How To Start An Online Business
So you’ve decided you want to finally pursue your dream of starting an online business, but you’re not entirely sure where to start.
Then you’ve come to the right place!
Don’t think of starting an online business as a linear process, but as a non-linear one with roundabouts, u-turns, and detours.
As you develop your business idea and mission, you’ll most likely start getting an idea of who your main audience is.
Consider filling out this Business Model Canvas as you go through this guide and refine your business plan.
Now get your pen and get ready to jot down notes as you read and generate fresh ideas for your online business!
1. Financial & Legal Aspects
While not always the most enjoyable step of starting an online business, it’s definitely a necessary one.
One of the first things you’ll need to decide is your business structure.
The three common business structures are sole proprietorship, limited liability company, and corporation.
Anyone can operate as a sole proprietorship!
It’s the simplest business structure and requires no paperwork.
However, it is important to know that sole proprietors are personally liable for any debts or liabilities that fall upon their business.
This means that if your business is sued or goes under, your personal belongings (house, savings, etc.) are at risk.
Limited Liability Company
A limited liability company combines aspects of a corporation structure with the characteristics of a partnership.
As a result, it is similar to a sole proprietorship, but those involved are not personally liable for the debts of their business.
Essentially, an LLC separates a person’s personal assets from their business’ assets.
More intricate and expensive than the other two, a corporation is an independent entity, separate from the owner(s).
Therefore, the debt of a corporation is not considered the debt of the owner(s).
Additionally, since corporations are typically made up of many members, if one member leaves, the corporation will still continue.
Once you’ve decided which business structure you plan to utilize, you need to make sure you understand all of the financial and legal aspects of starting an online business.
This includes things such as:
- secure forms of payment
The last thing you want to happen when starting your online business is for it to be shut down for a completely preventable reason.
Therefore, it is vital to educate yourself on what you will need to do financially and legally to set your online business up for success!
And now for the fun part…
2. Business Idea & Mission
Every great business starts off as a simple idea.
If you’ve been thinking of starting an online business for a while, then you probably have a few ideas floating around.
But if you’re just now starting to envision your business, then you may still have some brainstorming to do.
A good starting point is deciding on which specialized market you want to focus on.
Once you’ve chosen your niche, it’s time to start doing some research on what types of products/services best fit your market.
Start by finding an issue within your market and determine how your online business can address it.
If you’d prefer to start a bit closer to home with your business idea, then consider a problem that you personally experience.
Ask some of your friends if they’ve ever encountered this issue too and how they tend to deal with it. You may stumble upon a pattern that can lead to a promising business idea!
When you have a general business idea you want to further refine, you can start thinking about your business mission.
It should encapsulate the very basic essence of your business.
Questions to consider when generating this include:
- What is your business about?
- What do you want to offer?
- Who do you want to serve?
- What values do you want to promote?
This will provide you with guidance when you begin to hone in on what you want to accomplish.
Additionally, as you contemplate different aspects of your business your mission may change, and that’s okay! It’s all part of the process of starting an online business!
3. Your Target Audience
A large part of starting an online business is your target audience. They’re going to be your primary customers after all!
It’s crucial to have a clear understanding of who your audience is, so you can properly cater and effectively market your products/services to them.
You want to demonstrate to your audience that you care about their experience and want to help improve their lives.
If you’re in the business of fashion, aim to provide your clients with clothes that make them feel confident.
If you focus more on fitness, strive to create workout regimens that fit into the schedule of your target audience.
Ultimately, as you grow your business taking care of your audience should be one of your top priorities!
4. Product Development
So you’ve brainstormed some ideas, drafted a business mission, and identified your target audience.
Now it’s time to start developing your product/service!
This can be anything from digital products/services (eg. online courses, ebooks, and printouts) to physical ones (eg. customized clothes, dishes, and accessories).
Remember, it should be something that satisfies your audience’s wants/needs or that provides a solution to a problem your audience faces.
One of the first steps of product development is crafting a minimum viable product (MVP).
First, you design a simple, basic product and test it out. See what works and what doesn’t. Then you make improvements and test it out again.
By the end of the process, you will have a finalized product that is both viable and marketable, and it may be vastly different than your original product idea!
When you’ve finally crafted a working product, it’s time to validate it!
This means asking people, more specifically your target audience, if they would be interested in what you have to offer.
Then you will need to craft a brief, informational video about your product, post it to your website, and poll your audience to see if they’d be interested in purchasing.
This will help you gauge your audience’s interest level in your product and see if it’s actually marketable.
5. Market Your Product
You have a solid business mission, you know all that there is to know about your audience, you’ve finished fabricating your product, so it’s finally time to start marketing!
There are several ways you can market your product.
Social media is a superb option because it has such an expansive reach.
Each one has its own pros and cons, so make sure to find which will best suit your online business!
Besides social media, it is also highly important to market using a subscription email list.
And that’s it!
While it may seem like a large, daunting task right now, the most important thing is to just START.
So start generating ideas, start crafting MVPs, start interacting with people.
However, be prepared to fail. After all, failure is an integral part of success!
Learn from your mistakes and keep moving forward.
Additional articles you might be interested in:
- 5 SEO Tools Every Online Business Owner Should Have
- How To Develop Your Idea Into A Business
- 12 Most Profitable Niches For Making Money Online
- 6 Things To Keep In Mind When Naming Your Business
- How To Discover And Engage Your Target Audience
- 7 Tips For Getting Your Business Ideas Up And Running
- How To Create The Ultimate Business Website
- How To Drive More Traffic To Your Website
- If You’re A Fashionista: Here Are The 5 Best Businesses To Start
- 3 Core Values That Will Help You Grow Your Business
- 4 Marketing Tactics To Explore For Your Business
- How To Choose The Right Social Media Platform For Your Business
- 22 Social Media Marketing Tips For Beginners
Sarai Lopez is a senior at Wheaton College (IL) studying Spanish and Communications with a focus in rhetoric & culture. She loves learning, sharing her knowledge, eating just about any sort of chocolate dessert, and listening to all genres of music. One day she hopes to create a children’s animated series as well as open her very own bakery.