Becoming an entrepreneur is an exciting and fulfilling process if you do it right. While many people want to start a business, few of them know how to make it succeed.
Online companies are much easier to manage than a brick-and-mortar location, but you still have to know where to start.
The most vital aspect of building a business is coming up with a product or service that people need. Fulfilling those needs is going to propel you forward, particularly if you understand your audience. Once you have the right direction, you can take the necessary steps to get there.
So, with that in mind, let’s look at the 10 steps necessary to start an online business.
Table of Contents
Step One: Choose Your Business Model
There are quite a few ways that you can make money online. Make sure that the business model aligns with your idea so that it’s easier for customers to buy what you have to sell. Some standard business models include:
- ● Selling Physical Products or Dropshipping – Sites like Shopify make it easy to build a digital storefront. If you go the dropshipping route, you don’t have to manage inventory items, making it more affordable to get started.
- ● Selling Digital Items (i.e., software, e-books, webinars, etc.) – The best thing about digital products is that you can sell them over and over again without having to increase your operational costs. The key here is to develop high-quality materials that fulfil a specific niche.
- ● Affiliate Marketing – If you can build a substantial following online, you can leverage that with affiliate marketing. Customers click a link to buy a product, and you get a small commission from each sale.
- ● Sponsorships and Advertising – If you’re interested in the entertainment industry, you can also leverage your audience for money by getting sponsorships or high-paying advertisers.
- ● Memberships – This business model can be hard to build because you need to have enough content to charge a monthly fee. That said, if you can provide enough value, all you have to do is expand your audience to make more money.
Step Two: Write a Business Plan
A business plan helps you formulate your idea and turn it into an actionable goal. High-quality business plans will provide clarity and direction and help you establish where you are and where you’re going. Business plans are also necessary if you need to secure financing, as they show lenders or investors that you have a clear path.
Fortunately, you don’t need an MBA to write a business plan. There are tons of templates and guidelines online that can make it easy to build one from scratch.
Business plans typically have these elements:
- ● Executive Summary – A synopsis of your idea and business model.
- ● Company Description – An overview of your current organization.
- ● Market Analysis – Is there enough demand to support your business model? How will you address the competition?
- ● Organization and Management – Who will run the company and its various departments? How much experience do they have?
- ● Product or Service – A brief description of what you’re selling.
- ● Marketing and Sales – How you plan to reach new customers.
- ● Funding Request – How much money do you need to get started?
Step Three: Get Your Finances in Order
Even though online businesses don’t require as much upfront investment as a brick-and-mortar entity, you’ll still need financing. Whether you plan to self-fund or get investors on board, you need to have your finances organized. Here are some tips:
- ● Open a Business Account – It’s never a good idea to mix your funds with those used for your company.
- ● Figure Out Accounting Needs – Will you handle your books at first, use bookkeeping software or will you need an accountant to do that?
- ● Come Up With a Budget – Once you secure financing, you’ll need to know how you plan to spend your money.
- ● Organize Your Cash Flow – How will you track money coming in and going out?
Step Four: Take Care of Legal Tasks
Before you can start earning money with your business, you need to have all the proper paperwork in order. Legal components for new companies can include:
- ● Business License – Figure out what license you need in your state. You may need a business and seller’s license if you plan to sell physical products.
- ● Employer ID Number – You can’t hire employees without an EIN. Even if you’re a sole proprietor, an EIN can help you keep your business taxes separate.
- ● Business Entity – Are you forming an LLC, a corporation, or a sole proprietorship? You need to know the pros and cons of each option; then, you have to set it up as a legal entity.
Step Five: Set Up Your Domain and Hosting
Since you’re starting an online business, you need a website (more on that next). First, however, you need to make sure that your domain is open and available. Next, you have to find a hosting service to ensure your site will be fast and stable.
Knowing your business model first will help you determine the best hosting options. For example, if you’re offering digital content, users need to download it quickly.
If users can stream content from the site, that requires extra bandwidth as well. If you’re setting up a shopping cart, you need to be able to process transactions securely.
Step Six: Build a Website
Unless you’re a web designer, it’s best to hire a professional website builder. That said, there are many options available for entrepreneurs if you’re trying to save money upfront.
However, since your business lives online, you need to make sure that the site is as functional as possible. Broken links, confusing pages, and slow load speeds can cause users to bounce immediately.
A professional designer will understand how to organize your pages for maximum efficiency. Whether you’re selling products or streaming content, the right website design makes all the difference.
Step Seven: Set Up Your Payment Methods
How are you going to make money from your new online business? Will customers buy products with a shopping cart or pay a monthly membership fee? What about advertisers and sponsorships? Here are some elements to pay attention to when coming up with payment methods:
- ● Security – Shoppers are always wary of having their data hacked. Make sure that you have updated security licenses to prevent hacking and thievery.
- ● Shopping Cart Payments – Typically, the more steps users have to make a purchase, the less likely they’ll follow through. Try to streamline your shopping cart experience as much as possible (if applicable).
- ● Multiple Payment Options – Will your customers pay via credit card, checking account, or PayPal? Will you accept digital currencies? Each method requires a different infrastructure to work.
Step Eight: Design Your Logo and Brand Assets
Once you come up with a business name, you need to work on branding. These elements can help your company stand out and look more professional. Here are the essential steps to making brand assets:
The first part of designing your brand is to create a logo. It will act as the anchor for the rest of your brand design decisions.
Coming up with a logo is not so easy, you will need to create multiple logos at first and play with different colours, fonts, and icons. There are free online logo tools, like this one, that can help you with this.
Once you have a logo the next step is to create the rest of your brand design assets such as:
- Social media profiles
- Your website
- Website images
- Business cards (digital or physical)
- Branded merchandise
Step Nine: Leverage SEO
The bulk of your online traffic will come from search engines, so you need to make sure that you rank accordingly. While it’s possible to develop SEO strategies yourself, you will likely want to work with a professional marketing firm. Some SEO tactics to pay attention to include:
- ● Keyword List – Think about which keywords you want to rank for in searches. What alternative keywords can also work?
- ● Tags – Make sure that you utilize all the tags on your pages, including meta tags, title tags, and image tags.
- ● Links – Search engines want to make sure that your business is legitimate. Outbound and inbound links can make you much more relevant to specific terms.
Step Ten: Choose Your Social Channels Carefully
Beyond SEO, social media marketing is crucial for your online business. Social channels can help you find and engage with new markets and customers, meaning that you can build a strong momentum right out of the gate.
Consider how each platform works and which audience it appeals to. For example, Facebook skews to an older crowd, while TikTok is popular with teens and young adults. You will also have to make sure that your marketing materials work well on each site.
