Starting an online business (key things to consider)

By Indeed Editorial Team

Published 13 July 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

If you're considering starting your own business, you may wish to explore the possibility of starting an online business. Online businesses have distinct business features and structural aspects that set them apart from traditional brick-and-mortar establishments. Starting a business online is typically a fun and creative venture that takes careful preparation. In this article, we answer what is starting an online business and explore five steps to help you launch an online business successfully.

Starting an online business

If you're interested in starting an online business, it's important to understand what this entails. Any company whose major activity takes place via the Internet is usually known as an online business. Online companies, like in-person enterprises, represent a range of business models that fall into the purchasing and selling or delivering service categories. Information sharing, affiliate marketing and blogging are some examples of online business goods. Understanding the distinct advantages of an online business and the measures to successfully launch one remains a critical component of the process.

Related: Top 10 benefits of being self-employed

The importance of online businesses

Aside from the economic and creative advantages of running a traditional business, online enterprises carry distinct advantages. Online companies save revenue because they eliminate the costs of running a physical location and the necessity to stock a shop with products that may not sell. Using email and Internet marketing instead of conventional, paper-based interactions also saves money. Entrepreneurs like the freedom of remote working or working from remote places and sometimes at more flexible work hours. Customers enjoy having worldwide, unrestricted access to the company at all times.

How to start an online business?

There are many benefits to starting a business online. Websites can be constructed on a low budget and operated from home in an individual's free time as they gain traction. Digital businesses can also access a global market with ease as they are not tied down to a physical location. To start an online business follow the steps below:

1. Set a clear vision

A clear vision is crucial for starting almost any online business and encompasses more than simply creative thinking. It's typically viewed as the most enjoyable component of making a great online business. Determining the service or product you offer and the desired format for the business activities remains necessary for establishing a strong vision. Other questions to think about include what's your objective, the mission statement for your company, the breadth of your product line and the demographic of your target market.

2. Carry out market research

After you've established your goal, it's a good idea to conduct research to help you prepare. To develop your business model, define your target audience, establish that there's a demand for your services and research consumer buying trends. Market research's divided into two subgroups, primary and secondary, which represent different research approaches. When arranging your investigation, keep in mind research expenditures, ease of access and desired outcomes. It's also important to consider:

Conduct a competitor analysis

Research any potential competitors. Take note of how they operate, how effectively they do it and who their clients are. This offers you an indication of your target clients and prompts you to consider how to outperform your competition.

Determine your target audience

Decide who your target customer is. Understanding who to target online helps you make crucial decisions about how your website functions and looks. Consider age groups, gender, interests, career type and location to help identify your customer.

Seek feedback

Seek feedback from your target customer. Ask them what they think of your concept, what they are looking for and how your product or service can meet that need. Do this by giving out questionnaires, running focus groups or asking people you know and who provide honest feedback.

3. Consolidate your online business plan

The beginning of your thorough business plan includes developing your vision and conducting market research. To do this, think about staff requirements, staff qualifications, marketing strategies and the financial summary. Your company strategy encourages your success to the extent that it strikes a balance between design and adaptability.

Structure keeps you organised and engaged with your goals, while flexibility allows you to adapt to changing conditions and respond to the Internet market. While creating a careful and detailed business strategy remains essential, don't be hesitant to make changes as needed. Your marketing approach, budget and goals all change as your company expands.

Related: Freelance work: everything you need to know about freelancing

4. Choose an online business approach or model

Consider ways that you could generate money with your online business. If you're creating an online store or selling items or services on your website, you can use an e-commerce business strategy to generate cash. There are several ways to monetise your website if it serves a different function, such as providing on-site entertainment or instructional services to visitors. This includes:

  • Advertising. Businesses pay you to promote them on your site. The more people you bring in, the more money you charge your customers. Customers usually view the material on such sites for free.

  • Subscription. These sites remain ad-free and generate money by charging customers a one-time fee or a monthly membership fee to view the service online or the site's contents.

  • Freemium. This business strategy entails providing customers with free access to a basic model of your online platform in exchange for a fee for more premium features and benefits.

5. Build your website

To establish an online business, create a functioning and appealing website. Use easy and cost-effective ways to do so. When creating a website, consider the design and logistics of running the site in addition to the content. In terms of structure, begin by getting a domain name, which refers to your website's address and name. Use your actual business name or anything similar to increase visitors. Select a hosting platform for the webpage, which stores it and shows it to visitors. There are a variety of hosting platform providers to select from. These include:

Build the website yourself

If you have some website design skills, you can design your website yourself. This option can be time-consuming but is possible, even if you don't have extensive coding skills. This can save you money and give you complete control over your website.

Use a website builder to help you

There are many websites that are website builders. These websites simplify the process, as web developers have usually created the code and technical assistance is frequently part of the package. These are easy to use and guide you through the whole website construction process, from acquiring a domain name to creating the structure of the site with themes or drag-and-drop services.

Pay a website developer

If you want expert advice, this remains an excellent alternative. You may heavily rely on them for solutions anytime something goes wrong or needs alteration. Professional developers may ask for expensive rates, but you could track down a graduate that's ready to work for a reasonable fee.

Read more: How to become an online tutor

6. Fill your website with SEO-optimised copy

If the goal of your site includes entertaining readers, offering information about your physical business, selling items, it's important for the written content to remain free of grammatical errors, clearly describe what you're offering and pique people's interest in it. This applies to whatever written material you have, including the 'about us' webpages, product details and full-fledged articles.

If your company does something that isn't inherently heavy on written content, it's worthwhile to include a blog where you write and post articles about your company or related topics. If your Internet store offers pet collars, for instance, you could want to operate a blog about pet care alongside it.

Related: Finding a job: work from home guide

7. Comply with all the legal requirements

Beginning an online business, like starting a physical organisation, necessitates adherence to specific regulatory rules in the location in which your business operates. This remains important to avoid fines or persecution. Legal regulations to comply include the following:

General data protection regulation (GDPR)

GDPR provides individuals with privacy rights and requires corporations to be completely transparent and co-operative in their data usage. Before collecting consumers' data, it's necessary for Internet enterprises to obtain explicit consent per GDPR. They're also required to remain open and honest about the ways in which they can use it and honour requests to erase it.

Privacy and electronic communications regulations 2003

These rules concern the usage of cookies and prohibit them from exploitation for unethical purposes. If your website utilises cookies, alert visitors that they're in use. This includes describing how to disable cookies and making sure your privacy policy specifies all this information.

The consumer protection regulations 2000

These restrictions safeguard your consumers' rights in B2C transactions. The main concept of this law is that it emphasises the requirements of the return of goods. It specifies that it's necessary for online retailers to provide customers with a 14-day window to refund or exchange orders.

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