So you want to learn how to start an online business?
While this used to be a novel idea, most businesses are now online businesses of some sort — but unfortunately, only 16% of Canadian businesses are owned by women. And despite an increase in female-founded startups across the country, the number of digital businesses founded by women are growing at a much slower rate. According to a recent report, no matter the type of business, developing an online presence is one of the smartest ways to grow your venture.
Whether you’re looking to establish a retail store, provide a service, or build products for the web itself, every entrepreneur needs to know how to start an online business in order to succeed in 2020.
What is an online business?
An online business is any business that operates on the internet. If you’re selling a product people like to touch or feel before purchase or you provide an in-person service, this may not be your primary area of focus. However, it’s incredibly important to have an online presence for marketing and informational purposes. This is one of the most important reasons to start an online business. With that being said, almost every business in this day and age is a type of digital business.
Best online businesses to start
The next thing to consider is the best types of online businesses to start. Ask yourself what kind of skills you have to offer and what kind of demand there is for those skills. The best part of starting an online business is that start-up costs can be relatively low. Though this depends on what kind of website you need to get your business off the ground and what type of product you’re looking to sell. If you don’t have financial support, you’ll want to start a low-cost business. This means starting an online business from home, selling skills or products you already possess and finding a niche in the market that will make your business valuable. By working from home and selling your own skills, you can almost start an online business for free.
Types of online businesses
If you really want to get into the nitty gritty of online businesses, there are many types of online businesses to consider. Some of the most popular include starting a blog or publication, opening an online retail business or offering a virtual service or product.
Start an online blog/publication
Starting a blog or publication is popular because if you’re a writer, the initial investment is low. It’s probably one of the easiest ways to start an online business. It also allows you to start an online business for free. To start, you can use one of the many free publishing/blogging platforms. (WordPress and Contentful are both great options.) However, over time, you may want to consider a premium plan. This will allow you to include a custom domain name and additional features to make your blog or publication profitable. To purchase a custom domain name, try websites like Google, GoDaddy, and NameCheap.
Create an e-commerce site
Another popular online business is e-commerce. Though it’s exploded in popularity in recent years, online shopping is still in its infancy, having only been available to the public since the mid-’90s. Now in the 2020s, almost everyone is involved in some sort of online transaction. This could be paying bills, getting paid, communicating with friends and co-workers, or one of the most popular, shopping online. In fact, global e-commerce hit nearly US $3.46 trillion in 2019, up from US $2.93 trillion in 2018. This is why retail is a good business to start online and one of the best online businesses to start in 2020.
Many entrepreneurs opt to start a small online business selling clothing, handmade goods or jewellery. This is a great way to run an online business. You have products that others will likely want to buy (revenue), it can be done from home if you don’t need a storefront (free) and requires minimal financial investment. Though that depends on whether or not you already have the products you’d like to sell.
Sell an online service
Selling services online is also a great type of business to start. Once again, if you’re offering your own services, the start-up cost is relatively low. This makes it one of the most profitable online businesses to start. Think about your own skill set and what you can do to help others. Many entrepreneurs make an income off of selling their talents or skills. Think coaching, online courses, website building or maintenance, digital marketing, ghostwriting, podcast development or social media assistance. This option is not only one of the most lucrative, but also one of the easiest ways to start an online business.
What do you need to start an online business?
The best way to start an online business is to determine first what your business is, and then gather the tools you need to bring it to life. This will likely include a website with a custom domain name (which can both be procured at little to no cost), a brand and all accompanying branding materials, the corresponding social media accounts, any required vendors, and a plan for shipping (if you plan to start an online retail business).
Some of the most costly parts of starting an online business include marketing and advertising and hiring team members. This is particularly true if you’ve decided to start a business that requires skills outside of your own.
Build a website
One of the most inexpensive parts of starting an online business is the website itself. There are a ton of resources out there that can help you build it yourself. Look for free (or low-cost) DIY options like Wix or Squarespace. Both options let users design their own websites based on a large catalogue of templates. For a fee, business owners can add premium features, like an online store or the ability to accept online bookings and reservations.
Set up your social media accounts
Developing a social media presence can also be relatively inexpensive if you commit to managing it yourself. There are free tools available to create beautiful images for Instagram, like Canva. Seek out online resources that explain best practices. Social media does take time but if you commit to it, it can help you grow your consumer base with very little financial investment.
Determine any additional tools you’ll need
We can’t talk about e-commerce without mentioning Canada’s tech darling, Shopify. Thanks to this innovative online sales company, it’s easier than ever for entrepreneurs to sell their goods and services online. Depending on the type of plan you select, Shopify can do everything an online business needs, from collecting payments to shipping and managing customer engagement.
You may also want to consider setting up an account with Moneris. The payment processing app helps merchants big and small with a variety of transactions. It also offers 24/7 support to make sure that your business is always up and running, and you never miss out on a sale.
How to start your online business
Develop (and validate your business idea)
The very first step in any business is developing a business idea. Once you know what you’d like to sell, the next step is conducting industry research. This will help determine whether or not there’s a want and need for that product or service.
Consider your own skill set and what you can offer to others. This is the most inexpensive online business to start as you already possess most of what you’ll need. The only investment will be developing an online presence and a marketing plan.
Conduct a competitive analysis
It’s also important to look at the market and do a competitive analysis. How many competitors are out there? Is your product or service different? Is it better? Why would a consumer select your product or service over someone else’s?
If the market is saturated, try to figure out what you can do to differentiate your product or service. By carving out a niche for yourself, you’ll have a greater chance of outperforming the competition.
You may also want to talk to potential customers. Is your product or service something that they would pay for? Is your pricing too high or too low? Talk it out with those who are in the market. It can provide valuable insights into what your business idea should look like.
Write a business plan
Once you’ve determined that there’s a need and that your product can fulfill that need more effectively than your competitors, a critical step is writing a business plan. This is your guide that will explain how to start an online business, step by step. This should include any licenses or permits that will be required, a budget (including what kind of investment you’ll need to get your business off the ground, along with any monthly operational costs), and how you plan to structure your business.
Secure licenses and permits
Start by registering your business name with the government. You may also want to consider hiring a lawyer to make sure that you have any patents or trademarks that you need for your business. If you want to start an online business and position it for long-term success, you need to do your due diligence. Look into online business regulations. Understand what your responsibilities are when it comes to your customers’ personal information, along with other privacy and intellectual property regulations.
Get a business bank account and credit card
One of the most important steps entrepreneurs can take for long-term success is setting up business-only bank accounts and credit cards. This will make life a lot easier come tax time. It will also protect your personal assets should your business run into any financial or legal trouble. You may want to enlist the help of an accountant or a bookkeeper at this point. They can help set you up for financial success. An accountant can advise you on your tax options, so this may be a good time to invest in their expertise. This is a key step in learning how to start a profitable online business.
Another key step in learning how to start a profitable online business is finding a banker you feel comfortable with. This should be someone that understands your professional and personal goals, and can help your business succeed. Having someone you trust at a financial institution can make a world of difference when it comes to managing accounts, obtaining financing, and applying for government grants and assistance.
Do your research
This is a great time to do some learning about how to run an online business. There are tons of courses out there that can help you learn the basics of a successful online business, including digital marketing and e-commerce. Investing in your own skills will help you keep costs low as you build your business. While many in-person events and conferences have been canceled for 2020, there are online options that can help you virtually connect with other entrepreneurs in the industry and learn from the comfort of your own home. Look for networking events put on by big banks or think tanks.
Implement a digital marketing plan
Once you feel like you know how to start your own business online, it’s time to get your business out there. The only way to start bringing in revenue is to drive awareness. You can’t sell a product if consumers don’t know it exists.
Build your business website and set up your branded social media channels. Put together a promotional plan. This should include a social media calendar (which tools are you going to use to manage your social media channels? What are you going to post and when?), an SEO strategy (you can find more about developing an SEO strategy online and by leveraging free tools like Google search trends) and how much you’re going to invest in advertising. This is a key step in starting a successful online business.
Measure your success
Once you have your business set up and you begin marketing your product or service, keep an eye on the data. One of the biggest benefits of building a business online is the number of tools at your disposal. From Google Analytics to Facebook Insights, the internet offers a wealth of free options to help entrepreneurs measure the success of their marketing plans.
Set goals, record achievements and keep a close eye on which tactics are working. Are there certain types of Instagram posts that are resonating with your audience? Do more of those. Are you seeing a higher click-through rate on Facebook posts that include an image? Make sure images become part of your plan. While sales are a key indicator of your success, data can also let you know whether or not your marketing efforts are working.
There are many factors to consider when trying to figure out how to start an online business. Generally, you’ll want to figure out a business idea, a business and marketing plan. You’ll also need to determine what kind of investment is required to not only get your online business off the ground, but to make it successful. Once you answer those questions, you’re ready to start your online business today.
About the author:
Newsworthy Co. is a woman-owned and operated content development agency, and the creators of The Bullet, a quick shot of daily news. The team brings 20+ years of digital business experience to the creation of branded editorial content (covering everything from fashion to finance). Learn more at wearenewsworthy.ca
Disclaimer: The information provided in this article does not, and is not intended to, constitute legal, financial or accounting advice; instead, all information, content, and materials available in this article are for general informational purposes only.