that success? We're here to help you figure that out.
What Type of Online Business Should You Start?
When it comes to starting an online business, you have plenty of choices. Here are the main areas where online businesses can be successful:
Freelance Entrepreneurs
This is a great field if you can provide services other businesses and individuals are willing to pay for. From freelance writers and designers to editors and virtual assistants, the internet is a fantastic way to sell your skills far and wide. You have the option of promoting yourself or joining a freelance marketplace like Upwork, Freelancer or Fiverr.
Creative Online Entrepreneurs
If you have a flair for the creative, then the internet can help you develop a following for your work. Whether you’re a photographer, videographer, musician, designer or artist, there are plenty of ways to monetize your skills. From the Etsy shop to Cafepress and DeviantArt to Smashwords, there are lots of ways to reach your audience.
Marketing and Social Media
If you’re great at building connections, marketing could be for you. Whether you start up your own agency, promote yourself as a social media expert or get involved in affiliate marketing, there are some awesome opportunities if you can learn to stand out.
Software Coders and Application Developers
For those with a more technical skillset, developing mobile and online applications can be a great business to get into. Software as a service (SaaS) and smartphone application development are rapidly growing fields with plenty of opportunities for the right people.
The Gig Economy
The gig economy has created business owners of many of us. Whether it’s Airbnb, TaskRabbit, Lyft or something else, there are lots of opportunities for people wanting to make an income on the side. With commitment, these can even become full-time ways to earn an online living.
Blogging and Publication
If you can build up a huge following, blogging and publishing articles could be a lucrative business idea. You sell ads alongside the articles through services like Google AdSense and take a cut of the money earned.
Ecommerce and Online Retail
This is perhaps the biggest sector of all, and you have plenty of choices when it comes to being a successful e-commerce entrepreneur:
- Starting up your own store on a service like Shopify, Volusion or Bigcommerce
- Starting an independent e-commerce store
- Selling through third-party marketplaces like Amazon and eBay
- Starting as a traditional retailer and adding in an e-commerce function
- Getting involved in specialist online retail like dropshipping or selling digital products and services
Validating Your Online Business Idea
These areas are just starting points — there are hundreds of different types of online businesses. Once you’ve identified the areas you’d like to go into, you need to validate your online business idea.
Start by checking you have the right skillset. For example, if you’re going into freelancing, do you have a marketable skill you can sell? If you want to be an e-commerce entrepreneur, do you understand all about product marketing, profit margins, working with suppliers and getting customers?
Don’t assume that just because it’s online, it’s easy.
Every online business will have dozens or hundreds of competitors, and you need to stand out, deliver superior products and services, and excel in your chosen area.
Getting started in an online business is easy, but becoming a success is harder. Before committing too much time, energy and money into your new internet business, it’s important to test the marketplace.
Identify your online business’s unique selling points (USPs)
Whether you’re competing on features, price, quality, speed, or something else, your USPs set you apart from competitors and encourage customers to come to you.
Look at who your competitors are in the space
Having competitors is a good thing as it shows there’s a market, but if there are too many, you’re likely to struggle without a really good USP.
Talk to clients
SpeakSpeak with potential customers to understand what they want from your products and services, and validate this by asking if they would commit to spending real money on them.
Get involved with business communities and discussion groups
One of the great things about online business is that there are thousands of great communities and discussion groups. Get involved in them and learn the ins and outs of your chosen market before committing.
The thing to learn here is that it’s okay to say “no” to your first, second, or third online business ideas. Very few entrepreneurs get it right the first time. In fact, getting it wrong is often a badge of honor in the online world! Still, you don’t want to waste too much time, energy or money on the wrong initiatives, so ask and answer these questions honestly to find the right way forward.
Your Online Business Needs a Plan
Business plans are easily overlooked by online businesses — after all, if you’re taking advantage of a third-party website, you don’t need a business plan, right? Wrong.
You need to define how you’re going to run your internet business, market yourself, get sales, make a profit and grow. This can only come about through creating a watertight business plan. It will help you get your thinking in order and show your commitment to your online business.
Business plans do vary slightly, but they should cover the following areas:
An executive summary with the most important points from your business plan
Your goals and what you hope to achieve with your online business
A description of your business, background information, and context
A market analysis and likely demand
An overview of how your business is structured
Your business model
How you will market and sell your offerings
Financial projections, revenue, and profitability
Appendices
We’ve got the perfect guide to writing your business plan.
Setting up Your Business and Business Operations
Once you've legally created your business, you’ll need to get some other things in place.
Location of your business
Almost all internet entrepreneurs can work from home or a shared working space. This is great as it reduces your office costs considerably. Don't forget that if you work from home, you can write off part of your utility and housing costs against your taxes.
Marketing
Marketing will be a huge part of your online business. Naturally, you will need an awesome website, but you'll also need to get branding, newsletters, digital ads, social media accounts and other channels in place.
Equipment
It’s likely that the only equipment you will need to run your online business is a computer, laptop, tablet or smartphone.
Software and Process
Online entrepreneurs make extensive use of software; see our great list of the top apps at the end of this article.
Employees
To begin with, you probably won’t need to hire anyone else for your online business, especially if you’re a good administrator.
Finances and Taxes
You will need a separate business bank account for your online business. You might also want to consider a business credit card. Additionally, you will also need to keep careful bookkeeping records and file business and personal taxes. Here at , we can even help you file your taxes.
The Complete "Start Your Business" Checklist
A Clear and Comprehensive Guide to Starting Your Business the Right Way
Maintaining Your Online Business
There are certain forms and legalities you need to follow to keep your internet business in good standing.
File an Annual Report
Most states require all businesses to file a report once a year. This report has details of any major changes to who owns a business and other major impacts on a business’ legal status. We can file your Annual Report on your behalf.
Pay Estimated Taxes
You will be expected to pay estimated taxes on what you plan to earn in the current business year. Typically, you will need to pay estimated taxes in April, June, September and January (of the following year).
Renew Business Permits and Licenses
Your business will probably have several licenses, permits and other regulations. These typically need to be renewed every year.
File Your Taxes
You will need to file your taxes once a year.
Pay Payroll and Sales Taxes
If applicable, you will need to make payroll and sales tax payments on a regular basis.
Prepare Your Taxes
You will need to work with your accountant to prepare all the taxes you need to pay.
Useful Online Tools for Your Online Business
Here are some really great online tools for managing your online business. They will reduce the time you spend on administration, help you to collaborate with others and free up your time to grow and manage your new venture.
Collaboration
Social Media Management
Communication
Email Marketing
Advertising
Marketing Automation
Customer Relationship Management (CRM)
Customer Support
Human Resources
Website Development
Analytics
Hiring
Please note: This post contains affiliate links and we may receive a commission if you make a purchase using these links.
Conclusion
The internet has made online entrepreneurship available to everyone. If you can find a great niche, understand your competitors, and put together a solid business plan, you will have every chance for success.