How to start an online business – a guide for new start-ups in the UK

by Maxine Bremner

Published • 14/12/2023 | Updated • 14/12/2023

Starting a business

How to start an online business – a guide for new start-ups in the UK

by Maxine Bremner

Published • 15/12/2023 | Updated • 15/12/2023

Starting a business

If you’re wondering how to start an online business, then the good news is it’s a great time to start.

Before the advent of the internet, it was only those with the right connections or people who were experts in their field who could raise the capital to get a business idea off the ground.

These days, the bar for entry has been lowered tremendously. Starting a business has never been easier with just a laptop and an internet connection.

In this guide, we’ll walk you through every step of starting your own online business, highlight some of the challenges and opportunities you’ll encounter along the way, and help you create your own unique plan for building an online business that you can be proud of.

Questions to ask before starting an online business 

There are several steps you’ll need to take when considering how to start an online business. It’s important to begin this journey with a clear sense of direction before you get too invested in one course of action.

Before you launch your idea online, there’s an extensive checklist for starting a business you’ll need to work through, but we’ll begin with a few questions you’ll need to ask yourself.

What problem does your business idea solve?

No matter the industry or niche, every successful business solves a problem for their customers or clients.

Before you commit yourself to starting an online business in the UK, it’s crucial to critically appraise your business idea, think about how it solves a problem for your potential customers.

Naturally, starting a business will have many motivations for entrepreneurs, though the most common reason is for financial gain. 

With the cost of living escalating at greater speed than the average wage, many people's first thoughts centre around wondering how to make an idea profitable or how to price a service, rather than how they can solve a real problem for people. 

In a competitive market, consumers will more readily part with their money for products or services that make life easier for them. It doesn’t matter how simple or complex the business model is - all businesses have a problem they’re focussed on solving for their target market.

Here are a few examples of business types and the problem they address:

  • Window cleaning business: Homeowners want clean windows, but don’t have the time or the right equipment to take care of this job themselves. Window cleaning services solve the issue of lack of time and inconvenience for homeowners. 

  • Streaming service: Film fanatics and casual TV viewers want to be entertained, but don’t want to be restricted to the scheduling of live TV or cinema showtimes. Streaming services allow their audience to fit their entertainment around their other commitments for a more convenient viewing experience.

  • Business management consultancy: Business leaders want to see their companies succeed, but can run into challenges that they lack the skills, knowledge, or experience to effectively tackle. 

A business management consultancy allows you to benefit from a wealth of specialised knowledge and experience without the cost and commitment of hiring new senior management.

Aside from giving your business a clear sense of direction as you develop a strategy, focusing on a particular problem to solve will also make it much easier to promote your business and differentiate it from the competition.

Look inward at the skills you have built to date, and then find a problem or pain point that building a business will be able  to solve. This will not only help you identify a target market, but also give you a stronger sense of vision when it comes to writing a business plan.

What will your online business idea be?

Once you’ve figured out a need that your business is going to fulfil for customers, the next step towards starting an online business in the UK is to flesh out your plans a little more and settle on a business idea.

Articulating your business idea can be tough, especially if you’re looking to enter a saturated and highly competitive market, as many online industries are due to the aforementioned low barriers of entry. 

Below are a few pointers to bear in mind as you work to find a business idea that’s right for you. For further inspiration, be sure to check out our more extensive guide on choosing a business idea that’s right for you as a merchant: Online Business Ideas.

First, don’t worry too much about originality

It’s important to be able to differentiate yourself from the competition and have some kind of unique selling point (USP) that will act as your business’ strength. However, if you get too hung up on the idea of doing something that’s never been done before, you may never get started.

If you’re finding it hard to come up with business ideas you can get excited about, try to be less stringent with the business ideas you’ll consider. Avoid placing too much stock in forming a new, never-before-seen business. 

Take a moment to think about your favourite brands where you consistently spend money and stay loyal out of your passion for their product or service. 

You’ll quickly realise that building a great business is usually more about a new take on an existing industry, rather than having a completely revolutionary idea.

Look at your own skill set

From your schooling right the way through your career to date, you’ve likely built up a wide range of valuable skills, and discovered what you enjoy doing most. 

Starting a business doesn’t have to involve learning something completely new from scratch, but instead tweaking what has worked for you so far and then thinking how it could translate into a business with your commercial hat on.

Though it can, it doesn’t necessarily mean that you have to limit yourself to starting a business in the precise field where you have the most qualifications and experience. 

Knowledge is of course very valuable when starting an online business, but the way in which you acquired the knowledge is likely transferable, and could be applied to a new service, industry or niche.

If, for example, you have several years’ experience as a financial controller, you don’t need to limit yourself to opening an accountancy. 

Think more generally about the kinds of challenges you had to face in your job and the skills you had to develop outside of raw number crunching. Perhaps you became great at training new hires, streamlining processes, or negotiating with outside parties to find difficult compromises.

When you’re considering different business ideas, try to think about your own role as a business owner and how your existing skills will fit into the demands of the position. 

If you can commit to a business idea that’s a good fit for your professional aptitude, you’ll be able to adapt to your role as a leader much faster than you would by trying to fit a square peg into a round hole.

Think of how existing products or services can be improved

Google didn’t invent web browsing, and Amazon didn’t invent e-commerce. 

Going back to our point about letting go of originality, often one of the best ways to come up with a business idea is to review existing businesses that interest you, and consider how you can make their product or service offering better, or more specialised to a particular niche.

Take a moment to think about some of the businesses you’ve bought from most recently. Even if they’re some of your favourite brands ever, you can probably think of a way that your experience with the business could be improved.

Consider aspects of their product or service such as: 

  • The efficiency in how the product or service is delivered.

  • The price point of the product or service compared to its value.

  • The experience of their customer service. 

You might be surprised at how quickly you can come up with a list of improvements for these business models, and how easy it is to formulate this into a solid plan for developing your business.

Is your new online business idea viable? 

Unfortunately, having a great business idea doesn’t automatically translate into building a great online business.

Even if you’ve focussed on an industry and a business model that suits you perfectly, there are a few other variables you’ll need to consider to make sure your online business idea is viable.

Here are 2 of the most important things to think about as early as possible when developing your online business.

The market

A business with no customers or clients isn’t much of a business. It’s crucial to research the scope of the market you’re planning to enter before you commit too heavily to any one business idea.

At its most basic level, this kind of market research involves sketching out a profile of your ideal customer that would be interested in your product or service, and then using publicly-available data (e.g from trade journals, scientific studies, and government statistics) to determine how many of those kinds of people you’d be able to reach with the business model you’re pursuing.

Aside from this, it’s also important to analyse the other businesses within your niche that are serving the same needs you’ll be targeting. If the market is saturated, you’ll have a hard time finding success unless you can stand out with a powerful USP.

Customer demand

If you’re confident in your ability to enter the market, the next thing you’ll need to think about is how much your customers are actually going to want your product or service.

There are many more abstract ways for business owners to analyse the demand for their product or service. Often though, the best way to get a feel for the potential demand for your online business is to talk to people directly.

Reach out to your family and friends, acquaintances on social media, and anyone else who might fit into your target audience, and ask for their opinion on the business idea you’re forming. 

In just 10 to 15 of these conversations, you’ll soon have a surprisingly deep insight into the demand for your product and what your idea could be missing. As long as you can keep an open mind and stay open to honest feedback, talking to your market directly will be a great way to determine whether or not your business idea is viable.

Why should you start an online business?

Many people who have long-standing dreams of kicking the 9 to 5 and starting their own business keep a lot of different visions on the back burner.

If you’re not sure about whether to start an online business or something more traditional, here are some of the main pros and cons to think about.

Pros of deciding to start an online business

Lower cost

Strictly online businesses in the UK tend to have very low overheads, and may have none at all for certain service-based models. This is one of the key distinctions from traditional business models, where you’ll always have to think about significant overheads before you can start trading.

Scalability

Compared to a traditional brick and mortar business, online businesses tend to be much easier to scale. With an online focus, there are significantly fewer barriers between you and reaching an audience spread throughout the country, or even the world. This is especially true if you’re selling an intangible product like a piece of software in a SaaS model.

Flexibility

When comparing the flexibility of running an online business to a more traditional business, an online model will win every time. Because your core business assets will all be digital, you won’t have to worry about being in a certain physical location in order to facilitate the trade that keeps your business ticking, or communicate with your suppliers, staff and partners. 

When you’re looking to start a small business from home and follow a remote-working model, you can also enjoy the flexibility of recruiting talent across multiple locations and timezones.

Cons of deciding to start an online business

Extreme competitiveness

Our digital-first world has made starting a business highly accessible, but it’s also created a hugely competitive online market. 

If you were to open a traditional store in your local area, your competition will be limited to other brick and mortar stores that share a geographic space with you. If you opened the same store as a purely e-commerce operation, however, you’re potentially competing on keywords with business' across the world.

Customers can’t get to know your product before they buy

One of the key reasons why many consumers prefer brick and mortar stores to e-commerce is that it allows them to get a more intimate sense of the product they’re considering buying. 

Of course, online channels have plenty of high-quality imagery, videos, and even 360 product renderings. However, there’s nothing that will give you a sense of what a product is quite like being in a store and being able to hold it.

You’re going to be dependent on technology

Every modern business relies on technology to some degree. However, when you run an online business, its very existence will depend on a whole array of different technologies which you do not have full ownership or control of. 

From your site host to your payment security and any other third-party tech you need to run your business, you’ll be dependent on the smooth running of these providers to keep your business ticking over.

Pressure to future-proof your business

As technology will be so central to running an online business, you’re also going to experience a lot of pressure to keep up with rapidly-evolving trends, e.g. the rise of AI tools, in order to remain competitive. 

Many small business owners will find it challenging to address this need on top of the various other day to day duties of running their business.

Starting an e-commerce store - cost breakdown

With very affordable overheads, an ability to reach a global audience, and a fantastic degree of flexibility, it’s no wonder why opening an e-commerce store is one of the most popular routes into starting an online business or starting a side hustle for the first time.

If you’ve decided that this is the right business model for you, here’s a full breakdown of the costs involved in getting an e-commerce store up and running.

Template vs bespoke

One of the biggest influences on how much your e-commerce store is going to cost is the level of customisation you’ll need for your store.

For many entrepreneurs, the most logical way to build their online store is also the cheapest: using an off-the-shelf online store builder.

These kinds of businesses prioritise being user-friendly and intuitive, and allow people with no prior web design experience to build a functional online store with ease. Though cheap and accessible, it’s important to note that you’ll be limited in terms of customisation.

Looking for an e-commerce online store builder?

SumUp’s store builder platform is intuitive, functional, and available at no extra cost.

Open a store now

If the features you need aren’t provided by off-the-shelf e-commerce builders, you may need to look into hiring a web design firm offering custom e-commerce store builds, and get a quote for the exact functionality you need. 

Note that some store-building services will have more capabilities than others, and more complex functionalities will generally mean a higher cost.

Here are the average overall costs for building an e-commerce store depending on complexity.

  • Template e-commerce site building software: £200.00

  • Bespoke e-commerce site: £2,000

  • E-commerce site with complex functionality (product customisation etc.): £6,000+

The cost of design

If you’re wondering how to start an online business for free, take advantage of template themes, free graphics, and your own design skills. Though it is more time-consuming, it is  completely possible to design an e-commerce store without spending a penny. 

In many cases however, you’re going to need some outside help to source imagery and designs that are true to your vision and embody the unique branding of your online business.

The cost of outsourced design can vary greatly depending on your needs. Here are the price brackets to expect for design depending on the scope of the store you’re planning to build.

  • Small-to-medium e-commerce stores: £0

  • Small-to-medium e-commerce stores with outsourced web design: £1,500 - £5,000

  • Large or complex e-commerce sites with outsourced web design: £30,000+

The cost of hosting

In web design, hosting is the background infrastructure that allows your site’s content to be served to the users. 

The host will provide server space where all of your files will be stored, including the program files needed to maintain a shopping cart, process payments, manage features like gift cards and payment links, etc.

If you opt for an off-the-shelf online store builder, the cost of hosting will generally be wrapped up in the fees for the store builder software itself. 

If you’re going down a more bespoke route, you may need to source your own hosting and factor in this additional cost.

Bear in mind that shooting for the cheapest possible solution to your hosting needs will often mean that you’ll be sharing resources with more websites, which could run the risk of harming the user experience. By paying more per month for your hosting, you’ll be able to build a faster and more trusted site, with better technical support should you run into any issues.

The typical annual cost of hosting an e-commerce site is as follows:

  • Small-to-medium e-commerce stores: £0-£100

  • Small-to-medium e-commerce stores with outsourced web design: £300-600

  • Large or complex e-commerce sites with outsourced web design: £600+

SSL certificate

These are digital certifications that are used to authenticate a website as legitimate and facilitate a secure connection for any visitors. 

This is an especially important component for e-commerce business', as you’ll be handling users' private information often.

SSL certificates last for a maximum of 397 days (approx. 13 months). As with hosting, the cost of an SSL certificate is usually included in the fees for using a typical store builder software. However, if you’re purchasing your certificate independently, it will usually cost around £60 per year.

Domain name

A domain name is a simple and easy-to-remember URL that will serve as the homepage of your online business. 

Though the price of this aspect of your website won’t be affected by how large or complex your store is, prices will vary depending on the domain name extension you want to use (.com .co.uk .uk .org .net), as well as how in-demand the words or phrases making up the domain name happen to be. 

Some highly sought-after domain names can go for mind-boggling amounts, for example Money.co.uk, which was reportedly bought for £140 million by the owners of property portal Zoopla.

While it is generally advisable to have a domain name that describes the products or services, it is not as important as it once was for search rankings. Having a memorable name that suits the branding is equally as important, especially as part of an optimised digital strategy for traffic acquisition. 

Generally, your domain name will cost between £5 and £15 per year.

Step 1: Market research

Now that your online business idea is backed by preliminary research, it’s time to get to work and start making things happen.

The first practical step in your journey is carrying out market research, the process of collating information about the market you’re going to enter, your audience, and the kind of competition you’re going to be up against.

Market research will help you understand the motivations that drive your customers’ decisions, and make decisions that align with those behaviours as closely as possible. For example, if you’re looking to set up a sustainable clothing e-commerce store, the motivations that drive your audience might be looking great without contributing to climate change.

Here are some of the most effective market research strategies and methods to plan for:

Focusing on customer pain points

As the name suggests, customer pain points are problems which customers commonly encounter at various touchpoints in the customer journey. 

By getting yourself familiar with these issues, you’ll be able to align your business strategy to offer solutions, and better align your business with the conditions of the market. 

Aligning your online business to the pain points will create a clear vision for your branding, and the content on your website, which will ultimately be a big driver of the future success you are hoping to achieve.

The key types of customer pain points to think about are:

  • Financial pain points: Pain points that come about when a customer feels like they’re paying too much money for a given product or service. You can address these pain points by forming a strategy that creates more budget-friendly options than the competition, or by working to provide more value for a more standard price point.

  • Efficiency pain points: Inefficiencies in business operations are another major source of frustration for customers. Operational inefficiencies can not only have a negative effect on the customer experience, but can also cause internal problems that will slow a business’ development. Your strategies can address these by placing an emphasis on efficient tools and processes.

  • Support pain points: Support pain points are any instances where a business is hampered in trying to resolve an issue the customer has. Sooner or later issues are going to arise which will require you to respond with robust customer support capabilities. When these happen, your customer support agents will need to rise to the challenge and ensure that their interactions with customers always have a positive outcome. 

Each industry and niche will be characterised by its own unique pain points that fall into these categories. Research some of the most common instances of these, their causes and their solutions as a top level piece of your market research.

Competitor research

Competitor research involves identifying business' that offer a similar product or service to yours and carrying out deep analysis of who they are and how they conduct business. 

These insights will help you understand how your strategy is looking in comparison, and highlight areas where it could be improved. As you’re developing an online business, the bulk of your competitor analysis should be done online.

One of the key steps in analysing your competitors’ online presence is putting yourself in their customers’ shoes, thinking about how appealing and functional their websites are, and how easy it is to get from a landing page through to the end of the customer journey.

It’s also a good idea to search for mentions of your competitors on popular online review aggregators like Google, Trustpilot, and Yelp

Keep an eye out for anything that keeps cropping up in positive reviews, this will help you identify your competitors’ key strengths that you’ll have to compete with. 

While anything mentioned in negative reviews will let you build a list of things to avoid, and develop a USP targeting areas where your competitors are falling short.

Customer service and branding are big deciding factors in how well an online business will perform, so it’s also a good idea to check on your competitors’ social media platforms and observe how they interact with people there. 

Look at how often they are posting, what exactly they are posting (reels, images, tutorials, giveaways etc.) and which channels are they most active on. 

There’ll usually be something missing that you can prioritise for a more positive relationship with your target audience.

Research emerging trends

Looking into past and current market trends can also be a great source of insights to include in your market research. 

Using statistical data and macroeconomic behaviour, you can zoom in on patterns that will affect your industry or niche and strategies around them.

There are countless online trade journals with a focus on analysing these kinds of trends, so be sure to find a few that you like and subscribe to their mailing lists.

Here are just a few examples of popular trade journals you may want to subscribe to, and the wide variety of focuses that these journals can have:

  • Harvard Business Review: A general business management publication published by Harvard University, focusing on trends and news across a wide variety of industries that can help merchants direct their broader strategy.

  • E-commerceBytes: A long-running journal that focuses on the e-commerce industry, with news about some of the giants of the sector like Amazon and Ebay as well as content that teaches e-commerce merchants to run more effective operations. 

  • The Spirits Business: A niche publication focusing on the spirits category of the alcohol industry, covering everything from changes at major distillers to market trends that affect retail strategy.

Some key categories of trend analysis include:

Consumer trend analysis

Trends that emerge among a particular audience segment, such as their purchasing behaviour or patterns which emerge in surveys. 

Historical trend analysis

Trends that show how a particular industry responds to events in the news or other kinds of stimuli. For example, following the COVID19 pandemic, small businesses in the hospitality sector adapted rapidly to using QR codes, digital menus, and other tech that hadn’t been as present beforehand.

Seasonal trend analysis

How markets have been seen to shift depending on recurrent seasonal events, such as public holidays and the weather. A store that sells water sports equipment, for example, will likely see demand ramp up in spring and summer, whereas a clothing retailer specialising in knitwear will have their most active months in the run up to Christmas.

Geographic analysis

How people tend to interact with certain types of business' depending on the geographic area where they’re based, e.g a hiking and camping e-commerce store is likely to see more success in rural areas rather than built-up towns and cities.

Forums and other discussion platforms

One of the best methods of free market research is something you’ve probably been doing for a while already: interacting with forums, social media groups, and other discussion platforms with a relation to the industry you’re planning to enter.

Run a quick Google search for ‘[your industry] forum’. 

After a little scrolling, you’ll find an active online community where both business owners and consumers share their thoughts and experiences relating to your business niche.

Here are a few examples of small business forums that may be useful to someone looking to start an online business:

  • Small business forum: A UK-specific hub of message boards covering every aspect of running a small business.

  • Warrior forum: A digital marketing forum where experts and newcomers alike can discuss many different marketing topics, including email, pay-per-click (PPC), social media, and web design.

  • Reddit r/ecommerce: An active subreddit community of mostly small merchants used for discussing anything to do with e-commerce.

Getting active in these kinds of communities is great for a couple of reasons. 

First, they can show you a democratised snapshot of customer sentiment around certain developments in the industry.

Secondly, the constant flow of new content can open your eyes to news or opinions surrounding your niche that you may not have thought of before, and give you a good jumping-off point for more granular and focused market analysis.

Step 2: Research regulations for starting an online business in the UK

The next step in how to start your own online business is getting familiar with some of the regulations you’ll need to abide by. Whether you’re B2B or B2C, you’ll be subject to various legal requirements for starting a small business.

These regulations are put in place to ensure tax compliance from companies, protect customers, and generally prevent any unethical practices by companies.

Though you don’t need to be an expert in business law to run an online business, you will need to become somewhat familiar with the kinds of legislation that your business will be subject to, and what this means for the way you operate.

Business structure and tax obligations

One of the first regulatory aspects you’ll need to consider is the kind of business structure you’re going to adopt. In the UK, you'll need to register a business under a specific structure in order to trade legally.

Here’s a quick breakdown of the main types of business structure and what they mean for you:

Sole trader

If you’re a self-employed individual who owns and operates a business, you’ll likely register as a sole trader. 

In this structure, you and the business will be seen as a single legal entity, and you’ll be liable for debts and losses incurred as part of your operations. 

When you form a business as a sole trader, you’ll need to register for self-assessment tax with HMRC and pay a rate of tax in-line with normal income tax through an annual tax return.

Partnership

Partnerships are regulated in a similar way to sole traders, with the distinction that you’ll need at least 2 people to legally form one.

As a member of a partnership, you’ll be personally liable for the debts and losses made by the business, and will share responsibility in the instance of any negligence or misconduct on the part of another member. 

In this business structure, you and your partner(s) usually sign a legal agreement regarding how profits are shared. You’ll file your own taxes using a self-assessment tax return.

Limited company

Limited companies are privately owned by shareholders and run by directors (a director is usually a shareholder too.) 

Unlike with sole traders and partnerships, setting up a ltd company means your business exists as its own legal entity. This means the firm itself incurs all responsibility for any financial commitments, without affecting your personal assets, or the assets of any other members.

If you set up as a limited company, the profits generated by your business activities are retained by your company, and will be subject to corporation tax.

Limited liability partnership (LLP)

A limited liability partnership can be thought of as the partnership iteration of a limited company. 

Like a normal partnership, an LLP must be formed by you and at least 1 other partner (only one of which needs to be an actual person). However, there’s a legal separation between the assets of the company and those of its personnel. As an LLP partner, your liability will be limited to the amount of money that you invest in the company

When setting up an LLP, you’ll be required to submit a self-assessment tax return every financial year, pay tax on your share of the business’s profits, and make National Insurance contributions.

Licences and permits

Many businesses in the UK require certain licences or permits to operate legally.

Sometimes this is closely related to the kind of products you deal with. If you're looking to start an online business selling alcohol or food subscription services online, you’ll need to account for tight regulations in terms of how the products are produced and the way they’re sold and distributed.

Other times, you’ll require a licence to carry out certain internal operations, such as with pollution inventory reporting.

Be sure to research the regulations specific to your industry thoroughly and come up with a compliance list to ensure your trading stays on the right side of the law.

Tax obligations

The research you carry out as you decide on the legal structure you’re going to use to register your business will give you a basic idea of the tax obligations you’re going to have to account for. 

However, it’s important to research the tax obligations you’ll be facing in high detail as well, to avoid any nasty surprises or budgetary deficits.

Answering questions like when your business will start paying VAT and what rate of tax it will be paying at different stages of growth can give you a more detailed projection of the future, and help you organise your finances logically and efficiently.

Intellectual property

Intellectual property is a term that encompasses a range of creative assets, including a business’ trademarks, patents, original designs, and copyright.

When setting up your online business for the first time, small businesses must not only make sure they’re not infringing on other organisations’ intellectual property, but also that they have adequate protections to prevent other entities from stealing or using their assets.

Intellectual property law can feel puzzling for many first-time online merchants, but tackling this issue early on is essential to avoid being drawn into lengthy and stressful legal conflicts when you least expect it.

GDPR

GDPR is a set of relatively young regulations which were put in place to ensure consumers’ right to privacy. 

As a new business owner, you may think this legislation is more the realm of large international corporations. Although it tends to be high-profile companies that make it into the news for GDPR breaches, the fact is that any business that handles people’s private data must ensure GDPR compliance.

Set some time aside to create robust privacy and data-handling policies, and ensure adequate protection for both your customers and your brand. 

As a small business, you may find it easier to ensure GDPR compliance by outsourcing a review of your data handling policies and getting data protection insurance to protect you from the effects of a breach. 

EC Directive Regulations

The Electronic Commerce (E C Directive) Regulations (2002) are a set of laws dealing specifically with e-commerce businesses.

These regulations have some overlap with GDPR, dealing with transparency and information requests, but also set certain rules about any commercial communications that you make, and the contracts you form with third party organisations like couriers.

Note that the E C Directive Regulations is a piece of EU legislation. Because the UK is no longer part of the EEA, you likely won’t have to worry about these rules when you first start trading and operate strictly within the UK. However, legislation can still affect you when selling to customers within the European Economic Area or expanding your business into these countries.

Step 3: Setting up your UK business online

Now that you have your research and compliance aligned, it’s time to do the practical work of getting your business set up and trading online.

Here are the steps involved in building your business’ first website and creating the digital assets needed to make it tick.

Get a domain name and choose your hosting

Buying a domain name will give you the right to build on a specific website address, e.g Sumup.co.uk.

This should be your top priority even if you’re not ready to touch any other aspect of your website, as competitive domain names can be snatched up quickly.

You’ll also need to find a reputable hosting provider who can accommodate your requirements, in terms of storage and bandwidth.

Choose a content management system (CMS)

A CMS is the software you’re going to use to actually build your site. As a hugely important asset for your online business, it needs to be chosen carefully based on the level of customisation you need to fulfil your vision for your online experience.

Regardless of the more specific requirements for your business, your CMS should score highly in a few key areas:

  • Security, both to protect you and any customers who decide to share sensitive data through your site.

  • Ease of use, so that you can create a user experience that reflects your care for your customers, as well as being easy to maintain or update.

  • Customer support, so you’re not held up at a crucial moment for your business.

Branding and design tips

Instead of a physical storefront, your website is going to be the virtual face of your business. As you go about building your site, consider the branding and design of your online business:

  • Avoid clutter: Every aspect of your website should serve a purpose. If there’s too much text, visual assets, or any other kind of design element that doesn’t serve a purpose, as this will only create a poor user experience (UX) for your site visitors.

  • Don’t let your theme show: Modern site-building software has given people with limited technical capabilities access to some truly stunning site templates. However, it’s still important to differentiate yourself from the countless other online businesses that launch every year through your design. It’s fine to start with a standard theme from your CMS, but be sure to inject some originality.

  • Make it mobile-friendly: More than half of all web traffic now comes from mobile devices. Don’t let your site design alienate those visitors by having a clunky, non-responsive design. Keep in mind that Google now uses mobile-first indexing, meaning that its algorithms will predominantly feature mobile sites in their results rather than the desktop equivalents. This means that a mobile-friendly site is now a prerequisite for finding success in organic digital marketing.

Choose a theme or template

Any leading CMS will start by presenting you with a list of standard themes you can use to start building your site. 

Depending on the CMS you choose, these themes may be sorted by functionality, with some themes designed for building e-commerce stores, portfolios, sites for service-based businesses, etc.

Generally, the theme you go with will be a branding decision, and something that you can choose confidently based on your own personal taste, that appeals to your target audience and branding. Having said that, it’s still possible for the features of a website theme to affect its functionality and your ability to edit it.

Whichever theme you go with, do your research to ensure that it’s fast-loading, mobile-friendly, and has some developer support for advanced changes further down the line. 

If you have a vision for allowing customers to create and order customised products on your website, having robust support for developers can mean the difference between integrating this feature in your existing site or having to build a totally new site from scratch.

Optimise your site for search engines

The finishing touch on your website should always be to make some basic search engine optimisation (SEO) to maximise the chances that it will be picked up and ranked by Google. 

SEO is a marketing discipline that focuses on improving a website with the aim of increasing its visibility in the results of search engines like Google. By aligning your website with what your target audience is typing into Google, SEO helps maximise your chances of appearing near the top of the search results and gets your business in front of them for relevant search terms.

SEO is a fairly complex topic, but there are a few basic steps that everyone can take to help make their business more discoverable online:

  • Researching high-volume keywords and including these in your page titles, meta description, and body content.

  • Creating and optimising business listings on Google and popular business directories.

  • Testing your site for loading times and ease of use and amending any shortcomings you discover.

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Build your social media presence

One final step to officially start an online business is to set up official social media profiles.

As a small online business just out of the gate, you’re probably going to have limited resources to promote yourself on social media. With this in mind, we recommend focusing your efforts on just 1 or 2 social media platforms to ensure you can make your efforts as effective as possible.

It’s a good idea to refer back to your market research here, as different audiences will spend more time on different platforms, depending on the kind of content they like to consume and the users they want to interact with.

If you’re starting an online business that sells eco-conscious streetwear, your target audience is more likely to be Gen Zs and millennials. This means you may want to invest more time into Instagram and TikTok. 

If you’re starting an online business management consultancy, on the other hand, you’ll want to target people who make key decisions within the businesses they work for. In this scenario, LinkedIn might be your primary platform.

Building your social media presence will help add greater legitimacy to your brand, and give you an effective channel of 2-way communication between you and your customers.

Step 4: Launch and market your online business

Once you’ve worked through all the previous steps, the next phase in the process of how to start a business online is launching it.

What does launch day look like?

Your business only started existing a short while ago, so don't be discouraged if you don't make a sale on your first day. Small businesses take time to gain momentum and establish themselves, especially in competitive online markets.

However, there’s still a lot you can do to generate some momentum and get your venture started on the right foot.

Run a grand opening deal

A classic way to drum up some business when you’re first starting out is to run a grand opening promotion.

Coming up with a generous discount or offer and promoting it through popular coupon aggregators such as Groupon will motivate many people to check out your business just because they can’t resist a bargain.

This initial flash of business can not only bring in your first loyal customers, but will also provide a great morale boost on your first day of business and provide the capital to invest back into marketing your business.

Get active on social media

Keeping social media accounts active is something that can often fall by the wayside for new merchants who have to fill a lot of roles. 

Take this opportunity to create a buzz while you still have the time and internal resources.

Curating content to post to your profiles, following accounts that are influential with your target audience, and reaching out to other businesses and organisations, can all be great ways to raise your profile and let people know you’re open for business. 

Avoid spamming audiences by carelessly promoting your product or service on social media. Instead provide meaningful value and insight to the conversation, and slowly but surely, people will start to take notice and begin to recognise your brand within these spaces online.

Make sure your systems are in good shape

Even if you don’t make a sale on your first day of trading, it’s still important to periodically check the various systems that keep your business together, and make sure that everything will run smoothly if and when someone does convert with your business.

Unless everything from the buttons on your homepage to your payment processing and dispatch is working perfectly, you could be running the risk of a poor customer experience, something that could have a resounding negative impact on that all-important first year of business.

Choose your marketing method

As a small business owner with limited marketing capacity, we recommend that you focus on just 1 or 2 marketing disciplines to maximise the chances of getting a return.

Here’s an introduction to some of the core digital marketing methods you can use to boost your visibility.

SEO

Passive, free, and promising huge potential, SEO involves curating your website to maximise its value to its target audience and help it gain stronger rankings in search engines. Though SEO can get fairly technical, everyone can implement some basic best practices to lay the groundwork for making their online business more search-friendly.

PPC advertising

As the name suggests, pay-per-click (PPC) is a form of advertising where you pay for the clicks on the ads you run, rather than simply paying for the ad space as is the case with traditional advertising models. 

Success in PPC usually takes a significant up-front investment to start seeing a return, though the additional traffic to your website should in theory cover this and more. Again, this is a discipline that can be dabbled in, but a serious profession for agencies that you should consider outsourcing to fully maximise its potential. 

Social media marketing

Social media marketing involves using both paid and organic methods to promote your brand to the billions of users active on the world’s most popular social media platforms. 

One of the great things about social media marketing is that it levels the playing field between businesses. Through social media, small start-ups are able to make major wins through low-cost but high-quality content, and leveraging sophisticated targeting algorithms to interact with highly specific audiences.

Direct outreach

Direct outreach involves reaching out to potential customers, influencers within your target audience, and even non-competitor brands to forge mutually beneficial relationships. 

Direct outreach can be very challenging to break into as an unknown brand. However, if you’re able to forge just one powerful relationship through it, the long-term value can be huge for your online business.

Email lists

Email lists can be built up through subscription opt-in forms on your website, or through a lead magnet where people exchange their email addresses for a free piece of content. 

This marketing method can be a hugely cost-effective way to tell people about your product or service, share promotions, and generally build a closer relationship with your customers. 

There are many benefits of email marketing for small businesses. In fact, DMA (Direct Marketing Association) reported that businesses can anticipate an average return of £35.41 for every £1 spent on email marketing, putting it a cut above other popular marketing methods like PPC advertising.

Embracing the journey 

Starting an online business can be one of the most rewarding experiences of your life. However, it also involves many different challenges you’ll have to contend with.

As your plans start to take shape, we hope that this guide has given you a clearer sense of direction and helped you navigate the trials of a first-time online business owner.


Disclaimer: The contents of this page are intended for informational purposes only and should not be construed as professional advice. For matters requiring legal or financial expertise, it’s recommended to seek guidance from qualified professionals.

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