5 steps for starting a business online
Starting an online business can be tough. We break down the five steps to setting up an online business and share top ideas to help you get started.
Launching a business online can be an attractive option. You have lower startup costs as you’re not paying for a brick-and-mortar space and you may not be tied to one location, giving you the flexibility to work from home or anywhere you please. The tough part? Figuring out how to start an online business. Read on to learn how to make this dream a reality, plus browse some online business ideas for inspiration.
Step 1: Solve a problem
Whether it be a physical storefront or an e-business, one constant is that the business must solve a problem for clients. As you brainstorm online business ideas, write down what the problem is and how your product or service will solve the issue or make things easier.
Consider the following:
- Do I want to offer a product or a service?
- If I offer a product, will it be digital or physical?
- What costs do I need to be aware of (shipping, manufacturing, web hosting, online tools, marketing, etc.)?
- What problem does this solve in the marketplace?
- How does this stand out or differ from the competition or what already exists?
As part of this, identify your unique value proposition. In other words, what is the value or promise you intend to provide? Knowing this can help set you apart from competitors and help you establish a clear-cut business and marketing plan.
Step 2: Find an existing market
One of the easiest mistakes to make when starting a business online is coming up with something that you think is a great idea, and then realizing there are no customers or clients for the space. Before going full speed ahead on an idea, find an existing market for your product and service.
- Is there an existing market out there for your product or service? Google your product or service idea to see what exists.
- Is there demand? Look to the competition for product options.
- Can you fill a void in the market and offer something different?
When you find an existing market, the next step is to get customers and clients to you. This is a key part of how to start an online business.
The good news is that an online marketplace can transcend borders and reach many people (just be aware of how this may affect taxes, shipping, etc.). You aren’t limited to who may walk by your shop, but can access a broad, international customer base.
Step 3: Choose the right platform for starting a business online
After deciding on your offering, identifying the problem you’re solving, and finding an existing market, it’s time to choose a platform to build an online business.
Here are some examples:
- A website to sell your services
- Marketplaces, such as Etsy, to sell handcrafted or digital products
- E-commerce platforms, such as Moneris for physical products
Each of these platforms may have a built-in audience to get you the customers you need. You can have more than one platform, but as you get started you may want to focus on one. Be sure to look at total costs, fees and tax requirements.
To find out more about the general logistics of setting up a business, as well as what financial and legal bases to cover, check out this article about how to Start a Business.
Step 4: Develop your marketing materials
To run a business online, you need to create marketing materials to spread the word about your product or service. These materials can include:
- social media accounts
You can use programs like Canva for design help or outsource work to a graphic designer. However, it’s not just about the way things look, but what the materials say about you and your business. Make sure your ad copy (written materials typically designed to sell) is engaging, concise and reflects your brand personality. Ensure it communicates what you offer and how it’ll benefit customers. Also consider which online platforms are most popular with your potential customers (e.g. Facebook, Instagram, TikTok) so you can target your marketing efforts.
Setting up a marketing plan and budget can help keep costs under control, as marketing can be fast-paced and costs add up quickly.
Step 5: Nurture customers and clients
There’s a saying that “if you build it, they will come.” That’s not necessarily true for starting a business online. You don’t just create a website or launch a product line or service and have people flocking to you. If only it were that easy!
Customers or clients need to be nurtured along the way at every stage: from not knowing who you are and what you do to eventually becoming a repeat customer. That’s where having a digital marketing strategy can help bring customers to you. As part of your marketing plan, you can:
- Write relevant blog posts with SEO (search engine optimization) keywords that attract your target audience
- Create useful and informational posts on social media
- Publish opt-in content like a checklist or guide to get email subscribers
- Use social media platform business tools to drive traffic and sales
- Offer a 10% discount for email subscribers
- Use pop-ups on your website
- Ask for reviews, feedback and testimonials
Nurturing your customer base is an ongoing process that requires you to maintain a constant online presence. Plan for frequent, consistent news or social media updates to keep your customers engaged with your brand.
Building out a new venture can present its share of challenges. The above steps can help you learn how to start an online business and serve as a general recipe for success.
Online business ideas
Starting an online business is a time-intensive process that involves adjusting to new information along the way. There are several different business ideas you can pursue.
Here are some of the top online business ideas:
- Sell physical items like clothing, jewellery, purses or accessories in an e-commerce store
- Sell digital products like worksheets, ebooks, planners, guides, etc.
- Work as a freelance writer or editor
- Design websites
- Make handmade items or artwork
- Become a coach or consultant
- Work as a translator or tutor
- Become an app developer
- Start a social media marketing agency
- Teach online courses or workshops in your field of expertise
As you’re deciding the type of online business to run, consider your skills, any industry-specific knowledge you have and your vision for your life as a business owner.
Funding your online business
Setting up a business online likely has lower startup costs than a brick-and-mortar business. However, you’ll still need to finance your expected business costs. For example, if you want to sell physical products, you’ll need funds for design mockups, manufacturing and shipping costs. If you have savings or startup capital, you can use that to fund your online business. If you need extra financial support, consider a business credit card or line of credit. Check out small business loans and other lending options with BMO.
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