How to Start a Successful Online Business in 8 Steps

1. Perform market research

Effective market research will enable you to understand customer needs and develop products to meet current demand or close a market gap.

It is an opportunity to collect information about potential clients within your niche.

This should be your first step towards determining how your online business can create a competitive advantage.

To come up with a business to start online, you can think of the following questions:

Market research for an online business – Image Credit: pexels.com

Why are you starting an online business?
What is the right product to sell with a potential for profitability?
Are you leveraging your skills, hobbies, or strengths?
What gap are you closing, or what problem is your online business going to solve?
Is the market am targeting profitable?

Review different business ideas, perform keyword research, and narrow down to a more specific niche. For instance, though profitable, the technology industry has many players, but if you concentrate on marketing or selling a more specific brand, such as Android smartphones or iPhones, then you are more likely to stand out.

You could also conduct a market analysis to identify the problem or need best fit for the nature of your online business.

Can your business operate online?

Online businesses selling commodities, such as software, e.g. Wrike or Bill4Time, can operate solely online.

However, if you’re running an eCommerce business, you may need to operate a brick-and-mortar and an online store at the same time.

2. Test the market

Having an idea for an online business is not enough without validating it.

You can do so by interviewing potential customers to understand their needs. For instance, you can validate your online business idea by:

Conducting a competitor analysis – going through customer reviews
Going through google trends
Creating a landing page
Surveying potential clients

3. Design your online business plan

Every online business startup should have a roadmap on how to structure the business, how to run, and how to grow it.

The business plan will sell your idea to partners, supporters, or funders. It will convince them to work with you or to invest in your company.

4. Inject funds into your online business

Inject capital in the online business — Inject capital in the business – Image Credit: pexels.com

A business plan will enable investors and lenders to see your roadmap to success for them to invest or fund your company.

Identify how much it will cost you to start an online business.

You can then raise funds either by cash, from venture capitalists, or by securing a loan for your business startup.

5. Create a website

You can hire expert services to guide you on how to make the right decisions around web hosting, platform, and design.

Your site is equivalent to a physical store and should reflect your mission, products, and services accurately.

Here are a few factors to consider when setting up a website for your online business:

Website for an online business – Image Credit: pixabay.com

Hosting: You can host your own website or build one through eCommerce sites like Amazon and eBay.
Settle for a business name and register a domain name. It’s better when the two are matching.
Select a business structure: You can choose either a sole proprietorship, partnership, corporation or a limited liability company. The legal structure of your business will affect the requirements for business registration, taxes to pay, and liabilities.
Build your website from an existing platform or use templates of a current eCommerce site. You can also hire a professional web developer or a web design firm to do this for you.
Make the site mobile-friendly: Optimizing your site for mobile will make it easy for your customers to locate you on their phones. This approach will also reduce the risk of Google penalizing your online business in search results.
Invest in quality content, products, and images. Whether you’re selling products, services, experiences, or ideas, ensure that you feed your customers with top-notch services. You can get free images from unsplash, freepik, pixels, or pixabay.

6. Legalize it

Since you’ll have already settled for an online business name, register it to make it legal to run your brand.

Learn more about how to register with the federal or state government.

Keep in mind online business regulations, including consumer protection policies. It would help if you also learned about tax regulations governing online businesses, such as income and online sales taxes. Perhaps you can consult your lawyer to familiarize yourself further.

7. Get a tax ID & Set up your finances

Register and get a federal tax ID, which serves as the employer identification number (EIN), from the Internal Revenue Service (IRS) website. Sole proprietors are allowed to use their social security numbers (SSN) instead.

Once you have the identification details in place, you should open a bank account. You can start with a business checking account with manageable service fees, enabling you to handle tax, legal, and daily business issues.

8. Launch your online business

Launched online business – Image Credit: pixabay.com

Now that you have the right platform and product to sell, it’s time to go live.

Get your store up and running, learn ways to drive traffic, market it, and measure progress.

Read through these proven ways to drive traffic to your website.

You can use tools, such as Google Analytics, to see the key performance indicators (KPIs) for your online business.

Takeaway

As an entrepreneur, your priority is to reach your customers easily and conveniently. The online platform gives you this privilege. To start you off, the outlined business startup checklist will come in handy.

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Victoria Munyi

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