10+ Steps On How to Start An Online Business that Actually Works!

 22 Apr, 2021


If you want to know what is the right time to start an online business? I would say now. Statistically speaking, over 2.14 billion people worldwide are expected to buy goods and services online in 2021. That’s about 27.6% of the 7.74 billion people in the world. In other words, more than one out of every four people you see around you is an online buyer. So why miss out?

However, the mere idea of starting an online business from scratch might seem like an impossible task that requires extensive investment especially if you’re a small business with limited resources. Another scenario is you do own an online business but still haven’t been able to crack the successful code. So what do you do?

In this blog we’ll not only answer your question about how to start an online business but we’ll also deal with following questions to help you create your own online business:

  • Steps on how to start an online business 
  • Digital marketing for online business
  • Cost of creating an online business
  • How to start an online business for a small business?
  • Resources and tools for knowing how to start an online business

How to Start an Online Business from Scratch: 10 Steps to Follow

It might be quite easy to start an online business but you still need a direction, detailed insight into the steps involved with starting an online business. So here we are providing you with 10 steps to start an online business:

1. Have a Business Strategy

A business strategy is a documented plan about how a business is going to achieve its goal. The goal can be about reaching 1 millions users, fulfilling customers needs & expectations, creating a niche for yourself or be better than your competitors. This is an important and foremost thing before you go about starting an online business, as not only it gives you a concrete path to walk on but also helps you trace your success, performance, or areas of improvement against the target you’ve set in your business strategy. It can have these points or many more:

  • Executive Summary
  • Business Description
  • Market Analysis and Competition
  • The Product or Service
  • Marketing and Sales Plan
  • Ownership, Management, and Personnel
  • Financial Plan and Projections
  • Investment

2. Design Your Business Structure

When starting an online business, make sure you’ve the type of legal structure of your company. As this not only influences on how much you pay in taxes, or the legal formalities you’ve to file for or take licences. But the amount of investment you need to make or even the possibility of raising profit also depends on it. Here are few of the major business structure that you can choose from:

a. Sole proprietorship

The businesses which are owned by one person who runs the business on his own.

Sole proprietorship advantages

  • Owner receives all the profits
  • Profits are taxed only once
  • Owner makes all decisions and is in complete control of the company
  • Easiest and least expensive form of ownership to organize

Sole proprietorship disadvantages

  • Unlimited liability if anything happens in the business. Your personal assets are at risk
  • Limited in raising funds and may have to acquire consumer loans
  • No separate legal status

b. Partnerships

It's a type of business where two or more people share the ownership of a single business along with how they’ll share the profits, liabilities and assets and how disputes, if any, will be resolved or how partnership will be dissolved as outlined by a legal document.

Partnership advantages

  • Easy to establish (with the exception of developing a partnership agreement)
  • Separate legal status to give liability protection
  • Profits taxed only once
  • Partners may have complementary skills

Partnership disadvantages

  • Partners are jointly and individually liable for the actions of the other partners
  • Profits must be shared with the partners
  • Divided decision making
  • Business can suffer if the detailed partnership agreement is not in plac

c. Corporations

A business that is in the eyes of law is seen as a unique entity, separate from the people who own it. There are three types of corporations: C-corporation, S-corporation and Limited Liability Company.

C-corporation: It is taxed separately from its owners and allows a limited liability to the owners and thus more risk-taking and potential investment.

C-corporation advantages

  • Limited liability
  • Transfer of ownership, shareholders can sell their shares
  • Capital is easier to raise through the sale of stock
  • Company paid fringe benefits
  • Tax benefits

C-corporation disadvantages

  • Double taxation (corporation and shareholder earnings taxed)
  • Can be costly to form
  • More administrative duties - required by law to have annual meetings, notify stockholders of the meeting, must keep minutes of meetings and turn in
  • Pay corporate taxes at a different time than other forms of business

S-Corporation: Also known as subchapter S-corporation, gives limited liability to the owners as it does not pay income taxes and the earnings and profits are treated as distributions. Shareholders involved in this corporation must report their income on their individual income tax returns.

S-Corporation advantages

  • Limited liability
  • Avoids double taxation
  • Profits taxed only once
  • Capital is easier to raise through the sale of stock
  • Transfer of ownership

S-Corporation disadvantages

  • Can be costly to form
  • Stockholders limited to individuals, estates or trustees
  • Required administrative duties
  • Cannot provide company paid fringe benefits

d. Limited Liability Company

This type of business is a mix of structure that provides the limited legal liability of a corporation and along with the operational flexibility of a partnership or sole proprietorship. This requires you to file paperwork.

Limited liability company advantages

  • Most common business structure and specifically created for small businesses
  • Must have insurance in case of a suit
  • Separate legal entity
  • Usually taxed as a sole proprietorship
  • Unlimited number of owners

Limited liability company disadvantages

  • Can be costly to form
  • Yearly administrative costs
  • Personal tax liability
  • Legal and accounting assistance is recommended

Remember whatever the business structure you decide to go for always base your choices on three main factors: liability, taxation and record-keeping.

3. Choose Online Business Model

After deciding upon the type of business you will start an online business with, now is the time to choose the kind of online business model you want to go for. Here’s the list of one of the six popular online business to choose from:

Here are six types of online businesses to consider:

  • Freelancing: You can offer your service to other individuals and businesses using a skill that you have like content writing, designing or photography..
  • Coaching and Consulting: Become a coach or a consultant and sell your expertise, advice, and guidance.
  • Software as a Service (SaaS): Create a piece of software or application, and charge users a recurring subscription fee.
  • Ecommerce: Using platforms like Magento, Shopify or BigCommerce, set up a website and sell products online.
  • App Developer or Builder: With knowledge of coding & basic elements of software design, build apps for businesses that need specific apps.
  • Virtual Assistant:  Help businesses or entrepreneurs organize their personal or professional lives like setting appointment or  marketing management but virtually!

4. Analyze Your Potential Competitors

Familiarize yourself with the market you want to step in. A competitor analysis is important because it will not only ensure you can enhance your own business goal after considering market trends but it will do more. It helps you identify how you can create a better business strategy than your competitors and much more. It can also provide you insights into your own best practices, business growth plan and its potential flaws thus a chance to outgrow not only your competitors but also your own goals.

5. Identify Your Target Market

Like an effective business  strategy helps you stay on track to your success path, similarly identifying a target market helps employ better communication strategies whether through products, marketing or services. Additionally, when you know who you are selling your product or services particularly, it helps you organize the group in a cost-effective and time-effective manner. So figure the gaps in the needs of your customers and fill it via in-depth market research or exploring industry trends, reviews.

6. Decide a Relevant Business Name/Logo

Do you know Facebook was initially known as TheFacebook? But it lost “THE” and renamed itself to just Facebook. What do you think is catchier “TheFacebook” or “Facebook”? You have invested a lot in your business idea whether money, time or efforts, however if you can’t give it a name that not only distinguishes your business from others but also an image that is etched in the mind of your customers forever. Then what’s the point? So go for names that:

  • Related to your business messaging/branding
  • Give insights into what your business does or sells
  • Are scalable to suit your future growth plan
  • Develop Your Visual Identity via Logos

7. Perform The Legalities

Before you start an online business you do need to seek and file appropriate business-formation paperwork, permits and licences to perform your particular business activity. For instance, Payment Card Industry Data Security Standard (PCI DSS) is one of the major documents that you need for involving in any kind of online financial transactions. Other than that following are few other legal formalities that you need to do to give your online business solid legal foundation:

  • Registering your business with the appropriate government authorities
  • Obtaining all the required permits and licenses
  • Meeting all federal and state tax requirements, such as applying for state and federal tax ID numbers
  • Ensuring your business name, services or products are registered for Trademark so that your brand name is protected from getting copied or used without your authorization.

8. Choose The Right Website/Sales Platforms

There are several website platforms that you can pick for your online business but you need to make a sound decision considering your website is your first impression that you give to your potential customers. Based upon how your website looks and functions, they will form an opinion about your business so ensure it’s a positive one. So, go for websites or designs that:

  • Simpler or Easier learning curve
  • It is fast and secure
  • Mobile-responsive
  • Simple & intuitive to explore
  • Persuasive Call to Action
  • Cost-Effective Maintenance support
  • High on Customization

9. Create Brand Strategy

Having a brand strategy is all about shaping your existing and potential customers' perspective about your products, services and overall company image and that depends on how you communicate with them. Brand strategy isn’t a complex matter but is quite important as:

  • It helps you in creating a different and distinct image than your competition and gives you visibility in the marketplace
  • It’s the stepping stone to marketing strategy as it provides a clear purpose for how you can engage your customer and why you are doing so
  • With consistent, clear and cohesive brand strategy you can attract new customers & retain loyal customers 
  • It also gives your own employees a clear brand vision to ensure that everyone is working towards the same goals
  • It increases your business value as a strongly established brand not only adds value to your brand for future revenue generation but it also makes you an attractive choice for investment opportunity

These are some of the major branding key elements:

  • Brand Purpose
  • Brand Vision
  • Brand Values
  • Target Audience
  • Market Analysis
  • Awareness Goals
  • Brand Personality
  • Brand Voice

Wanna learn how you can position your brand well amongst your competitors? Ring JanBask Website Development Services to know the most cost-effective and compelling way! 

10. Create A Digital Marketing Plan

Digital marketing for online business just like branding is essential steps to start an online business and to attract more customers, convert leads into sales and for brand awareness via digital channels like search engines, email marketing, and social media. Other benefits include:

  • Interact with your prospects and learn exactly what they are looking for
  • Reach a global marketplace instantly
  • Cost-effective and makes quiet easy to reach more customers than traditional marketing methods
  • Create brand loyalty by knowing your audience and letting them know you intimately
  • Track what is working for you and what is not and improve based on it
  • Evaluate your progress of your marketing efforts immediately

Some of the key elements of Digital Marketing Plan:

  • Online Advertising
  • Content Marketing
  • Downloadable Content Offerings (eBooks, Whitepapers, Webinars)
  • Buyer Personas
  • Email Marketing
  • Video Marketing
  • Social Media Marketing
  • Search Engine Optimization (SEO)
  • Pay-Per-Click (PPC) Marketing

You’ve A Small Online Business But Sales Just Aren’t Where You Need Them To Be:

So far we discussed the steps on how to start an online business from scratch but at times you already own an online business but no matter what you do, you can’t crack the success code. Relax, we have got your back. Here’s a list of two additional steps you need to perform in addition to above mentioned steps:

1. Analyze Your Past Reports/Progress

Take out your past progress reports and analyze them thoroughly to understand where you fall short. Sometimes we do have well documented progress reports but we rarely give them a chance to analyze the performance and overall growth of the business. Not doing so leads to you missing the areas where you can improve for better opportunities and growth.

2. Re-design/Redevelop an Easy-to-use Website

A great website won’t just create your online presence or help you sell your products or services, it also leverages to help you achieve your business goals and keep you ahead of your competition. But a poor web design or an outdated website is going to do your business more harm than good. Everything is turning digital these days. So, if your website doesn’t provide a great user experience, user-friendly content and website design then you won’t only lose your new visitors but also fail to retain old ones.

Seek professional help for redeveloping or redesigning your existing website, the expert advice from a website design agency will make your website not only perform well for you but also give your customers a greater user-experience and you, their loyalty!

5 Reasons Why You Should Start An Online Business and 3 Reasons You Shouldn’t

Starting an online business is pretty much the buzz word since the pandemic has shifted and pushed us towards an online world. Not that we need another pandemic or epidemic to go online but the whole world is slowly turning digital. However, if there are ups to going online, there are downs to it too. So now, we’ll be listing out factors that you should consider before establishing an online business:

First the Pros

1. Be Your Own Boss

If you’ve a business idea that you want to see go live in the digital world one of the positive aspects to running your own start-up or small business is that not only you’re not restricted to office timings but you’re your own boss. You can work around your own schedule, need and requirement without having to be worried about your manager or seniors haunting you. You can simply spread the work throughout the day and enjoy the work you do at your own pace.

2. Low Overhead Costs 

These days anyone can start a business online. You can start a business even from your sofa simply because you don't need to get funding for a brick and mortar space or additional electricity or signage, or anything like that. For instance, to start an online retail store your products and marketing will most likely be your main expenses. Even if you’ve an online business that offers a particular service, you're essentially spending nothing on expenses except your website domain and maintenance.

3. 24/7 Income Stream

Yes, the revenue stream while running an online business is 24/7. As most offline stores are usually operational for some 12-13 hours but by being available at all hours and days, you can attract people to your store and buy your services or products who would normally pick up a product in stores if the outlet were open. However, that doesn’t mean you’ve to stay awake 24/7 especially for customers who usually order at night. Why? Because to accommodate their requests at odd hours you can simply automate your ordering systems so that customers receive a confirmation email when they place their order to give them peace of mind and you profit.

4. Greater Exposure & Branding

The online world is huge and most of the time, kind. If you’ve an online business, you get the opportunity to reach many new customers on the internet across the world in an instant, something you miss when you’ve an offline business. Plus, today’s world runs on clicks and shares, it is way easier for customers to find you online than on Google Maps and if they like what you offer, expect shares and likes in 5, 6 or 7 figures! 

5. Customization/Evaluation is Easy

With so much customer data regarding their likes, dislikes, buying history or behaviour, you can easily tweak your services or products or designs to their likings and interest. With unlimited access to tools and technologies you can not only give your customers a seamless and smooth user experience but can also trace your progress in terms of sales, conversion rates or bouncing rates to stay connected with your customers online and be relevant.

Now the Cons

1. Security and Fraud

Unforeseen circumstances that result in loss can happen whether you run an online business or offline one. However, with online businesses there’s a big chance of different kinds of theft: data, privacy or fraud, that’s why cybercrime has been the biggest hurdle not only for emerging business owners but also customers that feel buying online is a risky option. 

But worry not if there are chances of cyber threats and fraud then there are a million ways to avoid them. Integrate latest security systems, secure payment gateways and keep a regular backup and software updation of your website and you’re good to go!

2. More Competition

Online business is rising exponentially and so is the competition. Now-a-days you can find everything online be it food, movies, clothes, medicines or even education, today’s customers are spoilt for choices. If they don’t find one thing at one online store they’ll quickly move to another, so you’re always in need of measures and features to stay ahead of your competition and that can be a daunting task if you’re a start-up or small business who just started

If you feel your business idea is unique, we believe there’s really nothing that you won’t do that helps you in maintaining an edge over your competition. So don’t be disheartened by the competition yet, believe in your business idea, listen to your customers and offer them the best, secured and smooth buying journey and they’ll keep coming to you.

3. Website Costs and Technical Issues

Follow these steps to start an online business from scratch and anyone can have their own online business either free or with some meagre investment. But you still can go wrong with your site when it comes to basic tech know-hows, if you’re a non-IT guy. In that case, you need professionals who can give a  smooth and highly-functional website. This will surely add to your business cost, additionally securing your site or hosting costs is extra cost you need to incur with online business. 

However, steps to start an online business or running an online business might seem an expensive option with all these reasons but there are so many cost-effective service providers for online business website design & development that helps you run your website smoothly, safely and economically. They make it easier for you to focus on running your online business while they take care of your website for you.

How Much It Costs to Design and Development of a Website

So you know the steps to start an online business through our 10+ steps on how to start an online business. Now, follow the below table to know what is the cost of website development and design on an average:

Quick Trivia about eCommerce: 

  • More than 80 percent of the online population has used the Internet to purchase goods and services.
  • By the year 2040, it's estimated that 95% of all purchases will be through eCommerce.

Fascinated by the online or eCommerce world? Willing to give it a go? Check out these tips on how to start an ecommerce business before you start. They’ll help you better navigate the process of launching an ecommerce business.

Final Thoughts on How to Start an Online Business

The internet has brought such a huge shift in the way we eat, learn, watch, wear and now the way we do business. So if you’re planning on building an online business from scratch or if you already have an online business but couldn’t reap the enormous rewards, with the help of this blog, the 11 Steps on How to Start an Online Business you can learn how to start or restart and grow into a successful online business. Stick to the steps of how to start an online business online and you’ll not only get your answer to how to start a profitable online business but also pays off the time, money and efforts you put behind it. Additionally, we also provide you the realistic perspective behind an online business and lists out the advantages and disadvantages of starting an online business.

When you think about the pros and cons, there are more positives than negatives if you want to know how to start an online business. So process carefully and develop a growth plan for your online business that’s both profitable, reasonable and sustainable. Come on, go ahead and employ our 10+ steps on how to start a profitable online business.

Do you have any other questions on how to start an online business? Let us know in the comments section below!

Or do you have your own online business and want to share steps on how to start an online business? We’d love to hear from you!

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Eduardo BennettAli PriceMalakai SandersOrion KellyStephen Brooks Recent comment authors
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Louis Anderson
Louis Anderson

I am planning to start an online business, looking for relevant information. This post has cleared my vision of how to start a business. Nice blog!

Dante Ramirez
Dante Ramirez

Informative one ! I have a great idea for starting a business online but don’t know how to start and where to start. But after reading the blog, now I know how to proceed further. Thanks, team for such valuable information.

Atticus James
Atticus James

Being an honor of the company, now I realized the importance of online presence and want to move my existing business online. I reached out to some website development companies for my business website but they are charging high, and I can’t afford them due to budget constraints. Please suggest any better solution.

Killian Watson
Killian Watson

My business website is very old and also suffering from high bounce rate. Even after investing too much in paid marketing, not getting desired sales and conversions. Do I need a new website or is it fine to modify older one.

Stephen Brooks
Stephen Brooks

As I am planning to start a business online, just for gathering essential information I am browsing the web and go through so many relevant posts but really liked this post as the information provided in this is much better than others. Cheer up!

Orion Kelly
Orion Kelly

Hi! Informative blog. But can you suggest a few websites from where I can purchase my domain name? Please Revert!

Malakai Sanders
Malakai Sanders

My friend and I are desiring to start an online business. We have a plan but don’t know how to execute it also we are not that confident about our business strategies. So can your team help us!

Ali Price
Ali Price

Hi! I want to hire your team to build a strong branding strategy for my business. How can we Connect?

Eduardo Bennett
Eduardo Bennett

I desire to open an online business..and the initial stage for that is owing to a website. I am a non-technical person i.e. I want professionals to do so. What are the charges of your website development services?