start online business plan

How to Start an Online Business in 5 Steps (2024 Guide)

Brian connolly.

December 16, 2023

Table of Contents

Step 1: research your product idea , step 2: build a financial plan for your online business, step 3: create compelling product listings , step 4: market your product, drive traffic, and build brand awareness, step 5: optimize your online business and plan for growth.

Aspiring entrepreneurs have looked for innovative ways to make money. Fortunately, Jungle Scout’s research has proven time and again that running an ecommerce business is a viable way to earn an income —and can generate enough profit to replace a full-time job. 

Ecommerce offers entrepreneurs the kind of flexibility a traditional retailer could only dream of. Online sellers set their own hours, pay what they want to launch and grow their businesses, and can work from anywhere in the world. They succeed at all ages and education levels , many with no prior business experience. 

Selling products online isn’t just accessible—it’s meeting an enormous surge in demand for online shopping. As more consumers shift to shopping on their phones, tablets, and even smart speakers, opportunities to launch ecommerce businesses will only grow. In fact, 57% of consumers shop online at least once a week. 

If you’ve been thinking about starting a business online, now is the perfect time to get the ball rolling. We’ll go over how to launch an ecommerce business in five detailed steps, plus how to plan for future growth—even if you have zero startup funds. 

The first step to launching your online business is often the biggest bottleneck: finding a profitable product to sell . 

Notice that step one of starting a business isn’t fundraising. You can start a business at virtually zero up-front cost—stay tuned to find out how. 

If you don’t have any product ideas yet, don’t worry! Thinking about how you want to sell online will inspire you. 

Choose a business model

There are all kinds of ways to sell products online, but here are seven tried-and-tested, profitable options:

• Private label : You rebrand or rename a product already in production under your own label. If you’ve bought a drugstore’s “generic” equivalent of a brand-name product, you’ve seen an example of a private-label business. It’s the most popular and profitable business model among Amazon sellers. 
• Wholesale : You purchase brand-name products in bulk from a manufacturer, supplier, or distributor and resell them online as individual units to the end customer. It’s the second most popular model for Amazon sellers, and among the easiest to launch.
• Retail arbitrage : You’ll purchase inexpensive or discounted products from a brick-and-mortar retail store, then resell them online. This is a relatively low-cost method—you just pay for the products the gas you burned driving to the store. 
• Online arbitrage : Similar to retail arbitrage, except you purchase products from other online marketplaces and resell them online. 
• Dropshipping : You’ll take online orders for a product on behalf of a manufacturer, supplier, or distributor. When a customer makes a purchase, you notify the supplier, who then fulfills and ships the order. Next to used items, dropshipping is the best business model if you want to start selling for free. 
• Handmade products: You’ll sell your hand-crafted wares on handmade-friendly platforms like Etsy and Amazon Handmade. 
• Used items : You’ll list still-functional items like furniture, video games, art, books, collectibles, and even cars for resale online. This model calls for virtually zero startup investment—the products are already sitting in your closet, garage, or bookshelves. You can also source hidden gems from yard sales, consignment shops, and estate sales for cheap.  

Your business model will help determine where you source your products, your marketing plan, and how much you stand to profit. Check out our guide to Amazon business models to learn more about each method’s popularity and profitability. 

Note that you can sell online in more than one way—for instance, you could start selling used items to earn enough money to develop your own private-label product. 

Validate your product idea with data

Here’s a gut check: Your product decision can’t hinge on a hunch. 

That’s right—you can’t just take the revolutionary idea you conjured in the shower and run with it. You have to validate its profitability through product research, even if your family, your friends, and your dog all think it’s a million-dollar idea.

Product research answers many of the necessary questions any ecommerce business owner should ask before launching their operations, such as the following: 

• Is my product idea original? If similar products exist, is there an opportunity to improve on those products?
• Will my product idea sell year-round, seasonally, or not at all? 
• Where should I source my product, and how much will that cost? 
• What fees will I have to pay to list and fulfill my orders? 

Product research estimates your dream product’s profitability before you seriously invest in selling it—a necessary, if time-consuming first step. Skip it, and you may end up building a business around inventory that will ultimately sit unsold in a warehouse (or your garage). 

Jungle Scout’s data-driven tools and free educational resources are here to handle the heavy lifting and guide you in your product research. While our software tools use data specific to Amazon, the product opportunities they reveal are transferable to virtually every ecommerce platform, whether it’s Walmart , eBay , Etsy , or Facebook Marketplace . 

With the Opportunity Finder , Chrome Extension , and Product Database , Jungle Scout users can examine competition and demand for specific product niches, forecast potential sales using real Amazon sales data, and ultimately uncover profitable product ideas they wouldn’t otherwise find. 

If you’re not a Jungle Scout user yet, you can still follow our free, in-depth guides to selling on Amazon, read about our data-driven ecommerce product ideas , and learn about how to discover niche opportunities . More guides will be linked throughout this article.  

We keep a finger on the pulse of the ecommerce industry through regularly-published data reports on consumer spending and seller behavior. You can view insights into what consumers are buying online in our quarterly-updated Consumer Trends Report . 

Data on how ecommerce sellers conduct their business can be found in our annual State of the Amazon Seller Report . Our seller guides draw from industry trends to give readers new opportunities to launch and grow their businesses. 

Find a supplier

Your supplier can be many things—a private-label product manufacturer , a wholesale distributor, or the local hardware store where you buy furniture-making supplies. Whatever your sourcing needs, the cost of procuring your product is a crucial aspect of product research. 

Reliability is important—you’ll want to develop a rapport with your supplier if possible, choose materials you can easily reorder, and stay within your inventory budget instead of banking on runaway sales to cover the cost of goods.  

• Private-label sellers can easily find high-quality suppliers using Jungle Scout’s Supplier Database and on Alibaba . 
• Arbitrage sellers looking for sourcing ideas can check out our guides to retail arbitrage , online arbitrage, and profitable seasonal products to sell. 
• Wholesalers can check out this article for tips on finding a distributor. 
• Our startup guides on eBay and Facebook Marketplace offer tons of ideas on where to find used items. 

Choose an ecommerce platform and fulfillment method

Thanks to ecommerce’s growing popularity, you can list your product on many different online marketplaces, where it can be viewed by thousands—if not millions—of potential customers.  

While online marketplaces tend to have some similarities, you’ll find that each one offers advantages depending on what kinds of products you’re selling. For instance, used items tend to do well on eBay and Facebook Marketplace, whereas private-label products sell well on Amazon and Walmart Marketplace .

Selling on Facebook Marketplace, or Instagram can also be lucrative; 54% of U.S. consumers have purchased products they first learned about on social media, and that figure is likely to grow.  

Each platform offers different fulfillment methods. “Fulfillment” includes all the actions that occur after a customer clicks “purchase”: picking and packing the order, labeling the package, and shipping it to the customer. Done right, and it feels like a magic trick to the end customer—it’s a key determinant of customer ratings and reviews. 

The best fulfillment method for your business will depend on your finances and time. You can self-fulfill by storing inventory in your home or a rented space, and pack and ship orders yourself. You may prefer to outsource these tasks to a third-party logistics provider or use Fulfillment by Amazon (FBA). 

Whatever you choose to do, make sure you can reliably fulfill orders on time and at a reasonable cost to the customer, using packaging that ensures the product arrives intact.  

To that end, it can be helpful to have some inventory on hand in case there’s a sudden disruption with third-party fulfillment services. When COVID-19 interrupted FBA shipping speed, many Amazon sellers temporarily pivoted to FBM (Fulfillment by Merchant), packing and shipping orders from their homes to avoid losing their rank and ratings on Amazon. 

Choose a memorable brand name 

Think hard about your brand name—it’s an important piece of marketing. Use it to evoke what you want your customers to feel about your brand. 

It should be distinctive, memorable, and original. Be sure to check whether your intended brand name is already taken before you use it.

Not sure what to call your brand? Try riffing on branding trends and archetypes , or tell a personal story with a family name. If you’re stumped, play around with an online brand name generator— this one even suggests fonts and logos to match. 

Once you’ve validated your product idea, it’s time to get real about the numbers game—namely, how much it’ll cost you to launch and maintain your business, and when you can expect to start earning profits. 

It is possible to start an online business for free . But if you want to make a significant investment in inventory, legally register your business right away, or develop your own private-label product, you’ll incur some up-front costs. 

Having a budget for your business is important. Try not to get overwhelmed by all the line items that can accrue—making adjustments here and there to stay within your spending limit is part of the process. An up-front investment can feel like a huge risk, but with a well-researched product and optimized operations, it’ll pay off.   

Let’s go over what items you should consider in your financial plan. Loosely, they include: 

• Cost of goods/sourcing costs
• Seller fees and/or fulfillment fees (varies by marketplace)
• Cost to form an LLC
• Business insurance
• Taxes 
• Your estimated time-to-profit
• Financing options

Seller fees, legal fees, insurance costs, and taxes

Depending on where you list your products, you may be subject to seller fees and insurance requirements . You’ll also want to think about legally registering your business as an LLC , as it comes with some tax advantages. 

Seller fees

On Amazon, sellers must pay “referral” fees—kind of like a commission—back to Amazon for each order. Typically, these fees come out to 15% of the product’s sale price. Amazon sellers also pay additional per-item fees or subscription fees (depending on their seller account type) and refund administration fees. And if they use FBA, there are fees for that, too. 

Not every ecommerce platform will charge as many fees. You can use a fee calculator to estimate your net profit—we recommend Salecalc . 

Here’s a rough breakdown of online seller fees outside of Amazon: 

• Walmart: referral fee for each product sold, typically 15% of sale price; no monthly subscription fees
• eBay: 13.25% of product sale price to list and sell most items; $0 monthly for a free seller account, $7.95+ per month for eBay Store subscribers 
• Facebook Marketplace: no subscription fees; no referral fee for local sales; referral fee of 5% of the sale price if the product is shipped  
• Instagram Checkout: selling fee of 5% per shipment
• Shopify : monthly seller subscriptions start at $29.99
• Etsy: listing fee of $0.20 for each item, plus a 6.5% of sale price transaction fee. Etsy Plus subscribers pay $10 per month
• Craigslist: listings are free , except for a handful of regional fees for vehicles, housing, and furniture

Keep in mind that platforms often offer advertising programs to their sellers, which come with their own fees. We’ll discuss marketing in Step 4, but for now, keep in mind that advertising costs need to factor into your overall budget. 

If you’re in the U.S., it’s a good idea to register your business as an LLC (a Limited Liability Company). While you don’t technically need a business license to sell products in most ecommerce marketplaces, LLCs offer business owners protection, flexibility, and a simpler tax reporting process—not to mention the credibility of a licensed brand name. While it costs money to create and maintain an LLC, we recommend it. 

You can form an LLC all on your own, or you can hire a lawyer to help you. The price of forming an LLC varies by state , but typically falls between $50-200. Naturally, you can expect to pay more for the help of an attorney. 

Once you have your LLC set up, you’ll want to protect it from unexpected costs like accidents and lawsuits. On certain ecommerce platforms like Amazon , you may be required to maintain some form of business insurance. 

The type of insurance you’ll need depends on where and how you run your business—there are policies to protect you from lawsuits, property damage, and defective products. You should shop around to compare rates and benefits. 

All U.S. businesses must file taxes, typically on a yearly or quarterly basis. Our seller calendar can help you stay on track with quarterly business tax deadlines. 

If you’re operating as an LLC, you’re eligible to write off a significant amount of business expenses through deductibles. We recommend that you hire a professional accountant to handle your taxes, as they can be tricky to decipher.   

Startup costs and time to profit

So, after all of these fees and taxes, what should you expect to spend at startup, and how quickly can you make a return on your investment? Once again, it depends. 

You can start selling online for virtually no money—dropshippers, Amazon Merch sellers, and used item resellers (if they’re selling their own stuff) don’t have to spend a dime on inventory. 

Our data on Amazon sellers indicates that sellers using the wholesale or arbitrage models will pay up-front costs in the neighborhood of $500-$2,000. Private-label sellers tend to spend more, because it costs more to develop your own product. 59% of private-label FBA sellers invest at least $2,500 at startup on inventory, Amazon fees and storage, and advertising costs.

On the whole, over half of all Amazon sellers spend below $5,000 at launch, and nearly one quarter spend no more than $1,000.  

Ecommerce isn’t a get-rich-quick tactic—it takes time to generate profits. While the majority of Amazon arbitrage, wholesale, and dropshipping sellers turn a profit within three months of launching their businesses, private label sellers usually take longer. 

But the outlook is generally positive: 63% of all third-party Amazon sellers achieve profitability within the first year of launching their business.

That said, if you’ve invested heavily at launch, make sure you’re ready to spend several months to a year before making that money back. While most Amazon sellers are profitable ( 89%, to be exact ), they didn’t get that way overnight. 

How to finance your online business 

There are many different ways you can fundraise the money you need to start an ecommerce business. 

Over three quarters of Amazon sellers funded their businesses using personal savings, a testament to ecommerce’s affordability for aspiring entrepreneurs. 

A third took out family or business loans, which can range from $500 microloans to tens of thousands of dollars paid back over several years. 

It can be difficult for new ecommerce sellers to qualify for loans from a bank or the government, because they tend to require tax and credit histories that new sellers don’t have. 

Fortunately, Amazon and fintech companies like AccrueMe are developing investment solutions for online sellers that offer more flexibility. You can read more about how to fund your ecommerce business in our guide to financing options . 

Customers can learn about a product many different ways—by viewing ads, seeing a suggestion on Google or Amazon, reading a review from a satisfied customer, scrolling through social media, and even via word-of-mouth.  

Ultimately, brand awareness starts with your product listing —it’s the single best piece of marketing in your arsenal. Use your listing to tell customers why they need your product, communicate your brand identity, and build credibility with your audience.  

Use keywords to boost visibility 

Your product listing should capture the relevant keywords and feature the data that customers use to find the products they want to buy. That way, it’ll actually show up in search results, instead of getting lost in a sea of competitors. 

Here’s how that works: when deciding what to display in search results, search engines like Google and Amazon check potential results for relevance—either by “crawling” text on a web page, as is the case for Google, or by scanning keywords and data associated with different products, as Amazon does with ASINs. 

One big difference between traditional search engines and ecommerce platform search functions is that the latter are product-focused. In other words, while Google seeks to answer questions with information (i.e. articles on the “best dog beds” or “top 10 dog beds”), Amazon wants to answer search queries with relevant products (i.e. the products most related to the customer’s search terms, like “dog bed”).

Because users come to Amazon to buy things, the search results need to facilitate a purchase, which means presenting the products most likely to satisfy the customer’s needs.   

In any event, this is true for both Google and Amazon: the more relevant your listing is to a customer’s search, the more likely it is to appear in search results.

A keyword-rich product listing boosts your product’s visibility to the millions of customers across the globe who shop online. A great keyword strategy can elevate your brand above your competitors, reach new audiences, and ultimately generate more sales for your business. 

You can do keyword research for free on ecommerce platforms and search engines. Here’s a great method to start: try searching Amazon for broad terms that describe your product, and see what its search algorithm suggests in the autofill drop-down box. For instance, if you’re envisioning selling a dog bed, type “dog bed” into the Amazon search bar, but don’t press “enter” just yet.  

Amazon will suggest popular keywords associated with “dog bed,” so you can see exactly what real customers have searched for, design your product to suit that demand, and include those keywords in your product listing. 

If you already have ideas about your product’s design or features, you can search for more specific keywords, too. Say you want to sell a pink, fluffy dog bed that heats up.  Make your search more descriptive (“pink dog bed” or “heated dog bed”), and take note of the suggested keywords for those specific niches. You’ll want to include at least some of them in your listing. 

Then, start browsing your competitors’ listings. Take note of how other sellers describe their dog beds: do they mention benefits for your dog, machine-washability, or other special features? Informative descriptions help convert customers, so be sure to include relevant details about functionality, advantages, and design features in your listing. 

You run a similar autofill search on Google. Be sure to also take a look at the “People also ask” feature to generate more keywords. This section pops up in Google search results and can offer details about how and why people are searching for a given product. You can translate those queries into keywords that indicate your product’s functionality or purpose.

For example, people who Google “dog bed” want to know about proper firmness, best use, and accessories, so you should include keywords in your listing like “soft” “for crate” or “with blanket” if they apply to your product. 

The best way to do keyword research is to use a paid tool like Jungle Scout’s Keyword Scout. This tool does the work for you—it pulls advertising data directly from Amazon and suggests thousands of high-converting, top-ranked keywords to include in your listing.

To learn more, check out our top keyword strategies .  

Take great product images

Different marketplaces will have different image requirements for listings and ads. One thing is true wherever you sell: having high-quality images of your product will boost sales. 

You should also consider including video content of your product. Amazon allows sellers to upload quick, informative videos for ads and product listings.   

So, you’ve built an informative, keyword-rich product listing with compelling copy and stunning visuals. Now it’s time to let the world know about it! 

You want to drive as much traffic as possible to your listing so you have more chances at conversion—that is, you want to get as many people as you can to click on, view, and purchase your product. 

The broader your online presence, the more likely you are to attract online shoppers. So make sure to establish a digital foothold in at least three areas: on your own ecommerce storefront or landing page, on social media , and in online ad space. Once you start making sales, keeping your review count and ratings high will boost your brand’s legitimacy. 

Build an ecommerce storefront

Your storefront is where customers can learn about your brand, and where you’ll convince customers that your brand is legitimate, with products worthy of their hard-earned cash. 

Essentially, you want to recreate the experience of visiting a physical store, but streamlined. Think about what a customer would want to know about your product or brand and what questions they’d have for the store clerk, and communicate that information somewhere within your storefront.

Typically, that means providing plenty of photos and videos of your products in action , links to product listings, and information about your return policy. You can include your brand story, customer testimonials, and even helpful tutorials on how to use your product. The goal is to gain the customer’s trust in your product—and ultimately, a purchase.

You can build a standalone website through hosting platforms like Shopify or Wix, or you can create a storefront on Amazon or eBay using their templates.   

Leverage social media

54% of consumers have purchased products they first learned about on social media, making a social presence a no-brainer for entrepreneurs looking to build brand awareness. 

Growing a following for your brand on Instagram, Twitter, Facebook, and TikTok exposes your products to millions of potential customers. 

You can link your storefront or individual product listings within your social media profiles so customers can easily navigate to your listings You can even sell products directly on Facebook and Instagram . 

Social apps also allow you to interact with viewers in ways that can feel more organic than with traditional advertising. For example, you can run polls on Instagram or Twitter to get feedback on your products, notify customers about sales and discount codes, or post engagement prompts to encourage comments. 

You can also use social media to notify customers about sales and other notable events. 

Even if you don’t yet have a social media strategy to promote your brand, it’s important to claim the social media handles you’ll want to use (like “@junglescout”) before someone else scoops them up. 

Create ad campaigns 

Ads generate clicks, which in turn lead to sales. And in today’s competitive ecommerce industry, you have to maintain a solid advertising strategy to get noticed.  

Fortunately, ecommerce sellers have a ton of options when it comes to advertising their products. Amazon offers a wealth of pay-per-click (PPC) ad options to its sellers, as well as other marketing programs to boost visibility. You can even track inbound traffic to your listing from your off-Amazon ad campaigns. 

Here are some helpful guides to advertising your products on and off Amazon:

• Amazon PPC Strategies – The Ultimate Guide for 202 4
• 2024 Amazon Advertising Guide for Sellers
• How to Use Facebook Ads for Amazon FBA (And Sell More Products)

Get reviews 

Product reviews matter more to your business’s long-term success than you might expect. 71% of U.S. consumers are influenced by products with the best ratings and reviews when shopping online, and 68% find reviews with photos or videos more compelling. On Amazon, getting a high volume of great reviews boosts your product’s ranking, which in turn affects sales. 

Getting great reviews starts with having a high-quality product. Ensuring timely fulfillment and returns processing, courteous communication, and beautiful brand help, too. 

We know getting reviews is hard, so we’ve published a few different articles about why reviews are important and strategies for boosting your review count.

Launching a business is a huge accomplishment that takes time, money, and patience. Congratulations on becoming an entrepreneur! 

Once you’ve gotten your business up and running, it’s important to regularly check in on its performance. You may need to make some changes in order to set yourself up for long-term success .  

Plan to check in on your business sometime in the first three months. But remember that while the majority of Amazon sellers get their businesses up and running relatively quickly, 23% take at least three months to launch their businesses, and over half wait six months or longer before turning a profit. 

Measure your business’s performance

Pull up your financial plan and start comparing it to how your business actually performed. Here are some questions to consider: 

• Are you meeting sales estimates, exceeding them, or falling short?
• Have you turned a profit? 
• Is your current fulfillment method working for you and your customers, or do you need to find an alternative? 
• Are you able to stay on top of your inventory, or do you regularly run out of stock? 
• Is your profit margin above 20-30%? If not, how can you raise it? 
• Are you getting plenty of positive reviews? Have you checked your reviews for helpful feedback or improvement opportunities? 

You’ll want to keep a close eye on performance metrics like sales volume, revenue, and ad spend, so you can spot trends and quickly identify hidden fees. Software tools like Jungle Scout’s Sales Analytics keep track of this for you, so you can focus on strategy instead of bookkeeping.   

If your product isn’t living up to your expectations, don’t panic. Investigate any changes you could make to improve its functionality, or try to get customer feedback on how it could be upgraded. If you’re selling multiple products, consider nixing one that isn’t selling well.  

Lower your fees and costs

If running your business is costing more than you expected, there are probably ways you can cut back. 

It’s easy for first-time ecommerce sellers to know they’re being overcharged for things like shipping fees, so we wrote a guide to help you get reimbursed . 

Here’s another way to cut back on overhead costs: try negotiating for better inventory costs with your supplier. 

Expand to other channels

Just because you start your business on one ecommerce platform doesn’t mean you have to stay there forever. You’ll be more competitive and attract a wider audience if you list your product on multiple ecommerce channels.

Hire freelancers or employees

Like any job, selling online comes with tasks you perhaps would rather not have to do. Thanks to freelancer hubs like Fiverr and Upwork, it’s easy to find high-rated, trained consultants to cover every imaginable aspect of running an ecommerce business. 

Start your online business today

Ecommerce is a rapidly growing industry with plenty of opportunities for newcomers with great product ideas. With a bit of product research and planning, you can join the ranks of profitable ecommerce sellers. In time, you may be able to replace your full-time job, like the 47% of Amazon sellers who are self-employed or earn income exclusively from ecommerce. 

If you’re ready to get started on your new business, check out our in-depth beginner’s guides to selling on different marketplaces: 

• How to Sell on Amazon FBA , Amazon Handmade , and Amazon Merch
• How to Sell on Walmart
• How to Sell on eBay
• How to Sell on Facebook Marketplace

If you need a product idea, get started here: 

• Top 20 Ecommerce Business Ideas
• Low Competition Niche Products to Sell on Amazon FBA

Do you have any questions about launching a business online that we didn’t cover in this post? Let us know in the comments!

Start your online business with Jungle Scout

Get everything you need to launch a profitable business on Amazon, including product research, competitive analysis, and more!

Ecommerce Expert & Writer at Jungle Scout

Brian Connolly is an Amazon seller, ecommerce expert, and writer for Jungle Scout. He lives in the New Jersey Shore area with his wife and cat. When he isn’t writing advice online for aspiring and experienced Amazon sellers for Jungle Scout, he spends his free time boating, fishing, and selling boating-themed items on his Amazon business.

Stay in the Amazon seller loop

Thank you for subscribing!

Recommended Posts

Market intelligence for sellers.

The industry-leading product and keyword data to help you sell smarter on Amazon.

What is Amazon Ships in Product Packaging (SIPP) and How Can Amazon FBA Sellers Use It?

How to optimize and scale ads for amazon success, how to find suppliers for your amazon business with jungle scout supplier database, amazon ar (augmented reality): how to add 3d content to your amazon fba listings, how sellers can prepare for amazon prime day 2024, amazon best sellers and trending products in may 2024, clicks to conversions: mastering google ads to boost your amazon traffic, how to sell on amazon 2024 – complete guide, stay in the loop.

Get the industry's best e-commerce articles, videos, reports, and more — delivered to your inbox weekly.

Thank you for signing up!

Leave a comment

Leave a reply cancel reply.

Your email address will not be published. Required fields are marked *

How to Start an Online Business Profitably From Home In 90 Days

Darren DeMatas

November 27, 2023

[show_reviewed_by_link]

In addition to receiving commissions generated through affiliate marketing, we are able to fund our independent research and reviews at no extra cost to our readers. Learn more.

If you have ever thought about how to start an online business of your own, now is a great time to finally roll up your sleeves. In the wake of COVID-19, the ecommerce world was flooded with new activity from all sectors. Although growth has slowed since then, there’s still plenty of room in the market.

How To Start An Online Business

• Research Business Models
• Decide Your Niche
• Conduct Competitive Analysis
• Define Your Brand And Target Audience
• Set Up Business Logistics
• Build Your Website and Marketing Automation
• Promote Your Business

People can make money online in lots of different ways. They can open an online store, write a blog, or become popular on social media. In this post, we will dive into the different models and guide you step-by-step to launching your own online business.

Why Start An Online Business From Home

Online businesses can be profitable with low startup costs. The ecommerce market is growing, especially due to COVID-19, offering many opportunities.

Some of the richest people in the world got their start with online businesses. With the right business plan and commitment, you can reach customers worldwide .

Types of Online Business Models

Online businesses come in all shapes and sizes. You don’t have to be the next Amazon ecommerce marketplace or Netflix to be successful.

When it comes to online business models there are a few major buckets to consider.

• Physical Products: Selling products like t-shirts through online retail
• Digital Products : Like courses, ebooks, or software
• Media / Publisher: Selling ads, affiliate marketing, or sponsored content
• Services : Exchanging time for money by providing services like logo design or marketing

We have hundreds of online business ideas you can start , but I wanted to highlight a few ones in each of those buckets.

Physical Products

An ecommerce store is likely the first thing you think of when it comes to online businesses. Instead of shopping in person, customers make purchases over the internet.

In essence, your website replaces the store. Customers browse and buy your products or services online, and then you ship the order to them.

Online stores offer advantages over brick-and-mortar. Customers anywhere in the world can shop with you regardless of location. Plus, a virtual storefront means lower overhead.

Dropshipping

A dropshipping business is great for its simplicity . To the customer, they operate just like any other ecommerce store. But in actuality, your internet business is just the middleman. 

When a customer places an order, you send the order to the drop shipper . The drop shipper fulfills and ships the order to your customer.

Digital Products

Selling digital products online is very low overhead, but it’s highly competitive. If you have unique skills or knowledge, create digital products to monetize your expertise.

If you have experience in graphic design or web development, create and sell online courses. Or, maybe you’re a talented writer who could create and sell ebooks, audiobooks, or other digital content.

The possibilities for digital products are almost endless. All it takes is some creativity and hard work to get started.

Launch An App Or SaaS Startup

In today’s digital era, launching an app can be a viable business online.

With an innovative app idea, you could tap into a potentially huge market. If you have the technical skill to create it, or the resources to hire someone to do it for you, it could be lucrative.

To successfully launch an app, identify a problem or need your target audience has. Then, address it with your app. Invest time and resources into promoting your app to get it noticed. In a crowded marketplace, marketing can make or break you.

Remember, developing an app is only the first step – you still have to market it.

Ebooks or Courses

Have a passion for sharing what you know with others? Create and sell ebooks or online courses. It can be a long-term viable business since you can create content on almost any topic. Ideas include cooking and fitness, entrepreneurship, and personal development.

For success, pinpoint your target audience. Create content that speaks to their needs and preferences. Spend time building your brand and promoting your products. Use social media, email marketing, and other channels.

Media Publishing Company

You can start a media company with almost no resources other than yourself. Again, a low barrier to entry means tight competition.

Starting a media publishing company involves creating content for your target audience. You can create written, video, or audio content. Then, you monetize it with advertising or other methods.

This business model is highly scalable. Healthline is a publishing company that generates $100M+ per year.

To compete in this space, focus on consistently producing high-quality engaging content. It will help you build a loyal audience. Learn about online advertising and marketing strategies to maximize revenue potential.

Affiliate Marketing

Affiliate marketing allows you to promote and sell without handling products. Your job is to promote affiliate products and drive traffic to the partner’s website.

You earn a commission when customers use your affiliate link to make a purchase . The company selling the product handles processing and shipping the order. You are responsible for encouraging the sale and directing traffic with referral links.

Blogging is a large and varied category for online businesses. There is a wide range of blogs and many ways to monetize them. For example, some people make blogs as a hobby, while others use them for affiliate programs.

Blogs can make money selling ad space, sponsored posts, or ecommerce. You can even work as a blogger by creating content for other companies’ blogs. Blogging can be great as a part-time job or full-time gig.

Launch A YouTube Channel

What are you passionate about? Create videos about what you love, and build a following of interested viewers. After you build a loyal audience, monetize your channel with:

• Advertising
• Product sales
• Sponsorships

Most full-time YouTubers make $60K per year. But people like Blippi make a ton more. In fact, his net worth is around his total YouTube subscribers.

Become an Instagram Influencer

These days anyone can become an influencer. That’s if you don’t mind being the “face” of your business. I prefer to pass on that. With that said, influencers can make a killing by putting themselves in the spotlight.

Trading hours for money is the basic idea behind selling services. If you have a particular skill set or expertise, you can offer your services online to those who need them. This includes things like:

• Social media management
• Content creation
• Virtual assistance

Use platforms like Fiverr or Upwork to find clients and build your reputation.

Web Design Services

If you have web design skills, leverage them to build websites for others . If you have software development experience, this is a lucrative business opportunity.

Many tools can help non-technical people build websites. But business owners don’t have the time to do it. Beyond websites, you can also create and manage social media accounts.

Marketing Agency

Have a background in marketing? Experience in social media, content marketing, or search engine optimization (SEO)? You can offer your expertise to help other businesses grow. These businesses tend to have a lot of overhead, but you can easily build and sell a marketing agency for seven figures.

Start With a Niche in Mind

Before starting your online business, you have to know what you will be selling . This could be a product, a service, or an idea.

For example, selling a cool t-shirt design differs from selling a website-building service. Once you know what you want to focus on (this can be many things), you can start developing your strategy.

Some questions you will want to ask yourself are:

• What am I selling?
• Do I need or want a website?
• What will my company (and website) name be?
• Will I have stock to manage?
• Do I need to hire anyone?

What you are selling will help answer most of these questions. And you’ll learn things along the way. But first, what are you selling, and how will you make money?

Conduct Competitive Research

Whatever it is you are selling, you will have competition. Before you get started, do some competitive analysis of the market as a whole.

Begin With Basic Keyword Research On Google

Start with basic keyword research on Google. Identify keywords that are relevant to what you’re selling and see who shows up in the search results. Note their website, pricing, products or services, and any unique selling propositions.

Next, delve deeper into their online presence. Visit their website, social media profiles, and any other online platforms they use. Pay attention to:

The design and user experience of their website

How they engage with their audience on social media

Any content they create

This will help you identify what’s trending and the competitive discovery process.

Conducting product research is important. Entering a highly competitive industry with established competitors makes a difficult battle. When it’s hard to carve out your market share, you stifle growth before you even start.

What is the competition doing well? Where could they make improvements? Exploit the areas of improvement for your own benefit.

Your market research could show competitors pricing products too high. It could show poor customer service. Ensuring you do better may determine product viability . If you cannot, it will point you to another business niche.

Define Your Brand and Target Audience

Think about what you want your brand to communities. Beyond the name, consider your color scheme, logo, and mission statement.

You might have an idea or starting point for defining your brand and company image, but you’re not stuck with it. Amazon grew from an online bookseller to a global marketplace. Your brand will likely evolve and settle into its niche.

Define Your Target Audience

What you are selling will also determine who your target audience is . Are you selling to other businesses or customers? Who are they? What social media platforms do they use?

Define and understand your target audience to shape your business and marketing strategy. Your target market will likely change over time. You may notice a difference between your ideal and actual customers, too.

Analytics tools help identify your audience and track what works and what doesn’t. Your customer demographics determine how you run your business (and make money.) It also impacts your social media marketing.

Trademark Your Brand Name

Once you have defined your brand name and image, it is important to protect them legally. Register a trademark for your brand name to ensure no one else can use it or create confusion in the market.

This important step helps establish your business and protects your intellectual property. It’s helpful to consult with an attorney to navigate the process. This ensures you don’t miss anything when securing your trademark,

Create Your Business

Creating your online presence isn’t enough to start your business. You must officially register your company . You can find original and distinctive names for your business with the use of a  business name generator .Generally, it’s okay to start working and make a few sales. But you’ll eventually need to make things official.

Take all Necessary Legal Steps

You will need to address some legal aspects when creating your company . A licensed and registered business provides personal legal protection.

First, make sure you choose the right business structure. Depending on your location, products, and services, you may need a business permit. You may also need a federal business license. In most cases, you will need a federal business license .

Here are the main legal hoops you will need to jump through:

Register Your Business

Don’t let the idea of registering a business scare you. It’s paperwork and paying fees.

You can expect to:

• Register your new business name and optional Doing Business As (DBA)
• Choose your business’s legal structure: limited liability company ( LLC ), partnership, etc.
• A Federal Tax ID (or EIN)
• Other licenses and permits

Opting for a sole proprietorship allows you to skip many steps. That’s why many people getting started take this route. However, this doesn’t legally separate you from your business. If something goes wrong, you put your personal assets at risk.

If you’re confident in your business, save time and register your business at the start. A DBA and Federal Tax ID can also provide other perks.

Get Tax IDs

After getting your federal tax ID and business license, get your state and local tax IDs. You may have more paperwork for taxes and permits.

Get All Necessary Licenses

Certain types of businesses have licensing requirements . Common business licenses you may encounter include:

• Federal business license
• Sales tax license
• Home occupation permit
• Specific industry licensing
• Permits for regulated products

Your needs depend on your business and the products or services you’ll sell. Your local government or the Small Business Administration can help you.

Remember that sole proprietorship can avoid a lot of these requirements.

You must abide by all regulations where you do business. This includes across state lines or international borders.

Open a Business Bank Account

A separate business bank account is crucial. It simplifies your accounting to keep your business revenue separate from personal income. You need a registered business tax ID to open a business checking account.

As a sole proprietor, you can still open a separate bank account to manage personal and company funds.

Choose a Payment Gateway

Whether you sell B2B or B2C, you need a system for handling payments. Popular ecommerce tools integrate with third-party services so you can collect customer payments.

You must connect your payment gateway to your business account to accept payments. Your location and the ecommerce tools you use determine available payment gateway options.

Set up Taxes 

As with any business, you must track your earnings and pay business taxes. Consider hiring an accountant to help you get started if you can afford one. Keep clear and accurate records to ensure you’re ready for tax time.

Build Your Website

Your website serves as your storefront and a direct representation of your company. Building an effective and attractive website is essential for a successful online business. Luckily, there are tools you can use to build a website without technical skill.

Choose the Website Platform

Thanks to many different ecommerce platforms , it’s easy to start an online business. If you’ve got general computer skills, you can build an ecommerce website yourself.

Popular codeless ecommerce platforms include:

There are others, though these make up the vast majority of websites that aren’t coded from scratch. In fact, WordPress powers roughly 40% of all websites on the internet!

The beauty of WordPress is it is free, open-source software . Developers can create custom plugins, so no matter what feature you need, you can find it. This makes it easy to build your website without technical knowledge.

With its popularity, you can find step-by-step guides for anything you may need.

Shopify is an easier website builder for creating a basic ecommerce store, though it will require a monthly fee. It uses simple templates for creating product pages to sell your goods online. This is a popular option among small business owners.    

WordPress may be free, but there are ongoing expenses , including:

• Domain name
• Web hosting plan
• Premium plugins

Find a balance between cost and service when you choose an ecommerce platform.

If you are selling digital products, consider using an online course platform.

If you’re not ready to build a website, use marketplaces like Amazon, eBay, or Etsy to sell your goods. The downside of this business plan is marketplace fees, which can eat into your profits.

Set Up Marketing Automation

Once you have your ecommerce platform set up, it’s time to start thinking about how to market your business. One of the most effective ways to do this is through marketing automation.

Marketing automation refers to software that automates repetitive tasks. This can include email marketing, social media posting, and advertising campaigns. This can save you a lot of time and effort while still achieving great results.

To start using marketing automation, create a customer database. Collect customer information through your website or social media accounts. Use the data to segment customers into different groups. From there, send them targeted messaging.

Email Marketing

Email marketing is one of the most important tools in your marketing arsenal. With it, you can reach customers directly in their inboxes. When done properly, it increases brand awareness and sales.

To start, build an email list. Offer something of value, such as a free book, discount code, or webinar. Subscribers get access to your offering in exchange for their email addresses.

After building your list, use an email marketing platform such as Mailchimp or Constant Contact to create and send emails.

Personalize and offer value to your subscribers with each email you send. Segment your list based on consumer behavior and interests to boost engagement.

Landing Pages

A landing page is a standalone page designed to convert visitors into customers or leads. Effective landing pages have:

• Clear and concise messaging
• A strong call-to-action
• A form for visitors to fill out to become a lead or make a purchase

When creating your landing page, keep in mind your target audience and what will appeal to them. Use eye-catching visuals and persuasive copy to convince visitors to take action. Tools like Unbounce or LeadPages make it easy to create landing pages without coding knowledge.

Funnel Set Up

To maximize your online business success, it’s important to set up a sales funnel. A sales funnel is a step-by-step process that guides potential customers toward buying.

Typically, it starts with the awareness stage. This is where visitors discover your brand. From there, you’ll move them to the interest and consideration stages. Here, they’ll learn more about your products or services. The end goal is to move them to the decision stage, where they make the decision to purchase.

Setting up your sales funnel involves:

• Identifying key steps customers take before they buy
• Creating content and offers to guide them through each stage

For example, you can offer a free trial or consultation.

Market Your Website

Marketing is crucial to help your business grow. To effectively market your online business, understand your target audience. Once you know who your ideal customer is, you can use various strategies to reach them.

Content Marketing and SEO

Using content marketing and SEO can attract potential customers and improve your search rankings. Creating high-quality, relevant content using keywords related to your niche can organic visibility.

Start by identifying topics and keywords relevant to your business. Then, create content around those phrases. You’re not limited to blog posts – you can also create infographics , videos, and more.

Optimize the content with proper headings and meta descriptions to improve ranking potential.

Facebook and Instagram Ads

To build a social media following and increase brand awareness, run ads. Facebook and Instagram make it easy to create targeted ads based on:

• Demographics

To get started, set up a Facebook Business Manager account and connect it to your website. Then, create your ad campaign with an objective that aligns with your business goals. You can choose from options such as brand awareness, website traffic, and conversions.

Create visually appealing graphics and compelling ad copy. Everything should speak directly to your target audience. Use A/B testing to refine your ads over time and achieve a return on ad spend.

Influencer Marketing and PR

Find influencers who have a following in your niche. Reach out about collaborations on content or promotions to tap into their audience.

Use PR tactics such as press releases and media outreach to gain exposure for your business. Focus on relevant journalists and publications because they’re more likely to feature your brand.

Building relationships with influencers and journalists takes time and effort. Don’t expect immediate results. With consistent outreach and quality content, you can establish yourself as an authority.

Retargeting

Retargeting involves showing ads to users who have already interacted with your brand. It reminds them of what they’ve viewed and encourages them to complete the purchase.

To set up retargeting, install a tracking pixel on your website. Then, you’ll create ads targeted at those who have interacted with your site. You can use platforms like Google AdWords or Facebook Ads to create and manage your retargeting campaigns.

Conversion Rate Optimization (CRO)

It’s not enough to drive traffic to your website. For success, that traffic needs to convert to customers. CRO is strategically editing your website design and content to increase conversions.

To leverage CRO, analyze your website data using tools such as Google Analytics. Find pages with high bounce rates or low conversion rates. Make adjustments to improve the user experience. For example, simplify navigation or make your calls-to-action clearer.

Use split testing to identify the changes that are most effective.

Successful Online Businesses You Can Learn From

While every online business is different, we can learn from those who paved the way. Here are some strong ecommerce examples :

We’ve already mentioned Amazon a few times, with good reason.

Why? Because Amazon is the be-all and end-all of ecommerce business . It started as a small operation selling used books out of a garage. It grew to control more than a third of all ecommerce in the United States. You can’t ignore Amazon.

Amazon followed many of the tips we’ve covered in this article. (You could argue that they wrote the book on successful online business).

But Amazon started with a focus on one product category: Books. Its target market was people who wanted to save money and enjoy the convenience of delivery.

They embraced their success and continued to grow the brand around those strengths. They expanded into other product categories and now offer countless products and services.

With them, we learn how to focus on our strengths and look for growth opportunities.

Etsy is another good example of a simple idea that turned into a huge success. Etsy started as a small online business that focused on the sale of homemade goods. This differed from marketplaces like Amazon, which sold mass-produced items.

Etsy stayed true to its concept. It is a popular platform for artists and crafters who don’t want to compete with factory-made goods. Their business model was a success, offering niche products you can’t find anywhere else.

EBay revolutionized ecommerce with its new business plan of online auctions. Rather than selling products, eBay built a business around allowing others to sell.

eBay inspired many other ecommerce websites to follow a similar approach.

Each of these ultra-popular websites started as a small ecommerce business before making it big. We can apply the same strategies to our own online business plans. 

Which business is best for online?

Some business concepts that benefit from being online are:

• Affiliate marketing
• Digital product sales
• Dropshipping (and Fulfillment by Amazon companies)
• Training and digital courses

What do these business models all have in common? You can start them with little to no money and with minimal overhead.

Basic ecommerce companies can be successful. But there is greater risk with physical inventory. You must rent warehouse space, buy the inventory, and pay other business expenses.

With the above examples, all you need to invest is your time, and you can start earning money online!

What is the most profitable item to sell online?

You can sell most things online, but digital goods have unique profitability. Unlike physical goods, you can create digital goods like games or online courses once and sell them forever. The same goes for ebooks, videos, and other digital content.

You must print, bind, sell, and ship a physical book. You can sell and download an ebook with no physical labor involved. This is what makes digital goods so profitable for online businesses.

What online services are in demand?

In-demand online services are those that help others get online. In the wake of the pandemic, companies rushed to build their online presence.

Service-based businesses related to website design and digital marketing are in demand. An example is email marketing software, especially email marketing automation.

What are the most successful small online businesses?

You can sell almost anything online, but fashion and beauty are among the most successful. Fashion was the largest ecommerce segment in 2022 . Countless boutiques , brands, and content creators are getting their slice of the pie.

Start Creating Your Online Business

Now you are ready to start planning your own online business endeavors. Chances are it won’t be quick, and it won’t be easy. With a bit of luck and persistence, you can launch a successful online business.

Before, it took specialized knowledge and big risks to make money online. N ow abundant opportunities for those looking to break into ecommerce . No matter your strengths or skill level, there is a solution for how to start an online business.

With a little bit of elbow grease, you can turn your side hustle into a profitable business.

About the author

Featured on

Join 30K+ entrepreneurs already learning ecommerce.

Ecommerce ceo.

Partner With Us

Editorial Policy

Review Guidelines

Terms Of Use

Affiliate Disclosure

Privacy Policy

[email protected]

Guides & Resources

Ecommerce Learning Center

How To Start An Ecommerce Business

How To Make Money Online

What To Sell Online

How To Sell On Amazon

Online Business Ideas

Best Ecommerce Tools

Ecommerce Platforms

Fulfillment Services

Shipping Software

Inventory Management

Print On Demand

Dropshipping Companies

Amazon Research

Online Course Platforms

POS Systems

3PL Companies

BigCommerce

Shopify vs BigCommerce

2800 N 6th Street #5156 St. Augustine, FL 32084 United States

‪(904) 458-7077 ‬

Copyright © 2024 - Mission Demand LLC . All rights reserved.

Exclusive Member of Mediavine Finance

• Search Search Please fill out this field.

Market Research

Business planning, website development, product or service selection, marketing and promotion, is it a good idea to start an online business, can i start an online business with $100, what are different types of online marketing strategies, the bottom line.

• Small Business
• How to Start a Business

Starting an Online Business: A Step-by-Step Guide

Crafting a Winning Business Plan: Setting Goals and Strategies

Katie Miller is a consumer financial services expert. She worked for almost two decades as an executive, leading multi-billion dollar mortgage, credit card, and savings portfolios with operations worldwide and a unique focus on the consumer. Her mortgage expertise was honed post-2008 crisis as she implemented the significant changes resulting from Dodd-Frank required regulations.

If you want to get into the online business game, it’s a good time to start. The COVID-19 pandemic reshaped online consumer spending, including how people shop online and how they research products.

Today, 76% of Americans buy products online. Furthermore, roughly a third of people purchase items online weekly. From setting up an ecommerce business to offering web design services, there are countless avenues to explore as an entrepreneur.

Below, we’ll walk through each step to building an online business.

Key Takeaways

• When starting an online business, comprehensive market research is critical for identifying your target audience and learning how to resonate with your customers and understand their needs.
• Creating a business plan is an important step for outlining your business goals. It also includes your product description, target market, and financial projections, among other core components.
• Building your website involves setting up a domain name, finding a hosting company, and designing a strong website with consistent branding that allows your customers to navigate it intuitively.
• Choosing the right product or service to sell is essential. It’s important to think about how you’re addressing an unmet need.
• Several digital marketing strategies can be utilized, from content marketing to paid advertising, to help your business grow.

Successful online entrepreneurs study hard in order to have a thorough understanding of their market. This is important for knowing exactly how to reach your target market , because these are the people who will buy your products and drive your business growth.

At its core, market research is about understanding your customers’ needs, pain points, and solutions. It is designed to help your business better meet these needs.

Steps to Conduct Market Research

Market research involves understanding key aspects of your current and future customers. To get a clear sense of your target market, outline the characteristics of your audience—for example, age, location, gender, income, job title, and key pain points.

Once you have identified your target audience, conduct research on the following topics, which will tell you about how they make decisions and how you can better position your business:

• What are the challenges that your target market faces?
• Where do they research a given product or service?
• What are their views on pricing for this product or service?
• What factors influence their decision to make a purchase?
• Who are your competitors?

To put this market research into action, there are a number of different avenues you can take:

• Focus groups
• Competitive analysis
• Brand awareness research
• Market segmentation research

Consider the following questions that may be asked in an interview or focus group to learn more about your audience:

• “How do you search for that product?”
• “How useful was it?”
• “What words do you use when you search on Google?”

When you have completed your market research, identify what you have learned as well as your next steps based on these insights.

Creating a business plan is a key first step for all business owners . It is important for companies looking to secure funding resources. It also serves as a blueprint to summarize your key business objectives and goals.

To write a business plan , incorporate these eight main sections, which are often found in traditional templates:

• Executive summary : This is typically a one-page section that explains your objectives and includes your mission statement, core team, and why your company is positioned for success.
• Company description : This describes what you offer, your competitive advantages, and your business goals.
• Market analysis : This is where you explain your target market, market size, market trends, and competitive landscape.
• Organization and management : Explain who is working on your team and their professional background and experience.
• Service or product line : Describe the product or service you are offering, including any copyright or plans for patenting.
• Marketing and sales : Discuss your marketing and sales strategy. Discuss your pricing, key metrics, and sales plan.
• Funding request : If you are a company looking for funding, here is where you outline the capital you are requesting and where it will be allocated.
• Financial projections : Include projections for your company’s revenue and expenses. Consider including an income statement, balance sheet, and cash flow statement in this section.

A business plan is important because it helps clarify your action points, who you are, and what you offer, all in a coherent template.

Getting your business online is the next key step. In an ever-changing environment, it is important to know the tools, trends, and strategies for building a strong online presence to allow your business to grow.

Registering Your Domain

The first step is registering your name, or your website address. This can be in the form of your business name “.com.” To purchase your domain name, you can go to sites like GoDaddy or Namecheap . If you decide to build your website using WordPress, you will need to use a site such as these to host your website.

Web Hosting Companies

Alternatively, you can buy your domain name at a hosting company. These are companies like Shopify , Wix , or Amazon Web Services , that may also offer tools to build your website and release content on them. 

Website Design

A well-designed website is important for many reasons. Using a website builder, such as Mailchimp or Squarespace , can allow you to choose a theme, customize your pages, create relevant content, and set up a payment page.

Other key aspects of your website design include its functionality, simplicity, and ease of use. Allowing your potential customers to navigate the site intuitively will be key to their experience. Brand consistency—in your logo, colors, and typeface, for example—is also key to creating a unified brand.

Another essential part of website design is its mobile application. You’ll want to ensure that your website runs smoothly on mobile, that images load properly, that the text is legible, and that buttons are intuitive to click.

This step focuses on how to choose the right product or service to sell. At the heart of this choice is the goal of solving a customer’s problem. But there are a number of strategies you can use to identify your product idea.

For example, you might consider analyzing companies with high-profit margins, products that align with your passion, burgeoning trends, items trending on online marketplaces, and/or customer reviews.

With this in mind, analyze how this product will get to your customers. Additionally, you may consider products that are not available in stores in your local market but are offered in communities such as Europe or Japan, for example.

Marketing strategy and promotion is an essential driver of business growth. As the digital landscape evolves, it’s important to have an effective marketing plan that resonates with changing consumer preferences and needs.

Here are questions that companies can consider as they create their marketing strategy, navigating today’s environment:

• Impact, value, and growth : What are the goals and key performance indicators (KPIs) that will measure success for your business? How will you explain the value that the business provides to its customers and/or society? Create an “elevator speech”—a 30-second description of what you offer and why it’s special.
• Customer need and brand promise : How does the brand meet a customer’s need through its products and services?
• Customer experience : How will the business deliver the best experiences at each stage of the customer journey?
• Organizational model : How will the business operate to serve the customer with the most impact?

These will help you understand what types of strategies can have real impact.

Types of Marketing Strategies

Consider the following digital marketing strategies that can be used for your online business:

• Email marketing
• Social media marketing
• Paid advertising
• Search engine optimization (SEO)
• Content marketing
• Influencer marketing

Each of these presents a different way to reach your target audience, drive conversions, or build brand awareness, depending on your marketing goals.

You need to determine that for yourself. But before starting an online business, it’s important to assess the time, investment, and resources you’ll need to get it off the ground. While the barrier to entry can be quite low, it’s worth considering your goals and strategies for making it a reality.

However, compared with starting up a traditional brick-and-mortar business, the risks of launching an online business may be reduced due to lower upfront costs such as rent, staff, and materials, among others.

The short answer: yes. While it depends on the type of business you hope to pursue, there are many ways to set up an online business at very little cost. For example, you could offer your services doing freelance work, photography, bookkeeping, or personal training. The primary costs involved include setting up your business website, which can cost as little as $2 to $20 each year with companies such as GoDaddy.

There are a number of digital marketing strategies that online businesses can use, such as content marketing, email marketing, paid advertising, SEO, and influencer marketing. Each of these strategies can be useful, depending on your product and goals.

Starting an online business can be a powerful way to launch a new product or service while reaching a wider audience. With market research, a solid business plan, a strong website, and a digital marketing strategy, you can get started in growing your company effectively. As customers increasingly make decisions virtually, building an online business is vital to any business owner’s success.

Pew Research Center. “ For Shopping, Phones Are Common and Influencers Have Become a Factor—Especially for Young Adults .”

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Write Your Business Plan .”

Ogilvy. “ Getting Future Ready with Marketing Transformation ,” Page 15.

GoDaddy. “ How Much Does a Domain Name Cost? Find Out! ”

• How to Start a Business: A Comprehensive Guide and Essential Steps 1 of 25
• How to Do Market Research, Types, and Example 2 of 25
• Marketing Strategy: What It Is, How It Works, and How to Create One 3 of 25
• Marketing in Business: Strategies and Types Explained 4 of 25
• What Is a Marketing Plan? Types and How to Write One 5 of 25
• Business Development: Definition, Strategies, Steps & Skills 6 of 25
• Business Plan: What It Is, What's Included, and How to Write One 7 of 25
• Small Business Development Center (SBDC): Meaning, Types, Impact 8 of 25
• How to Write a Business Plan for a Loan 9 of 25
• Business Startup Costs: It’s in the Details 10 of 25
• Startup Capital Definition, Types, and Risks 11 of 25
• Bootstrapping Definition, Strategies, and Pros/Cons 12 of 25
• Crowdfunding: What It Is, How It Works, and Popular Websites 13 of 25
• Starting a Business with No Money: How to Begin 14 of 25
• A Comprehensive Guide to Establishing Business Credit 15 of 25
• Equity Financing: What It Is, How It Works, Pros and Cons 16 of 25
• Best Startup Business Loans for May 2024 17 of 25
• Sole Proprietorship: What It Is, Pros and Cons, and Differences From an LLC 18 of 25
• Partnership: Definition, How It Works, Taxation, and Types 19 of 25
• What Is an LLC? Limited Liability Company Structure and Benefits Defined 20 of 25
• Corporation: What It Is and How To Form One 21 of 25
• Starting a Small Business: Your Complete How-to Guide 22 of 25
• Starting an Online Business: A Step-by-Step Guide 23 of 25
• How to Start Your Own Bookkeeping Business: Essential Tips 24 of 25
• How to Start a Successful Dropshipping Business: A Comprehensive Guide 25 of 25

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

Home > Business > Business Startup

The Complete Guide To Starting An Online Business

We are committed to sharing unbiased reviews. Some of the links on our site are from our partners who compensate us. Read our editorial guidelines and advertising disclosure .

Starting a business is sometimes scary and almost always challenging. It might seem overwhelming at first, but that is completely normal. And we owe you a massive congratulations. You have an idea good enough to share with the world, and that’s a big deal! You’ve officially gone further than most hopeful entrepreneurs. You’ve made the decision to get online and figure out how to turn this idea into a money-making business. So, let’s talk logistics. 

When I first started my own business, I panicked over taxes, finances, and marketing. I felt so behind that first year because I didn’t have anything figured out before launching my site. Then, when I did launch, I had to check all these boxes while I was knee-deep in the stress of maintaining my business. I had no idea which holes I hadn’t filled until they imploded and quadrupled my stress, since I had to put out fires that were completely preventable. 

To help you avoid the same mistakes I did when I launched my business, we've put together this guide to starting your small business online. Read through our eleven steps below to officially start your business off on the right track.

How to Launch a Small Online Business

• Vet your idea
• Identify your audience
• Choose your business name
• Write your business plan
• Sort out your branding
• Build your website prototype
• Test and validate your product
• Nail down your processes for delivering your product
• Make it legal
• Deal with your finances
• Launch your business

1. Vet your idea

First things first: you gotta vet your idea. 

Before jumping in head first, you need to be 100% confident (or at least 90%) confident that your idea is worth it—worth the time, sacrifice, stress, anxiety, frustration, and ego hits. 

It’s worth remembering that no matter what type of business you own (or how good your idea is), you’ll definitely experience ups and downs within the first 10 years. Some of these ups will be sky-high, and some of these downs will be depressingly low. 

But if you believe in your idea enough, you will persevere—you can absolutely come out the other side with an awesome business, which is an amazing way to spend your time and earn a living. On the other hand, if you’re shaky about your plans, this will be a tricky first decade for you. To make sure you’re on the right track, let’s talk about how to vet an idea:

While vetting your business idea, ask yourself these five questions: 

• How big is your potential audience? Are enough people interested in this type of product or service that you have a stable audience for sales? 
• Is your product or service something customers buy once and move on? Or is there a chance for building a repeat customer base? 
• Is your business idea going to be a passing trend like low-rise jeans, or does it have a long-term possibility like pencils? 
• What is your competition? For instance, if you are setting up a fry bread cafe, are there other fry bread cafes in the area? If there are, what unique element will set your business apart from the competition? 
• Will your business have any legal issues or limitations? For instance, are you creating something with strict regulations that make it trickier to market? Are you passionate enough about your idea that you’re willing to deal with the ups and downs and chaos of starting a business?

Once you’ve vetted your idea by asking yourself the questions above, getting advice from people you trust, and even speaking with an accountant or business banker about your business’s viability, it’s time to move on to the fun stuff—like choosing a name for your budding business.

By signing up I agree to the Terms of Use and Privacy Policy .

2. Identify your audience (or your target market)

Arguably, the most ignored aspect of building a business is identifying a specific audience. A lot of fresh entrepreneurs hesitate to hone in on one demographic because they believe their product or service can and should help everyone. Depending on the product, that might be true—but it still creates a watered-down, generic brand that doesn’t catch anyone’s attention of anyone. 

Our advice? Don’t fall for the trap of thinking everyone is your audience. There’s no way you can market to everyone and still have a unique brand. 

In contrast, if you are clear on who you are selling to, then you will attract people who actually want your product—which means your business is likelier to last. 

To take this a little further, remember that the best brands are aspirational. In other words, while you should start with the people who want your product, you should eventually expand into finding people who want to want your product. This means you will inherently cast a wider net than just your target market—but you will not catch much of anyone without a target market. Start there.

If you can really hone in on exactly who your dream customer is, you then know how to market your product to them. A good exercise to do here is to write your dream customer’s profile or buyer persona: 

• What is your ideal customer’s name? Age? Occupation? Hobbies? 
• What food do they like? What food do they dislike? 
• Do they have a family? 
• How much money do they make, and how much disposable income do they have? What are their hopes and goals? 

Now, ask yourself: Does a person like this actually exist? If so, now you know which social media platforms to target, where to buy ad space, and what tone your advertising should take. 

Having a hard time answering the questions above? Start by identifying who is not your audience. List the qualities of the person who is not your target audience, and narrow things down from there.

Again, you can have more than one target audience, but you should try to be as specific as possible for each one.

3. Choose your business name

Choosing a business name is where the fun starts. For one thing, your business’s name is the first point of contact between your business and your consumers. It also gives customers the first glimmer of your personality and is the place where your branding will shine. 

Remember, your name is also how the legal world will note your business. It also helps Google determine how to position your website when someone searches for your product or similar product on the internet. If your name is confusing, long or even too similar to other business names, you might be positioned at the bottom of the search results page. 

In other words, your business’s name is important. 

When it comes to business names, entrepreneurs tend to overthink, overthink, and, overthink some more. Sometimes, it feels like the trickiest part of starting a business, so here are some tips for figuring out the perfect name.

Keep it simple and short

Shoot for one to two words. You don’t want the name to be a chore for your customers to remember. Make it as easy as possible for your customers to think only of your service or product when they hear your name. You also want the name to fit neatly on a price tag or as a hashtag (always keep that social media marketing in mind)

For a good example of a short, simple brand name, consider Macintosh computers and Apple products. When someone says the word “apple,” most people now think of the computers before they think of the fruit. It’s a simple name, but with excellent marketing, the company completely co-opted the fruit.

Dare to get personal

Don’t be afraid to think of something quirky, weird, and maybe even a little kooky. For instance, many small online clothing businesses include the name of the owner’s grandmother in the title, or maybe of the owner’s children who inspired the clothing. 

Or if something from your hometown (or even a particular food) means something to you, consider including that as part of the name. This type of personality flair makes marketing the founder’s story even clearer (read: makes you more marketable). It’ll also provide an easy framework for storytelling within your marketing plans. 

These personal details will also help customers feel a sentimental connection to the brand. Sentimentality is an effective tool for building loyalty.

Be original

Make sure there are not other companies filed under the same name or an adjacent name.  You don’t want to confuse your potential customers or investors, and you also don’t want to confuse Google, which might pull up your company’s name and location while filling in product information from a completely unrelated company that happens to share your business’s name.

Search domain names, URLs, and social media handles for your would-be business name. Don’t forget to simply Google the name either. If you are dead set on your chosen name, consider tweaking it a little just to set it apart.

4. Write your business plan

Your business plan is a structured document that gets all your brilliant ideas down on paper. You’ll show it to investors (like angel investors or traditional lenders like banks) to demonstrate that your ideas are worth investing in. While you can modify your business plan from year to year, try to think about it as your business’s foundational document—this is how you design the path to making your dream work. 

You can create your business plan as early or late as you want before launching your business, but I highly recommend doing this early because it will reveal any flaws in your idea. The plan itself might feel redundant, but don’t speed through this. Consider it a proposition for the world to take your idea seriously.  

Executive Summary

This is your elevator pitch. Simply sum up what your business is, how it will function, and what success you anticipate. It should be brief and to the point. 

Company Description

This section should be a detailed description of what problems your company solves. It should also focus on who your company is serving and how you are serving that population.

Market Analysis

Who is your competition? Your investors will want to know you’ve done the research to find out that yours is a good idea, or that there is even a demand for this service or product. Along with showing that there is competition, this section of your business plan should point out what the competitors are doing better than you—and what you plan to do better than your competition.

Management and Organization

What kind of business is this? Is it an LLC, INC or DBA? How big is your business, and what is its structure? Most any business structure is fine—but remember: remember...stay away from pyramid schemes. (We say this mostly because they’re pretty similar to illegal pyramid schemes, but also because they can take advantage of women and marginalized populations.)

Products and Services

What exactly are you selling? List out each product, including each variation of your main product or service, as well as your pricing. Keep this portion of your business plan as clean and organized as possible (a spreadsheet will likely be a useful tool here). You will probably add to this list as you launch your business and continue to grow.

Marketing & Sales

How do you plan to let people know what you are selling? Many business owners use social media, local newspapers, radio ads, billboards, or even a combination of everything. The point is that you need to have a plan. 

Another angle to consider is what medium your audience primarily uses. For instance, if you’re focusing on a product that primarily serves older communities, you’ll want to focus on Facebook advertisements. If you’re focused on a younger population, TikTok ads will probably serve you better. Consider how you can use your audience’s preferred same media to get your message across. And what sort of posts or commercials will you create that both fit your brand and speak to your dream consumer? 

Funding Requests

Outline your funding requirements. This is where you get specific on how much you need and how each dollar will be spent. It’s also where you explain the lending and investment terms you would like and whether you are looking for debt or equity. The more specific you are, the better. Answer basic questions like how long you’ll need funding and how exactly you’ll use it. Most importantly, be overly detailed and incredibly tedious with this information—investors prefer more information when making a decision about whether or not your business is worth their time and money.

Financial Projections

Because you haven’t launched your business yet, this is where you will keep track of your monthly and/or quarterly projections. Throw in graphs, charts, and anything else that will tell your financial story as easily and quickly as possible. This section can be updated and added upon after you launch, but you should definitely keep track of your financial projects throughout the life of your business. Set routine goals to keep yourself motivated and on track.

Keep your business plan close by and allow it to remain a living document as you grow and learn new things. Even if you never end up presenting it to anyone, it will keep you focused and aware of when things are not lining up for you.

5. Define your brand identity

Last year, I taught a business class to high schoolers., These were Gen Z brilliant students who knew the internet forward and backward. They used the word “branding” casually, but they didn’t quite understand the ins and outs of branding a company. So we did what I like to call “the Starbucks exercise.”

I asked them to get out a piece of paper and write their answers to my questions: If Starbucks were a person, what gender are they? Do they smoke? What age are they? Do they have a family? A partner? Kids? A dog or a cat? What kind of outfit is Starbucks wearing? 

The majority of students had the same answers. To them, Starbucks was a white middle class lady who used to smoke cigarettes. She is a straight cis female with a couple of kids and a cat. She is stressed and she wears yoga pants a lot. 

These students were all from different homes and all had different relationships with the coffee brand— but they all had the same general understanding of what this brand was. And that’s the power of strong, consistent branding. 

If you can create a set understanding of what your company is if it were a person, you are golden. Creating a brand like this means you know exactly who you are marketing to. And having such a specific focus also means that you can attract the right customers. You will know which aspects of your company to negotiate in order to attract your target audience and expand from there.

What gender are they? Do they smoke? What age are they? Do they have a family? A partner? Kids? A dog or a cat? What kind of clothes do they wear? What is their income bracket? What type of music do they listen to?

Another helpful exercise is to try to describe your company with one word. Examples include: sleek, economical, efficient, retro, conscious, powerful, and rejuvenating. Practice this with your own business, and then make branding decisions based on that word. 

Now that you have an understanding of what your brand is, consider your unique selling point, words, colors, and logo.

Figure out your unique selling point

What makes your brand different from other brands? Why should people choose your service or product over others? Is there an emotional reason (for instance, you’re a local, naturally sourced brand), a practical reason (maybe you’re more affordable or offer higher quality products), or a combination of both?  Frankly, if there is an emotional pull, run with that—people love an emotional connection to the product they’re buying.

To put it simply, think about your origin story and what YOU bring to the table. Then go from there.

Colors are important! They should work together to make a good story. They should not be in a contest with each other. If you look at your branding and feel confused or disturbed, it means that the colors are not doing you favors. 

Not sure what we mean by that? Well, there is an area of study called color psychology. This is how our brain responds to certain colors. 

For example, yellow is a trigger for discomfort and red is a trigger for hunger, which is why most fast food places use red and yellow in their branding. These colors are intended to inspire patrons to come and eat a lot (red) and then leave quickly because the yellow is so glaring. Blue is calming which is why most therapy offices paint their walls blue. 

Consider what emotions you want your clients to feel and Google which colors best make that happen.

Red - enhances human metabolism, increases respiration rate and raises blood pressure; associated with energy, strength, danger, war, determination, passion, desire, and love -- it attracts more attention than any other color

Green - slows human metabolism and has a calming effect, associated with tranquility and calmness, symbolizes growth, freshness, rebirth, fertility and is associated with nature (all things organic). 

Blue - Peaceful, honest, compassionate, authentic and sympathetic 

Brown - reserved, dependable and resilient 

Yellow - joyful, happy, intellectual, a lot of energy, stimulates mental activity and muscle energy, can bring feelings of anxiousness when overused, and is definitely an attention grabber. Commonly used to mean loyalty and in other settings cowardice. 

Pink - calming and vulnerable. Signifies gentleness and youthful innocence, very sweet and tender feelings

Purple - power, nobility, luxury and ambition, wealth and extravagance. Reminds mystery, creativity, independence and magic 

White - signifies safety and cleanliness. Reminds of purity, light, faith, innocence and goodness

Black - power, death, formality, fear of the unknown, often feels negative and reminds of grief

Color theory also tells you which color combinations are most pleasing to our eyes. A fun resource is the Adobe color wheel . This site allows you to jump in and look at different combinations of colors that work within these theories of which colors are most compatible.

This is where you get to tell your story. Use words that fit the tones of the colors you choose (or vice versa). Words like sleek, organic, fresh, and honest all feel good with greens, light pinks, and whites. Words like powerful, strong, and forthright match the tones of reds and blacks. Consider which words best describe the mood you are trying to convey.

Unless you have a design background and are good with graphic design, consider hiring someone else to design your logo. Before hiring someone, your job is simply to figure out a basic idea of what you want. This will require you to look at different branding, websites, and fonts to think about what really resonates with you. 

When I was trying to sort out my own branding, I came across an Instagram profile that posted old Russian products with pre-1990 branding. My family comes from Eastern Europe and many of my family members speak Slavic languages, so seeing these unique logos and fonts felt familiar to me. I decided to hire a designer who created a font that could have come straight from old cheese cans from Moscow 1955, something with a Slavic touch and retro vibe. You never know where you will find inspiration.

• Old branding. Look at old magazines or old boxes and just study those fonts and how the logos were made.
• Notice t-shirts. 
• Whenever you find yourself in a waiting room or watching tv, jump on Pinterest and create different boards of ideas or tones.
• Start following different designers on social media. A popular one is Aaron Draplin, and from him you should be able to find an entire community that posts different design and logo ideas. This should inspire you as you figure out what you want. 
• Album covers. Go to a record store and sort through different old school album covers. You will see some of the best branding there has ever been. 
• Instagram, Instagram, Instagram. We love to hate it, but if you tap into the design community, you will be blown away by the options. 
• The grocery store. Andy Warhol found art in advertising and sold his Campbell’s Tomato Soup renderings for millions of dollars. He described the soup can as brilliant art and branding. Go to the grocery store, pretend to be Andy Warhol, and look for art in the mundane.

6. Build your website

Whether you’re offering a newsletter or a physical product, you need to start creating a site so you can fund your business and find customers. 

To start creating your ideal website, start by asking a few key questions. What is the purpose of your site? Are you selling or just giving information? Does your site include a call to action like signing up for a newsletter or service? Or do you need an e-commerce site to collect credit card information and shipping? 

A ton of different website building platforms are built for small online business owners like you. With services like Wix , Squarespace , and Weebly , you can create a site and keep it dormant before launching for testing. 

Not sure how to build a website from the ground up? Find other websites that are doing similar things to you and follow their lead. It is okay to gain inspiration from multiple sources. (Just don’t copy and paste an entire site. Plagiarism will not go well for you.) 

Start simple. You don’t have to have a perfect product right away. Create a basic website, then have a friend go through it and tell you what they would love to see or use. 

As you start creating your site, Just make sure you have these basics: 

• A site map 
• High-quality images 
• A call to action on each page (“sign up for our email,” “click to purchase,” etc.)
• A contact page

You’ll also want to use proper SEO ( search engine optimization ) for any blogs and sites you create. If you’re not sure what that means, no worries—most website builders include some sort of SEO recommendations that will help optimize your content. 

SEO is an acronym for “search engine optimization.” It is the method in attracting a higher quality and quantity of traffic to a site. 

The goal of SEO is to make it easier for Google to recognize what your site pages are about and then help users find the best solutions to their needs.

• Figure out where your site stands in terms of Google rankings. Use the Google toolbar or other monitoring tools (there are a lot). 
• Use keywords or phrases organically throughout your pages. Use keywords that people might be including in their searches. Feel free to Google your topic and see what other people are posting or searching. 
• Include these search terms in your URLs. 
• Attach descriptors to your images. 
• Use internal links to guide users to another page on your site. 
• Link to other sites or the site you are sourcing information from. 
• Make sure that your website is updated regularly and actually has high-quality information.

7. Test and validate your product

Test your product.

Before launching and advertising, you must test your product and see if it is actually meeting the needs it is setting out to meet. You can do this in the form of focus groups, which means sending the product to a few choice people who you know will be honest about their impressions. Then you can start sending and giving to others. Find a bigger audience by inviting people from your focus group to pass your product along to their friends and ask for their feedback as well.

Validate your product

Before really going crazy with scaling and production, you must validate the product . This means setting up pre-orders and selling in person (read: starting off small before you buy 6.000 scrunchy leopard print bracelets that will just sit in your garage). Produce a few items and try to sell them. If you can’t move those few, there is no way you will move 6,000. 

Validating your product tests whether your idea actually does have legs and whether you are the right person to move it forward. This can also be done by setting up pre-orders, launching a crowdfunding campaign, or selling person to person. Each of these tactics can act as a thermostat of where you are in meeting a need or want of your dream customer. 

If your product is not a tangible thing and is content– or service-based, start promoting it through advertising. Consider offering a free service to get feedback before you start to sell. See what happens. Once again, if no one bites, it’s time to find another idea for your small business.

8. Nail down your processes for delivering your product

By now, you should have a good sense of your business’s organization, branding, and purpose. Now, it’s time to dig deeper into the nitty gritty part of building a company. 

Let’s start by asking a few questions. 

If you are using an online store to sell a product, ask yourself:

• Where are you going to store your inventory? 
• Would you rather mail each product yourself, or should you outsource via dropshipping ? 
• Who is making your product? 
• Are ethics and sustainability a part of your brand?  
• Do you need design help and how long term do you need the help to be? 

If you are selling a service, ask yourself: 

• Exactly what service are you offering? 
• What are your price points? 
• What size of jobs are you accepting? 
• What are you willing to negotiate with clients? 

Whether you’re selling a product or service, we recommend getting support that can help you save time and money as you hammer out the logistics of running your business. Here are some of the most crucial tools to consider:  

• Accounting software. We live in a wonderful time when there are trillions of options for different accounting apps. Different programs are tailored to different needs and include different price points as you grow. Check out our  list of the best accounting software for small businesses . 
• Email marketing. Email marketing benefits your SEO and builds trust with your customers—potential, past, and current. This is the one chance you have to speak directly with the people you are hoping to impact with your service. This is where you can ask them questions and remind them that you exist.
• Project management. If you are anything like me, you tend to procrastinate and get frazzled when things get off track. Just like accounting apps and software, finding the right project management tool can make a huge difference. We all work differently, so find the tool that makes the most sense for your brain and also your company’s needs.

9. Make it legal

Research licensing and government regulations.

Different states have different laws on what’s legal to sell, where, and how. These regulations can be quite complex, and there may be legal problems if you make a wrong move. 

Go ahead and Google your state laws. If you find any regulations that might affect your business,  definitely reach out to your county officials and they can guide you. If you feel like your business is in a gray area, consider investing in a lawyer as you set up your business.

Pick a business structure

A business structure is integral both for filing your taxes and your own liability.

10. Get your finances in order

Dealing with finances is usually where first-time entrepreneurs start panicking. They have an awesome idea, but they didn’t major in accounting and have no idea what to do about money . 

The first move is to figure out what accounting software you want to use(hopefully you figured that out in step seven). 

Next, we need to draw the line between your personal self and your business self. Your business profile needs to stay distinct from your personal finances.  

How do you separate the two? Just like how you have a social security number, your business needs its own identification number (this is called an employer identification number , or EIN) and bank account. Not only does this make sure you are not going to get into a jam with the IRS, but setting up a business EIN and bank account helps prove that your business is, well, yours. You will get your business identification number when you register your business with your state. 

Next, you need to get a business bank account and credit card . Open an account that will work best for you, whether that is through using a high yield savings account or an account with limited fees. Make sure that you are checking your credit card statement and your bank account weekly so you can stay on top of cash flow. 

Go to your bank and speak with someone about opening the right account for your needs. Your business banker will be your best friend—they can offer much better advice on different accounts and their benefits than anyone else. 

Be mindful that most of your money will go quickly in the beginning. You will be spending it on building your inventory and trial and error with marketing. If those startup costs are too big for your pocketbook, consider finding angel investors or crowdfunding . 

Starting at $0/month, Lili offers a checking account with time-saving tax optimization and accounting features specifically built for entrepreneurs.

11. Launch your business

You’ve done it! You’ve gone through all the major steps to get your business off the ground, and now you’re ready to launch. Publish your website and start getting the word out by leaning into social media and other advertising methods-. Using your brand identity and chosen colors and logo, be liberal in sharing your new project with the world to find customers. 

Most importantly, be confident . There will undoubtedly be ups and downs, but remember—you are providing something that people want. You’ve been through vetting and product testing and you know yours is a good idea. Hold onto that while you are weathering these early storms because yes, the initial phases are hard, but you’ve got this! 

Phew, you made it to the end—nicely done! Thanks for sticking with us, and best of luck to you with your small business. We know you're going to do great.

Related content

• 7 Essentials to Know Before Launching a Dropshipping Business
• Cheapest Website Builders of 2023
• 5 Essentials to Know Before Marketing Your Startup
• Best Online Bank for Small Business in 2023

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

5202 W Douglas Corrigan Way Salt Lake City, UT 84116

Accounting & Payroll

Point of Sale

Payment Processing

Inventory Management

Human Resources

Other Services

Best Small Business Loans

Best Inventory Management Software

Best Small Business Accounting Software

Best Payroll Software

Best Mobile Credit Card Readers

Best POS Systems

Best Tax Software

Stay updated on the latest products and services anytime anywhere.

By signing up, you agree to our Terms of Use  and  Privacy Policy .

Disclaimer: The information featured in this article is based on our best estimates of pricing, package details, contract stipulations, and service available at the time of writing. All information is subject to change. Pricing will vary based on various factors, including, but not limited to, the customer’s location, package chosen, added features and equipment, the purchaser’s credit score, etc. For the most accurate information, please ask your customer service representative. Clarify all fees and contract details before signing a contract or finalizing your purchase.

Our mission is to help consumers make informed purchase decisions. While we strive to keep our reviews as unbiased as possible, we do receive affiliate compensation through some of our links. This can affect which services appear on our site and where we rank them. Our affiliate compensation allows us to maintain an ad-free website and provide a free service to our readers. For more information, please see our  Privacy Policy Page . |

© Business.org 2024 All Rights Reserved.

Build a beautiful ecommerce website

Browse BigCommerce's fully customizable themes that speaks to your customers and showcases your products.

How to Start an Online Business and Find Success

Get The Print Version

Tired of scrolling? Download a PDF version for easier offline reading and sharing with coworkers.

A link to download the PDF will arrive in your inbox shortly.

Before the digital age, only the privileged few could consolidate the resources necessary to start their own business . Starting capital had to be significant, while outside funding was often scarce unless you had connections with financial and entrepreneurial know how.

In the world of online sales and ecommerce , that is simply no longer the case as the demand for ecommerce and online businesses has exploded. Even in the last few years, the growth of ecommerce has been tremendous. From 2019 to 2021, ecommerce sales grew more than 50%, representing 13.2% of all retail sales in the U.S. 

Today, anyone can start and scale an online business , regardless of professional background or past entrepreneurial experience. 

However, while the entry barrier has been lowered, it’s not entirely gone, either. Potential business owners still need to develop a quality product idea, figure out sourcing or manufacturing strategy and then implement a viable sales model. 

Reasons You Should Start an Online Business

You may be wondering, why start an online business in the first place? Why not go with a brick-and-mortar one instead? 

The answer? Starting an online business has several advantages, including: 

It is fairly inexpensive to start.

Many want to start a business but are deterred by the investment required to get it off the ground. You must pay for a lease, purchase inventory and budget for employee salaries. If the business fails, it could ruin you financially.

However, with an online business, all you need is:

Domain name.

Website builder .

In other words, launching an online business with $100 as a starting capital is feasible, and you don’t need to risk your life’s savings to become a successful online entrepreneur.

Major potential and growth.

When you have a brick-and-mortar business, you have to deal with the limitations of the real world, from real estate costs to local demand. 

When you run an online business, none of these limitations apply. You can sell to anyone — no matter where they live, and with each year — your pool of potential customers expands because more people are getting comfortable with online shopping. 

By 2025, ecommerce will account for nearly 25% of global retail sales . On top of that, the global internet population is also growing as internet users worldwide are projected to reach 5.6 billion by 2025 . 

More people online means more potential exposure for your online brand — especially if you don’t mind taking your online business across the border .

Another advantage online businesses have over brick-and-mortar businesses is that they can stay open 24/7, even through lockdowns and other disruptions. 

Once your business website is online, you are always available to make a sale. Shoppers can order from you at any time. 

Since you don’t need to be physically present to make a sale, your business can generate revenue with less day-to-day involvement. 

Determine Your Niche and Business Idea

A business niche is your focus area — a market segment and target audience you primarily cater to. This can be anyone from sports enthusiasts to hobbyists to professionals. 

You need to pick a niche for your new business . To find the right target audience, ensure they have: 

A problem no one else is solving.

Willingness to pay for a solution to that problem.

Sufficient discretionary income to afford the solution. 

Once you have determined your niche, consider the following steps to establishing your business idea: 

Start an ecommerce store.

Ecommerce has been around for nearly four decades , but there has never been a better time to launch an online store than now.

According to “The Future of Retail 2019” report, one-third of U.S. consumers (32%) now receive one or more Amazon packages per week. Meanwhile, 10% of consumers receive three or more Amazon packages weekly. 

Once you have decided on your niche, select an ecommerce platform , set up your online store and start driving traffic to it. If you intend to self-host, you can choose a dedicated service . 

Alternatively, you can start selling on online marketplaces such as Amazon, eBay and Etsy.

Get into dropshipping.

Dropshipping is an online fulfillment method that allows you to sell physical goods without maintaining inventory. 

Here’s how it works:

The customer orders a product on your ecommerce website.

You forward the order to the manufacturer.

The manufacturer then ships the product directly to the customer.

Dropshipping is an attractive option for those who want to get into ecommerce without assuming the financial risk of carrying inventory. With the revenue forecast for the year 2025 at $557.9 billion , it is no wonder that the dropshipping business market is growing. 

Become an affiliate.

Affiliate marketing is worth considering if you want to start an online business but aren’t interested in creating your products.  

It’s a popular way to make money online. According to the SaaS Scout , the annual affiliate marketing spending by brands is estimated at $12 billion. The figure is expected to grow by 10% in the next few years. 

Here’s how affiliate marketing works:

Sign up for an affiliate program.

Select someone else’s product to promote to your audience. This can be any digital product or physical goods. 

Get paid a commission for each sale generated through your referral link.

Promote affiliate products on your blog by creating SEO or social content around relevant keywords and then optimizing it to get organic traffic from Google. You can also promote affiliate products to your email list subscribers by allowing your affiliate partners to host webinars for your audience. 

Affiliate marketing has an extremely low startup cost. You only need to pay upfront for a domain name, web hosting and email marketing software .

Offer web design services.

Create a portfolio website to start attracting clients. You can learn the basics of web development and design via eLearning platforms and experimentation.

Alternatively, you can register with a freelance marketplace such as Upwork or 99Designs. Freelancing can be challenging at times. While you benefit from location independence and a flexible schedule, you also have less predictable income and financial stability at first. 

Regardless of which option you select, once you have web design skills, you can expand into creating and selling your own products — helping mitigate financial instability and bringing greater autonomy. 

Create a note-worthy blog.

Do you have a knack for writing ? Then blogging might be an online business idea worth considering.

While having a blog is not a business model in and of itself, it allows you to build an audience. Once you have an audience, you can sell your products or services, promote affiliate products, run sponsored campaigns with brands, etc. — helping you to gain passive income while working on other business projects.

Conduct Product Research

When conducting product research, you’ll want to review the following primary product types: 

Physical goods.

As the name implies, physical goods are material objects that must be manufactured, stored in a warehouse and shipped to customers. 

Selling physical goods can be lucrative, but the profit margins can be low if you don’t manage your operational costs well. 

Digital downloads.

You can also sell digital products, a category of products that includes anything a customer can download to their device, such as eBooks , audio courses, podcasts, online courses, etc. 

Digital products have higher profit margins compared to physical goods. However, pricing them can be tricky because they are often perceived as having a lower value than physical products.

Almost any service available remotely can be sold online. Selling services is one of the fastest ways to start an online business and turn a profit. 

However, it’s important to remember that it’s a business model where you are selling your time. This means that your earning potential is limited since you have a finite amount of hours each day.

Conduct Market Research

Market research is an essential step in starting your own online business. It helps determine any selected business vertical’s depth, competitiveness and profitability. 

The last thing you want to do is launch an offer no one’s keen on buying. By conducting online market research, you can learn what your target audience wants, needs or lacks. 

Here’s how you can get started with market research:

Check the SERPs.

Look up the variations of your product/service keywords and analyze search engine result pages (SERPs). What type of content is currently ranking on the first page? What businesses are paying to advertise on top of organic search results? 

Doing so will help you pre-assess your competition and gain information for a preliminary SEO and digital marketing strategy based on the content your target audience prefers.  

Research competitors.

You will want to look closely at your main competitors beyond SERPs. 

What are the biggest business ventures in your niche? How much money are they making? What are their strengths and weaknesses? 

By putting a microscope over the other players in the market, you can figure out what could give you a competitive edge over them. 

Track high-performing keywords.

Analyze how the demand for different products changes in your niche and what content ranks best by monitoring niche-relevant keywords. 

Quality tools to use include:

Google Trends .

Google Keyword Planner .

Semrush .  

Define Your Target Audience

By understanding who your target audience is and what they desire, you can begin the process of soliciting sales and scaling your business. When combined, these insights help develop a thorough understanding of your ideal buyer needs, preferences and purchase triggers.

To learn about their needs and preferences, make sure to research the following:  

Demographics.

Demographic data includes basic socioeconomic characteristics and templates such as: 

Psychographics.

Psychographic data includes various psychological characteristics such as:

Source Products to Sell Online

It will be challenging to run a successful online business if your products are mediocre. Even if your industry or products do eventually trend, it’ll likely be for all of the wrong reasons. 

When sourcing products to sell online, consider your sourcing strategy by:

Making your own products.

This option is relatively easy if you plan to sell digital products. 

On the other hand, physical product manufacturing involves hard work in terms of design, interactions, material selection, etc. The financial costs are higher, too. 

However, manufacturing will always give you an advantage over the competition in regards to quality, product range and branding capability .  

Finding a dropshipper.

Finding a manufacturer that allows you to dropship their products is potentially lucrative. This is especially true since many small business owners negotiate dropshipping deals with overseas manufacturers to offset the business costs. 

Working with a wholesaler.

A wholesaler can provide your business with a range of products to purchase and curate in your online store. Some even offer a plan to distribute your products for you as well. 

Evaluate Product Viability

You want to evaluate your product’s viability holistically before purchasing or manufacturing a big order. To do that, ask these questions: 

Is there a successful online business already selling products like that?

Is the demand for this product sustainable? Or is it temporary?

Does the math behind this product make sense? Can you sell it at a profit?

Remember, it doesn’t matter how cool or exciting a product may seem. What’s important is that it’s viable from a business perspective.

Define Your Brand and Image

A brand is the overall essence of your business. You want everything from your business name to your web design and copy to convey a consistent visual image and ideas. The same applies to your off-site presence — from social media and email newsletters to packaging. 

As you work on your brand identity, pay attention to your:

Color scheme.

Landing pages . 

Page layouts.

Typography.

Graphics and photos.

Your brand image should be a result of all these elements working together. 

Learn About Online Business Laws

Small business owners may assume that because they are running an online business, traditional business laws don’t apply. 

That’s not the case.

While an online business requires fewer licenses and permits than a brick-and-mortar operation, you still need to sort out several critical legal details. Specifically: 

What kind of business license do you need to start operations?

What legal structure makes the most sense — a sole proprietorship, limited liability company or corporation?

Are there any permits that you need to obtain?

Are there any inspections that you need to pass?

Do you need a sales tax license?

Are there any specific regulations applicable to online businesses only?

What are the laws regarding hiring contractors and hiring employees?

Each state and country has its own laws. Make sure to always verify information with local authorities. 

Learn more about online business laws and regulations for ecommerce companies.  

Launch Your Online Store

After a significant amount of setup, you should be ready to prepare for the launch of your website. To ensure that your website grows into success and viability, consider the following steps:

Choose your ecommerce platform.

An ecommerce platform is a technical backbone for selling online. Such software provides you with all the necessary features, from a product catalog to payment processing. 

Here are a few of the most popular options :

BigCommerce.

WooCommerce. 

Adobe Commerce (Magento).

Salesforce Commerce Cloud (Demandware).

Make sure to select a platform that provides all the features you need at a price you can afford. 

Add your products.

Once you have chosen a platform and a store theme, add products to your catalog. As you, do pay special attention to:

Product images : Provide high-def visuals featuring the product from different angles. Check this guide to ecommerce photography for more insights.  

Product descriptions: Don’t line up features — focus on benefits the customer will get. This post provides a quick formula for writing compelling product descriptions . 

Product images and product descriptions significantly impact the conversion rates of your product pages. Make sure to take the time to get them right.

Choose how you will do your shipping.

Fast and free shipping is the number one driver for making an online purchase and can significantly affect the quality and quantity of your sales.

Ensure that all the products will get to your customers without any delays. You will want to have several shipping strategies, including: 

In-store pickup.

LTL freight carriers.

Same-day or next-day delivery.

Free shipping.

Make sure everything works.

Finally, once your ecommerce store is live, triple-test all the facets. Verify that:

All pages look good across devices, including desktop, tablet and mobile.

The website functions well in multiple browsers, from Chrome and Firefox to Safari and Microsoft Edge.

All buttons are clickable/connected to the correct apps.

If you have a budget, it may be helpful to hire a QA specialist to run site tests for you and report on the findings.

Grow Your Business

Once everything is set up, it’s time to start driving traffic to your ecommerce store. Prioritize the following channels:

Paid ads : Allocate an ad budget for pay-per-click (PPC) ads on social networks and in search results. That’s one of the quickest ways to improve brand awareness for a new store.

Influencer marketing : Set about building partnerships with social media influencers to create testimonials promoting your products.

Social media marketing : Complement paid campaigns with organic traffic by building audiences on social media platforms like Linkedin, Instagram and Facebook.

Search engine optimization (SEO) : Ensure that all your website pages are SEO-optimized and create a content marketing strategy for your written content.

Email marketing : Build an email list by capturing the email addresses of the people who visit your ecommerce site. You can then promote your products to your email subscribers.

The Final Word

Starting an online business doesn’t have to be overwhelming. 

To make the process easier, take it step by step. From research and development to the eventual launch of your website, the process can be complex, but it doesn’t have to be complicated. 

By following this guide and through the use of helpful analytics, you can build a successful online business and have it running in no time

FAQS About How to Start an Online Business

What is the best type of online business to start.

It depends on your professional background and personal preferences. 

The popular options include online service-based businesses — as an evolutionary step from a freelance side hustle — and product-based online businesses such as online stores. These two typically require the least starting capital for beginners and can be effectively scaled over time.

What kind of online business is most profitable?

Ecommerce is one of the most profitable online business types since you have limitless potential for scaling.

You can start a small niche store and grow it into a cross-country or even cross-border operation, servicing customers worldwide.

What can you sell online?

Today you can sell virtually any type of product online as long as there’s a demand for it on the market. 

To determine product viability, analyze the target market size — the estimated number of people who may want to buy from you — and possible profit margins — the amount of money you can earn from selling a product for a price that the target market is ready to pay.

Can you start an online business with no money?

Technically, you can start an online business without any capital investment. 

However, there still will be a few minor startup costs such as domain name, website builder /platform and website content creation. If you DIY your business website creation and setup, you can start an online business at a low cost .

Do you need marketing to help your business launch?

You don’t necessarily need marketing as a business function to launch an online business, but you’ll have to invest in some promotional activities during launch. 

Unless you are launching to a pre-warmed audience acquired earlier — e.g., your existing fans on social media or blog readers. A strategic marketing campaign for the launch will pay itself off in hours.

Do you need a business plan for your online business?

Absolutely. Starting an online business without a business plan is like driving without a rearview mirror — you can get where you need to be but may miss obstacles headed your way. 

While you don’t need a formal, business school-style plan for a small ecommerce business, it’s best to prepare at least a short roadmap document, charting your main steps before the launch.

Dennis Anderson is a Content Marketing Writer at BigCommerce, where he specializes in SEO content strategy, writing and research. He holds dual degrees in English Literature and Humanities from Florida State University. Prior to joining BigCommerce, he worked on marketing teams spanning industries, from film production to telecom and utilities.

How to Start an Online Business in 2023

Starting an online business isn't easy. There are so many important decisions to make.  What should you sell ? Who should you sell to? How will you get customers?

If that's not enough, every other week there seems to be a new business trend online. There's chatbots, cryptocurrencies, Facebook ads, Instagram influencers, and many more. What should you pay attention to? What actually matters?

If you want to know how to start an online business in 2023, we've got you covered. In this quick and simple article, we'll take you through how to start a small business online, step-by-step. Consider this as a starting an online business for dummies guide, as we cover everything in plain English and list simple, actionable instructions to help you start. 

Start selling online now with Shopify

How to Start a Business Online (From Scratch)

#1: don't start building yet.

When looking to start a business , it can be tempting to jump into action.

So, if you're feeling the urge to build a website, choose a business name, or create a logo , hold off for now.

If you want to start a successful online business, first, you need a strategy. And steps two, three and four of this article will show you how to create your online business strategy.

#2: Choose a Business Model

When learning how to build an online business from scratch, it helps to know about some tried-and-tested online business models.

Here are six types of online businesses to consider:

• Affiliate Marketing : Promote other business's products and services online, and receive a commission for each sale you make with this passive income idea .
• Freelancing : Provide a service to other individuals and businesses using a skill that you have, such as advertising, writing, designing, or programming.
• Coaching and Consulting : Become a coach or a consultant and sell your expertise, advice, and guidance.
• Information Products : Package and sell your expertise in ebooks, worksheets, templates, and online courses .
• Software as a Service (SaaS) : Create a piece of software or application, and charge users a recurring subscription fee.
• Ecommerce : Use a service like Shopify to set up a website and sell physical products online.

Want more online business ideas to help inspire you? Check out our guide, "25 Small Business Ideas to Make Money".

#3: Identify Your Target Market

Next, you need to get clear on your target market. In other words, who are you going to serve?

This step is absolutely vital.

As the marketer Philip Kotler once said , "There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market."

Here's the trick: Make sure you are part of your target audience.

Think about it. If you've been camping your entire life, you'll understand the problems, desires, and language of other campers. As a result, it'd be much easier to sell camping products online. 

Plus, your marketing will be more successful because you'll have a better understanding of how to communicate with other campers.

On the other hand, if you've never been camping in your life, you'd probably struggle – a lot – to sell camping products online.

So, when choosing a target audience, ask yourself:

• What are my hobbies and interests?
• Is there anything that I know a lot about?
• What do I spend most of my time thinking, talking, and reading about?

#4: Find a Problem to Solve

When learning how to start an online business, it's important to note one key thing: all businesses solve a problem.

Plumbers fix leaking pipes. Hollywood movies fulfill people's boredom, curiosity, interest, and the need to escape and relax. Clothing brands help people express themselves and feel attractive.

Here's the golden rule: The bigger the problem you can solve – and the better you solve it – the more money people are willing to pay.

For example, take healthcare services. They solve a big problem, which is why almost everyone is willing to spend a lot of money on it. 

On the other hand, not many people will pay you to stop their table from wobbling. It's not a big problem, and they don't need help solving it.

Bottom line: If you want to identify how to start an online business, you need to find a good problem to solve.

Here are three examples:

• Target market : Fashion-conscious teenage boys
• Problem : The fashion-conscious want to stand out from the crowd without spending too much money.
• Solution : Create a clothing line that's flamboyant and budget-friendly.

• Target market : Marketing managers at multinational software companies.
• Problem : Businesses need to drive traffic to their websites.
• Solution : Write articles that rank on the first page of Google to drive traffic.
• Target market : Working Moms with young children.
• Problem : Many moms want to work out regularly, but they don't have much time.
• Solution : Create a time-saving fitness program and schedule.

How can you find a problem to solve?

• Join Facebook groups and online forums and ask people what they need help with.
• Use Google Keyword Planner to find out what people are searching for.
• Find successful online businesses and identify the problem they solve, then look for ways to do it better.

#5: Analyze The Competition

Anyone learning how to open an online business shouldn’t sleep on competitor analysis .

Analyzing your competitors helps you stay on the cutting edge of what’s working in your niche, identify successful tactics and new trends, and anticipate shifts in the market. It also helps define your messaging, positioning, and overall business strategy.

So how do you conduct a competitive analysis? Here are some tips: Subscribe to your competitors’ blog

• Buy a product they sell
• Abandon a product in their shopping cart
• Sign up for their newsletter
• Follow them on social media

While taking these measures, make sure to document your findings with notes on each approach. You want to be able to find relevant insight when you need it.

By analyzing their customer experience and looking at how they engage people via content, you can identify tactics that your competitors are using to drive sales. 

Pro Tip: Consider doing a SWOT analysis to accompany the findings from your research. It’s a blueprint that leans into your competitors’ strengths and weaknesses to define areas of improvement. To learn more about this tactic, check out our guide, “ Everything You Need to Know About SWOT Analysis .”

#6: Cover Your Legal Bases 

Any business you start must be properly aligned with the laws and regulations in your region. So make sure to read up on online business legal requirements when starting a new internet business. 

Just some of the legal aspects you’ll need to consider include:

Business structure

Register as an LLC or sole proprietor for online business? You can research and decide on your own, but it pays to get input from a tax specialist.

Licenses and permits

Depending on what type of business you start, you may need a license to operate it. This varies depending on where you live, so contact your local state department to find out more.

Tax obligations

Most online business owners are required to pay income tax. Additionally, you might have sales tax obligations if you sell products to consumers in certain countries. So before starting your business, consider speaking to an attorney to learn about the applicable taxes and the list of online business documents you’ll need to file them.

Copyright, patent, and trademarks

You’ll want to cover these legal elements to avoid trouble down the road. For example, registering your trademark will prevent others from using your brand name, saving you the hassle and cost of rebranding. 

#7: Select Your Sourcing Strategy 

If you’re interested in starting an online ecommerce business, you’ll need to find reliable and trustworthy sources of inventory.

There are several ways to do this:

• Search for product manufacturers on websites like Alibaba or directories like Kompass , Sourcify , and ThomasNet. 
• Discover dropshipping suppliers on platforms like DSers .

The last option is highly accessible and gives you a chance to start your business without making a huge upfront investment. 

With dropshipping, your product supplier ships and fulfills an order only after a customer has made a purchase; they handle the storage and logistics part of the business while you handle marketing and customer support.

Check out this list of the best dropshipping suppliers to find valuable partners you can count on for order fulfillment. 

#8: Set Up Your Payment Methods

You’re almost there! Now is the time to decide how your business will accept payments and how you as business owner will receive payouts.

There are several online payment options available to you. The most popular ones include accepting credit cards, PayPal, Apple Pay, and Google Pay.

If you’re planning to use Shopify to start an ecommerce business, you can activate the provider’s integrated payment solution called Shopify Payments . It sets you up to accept all major payment methods and comes with 0% extra transaction fees.

For a service-based web business like freelance writing, be sure to check out Transferwise, Payoneer, Stripe, and 2Checkout.

Regardless of the payment method, you should be able to set your payout schedule. You can choose to receive your money daily, weekly or monthly — depending on your preferences when it comes to cash.

#9: Build Your Sales Platform

Once you've identified your business idea and covered your legal bases it's time to build your platform.

Well, if you plan to start an ecommerce business, build a website with Shopify and then find products to sell with DSers.

If you plan to start freelancing, coaching, or consulting, Shopify has the option of plugging in many popular tools like Digital Downloads to sell digital products online , ReCharge to sell subscriptions online, and SendOwl to sell videos online. 

Keep things simple.

At this point, your business is still in the realm of theory. So try not to invest too much money, time, or energy into building a perfect website.

Instead, test your business idea and make sure it works before you invest.

Eric Ries , the author of The Lean Startup, said, "We must learn what customers really want, not what they say they want or what we think they should want."

#10: Choose a Marketing Method

When you’re ready to start promoting your online business, you need to choose a marketing method.

There are many different online marketing methods out there. However, when it comes to learning how to start an online business, some are better than others.

Here are four online marketing methods that you can use to land sales relatively quickly:

• Social Media Marketing : Use social media to create and share content, engage with your target audience, and drive traffic to your website to land sales.
• Direct Outreach : Reach out to individuals at companies to pitch your services .
• Paid Advertising : Advertise on platforms like Facebook , Instagram , Google , and YouTube to increase brand awareness and drive sales.
• Influencer marketing : Team up with influencers to promote your products directly to their existing followings.

Summary: How to Start an Online Business?

Wondering how to start an online business in 2023? Here are 10 steps to starting an online business:

• Create a good business strategy before you start building things.
• Choose an online business model that suits your skills, interests, and preferences.
• Identify your target market – and make sure that you are part of it.
• Identify a problem that your target audience has, and find a way to help solve it.
• Study your competitors to identify opportunities for improvements.
• Fulfill the legal requirements, including getting a business license.
• Choose a sourcing strategy that streamline your order fulfillment.
• Set up your payment gateway and payouts to collect and receive payments. 
• Build a basic sales platform to test your business idea.
• Choose a marketing method and start promoting your business.

Finally, it can take a while to learn how to start an online business successfully.  So don’t worry if your first online business doesn’t take off immediately. Many of the most successful entrepreneurs failed multiple times before achieving success.

As the co-founder of Apple, Steve Jobs, once said , “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.”

→ Click Here to Launch Your Online Business with Shopify

Bonus: additional resources to help you build and start your online business  .

• How to Build Your Own Brand From Scratch in 7 Steps
• 9 Best Shopify Tools for New Entrepreneurs
• How to Get Free Media Coverage for Your Business
• Decoding Product Life Cycle Stages (And Optimizing For Them)
• 15 Ways to Increase Social Media Engagement Quickly
• What You Need to Know About Pricing Before You Launch
• Ecommerce Shipping Solutions: Guide to Ecommerce Delivery
• Product Page Tune-Up: 9 Timeless Ways to Increase Conversions
• 10 Tips on How to Handle Customer Complaints
• 9 Ways to Earn Customer Trust When You Have Zero Sales

56 Small Business Ideas To Make Money in 2024

Find a list of 56 small business ideas that’ll make you money in 2024. Thousands of entrepreneurs have implemented them…

10 Best Ecommerce Hosting Providers in 2024

Who’s the best ecommerce hosting provider out there? That’s what this post aims to help you find out.

15 Product Photography Tips to Capture Better Images

Looking to stand out with product photography? Here are 15 product shooting tips that will help you make a great first …

Oberlo uses cookies to provide necessary site functionality and improve your experience. By using our website, you agree to our privacy policy.

How to Start an Online Business: Step-by-Step Guide

Starting an online business is not as difficult as you might think. With this step-by-step guide, you will learn how to start an online business in a few hours. 12 min read updated on February 01, 2023

Starting an online business has many advantages, most of which narrow down to saving on expenses and operating costs. Regardless, opening an online store can be an exciting step in your entrepreneurial journey. Check out our comprehensive guide on how to start an online business from home. 

How to Start an Online Business

So you want to learn  how to start an online business , but don’t quite know where to start. You may be weighing the costs and risks versus the reward of running an online business. These days, it’s very easy to start an online business and begin making money right away.

You can follow these steps to ensure success in starting an online business. 

• Identify your niche and business model. 
• Carry out market research.
• Take care of the legal requirements. 
• Determine your sourcing method. 
• Plan and create your website. 
• Promote your online business. 
• Build a reputation for your business.

Let’s go over each step.

#1: Identify Your Niche and Business Model

A niche is a specialized or focused area in a larger market that businesses can serve. When developing your niche strategy, make sure to determine your target audience and identify unmet or underserved needs. Some examples of success niches today include:

• Eco-friendly and sustainable consumers. 
• Tourists and travelers. 
• Sleep promoting products. 
• Remote workers. 
• Vegan products and baking. 
• Homeownership. 
• Books and online courses. 
• Smartphones. 

Below are five common business models that you might want to try out. 

• Learn how to start an eCommerce business. With the rise of companies like Amazon, people are now shopping online rather than setting foot in a store. The internet has made online shopping so easy with the push of a button. 
• Dropshipping. You may have heard this thrown around in the last couple of years. Well, it is simply selling physical products without keeping inventory yourself. 
• Affiliate marketing.  Receive a commission for selling other people’s products. 
• Offer digital services.  With the rise of digital business comes the rise of digital services like web design, content creators, social media management, and business management. 
• Blogging.  Passionate about a topic. Share your knowledge through a blog and monetize the content. 

#2: Carry Out Market Research 

Before knowing how to start a small business online, you need to know what type of product or service you want to offer to the general public. Take a look online and try to find out what the public wants. 

What kind of industry is popular and booming? Is the product you want to sell very popular, meaning that you will have a lot of competition? This step will take time. It won’t happen overnight, nor will it happen over a span of a month or two. It can take some people months (perhaps a year) to truly find a product or service that is right for their business.

Check the SERPs

Search Engine Results Pages (SERPs) are search engine pages, like Google, that return after a user types in a search query. There are various free and paid tools that you can use to check SERPs. 

Conduct a Competitor Analysis

Understanding your competitors is important for identifying opportunities and gaps within your own strategic and product/service planning. By conducting a competitive analysis, you will gain insight into your competitor’s sales, marketing, and product strategies. 

First, start by determining who your competitors are. Then you will be positioned to research their tactics, analyze pricing or perks, review their marketing plans, and take notes of how their social media performs based on their different campaigns. 

Define Your Target Audience 

Understanding your target audience boils down to one thing: research. Start with conducting client interviews to get an idea of who is currently buying similar products or services. One way to do this is by engaging on social media or sending out surveys. 

Next, expand to a broader audience by analyzing the current market and industry trends. This will allow you to adapt your product/service to newer potential audiences and understand what is being forecasted. You can also learn a lot by taking a peek at what your competitors are doing. What are they doing that is successful? What patterns do they tend to incorporate in their products and marketing? 

Once you have researched what your target audience wants, you need to create a customer persona, which is a fictional and general representation of your own ideal customers. Creating a persona will help you tailor your product or service to a person with specific needs and beliefs. When creating your persona, keep it high-level, but with a story. 

For example, a young woman in her twenties buys coffee every morning before going to her office job. You can deduce that coffee is part of this woman’s routine and that she likes the convenience offered by a shop instead of making it at home. She also has enough money to afford a coffee each morning. This will help inform how you will tailor your products to different audiences. 

After you have developed your customer persona, it is best to describe what your target audience does not want to see. Having a clear list will help you avoid campaigns that will not perform well because it is not what the audience wants to see.

Lastly, use tools like Google Analytics, which will provide insight into prospects. 

Legal Requirements  

Before you fully execute your business, it’s important to also make sure that you are complying with your local and state laws. 

#3: Take Care of the Legal Requirements

When thinking about starting an online business, taking care of the legal stuff is incredibly important to ensure you’re operating according to the law. You’ll need to consider things like the following:

• Depending on your location, you may need to register with the government
• Any industry-specific regulations that apply to your business
• All necessary taxes that must be paid correctly and on time
• Insurance policies as needed to protect yourself and your customers

Here’s some more information on the specifics for legal requirements.

Choose a Business Structure

You must choose a business structure before you can register it. The type of business you operate affects how you'll file taxes and any impact on your personal liability should something go wrong.

Limited Liability Company (LLC)

A   Limited Liability Company (LLC)   is a business entity defined as its own legal organization. If owned by one person, enter into a single-member LLC, and if owned by multiple people, enter into a multi-member LLC. 

Limited Liability Partnership (LLP)

A Limited Liability Partnership maintains the benefits of a limited liability for the company while holding a partnership structure. 

Sole Proprietorship

In a   sole proprietorship ,  the company and the owner are considered the same for legal and tax purposes. Thus, the owner is held personally liable if the business fails. 

Private Limited Company (LTD)

In a Private Limited Company, ownership is determined by shares owned by shareholders. Thus, the company pays corporate tax using its profits, and then distributes the remaining profits to shareholders, as dividends. 

Corporation 

Like an LLC, a  corporation limits your personal liability. It can either be taxed as a C corporation, where owners and shareholders are taxed separately from the entity, or an S corporation, where the business can pass its taxable income, credits, deductions, and losses to its shareholders.

Get All the Necessary Licenses and Permits

First and foremost, you most likely need to obtain a   business license , depending on your location and state. This will allow you to operate in the location where your business is located. Home-based businesses may also be subject to business licenses.

You may also need any or all of the following:

• Employer Identification Number, or EIN
• DBA or fictitious name
• Business Operating License 
• Seller's permit
• Zoning permit
• Special permits
• Industry Licenses
• Federal Licenses 

You can also check in with a legal professional to ensure you are meeting the legal standards.

Tax Obligations  

Tax obligations are determined by your business structure. For example, sole proprietorships, partnerships, and limited liability companies do not pay a corporation tax, but rather are charged at the owner’s personal rate. 

It is, however, estimated that small businesses pay 19.8 percent in taxes on average. 

When it comes to taxes, keep in mind that:

• Tax varies by state. 
• Tax rules are dependent on your business structure. 
• Small business owners may be subject to additional taxes such as payroll tax, income tax, self-employment tax, capital gains tax, property tax, and dividend tax. 

Trademarks and Intellectual Property  

Your ideas are what build this online business, so it is important to protect them. Copyright and trademark are two tools to help protect your intellectual property. Copyright protects literary and artistic works, whereas trademark protects words, phrases, symbols, or designs. It is best to contact a business lawyer or seek legal advice to determine the steps to registering a copyright or trademark.  

For example, a lot of business owners choose to  trademark their website name. If you choose to do this, you’ll need to take some additional steps to trademark the domain name.

It’s important while creating your business to also  check if a business name is available to avoid accidentally infringing on someone else’s intellectual property.

#4: Determine Your Sourcing Method 

Great suppliers are an important part of your business because they allow you to maintain a certain service level and deliver great products to your customers. Learning how to set up an online store will only be successful if you establish and maintain good relationships with suppliers.

• Align your values.  When shopping around for a supplier, choose one that aligns with your values. For example, some businesses may value customer service or eco-friendly products, so a business owner should look for those qualities in a supplier. 
• Respect your supplier.  Just as you will expect your supplier to meet your demands and requests, you will also need to seek out a supplier that you can respect—so that you can also follow any of their specific protocols and procedures. 
• Be a great customer. Just as you hope to build strong relationships with your customers, the supplier will expect the same from you. 
• Communication.  Keep in touch with your supplier on updates and feedback in a timely manner. Providing feedback in a timely manner reduces stress and allows for preparation. 
• Be loyal . If you receive good service from your supplier, be loyal. There will always be another flashy deal, but you can still reward them with your loyalty, if they’ve done everything to your liking. 

#5: Plan and Create Your Website 

Choose a website name .

Do you want your website name to be identical to your company’s name? If so, you’ll want to first find out if the domain name is available   before even choosing your  business name and registering it. A lot of business owners choose to  trademark their website name. If you choose to do this, you’ll need to take some additional steps to trademark the domain name.

Also, be sure to check out the many domain registration companies. 

Find a company to host your site

This company will rent you the space you need on its server to host your website. With a little research, you can find free hosting services, but if you choose to pay for such services, you’ll want one that offers all the services you will need to successfully run your online website.

You may consider using the following eCommerce systems: Shopify, BigCommerce, Wix, ShopWired, Zyr, Shift4Shop, WooCommerce, Volusion, Sellfy, Squarespace, and Magento.

Get help with designing your website

You could design your website yourself. It’s not too difficult. But, if you choose to hire someone to help you, you’ll want to ensure that this person or company has the experience necessary to increase foot traffic on your site. The site should be user-friendly and appealing to the eye. Remember that your website is what brings customers back. For example, if you choose to sell handbags, the visuals must be strong in order for your customers to spend money on a handbag that they haven’t seen in person.

You will also need to embed a payment system when designing your website. Some hosts have built-in systems, and others have add-on features. For example, FreshBooks, Payfirma, Moneris, TD Merchant Services, and PayPal are all online payment systems. 

Figure out how to deal with delivery 

You’ll want to provide a couple of different shipping methods, including expedited shipping choices. Will you use FedEx, UPS, or another carrier? What will that cost you in terms of shipping and overhead costs? Where will your products ship from? If you are offering downloadable products (e.g., e-books), you may want to consider using an electronic fulfillment company.

#6: Promote Your Online Business

Another very important part of the process is promoting your online business. Without promotions, sales, specials, and  advertising , no one will know that your online business even exists. You’ll have to increase the amount of foot traffic to your website. You can do this in several ways, including:

• Registering your company with large search engines such as Google and Bing; 
• Content marketing;
• Make your website search engine optimized (SEO);
• Market your business on social media;
• Pay for ads;
• Email marketing; and,
• Direct mailing to potential customers that will include specials and coupons; promotional ads that can be found on billboards and other brick-and-mortar areas.

#7: Build a Reputation for Your Business

Building a good reputation for your company starts with providing a quality experience with your clients. From first impression ads to blog posts and initial meetings, it is important to put the client’s needs first and showcase how your business will best meet their interests. 

Closely tied to providing a quality experience is providing excellent customer service. Being friendly and helpful will help build a strong relationship, leaving your customer satisfied with their service. If the customer is not completely happy, try to offer a solution. After all, it takes about ten to twelve good reviews to make up for one  bad review . Let the customer know that you appreciate their feedback and want to provide the best possible experience. 

Although your business is online, you will want to get involved in the community by attending local events or supporting local causes will help to build your presence. 

In addition to treating your customers well, make sure your staff is also happy. When employees are unhappy, then they may have a bad attitude towards customers. 

Last, but certainly not least, engage with customers in a transparent way. Be honest and authentic with your customers.

The internet is always changing, but the principles of creating a business remain the same. whether it is a brick-and-mortar or online. Stay consistent and patient because growing an online business can take time, but it is also a very rewarding experience to stick with your passion and see how your hard work pays off. 

If you need help with starting your online business, you can post your legal needs (or  post your job ) on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers on its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

What online business should I start from home?

Some of the best online businesses to start from home are SEO consultant, small business consultant, social media consultant, niche market e-commerce retailer, web designer, blogger, virtual assistant, affiliate marketer, remote tech support, and handmade craft seller. 

How can I start a small business online?

Follow UpCounsel’s guide on ‘How to Start an Online Business that’s Guaranteed to Succeed’ to find out how to start a small online business. We will cover the following steps: 

What online business type is the most profitable?

Affiliate marketing is one of the most profitable online businesses. 

What are you allowed to sell online?

There aren’t many products you cannot sell online. If you have any questions about what is prohibited, contact your state, who issues your business license. 

If I have no money, can I start an online business?

There are a number of businesses you can start without any money, including starting a blog, doing affiliate marketing, offering SEO services, translating documents, providing content services, selling things online, web design, online coaching, data entry, organizing travel, creating a podcast, and creating a vlog. 

Am I required to register my online business?

It is recommended that you  register your business as soon as possible. 

Where should I register my online business?

You can use our helpful guide on   where to register your business .

Do online businesses require a business plan?

Creating a business plan helps you set goals and think ahead for your business. It is one tool to help your business become successful.

What type of online business should beginners start with?

Training on specialized topics, selling digital products, and blogging are three examples of great online business examples for beginners. Ultimately though, the best business for you is the one that aligns with your skill set. 

What are the 5 top online businesses?

The top five online businesses include launching a dropshipping business, freelance writing, teaching an online course, starting a blog, and doing freelance web design.

Is a business license required to sell online?

Yes. There are only a few exceptions for businesses that don’t need a business license.

How can I attract customers for my online business? 

Ways to attract customers to your online business include running ads, optimizing your social media, partnering with creators and influencers, running flash sales, writing interesting blog content, making sure your website is search engine optimized, and providing good customer service. 

What are some requirements for running an online business?

The basic requirements for an online business are watching your market, registering a domain name, hosting your domain, creating a website, setting up payment options, establishing product delivery, and creating social media and website traffic. 

Do I need to pay taxes if I sell online?

Yes, you are taxed based on the state you live in and where your business is registered.

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

• How to Start a Business: A Comprehensive Guide for Entrepreneurs
• Where Should I Register My Online Business
• LLC for Online Business
• How to Register an Online Business
• Do I Need to Register My Online Business
• Starting a Company
• Register My Business Online
• Do It Yourself Business Plan
• How to Start a Marketing Business
• How to Make Your Business Legit

How to start an online business

Find out what it takes to start and run an online business. With insights from experts and owners who’ve done it before.

Download guide

What goes into starting an online business?

Starting an online business is different to starting a traditional brick-and-mortar business. Yes, you need an idea, a plan, and a budget. But even those fundamental elements are done differently online.

We surveyed 171 experts who work with online businesses to find out what makes them tick. They told us the idea can be weirder, the plan can be shorter (whoop!), and the budget can be smaller (hooray, again!).

This guide combines their insights with quotes from online business owners and ecommerce consultants so you can see how to start an online business.

• Pros and cons of online business
• Online business ideas
• Writing an ecommerce business plan
• Creating a budget for a digital business
• Finance options for an online business
• Digital marketing 101
• How to set up an online shop, office or app

1. Pros and cons of online business

Xero surveyed small business advisors to see how ecommerce stacks up against traditional brick-and-mortar businesses.

Key findings

The accountants and bookkeepers who completed this survey prepare financial statements for 1,500 US small businesses. We asked them to compare the performance of online businesses vs brick-and-mortar operations. Here’s what they had to say.

• Profitability – 70% say online businesses have a higher net profit margin.
• Resilience – 69% say they’re less likely to fail (and 68% say owners lose less if they do fail).
• Innovation – 69% say they’re more likely to be based on a novel idea.
• Lifestyle – Online business owners are 2.5X more likely to hold down a day job as well.
• Stress – Just 4% say online owners are more stressed (49% say brick-and-mortar owners are).
• Costs – Most say it costs less to start and run (see full report for retail/service breakdown).
• Break even – Most say they break even sooner (see full report for retail/service breakdown).

That makes online look pretty good. So what’s the catch? Well, the experts say there are a few.

Common pitfalls

• Digital marketing – 41% say digital marketing is tricky to figure out.
• Time online – 37% say the quantity of hours spent on social and reviews can be tough.
• Transaction fees – 35% say online transaction fees catch out beginners.
• Website – 33% say businesses struggle to create a genuinely good website.
• Technology – 33% say owners can have a hard time understanding the tech.

The online and brick-and-mortar businesses in this study had comparable revenue so these differences were not likely due to scale. 51 US accountants and bookkeepers participated in the study, with an average of 30 clients each (equating to a collective clientele of 1,500 businesses).

Back to How to start an online business

2. Online business ideas

Online business ideas fall into four broad categories – retail (including those who make their own products), service providers, apps, and content producers. Catch our article on online business ideas for tips on what could work for you.

Making your idea the best it can be

While online businesses generally cost less to start up, our study found they chew through just as much energy and effort as a physical business. You don’t want to waste all that sweat on an idea that could’ve been better. A little research can help you tweak your product or service in just the right way.

Experts’ number one tip for better ideas

We asked business experts for their top tips for online startups. The most common reply was to “define your target market”. In other words – work out which people (or businesses) will end up buying from you. They might be local parents, fitness fanatics, thrill-seekers, restaurants, schools, hairdressers, or something else entirely. Figure this out before starting your online business.

Whoever your target customers are, make everything about them. Make the product or service perfect for that specific user. And pitch your marketing at them, too. One way to get inside their collective heads is to have a chat with a few of them. Ask if they like your idea, your packaging, your price point. While you’re at it, ask who they buy from now and use the opportunity to learn about your competitors’ strengths and weaknesses.

Related articles

• How to come up with online business ideas
• How to do market research
• How to do competitor analysis

3. Writing an ecommerce business plan

Writing a business plan for an ecommerce startup can feel strange to anyone who’s run a brick-and-mortar operation before. You may not need to put in as much detail. In fact, you may not be able to.

Why you don’t need a 20-page plan

Those big, buttoned-down business plans are great if you’re naturally a planner. But most people do them so they have a strong pitch to take to investors and lenders. Online startups don’t cost so much to run, which means you’re less likely to need outside cash. Besides which, institutional investors and lenders don’t generally back ecommerce startups anyway.

That frees you to write a business plan that works for you. It might still be 20 pages long but it doesn’t have to be.

Why you may only need a 1-page plan

When planning how to start your online business, you’ll probably find you don’t have all the information you’d like. Almost 60% of new online business owners struggle to forecast revenue for their first few months (Global eCommerce report, Xero 2019) after starting an online business.

That’s because so much depends on the success of your digital marketing, which is a massive rolling experiment in the early days. You’ll probably try lots of tactics on several digital platforms before you crack it. Only then will you have enough information to forecast sales and revenue.

Because online startups have to launch in the dark and learn on the fly, they tend to go with shorter, more fluid plans. Something that is easier to update as more information comes in.

Shorter plans doesn’t mean no plans

While the planning is dialed back a bit for online startups, it doesn’t go away and nor should it. Working through the steps of a business plan will help you think about your startup from lots of different angles. That process will help you build on your idea and make it better.

Related articles and templates

• Business plan template
• How to write a business plan

4. Creating a budget for a digital business

While it’s hard to estimate income when starting an online business, it’s still a good idea to have a rough budget. You need to know what the venture is going to cost you, and when it might start to pay you back. Accountants and bookkeepers generally agree that online businesses cost less to run, but they also say beginners often overlook some big costs.

3 common ecommerce budgeting mistakes

• 37% of experts say people starting an online business underestimate the cost of a good website: Off-the-shelf templates have made websites so much more affordable but creating a great user experience may require the help of freelancers who know what they’re doing.
• 27% say startups get caught out by digital marketing: Most digital advertising is sold on a cost-per-click basis. You pay for each site visitor. Only about 1 in 50 will buy anything (based on 2% conversion), so things add up quickly.
• 35% say online businesses don’t budget correctly for online transaction fees: When you take an online payment, up to 5% goes to the merchant service provider who processes the transaction. You need to factor that into your pricing.

How to do a budget

List all of your business costs and plot them on a calendar so you know roughly when they’ll hit. Then place some modest sales projections on the same calendar. You will be in the red a lot at the beginning, but that’s how starting a business goes. Just make sure you have a plan for paying bills in the meantime.

Online business consultant, Shahemen Farid of Boobooks Accountants says it will take a while for your long-term budget to become clear. “We suggest clients who are starting an online business go in with three months of working capital and base their forecasts on that first quarter.”

Experts’ pricing tip for online businesses

While online businesses are cheaper to run, they’re not expected to pass those savings onto customers. They can maintain prices similar to brick-and-mortar competitors, which leaves them with more margin between buy and sell prices.

Some of that extra margin will end up paying for things like shipping, which most customers expect to be free . But some will go into the business owner’s pocket, with our study confirming that ecommerce businesses have higher net profit margins.

• How to create a small business budget
• Create a cash flow forecast with this free template
• How to set prices

5. Finance options for an online business

Banks are unlikely to finance an online startup, unless you already have a strong business track record. Fortunately, plenty of people have figured out how to start an online business without that external support.

Lots of online service businesses grow out of small freelancing teams, who don’t have terribly high operating expenses. They can get started with a laptop and a few software subscriptions, which they’re able to pay for out of their own pocket.

Retailers have to fork out more, but they can manage the risks easier than a physical store. They can try a soft launch, with limited inventory, and ramp up only when they find that demand is solid. “You can start an online retail business for 20K now,” says Shaheman Farid of Boobooks Accountants. “So people are increasingly able to self-finance.”

Sources of extra cash

If you still find you need extra money to start your online business, there are still options like:

• credit cards – just be aware that interest rates will be high
• personal loans – you will have to offer something you own as security
• friends and family – they might lend cash or buy in as investors
• angel investors – maybe, just maybe, a friendly industry contact will buy in
• crowdfunding – your idea would need viral potential to excite the crowd
• grants – some cause-driven businesses are eligible for free money
• Guide to finance
• Learn about friends and family loans
• How crowdfunding works

6. Digital marketing 101

In the online world, people don’t walk by your business by chance. You need to earn each and every visit to your website, and only about 2% of those visitors will purchase anything.

If you’re buying all your traffic through pay-per-click ads, costs can spiral out of control. Online business expert, Shaheman Farid says he’s seen failed campaigns chew through thousands of dollars without getting a single sale.

It’s not a unique problem. 41% of accountants and bookkeepers in our study say digital marketing is a big challenge for anyone learning how to start an online business. So how do you avoid catastrophes and give yourself a shot at online success?

The unsatisfying secret to digital marketing

The truth is that there’s no digital marketing playbook that works for every business. You could be doing search marketing through Google, creating articles on LinkedIn, posting videos on YouTube, or telling stories on Insta. Most things won’t work the way you need them to.

There will be heaps of trial and error. You can take some smart guesses, for sure. But you need to try several options at the beginning because results can be wildly unpredictable.

“There’s no telling what will work and what won’t,” says Ben Charlton of Air8 Digital , an agency that helps small businesses navigate the complex world of digital marketing. “You have to experiment. But you can do that without spending a fortune.” Ben’s low-cost tips are in our guide to digital marketing .

How much to budget for digital marketing

Ecommerce consultant Marc McKeown of FortBrave , encourages clients who are starting an online business to keep 40% of their startup budget for marketing. “We’d spend that in the first three months to see what things work and make a plan from there.”

That may sound like a big chunk of money, but remember that digital marketing may be your only source of sales or leads. And that investment is offset by the money you don’t have to spend fitting out a shop or office.

• How to do digital marketing
• How to manage your online reputation
• Simple CRM for small business

7. How to set up an online shop, office, or app

Geography becomes irrelevant when you start an online business. You can sell to customers in other parts of the country or the world. Even people with super niche ideas can scrounge up enough customers from across the internet to make a living from it.

That may explain why 68% of accountants and bookkeepers say digital businesses are more likely to be based on a novel idea. But how do you actually interact and transact over the internet?

Creating an online shop

Retailers can use existing marketplaces like Amazon, Alibaba, Facebook, or dozens of others. It’s a fast and easy way to start because you just drag and drop pictures of your products into the shop and the marketplace processes payments for you. On the downside, you don’t have much control over how your shop looks and you pay a cut from each sale to the marketplace involved.

You can also create your own online shop using off-the-shelf templates from providers like Shopify, Square and BigCommerce. These usually cost you a monthly subscription fee and you will pay a cut on each sale in transaction fees, but you have more flexibility. However, that extra flexibility comes with the potential to make mistakes. Build your shop with care.

Setting up an online office

If you work in professional services, you probably already know how to work remotely. There’s tons of great software for creating, sharing and collaborating on projects. Online businesses have higher net profit margins than their brick-and-mortar equivalents which goes to show those remote working tools are perfectly productive.

Even complex group tasks like brainstorming are thriving online. Michael Yared’s app development agency, Echobind , has been using remote collaboration tools for years and says they’re better than in-person whiteboard sessions. “Digital brainstorming boards allow you to capture ideas from everyone – not just the loudest or highest-paid people in the room. Plus remote working encourages better documentation of your methods because so much information is exchanged in writing.”

Creating an online studio

Olivia Park Coaching delivers online physical and wellbeing training to clients across Asia. Olivia Park attracts customers by sharing free content on social platforms, then signs paying customers to self-serve courses. She also offers one-to-one calls and says the digital approach allows her to help twice as many clients. “It’s enabled me to create more products with different tiers of service.”

Building an app

Got an idea for an app? Of course you do. Now you just need to turn that inspiration into a piece of working software. There are some pitfalls to avoid along the way. We spoke to an app development company to get the lowdown on how apps are made and what they cost.

Find out what they had to say in our article: How to make money from an app

• Two quick ways to sell online (infographic)
• When and how to offer free shipping
• Tips for setting up a remote office
• An intro to online invoicing
• How to bill subscription customers

Go start your online business

Our expert survey found that online businesses are less expensive to run and reach break even faster. They’re also less likely to fail and, in cases where they do fail, their owners lose less of their own money. It’s not risk-free – no business ever is – but it may be lower risk.

So write down your plan. Test your idea and build on it. Then give it a go. You can get free tips and tools for your business journey from Xero’s small business resources .

Get help from an ecommerce pro

You know who knows how to start an online business? Accountants and bookkeepers do. They do this stuff for a living. Find someone to help in our advisor directory.

Find an advisor

Why Xero knows about starting an online business

Millions of small businesses use Xero’s software to run their finances and accounting. About 100,000 accountants and bookkeepers use us too. We asked some of those owners and experts how to start a business, then put their insights into this guide.

Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.

Download the guides to starting a business

Fill out the form to receive two guides – "How to start a business" & "How to start an online business". Both are PDFs.

Privacy notice .

How to Open an Online Business

Updated: April 12, 2020

Published: April 07, 2020

I can't count how many times I've come up with an idea and immediately said to my friends, "I should start a business!" I never do, but if I did, I know it would be online.

Why? Well, in 2018, online businesses generated over $2 billion in revenue . If shopping online wasn't as popular a couple of years ago, it definitely is now.

Plus, online shopping makes the experience easier for the customer since they don't have to leave their homes to make a purchase.

Another reason I would open an online store is because it would be easier for me . I could use online management systems to execute business functions and set up an ecommerce website to take the place of a brick-and-mortar shop. Aside from physical inventory, almost everything I would need could happen from a computer.

I haven't yet landed on the online business idea that will catapult me into success, but you most likely have, and are itching to get going. There's only one problem: where to start.

Starting a business is a hefty and challenging endeavor. Here, we're going to focus on how to start one that operates online. If you're interested in starting an online business , we've got you covered with these six steps.

• Create and fine-tune a business plan.
• Build your legal structure.
• Pick your business name and register it.
• Obtain your business permit and licenses.
• Plan how to market your business.
• Set up your funding plan.

There are some fun aspects of building a business — like picking out a name, creating your branding material, and connecting with leads. On the other hand, there are some aspects that aren't as fun, like applying for business permits and filling out tax forms.

Here, we'll explore both the easy and challenging aspects of starting an online business.

1. Create and fine-tune a business plan.

First, you'll want to create a business plan . A business plan maps out the details of your company. It should serve as the point of reference for information about what your business sells, its structure, and how it will be run.

Business plans generally provide the important factors of your company, including financial projections, legal documentation, and leases or permits. It's useful for stakeholders, who should be able to picture every facet of your business with the plan. Additionally, it's a helpful resource for you, since it makes sure you don't leave any stone unturned when creating your business.

Before you get going, keep in mind these best practices as you work through it. These will make sure your business plan is effective.

Think about how your business sets itself apart from competitors. If your industry is marketing, for example, how will your online marketing services be a better choice than the competition?

You may have to do a competitive analysis to find out how your business will stack up against other online stores. This simply means figuring out the strengths and weaknesses of your competition, so your business plan is accurate and realistic.

When you explain your selling points, stick to simplicity. The plan will cover your bases, so you don't need to write a 1,000-word essay in each section if you don't need it. For instance, skip detailing your entire paid ads strategy in this plan — just include that you intend to have one.

Ultimately, a business plan should be a quick point of reference.

Finally, remember that your business will function solely online, so some factors of your business won't apply to a brick-and-mortar, like rent costs. Frame your plan so that it's based online.

For an in-depth tutorial of how to create a business plan for ecommerce in particular, this post has you covered.

You can also download this free business plan template . Follow this quick tutorial below if you don't feel quite ready to write one yet:

To summarize, a business plan will explain your company, its goals, customers, and why they should care. It will also include your product line and services, plan to sell online, and your legal structure. Finally, this'll provide financial projections and business goals.

Below is an example of a business plan template . Yours doesn't have to look like this, however. Just include the information needed.

Next, we're going to get into something that, I'll be honest, isn't that fun. Even so, this step is critical for your online store to be able to operate. What I'm alluding to is the legal process, which includes identifying and registering your legal structure, business name, and obtaining a business license.

2. Build your legal structure.

At this point, your business plan is done and looks incredible. Next, let's go over how to make your online company legal. You'll have to fill out some paperwork, apply for licenses, and complete tax forms, but first, let's identify your legal structure.

There are four different legal structures, and we'll go over the three that new businesses usually fall under. You'll want to keep in mind the online tax laws for your state as you move through this section. (Note, this is for U.S. businesses only).

• Sole proprietorship — This is a solo act, someone who runs a business by themselves. The government gives no restriction between the business and who owns it. This structure gives you the freedom to name the company after you without extra forms.

Tax information: The proprietor is responsible for every transaction. What that means is that your debts, liabilities, income, and losses are taxed on your personal income tax return at normal rates. You also are subject to payroll taxes and self-employment taxes on the money you earn.

• Partnership — A partnership is where two or more people are the owners and have equal shares in money spent and earned, like Ben & Jerry. Although partnerships are easy to form and may be cost-effective, every member has shared liability. You can vary this legal structure by having a limited liability partnership, or LLP, which protects business partners from the actions of others if a business goes south.

Tax information: Partnerships are formed by registering your business through your state. You can do this through your Secretary of State office.

• Limited liability company (LLC) — An LLC isn't subject to a separate level of tax and is generally more complex than a sole proprietorship or partnership. Their complexity generally means a higher startup cost. LLC laws vary by state, but generally, most don't restrict ownership, so you can partner with another business if you desire.

Tax information: LLCs benefit from a flow-through tax treatment. This means that the owners of the LLC are taxed, not the business itself, which makes taxes easier.

For more information on taxes and IRS tax forms, follow this link . Otherwise, now that you've identified your legal structure, you can file those forms and make your business structure legal.

Next, you'll want to register a name.

3. Pick your business name and register it.

Have you picked out your name yet ? That was probably the easiest part of starting your online business, right? Well, now you have to register it to make sure that your amazing name remains in your ownership.

First, make sure the name is available in your state for an ecommerce business, and obtain a trademark. These stipulations will protect your name from being stolen and make sure you don't have the same name as another online store.

If your business is an LLC, your name will be registered when you register your business. If you are part of a smaller structure, however, you will have to register a "Doing Business As" name, which just distinguishes the owner(s) from the business name.

You can usually register your business name for under $50. Recall that trademarks protect your business's name, and usually cost less than $300. You can learn how to register that trademark here .

4. Obtain your business permits and licenses.

Here's what you need to know about permits for an online business and why you need them. We'll also include tax information to take note of. (Don't worry, we're almost through the legal side of things.)

• Seller's permit — You'll need a seller's permit to sell products online. This permit allows for the sale of physical goods or services, such as clothing or books. Even though your business will be online, you'll still need a seller's permit to collect sales tax from customers.
• Business license — Nearly every business needs some sort of license to run legally, but some states require additional licenses. To make sure you have every license that you need to operate within your state, visit this website .
• Small Business Tax — If you are the owner of a business, you'll be required to pay federal taxes, which are determined by your form of business. Excluding partnerships, you'll need to file an annual income tax return (partnerships file an information return ).
• Self-Employment Tax (SE Tax) — This is one of the taxes you could have to pay within your state. It's a Social Security and Medicare tax for those who are self-employed, like business owners. If your net earnings are more than $400, you'll have to file a 1040 as well, but don't worry, here's where you can learn more about SE tax .
• Employment Tax — If you hire employees, you need to file certain employment tax forms that protect you and your team. These tax forms include benefit taxes, federal income tax withholding, and federal unemployment tax. Click here to learn more about Employment Tax .
• Excise Tax — Depending on what you sell and your location, you might need to file for Excise taxes. For instance, some industries require a federal excise tax. To figure out if your products or services qualify for this tax, learn more by clicking on this link .

To apply for a seller's permit, visit the website of your state's Department of Revenue . And don't worry about an application fee, these permits are free to obtain.

U.S. businesses need an Employer Identification Number (EIN), and after you register for one, you'll be able to see what taxes you'll need to file. The three types of taxes you can be taxed for are Self-Employment, Employment, and Excise, explained above.

That was a lot of information; are you still with me? I hope you are, because that means you're done with registering your online business with the government and have permission to operate legally. That wasn't so bad, right?

So, you're ready to be open for business! Now, let's talk about getting that business. For online businesses, your online presence is key, and how you can begin to build your customer base.

You'll need to find some sort of demand for your product before you can receive funding, so you'll have to generate customers and keep them. For now, let's talk marketing.

5. Plan how to market the business.

There's a bunch of information on the internet about how to market an online business, but this section will focus on the essentials you should absolutely have, regardless of the software or platforms you use.

1. An Audience

If you don't know who you're marketing to, your marketing messages will be misguided. Who will be interested in your product?

You might have a general idea, like the location or age-range of your customer. Now, really flesh out your ideal customer if you haven't already. Think of what makes them tick — their interests, challenges, goals, age, and, most importantly, their web behavior.

Additionally, you need to be knowledgeable about the social platforms your target audience frequents and why, so you can idealize how your store aligns with their online shopping habits. You also must know how your business will fit into their web routines so you can target the right people. Refer to this guide about how to identify your target customer with a buyer persona .

2. Online Brand Identity

A buyer persona is a fictional account of your ideal customer, and provides information about them that will help you frame marketing messages. Concurrently to finding your target customer, you'll want to build your brand identity.

Brand identity defines how you want customers to feel when interacting with your business, and promotes your company values. What do you want customers to feel or think of when they think of your business? That's what a brand identity conveys.

3. Social Media Accounts

Social media accounts will be the mascots for your brand identity. You can make them according to your brand colors, audience, mission, and values. For instance, let's look at HubSpot's Instagram and identify some brand themes:

What sticks out to you? Whether it's the color orange, the sprocket logo, or the tagline — all these factors support HubSpot's brand.

When you make social media accounts, stick to the platforms that support your business goals. This'll focus your marketing efforts and make sure you're engaging with your target audience. For instance, Instagram is a visual platform, LinkedIn is a networking channel, and Twitter and Facebook successfully support a mix of long and short-form text.

4. A Professional Website

Additionally, if you're opening an online business, you'll need to have a website or online store.

You must make sure your website is easy to navigate and make purchases. When you online shop, what are some features you notice on websites that you can implement on yours to delight customers?

Additionally, there are some website best practices to consider — like ensuring your website is mobile-responsive.

After purchasing a domain, you can build your website on your own , hire a web developer, or work with software that'll help you set up your website. The design is up to you, but remember to keep the customer experience your top priority.

Some ecommerce software, like Shopify , provide templates for building an ecommerce website, which is useful because you can set up your website and shopping cart software at the same time. This is an in-depth tutorial on how to set up ecommerce on your website , it provides resources for how to make one that glows.

5. Online Selling Capabilities

After setting up your website, don't forget to find software that'll help you execute online marketing functions, such as email, conversion, and social media. To streamline these processes, look for an all-in-one content management system, like HubSpot, to keep you organized. Check that your website is compliant with all ecommerce laws, such as COPPA , and Payment Card Industry (PCI).

Once you've built your website, social media profiles , and have the necessary tools set in place, you can start generating leads. Lead generation defines the process of turning strangers into prospective customers. Successful lead generation methods keeps your sales options plentiful.

Want to know more about lead generation? We've got you covered with this lead generation ultimate guide . Pro tip: Some content management systems offer lead generation tools built into their product , so be sure the one you choose does to keep costs as minimal as possible.

Selling your products or services online

Remember those management software systems mentioned earlier? They'll really come in handy when you set up your sales structure . They give you a homebase where you can keep client information.

Next, you'll need to figure out your sales goals. The question you'll have to answer here is, "How much do I need to make to keep running my business, and how much do I need to sell to earn that number?" You'll need to do a little budgeting, and for some help there, check out this quick read on budgeting for small businesses .

You'll also want to hire a sales rep. When you're a small business owner, you have to think about the essential hires to make, and a sales rep is one of them. You need a person dedicated to understanding your customer and selling to them.

When you hire a sales rep, make sure they're familiar with ecommerce practices and your audience. They should be able to follow the sales process you've put together . To cut down on the tedious tasks of the job, like data entry, you can automate sales tasks so your sales rep can spend more time focusing on other duties.

Be aware of web-specific laws, such as payment gateways and shipping restrictions. A payment gateway is a medium that authorizes credit card payments. For example, when you make a purchase online and see the types of credit cards supported, that's a description of the payment gateways on that site.

Common ecommerce tools have payment gateways built into their system and support methods from PayPal to AmEx, so check to see what yours provides. When you choose payment gateways, go with the most common choices, such as major credit card providers and an app or two, like Afterpay.

After payments are processed, the product is ready to ship, so be conscientious about shipping laws. These are dependent on your product and your area, so go with a wholesale manufacturer or dropshipper that supports your product when you're product sourcing.

(For instance, if you sell nail polish or alcohol, you might want to look outside of USPS, because they have restrictions on the shipping of those products). If you're wondering how much you should charge for shipping based on what you have to pay for shipping, check back to this pricing strategy guide to make sure you and your customers are getting the best deals.

When analyzing your performance and sales, make sure you have analytics software downloaded, otherwise, you won't be able to measure your success. This software monitors activity in your store and gives you metric reports that detail sales, time spent on your site, etc.

6. Set up your funding plan.

Small businesses need funding or some sort of capital in order to turn a profit consistently. If you can finance your business solo, or with help from friends, that's called bootstrapping, and can eliminate the need to seek additional funding.

If, however, you need to look for additional funding, here's the options for startup capital:

• Crowdfunding — You may have heard success stories of businesses that get funding through platforms like Kickstarter. That's called crowdfunding, and it's how to get funding from potential customers who take interest in your business idea in exchange for a perk, like early access to your first launch. You can learn more about how to successfully crowdfund in this post .
• Accelerator — If you go the accelerator route, you'll be involved in a process that involves going against other small businesses in a pitch event. The winning business typically wins funding, seed, and capital. This is also an excellent opportunity to network with other businesses.
• Small Business Loan — If you're really set on your budget and how you'll spend the money you need, you may be able to get a small business loan from a bank or lending institution. Before you start reaching out to possible investment opportunities, do some research on the different offerings and make sure every cent in your business plan is accounted for.
• Seed  — Seed financing means that whoever invests in your company will get a share of stock in return. There are a couple of different types of seed financing, but this is the general idea. Keep in mind that if your business gets sold, investors will most likely want their investment back.

Investments can help you with different costs that are essential to running a business online, but too expensive for out-of-pocket purchases. For instance, you have to pay to ship out your products, and you need money for that. Also, a paid ad strategy gets your business out there online, but you might need extra funds to make a successful one.

Migrating your business online

If you find yourself in a place where you have to migrate your business to online, don't panic. Instead, make a plan. Let's go over some best practices for successful migration.

First, think about the practices you're already performing online and how you can expand on them. For instance, do you already use software to help you manage sales? See what else that software offers to help you succeed online. You might not need to invest in extra tools to make the migration.

Next, make sure that your business has filed the necessary paperwork in order to sell online. Your state might require an extra licensure or tax for ecommerce.

Then, follow the steps needed to move to ecommerce. You might need to download an extension, like Shopify, to allow selling on your site. Refer to these resources on ecommerce practices to help you out.

Make sure to let your customers know about your migration and use your best customer service skills to help them navigate the changes. This will keep your customers coming back, even online.

Check your performance metrics to see how the migration is affecting your data. After you migrate, keep a close eye on them to figure out areas by which to improve your customer experience.

Most of all, be patient and calm. Migrating can be a tough process, but you're not alone by any means. Take your time to provide the best experience for your staff and customers, and you'll see success on the other side.

We've gone over everything you need to know about starting your online business, from business planning, to legal forms, marketing, and sales. I'm still working on my winning idea, but for now, you're fully ready to get going on yours. Good luck!

Don't forget to share this post!

Related articles.

How to Write an Ecommerce Business Plan [Examples & Template]

TikTok Shop: What It Is, How to Launch One & How to Market One

How to Make Your Brand Stand Out When Amazon's Your Marketing Competitor

14 Ecommerce Trends to Expect in 2024

The 16 Best Abandoned Cart Emails To Win Back Customers

Ecommerce Conversion Rates Across Industries (And How to Raise Yours)

How to Send Effective Order Confirmation Emails [Examples + Template]

11 Best Online Payment Methods for Businesses

How to Start an Ecommerce Business in 2022 [Steps + Must-Follow Tips]

How to Get the Most out of Your Ecommerce Marketing Strategy

Download for free marketing, sales planning, and abandoned cart email templates.

Marketing software that helps you drive revenue, save time and resources, and measure and optimize your investments — all on one easy-to-use platform

How to Start an Online Business: 8 Steps to Follow

Bryce Warnes

Reviewed by

April 8, 2021

This article is Tax Professional approved

Starting an online business can set you up with a lucrative source of passive income, or even plant the seeds of your next career. It can also be a lot of work: Planning how to get your online business off the ground and making a profit is no mean task.

I am the text that will be copied.

Luckily, if you follow these eight straightforward steps, you’ll be well on your way to starting your own online business.

1. Consider low-cost small business ideas

Take some time to consider inexpensive business options. There are plenty of business models that let you get started for less than $1,000. Add a little elbow grease and a spark of inspiration, and you could well be on your way to a digital empire.

Traditional ecommerce

Certain ecommerce business models come with low initial investments and potentially massive payoffs. For instance:

• Vintage stores, which often resell inventory hunted down in thrift shops or at estate sales
• Online courses, consisting of self-produced instructional videos and live teleconferencing sessions
• Handmade jewellery, created using inexpensive materials and tools
• Stickers or enamel pins, which can be produced inexpensively in bulk using remote services
• Handmade pet treats, which you can make and sell without the use of a commercial kitchen

These are just a few ideas to get you started. When it comes to low-investment ecommerce, there are plenty of ideas waiting to be put into action.

Shopify, Amazon, Etsy, and eBay are four of the most popular platforms for operating an online store.

• Shopify : Highly customizable, Shopify comes with tons of plugins, and lets you run just about any type of ecommerce store you can imagine.
• Amazon : While it has more stringent limitations on what you can sell and how, Amazon also has a global reach. And their Amazon fulfillment plan can take warehousing and shipping off your hands.
• Etsy : A thriving marketplace for handmade and vintage items, Etsy is nonetheless host to many large scale ecommerce businesses—so there’s plenty of room for growth.
• eBay : An old mainstay of online stores, eBay is also a great place to sell vintage wares, and may potentially reach a wider audience than Etsy. That being said, eBay has less of a community focus—it may take longer for you to build credibility as a seller.

Further reading: Bookkeeping for Amazon Sellers

Drop shipping

The drop shipping business model completely outsources all your inventory and shipping. It’s up to you so set up a store and market products. The orders themselves are fulfilled by suppliers who you’ve established working relationships with.

So, as soon as a buyer clicks the checkout button, the sale is out of your hands. You collect your profit, and the rest of the money goes to the supplier. After that, you just need to be available to provide customer support if something goes wrong—like the package getting lost, or arriving late.

The drop shipping model is appealing because of its extremely low startup costs; with a laptop and less than a thousand dollars, you can start a business from a table in your favorite coffee shop.

But, because of that easy accessibility, drop shipping is competitive. And you’ll still need to jump through the usual hoops to set up your business, get your financials in order, and pay taxes.

Affiliate marketing

Similar to drop shipping, affiliate marketing lets you profit from selling products without ever handling a piece of inventory.

With this business model, you embed affiliate links on your website, blog, and social media posts, or else in a newsletter you send out to your email list. When customers click the affiliate link and make a purchase from the affiliate’s store, you get a cut—typically a 5-25% commission.

If your strong points are content marketing or social media, life as an affiliate marketer may be right for you. And if you’re already a blogger whose content appeals to a certain niche, you may be able to turn your WordPress pastime into a source of passive revenue.

So long as you’re putting out content your followers value—and attracting traffic through search engine optimization (SEO) and ads—you’ve got all the infrastructure you need to jump into affiliate marketing.

Startup costs are low—all you really need to get going is web hosting, a domain name, and a WordPress account, plus a little know-how when it comes to blogging for your target audience.

Keep in mind, though, the infrastructure you need may take time to build; search engine credibility, large follower counts, and archives full of high quality content don’t show up overnight. If you’re planning to start affiliate marketing, be prepared to invest time and energy building up your online assets.

Pay-per-click (PPC) ad revenue

PPC earns you money every time a visitor comes to your website and clicks an ad. It’s often used in tandem with affiliate marketing. And like affiliate marketing, you’ll need a strong base—such as a popular blog or website—to work from.

So, while PPC isn’t a business model per say, it can supplement your revenue from existing online content. That’s worth taking into account as your put together your business plan, mapping out revenue streams and creating financial projections .

Working as a freelancer

Ready to quit your day job? Online freelancing may be the answer. If you’re already doing work that can be handled remotely—coding, design, marketing, accounting, copywriting—then you’ve got a valuable asset that can earn you cash as an independent operator.

Even if your job is hands on, you can still use online freelancing platforms like Upwork.com or Fiverr.com to set up a consulting business . For instance, maybe you already run your own successful wedding photography business. You can earn side income by marketing yourself as a photography consultant, helping mentor other business owners.

Whatever you specialize in, be prepared to set up a website for your freelancing business, as well as profiles on any freelancer platforms you choose to use. Also, assets like an active social media presence, blog, or newsletter can help you build credibility and stand out from the crowd.

Finally, if you’re used to working for someone else, becoming a freelancer will change the way you do taxes. Our independent contractor’s guide to taxes has everything you need to know.

Starting a podcast

Podcasts brought in almost $500 million in revenue in 2018; by 2021, that number is expected to hit $1 billion. If you’ve memorized the weekly release schedules of all your favorite podcasts, and you figure you recognize the ingredients to an addictive program, then the microphone could be your path to stardom.

Podcasters typically earn their income through affiliate marketing. Obviously, embedding links isn’t the way to go—it’s up to you to promote businesses on your program. Podcasting platforms like Podbean and Buzzsprout connect you with affiliates from day one, so you never have to go hunting for a sponsor. They’ll also host your podcast, and help you promote it and track your progress.

Besides the cost of hosting, be prepared to spend most of your startup budget on promotion through ads and sponsored posts. There’s also the matter of your studio; entry level professional microphones range in price from $100 to $500.

2. Write a business plan

Your business plan is a roadmap for your online business. It describes where you are now, and where you’re headed. As your business grows, you can return to your business plan for help planning growth or anticipating future challenges.

Having a plan in place before you get off the ground is key to building a successful online business. It keeps you centered on your goals—so you know what’s important and what isn’t when it’s time to make important decisions.

A few questions your business plan should be able to answer:

• What need is your online business fulfilling for customers?
• Who will you be competing with?
• What assets will your business draw on? These can include startup funds, your professional skills, or intellectual property (like the exclusive podcasting rights to a juicy crime story).
• What will your financials look like in your first year? How about your second year?
• How long can your business go without making a profit?
• What sort of sweat equity will it take to get your business established?
• What will you need to earn each month to break even?

Your business plan can follow either the lean model (quick and dirty) or the traditional one (extensive and deeply researched). And don’t forget to include a cover page that can catch people’s attention.

3. Choose your business structure

How you elect to structure your business will determine how you will file and pay taxes. It also determines your liability—whether your personal assets are on the line in case your landscaping business can’t pay its debt or gets sued.

The five main types of business entity recognized by the IRS are:

• Sole proprietorship
• Partnership
• S Corporation
• C Corporation

As soon as you start earning money from your own business, the IRS considers you a sole proprietorship. Meaning, you and your business are identical for tax purposes.

In some ways, that makes life easy—you don’t have any extra paperwork to deal with. Partly for this reason, the sole prop structure is popular with freelancers. On the other hand, it doesn’t offer any liability protection—so your personal assets are on the line in case you get sued or default on a loan, for instance.

A single-member LLC structure is the next step up. It gives you liability protection, while still functioning much like a sole proprietorship. Many small business owners start out as sole props, then become LLCs .

Our guide to business structures lets you compare your options, and see the strengths and weaknesses of each. And even if you opt for the simple sole proprietorship, you may need a business license to sell online .

4. Register your business name

If you freelance under your own name as a sole prop, there usually isn’t any need to register a business name. But as soon as you begin operating under a different name—"Greg’s Graphic Design,” instead of "Greg Jackson”—you’ll need to register it. Also, if you’re using any business structure other than sole prop, you’ll probably need to register your name.

Here’s how you do it:

Make sure no-one else is using your name

Do some research online to make sure no-one else is using your business name. To be extra thorough, you may want to hire a patent and copyright attorney to check for you.

File a doing business as (DBA) form

To run your business as a sole proprietor under a name other than your own, you’ll need to file a DBA with your state.

LLCs, corporations, and partnerships register their business names when they elect their business structure for federal and state tax purposes. However, you’d like to operate under a name different than the one you’ve registered, you’ll also need to file a DBA.

5. Snag a domain name

Once you have your business name, it’s time to register a domain name. Even if your main marketing platform is social media, and you don’t need a website, it’s best to register a domain now. There’s always the chance that once your business takes off, someone else may try to register your domain for their own business, and that lower your standing on Google search results page.

Plus, while you may not absolutely need a website to run your business, even creating a small, simple one could benefit you in terms of SEO, helping you come out at the top of Google’s search results when someone searches for you.

Google Domains is a good one stop shop for your new domain. They make the process easy to navigate, without the upselling techniques used by other providers (“For just $9.99, add YourCompany.biz !”). Once you decide to build a site, you can automatically import your domain into Squarespace, Wix, Wordpress, Shopify, or Weebly.

6. Sort out sales tax nexus

If you’re running an ecommerce store, you may be required to collect sales tax in multiple states. If and when you do is determined by your sales tax nexus. Sorting that out can be a bit tricky, but our introduction to sales tax nexus makes it simple.

7. Launch your social media presence

Maybe you’re planning to use Instagram as your number one sales channel for your vintage clothing store. Or maybe you’re launching an online consultant business, and hadn’t considered using social media at all. Either way, one of the first steps you should take after launching your online business is to create a social media presence.

Even if you’re not selling through social media, having an active account shows potential customers the lights are on: It proves that you’re engaged and accessible as a business, and can serve as a point of contact for customers who have questions.

The most important social media platforms for marketing your small business are:

When it comes to younger demographics, like millenials and zoomers, Facebook has seen a decline in popularity. Nonetheless, on a global scale, it’s still the most popular social media platform overall. Maintaining a Facebook profile makes your business easier to find by improving your SEO score.

Especially among younger cohorts, Instagram has seen a surge in popularity for marketing products. Hashtags let you research and target specific groups of users, as well as seeing what your competitors are up to. And since it’s primarily a visual platform, it’s the perfect place to showcase new products.

If you offer your services as an online freelancer, Instagram may not be your first choice in terms of social media—after all, you don’t have any glitzy products to sell. But keeping a tastefully maintained personal account can help prove to people researching your services that you’re a “real person,” and trustworthy.

If you’re publishing blog posts, videos, or podcast episodes, Twitter can be an excellent platform to keep your followers updated. It may also give you the chance to network with other businesses in your industry. But unless you’re publishing regular content—or launching a quirky brand identity —you can probably skip it.

A visual platform similar to Instagram, Pinterest is a good fit for niche businesses, especially ones dealing with handmade products. It’s a popular source of inspiration for crafters, decorators, and hobbyists. Pinterest may be perfect for promoting your Etsy store, but if you’re starting a software company or hiring yourself out as a business consultant, you probably don’t need an account.

Even if you’re not much of a networker, having a LinkedIn page for your business is valuable. It proves you’re legitimate: You may be your company’s only employee, but it lets potential customers put a face to a name. If you’re running a drop shipping or affiliate marketing business, where fly-by-night operations are all too common, a simple LinkedIn profile can make you more trustworthy.

You already know the biggest search engine in the world is Google. The second biggest? YouTube. With one billion hours of video watched every day, YouTube has massive reach. And the sky’s the limit when it comes to what kind of content you can create: From educational mini-documentaries on your industry, to interviews with thought leaders, to step-by-step overviews of your products. Try entering search terms relevant to your business—"motorcycle parts” or "stain remover”— and see what’s out there. You may find a new fan base just waiting to be targeted.

8. Get bookkeeping right from day one

Organized bookkeeping means an organized business. When your financial records are in order, you’re able to anticipate the future and make smart business moves. And it’s especially important to have tidy books come tax time ; the more organized you are, the faster it is to file, and the easier it is to take advantage of tax deductions .

Bench is especially suited to online businesses. We automatically import your bank statements, and transaction records from payment services like PayPal. If you’re already operating a paper-free business —with all your financials online—then Bench integrates seamlessly.

The best part? You get a professional team of North American bookkeepers who handle your bookkeeping—so you don’t have to. Try one month of bookkeeping free .

Join over 140,000 fellow entrepreneurs who receive expert advice for their small business finances

Get a regular dose of educational guides and resources curated from the experts at Bench to help you confidently make the right decisions to grow your business. No spam. Unsubscribe at any time.

How to Launch a Successful Online Business

By Annie Zaleski

Download our free workbook and get started on your action plan to launch your business

The email you entered is invalid.

Thank you for subscribing.

By entering your email, you indicate that you have read and understood our Privacy Policy and agree to receive marketing from Squarespace.

For entrepreneurs, there's nothing more exciting than channeling your passion, creating something from scratch, and watching a business idea spring to life. 

When you start an online business, you gain advantages like lower upfront costs and more flexibility to pivot your ideas. However, even for the most booming businesses, there are also unexpected bumps in the road, especially when you’re getting a new endeavor off the ground.

Whether you're launching a brand new startup or updating your brand’s online presence, here's our step-by-step guide to launching a successful online business.

Identify your ecommerce opportunity

Embarking on your online business journey starts with finding your ecommerce focus : 

Do you want to provide services to other people, such as writing or web design work?

Are you interested in selling merchandise, maybe with third-party services like print-on-demand and dropshipping ?

How about selling digital content or online subscriptions ?

No matter what you choose, if you start an online business in an area that you love, chances are better you'll enjoy working on and growing that business. Matthew Chojnacki, the founder and owner of 1984 Publishing , a boutique book publisher based in Cleveland, Ohio, considers his online strategy key to growing his business over the last twenty years. "People often have this idea that work isn't supposed to be fun, and that fun isn't supposed to pay," says Chojnacki. "But the fun part, or the passion part, is always the key to success. It's an extension of what you enjoy and do in your life. Because if you're not passionate, that business is going to be a thorn in your side."

That doesn't mean your business needs to reinvent the wheel. Simply improving what's already there can be just as successful. "If you think inside the box, and what's already been done, that's fine," Chojnacki says. "But can you make it better? Are you coming up with a new, untapped idea?" 

In the early stages of launching your idea, research existing businesses to start narrowing in on your unique concept. Chojnacki suggests asking yourself a few questions:

What do you enjoy doing in your personal life or for fun?

What types of opportunities are there in that realm?

How can you generate income from something that you find fun?

Create your business plan

After you've landed on an online business idea, the next step is writing a detailed business plan . Informed by deep research and analysis, this document is a robust roadmap of your operations, goals, outlook, and opportunities. One of the main goals of a business plan is to help you organize your thoughts and be focused and intentional about growth and strategy. At the end of the document, readers should be excited about your company and have a clear sense of why you're the right person to bring this business idea to life. 

Putting together a full business plan might not make sense right away. Part of starting a business is experimenting to find your unique niche. For entrepreneurs who are developing their business plan as they go, a shorter document that's a few pages long can be just as useful. 

Build the foundation for a strong brand

Developing your brand is one of the most exciting parts of starting an online business. This is where your personal passions and professional acumen intersect and you formulate how you can communicate what makes your business special.

A successful brand is well-defined and built for personal connection. "There are all different ways to explain what you stand for," says Chojnacki. "But people have to understand and connect with a brand almost immediately. You don't have the luxury of building a new brand over a 20-year period with endless cash. If you're doing it on your own as a sole proprietor, you need to somehow stand out."

There are limitless ways you can communicate your values. Many online business owners enhance and extend their brand by connecting with customers in person. For example, a business might offer local pickup of online orders, or an entrepreneur might give a keynote speech at a conference. Developing a brand strategy, or a brand marketing strategy, is another way to define your brand proposition and create channels of connection.

A brand strategy is as detailed and organized as a business plan: It's a long-term blueprint outlining your values, mission, and vision . Within this strategy, the brand mission goes hand-in-hand with a brand vision. "The vision is really important, whether it's your vision statement or defining your purpose," Chojnacki says. But he notes that these statements don't need to be lengthy or grandiose: "Sometimes less is more."

A simple slogan or elevator pitch can capture your brand and help create an emotional connection to your work. "When you're selling something, with a brand, how are you supposed to feel when you get that item or service?" Chojnacki explains. "That emotion is really important. The brand should make you feel in some way. And it can be any feeling: sad, scared, excited, wealthy, cool."

Brand strategies also outline a business’s visual identity, communication style, and touchpoints. "It might mean a personal story; it might mean your passion around why you're doing your business," Chojnacki says. "It also might mean what opportunities or advantages you're giving them through your brand."

There's no one right or wrong way to communicate your brand, he adds. "Depending on the type of business you're trying to launch, some are all about good quality and the best pricing. There doesn't necessarily have to be an amazing story that goes with that. The business is a great way for customers to save money and get exactly what they want." 

With the right website-building platform , you can do everything from launching sophisticated marketing campaigns right from your own house, to easily creating branded videos to feature your products and tell your story. You can even implement back-office functions—like accounting, invoicing, shipping, and order fulfillment—without needing to hire a whole team of employees. As a first step, decide which online tools are right for your small business .

According to Chojnacki, one of the most effective and easy-to-integrate marketing strategies is also one of the most traditional: email campaigns . "Customers want to be up-to-date on products and what's selling, and they want advance notice on what might be on sale," Chojnacki says. "Email lists are a really important small business tool, because you want to bring those customers back." He adds that the excitement generated by email blasts can be especially effective if you're selling an exclusive item or running a sale. "No one wants to miss out. No matter how old you are, there's always that fear of missing out. Whatever product you're selling, you need to create some level of excitement."

Integrating social media capabilities into your marketing plan is also important, because it allows you to have a more personal touch and connect directly with your audience. "You want to bring customers back," Chojnacki says. "And you want to make a customer for life." 

Small business owners can clear up time to focus on marketing by automating other aspects of their business, including appointment scheduling and ecommerce functionality.

Optimize your website for launch

Making a website is the last piece of the puzzle after you've developed a business plan and brand strategy. This step involves concrete actions like choosing a domain name and website template for your business. 

Luckily, Chojnacki says, building a website can be a piecemeal process. "You can start with a landing page that has just contact information, and then build it out as your story builds out. You don't have to have your whole business thought out." Having your mission figured out is a must, he adds. "Are you opening a restaurant? Are you selling books? Are you selling clothing? That has to be solid."

Chojnacki adds that having a good handle on your business angle and audience is also important before diving into building a website. "What's your focus? If you're selling clothing, are you looking for millennials or Gen Xers? So that has to be at least organized before you even think about a website."

When you do start building out a website, certain elements should be part of your design strategy, including core colors, fonts, visuals , written content , and your logo . Your website layout can also reflect your brand identity. You don't need to hire a professional photographer or spend too much money on these elements. What's most important is conveying to customers who you are — and why they should be excited about what's coming next. 

Still finding your focus? Read our guide to identifying your ecommerce opportunities .

Posted on 23 Feb 2022

Related Articles

Find Your Ecommerce Opportunity

23 Feb 2022

When to Make a Website for Your Business

Subscribe to receive the latest MAKING IT blog posts and updates, promotions and partnerships from Squarespace.

By providing your email, you indicate you have read and understood our Privacy Policy .

How to Write an Online Business Plan in 2024

Written by Vanessa Petersen on July 26, 2023 Blog , Sell Online .

You’ve committed to turning your ecommerce or online business idea into something real. You want your small business to produce revenue and change the course of your life, but what’s your first step in realizing your dream? Developing a plan. If you’re not sure about how to write an online business plan, you’ve come to the right place.

One of the most essential tasks involved in starting any kind of business is to write a business plan. An online business plan won’t look that different from a traditional business plan and will include many of the same elements.

In this post, we’ll show you how to write an online business plan, including all the components and sections. We’ll also walk through how WooCommerce can help you put your plan to action and achieve your business goals.

Why write a business plan? 

Starting your own business is a great experience and something that will shape your life, fill you with self-confidence and independence, and inspire other people around you. A new business is also a serious endeavor that will take time, money, sweat, lots of decisions, and a degree of risk.

A traditional business plan template helps you document and keep track of your business goals, challenges, opportunities, and all the steps and processes involved with making your idea work. It will help you conduct thorough market research and set you up for success.

When you write a business plan, it can confirm that you’ve found the best online business to start , or provide clarity about the need to pivot.

It details all the things you will need to do in order to successfully launch and grow your business, and may include revenue projections, timelines for specific goals, concept art for products, and architectural drawings for any brick and mortar aspects of your business. 

Business plans help create a structure for your company’s development and keep you grounded in reality, focused, and not distracted by less important matters. 

If you have more than one person helping run the business, the business plan also keeps everyone unified around the same set of goals and objectives. 

Another reason to write a business plan is for situations where you are presenting your idea to someone else and asking them to invest. In that scenario, your business plan is also a sort of sales document. It makes the argument for why your business idea is so good and well-considered that an investor should want to be a part of it. 

But even if you’re self-funding your entire business — which is more common with online businesses — you still want to write the plan for the reasons given earlier.

The benefits of running an online business

Starting an online business or ecommerce store offers many of the same great benefits as any other business, but without as much risk. If you’re thinking of starting a business, here’s why an online one is a great option:

It has low startup costs

Without a storefront, you eliminate so many costs of running a business. With all the bills that come with having property — like rent, parking, furnishings and decor, etc. — there’s a much higher investment required to start a brick-and-mortar-based business. Online businesses still have startup costs, but they are much lower. 

It gives you freedom over your schedule

With an online business, you have more freedom to set your own hours, because you don’t always have to be open during the usual times. You can build your business to suit the lifestyle you want. Rearrange your time to get things done in the fastest possible way and take time off when you need it. 

You can start small

Once you have a location, it’s yours, and you have to make it work. With an online business, you can start very small, offering just a few products or even just a single service. You can more easily test the waters without making huge commitments with inventory, and other physical investments.

You can more easily pivot

If your online or ecommerce business doesn’t do as well as you expected, it’s easier to pivot and adapt to something new because you haven’t committed so much to making your original idea work. There are many business success stories where the business owner adjusted their idea after gaining some experience, and then it took off. It’s a lot easier to do that when you aren’t tied to a physical location.

But, there’s one thing online businesses have in common with every other type of business: You need a robust business plan to help guide your idea from concept to a successful reality that makes money and fulfills your dreams and goals. 

So, let’s get into business planning. 

How do I write my own online business plan?

Most formal business plans and business plan templates include seven sections, plus an executive summary. You’ll need to keep in mind who you’re writing your business plan for. If you are taking this to potential investors or will be seeking a business loan, your business plan needs to sell the idea of your business as a great investment opportunity and communicate the skills, expertise, and commitment you personally bring to the table. 

Here are the key sections of a traditional business plan format:

• Executive summary
• Company description
• Market analysis
• Organization and management
• Service and product line
• Sales and marketing plans
• Financial projections
• Funding request (if working with investors or partners)

Here’s a brief look at each step of creating an online business plan:

Draft an executive summary

In the executive summary, the first section of almost every business plan template, you’ll present your vision and focus on building excitement. If the business plan is a sales document, the executive summary is the lead. It gets the reader engaged and excited to hear more. 

Your executive summary should achieve two goals:

• Deliver the basic facts about your business
• Motivate the reader to keep going and get them excited about your idea

What facts should you include? Whatever helps the reader understand your business idea. Describe the industry and niche. Mention the target market. Briefly state the needs or problems your products and services will be solving. Touch on the potential for growth in terms of revenue and customers. 

For motivation, describe your mission statement and company values. What will set you apart from the competition? What is your value proposition as a business owner? What makes you different? Again — keep this brief. You’ll elaborate later. 

It might be a good move to write all the other sections first, then finish with the executive summary so it will be the most concise and best version of how you describe your business.

Write a company description

Here, you’ll give a brief overview of your company. What are your strengths, skills, and areas of expertise as a business owner that will position you for success? If you have a compelling story behind why you’re starting your business, you can include that too.

Conduct a SWOT analysis 

If you’re not sure where to start, consider doing a SWOT analysis , which is a diagram outlining your strengths, weaknesses, opportunities, and threats. 

It’s a common part of many business plans and will help paint a realistic picture of what your business can achieve, and what stands in the way. You won’t include all of this in the company description, but your strengths and opportunities may fit here. 

Create a mission and vision statement

The company description is also the place to create a mission statement and a vision statement. What’s the difference between these? 

The vision is where you’re going, the mission is how you’ll get there. A vision statement paints a picture of a future reality for your customers and perhaps the world at large, as a result of your company’s influence. A mission statement expresses how you will achieve that.

The company description can elaborate on your vision and mission beyond just a single sentence, and later you can fine-tune what you write into a succinct pair of statements. Feeling some writer’s block? See company description templates by industry for some inspiration.

Include any unique attributes

If your company will involve particular attributes such as manufacturing, supply chains, dropshipping, affiliates, coaching or advising, online courses, or other relevant particulars, include that in your company description, too. 

State your business location, industry, niche, and other details

Also, state the location of your business, even though it’s online. Name your industry and niche target market again, and describe the nature of your company. For example, is it an ecommerce business, a consulting firm, delivery service, wholesale, or ad-based website? These are just some of many types of online business structures. 

You may also want to include whether your business is in any special class of business that might position it for special loan or grant opportunities like women-owned businesses or veteran-owned businesses.

After reading your description, readers should have a good understanding of what your business is about, why it exists, and how it works. Here’s a detailed look at company descriptions , with an example.

Perform a market analysis

A market analysis uses industry research to assess the scope of your business’s target market and describe the current competition in your industry. It can help you estimate the potential for success and prepare for the challenges you may face when you launch your online business or ecommerce shop.

Doing this research, and including it your business plan, can also help you:

• Identify industry trends
• Pinpoint opportunities 
• Diminish risks and reduce costs
• Generate new ideas for products and services
• Learn from the failures and shortcomings of your competitors
• Find ways to stand out from your competitors
• Discover new markets
• Refine your marketing plans

Now let’s dig into the elements involved in a thorough market analysis.

Understand your audience

Here, you will explain in detail who your target customers are and why they want or need what you’ll be selling. What problems or needs does your product solve? What will motivate people to buy from you? And why can’t they get it somewhere else just as easily? An ecommerce business competes against other ecommerce businesses as well as brick-and-mortar stores and shopping malls. Stores with omnichannel strategies compete with both. Why would someone choose you?

Share your key customer demographics, psychographics, and interests. Who will you be serving? What drives them? 

What are their values? If your product, service, or personal brand will appeal to a customer segment that also shares particular values, that’s a strength, not a weakness, and you can use that to win them over. 

Perform customer segmentation

Break down different categories of target customers your business plans to serve. One category could be age. Another might be life situations such as retirees, parents, divorcees, or living with older relatives. You could create a segment of people with particular health conditions, or who live certain lifestyles. 

But you can also get way more specific than that. Runners are different from hikers, who are different from bikers, yoga enthusiasts, and gym enthusiasts. Different supplements, philosophies about food, motivations for eating various foods — all of these present near endless possibilities for more narrowly defining your customer segments, all under the broad category of ‘health.’ And you might serve multiple segments. 

The more customer segments you know, the more effectively you can market to them. In an online store, good product descriptions call out the various customer segments that product is designed for.

Also, give a sense of the potential size of your target market. How many people need what you’re selling? Show how this market is large enough to justify your business and drive revenue. You might do this by studying revenue reports from other companies in your industry. Or look at specific products related to yours and research their sales and revenue performance. 

You may also perform a survey of some kind, or an online quiz, and use that to express the needs your potential customers have that aren’t currently being met.

Perform a competitive analysis

Study your competition. What are they doing well? What areas are they underserving? Where are they underperforming? Make note of what other companies in your industry are struggling with or failing at so that you can deliver something more valuable and gain a competitive advantage.

It could be product quality, customer service, or selection. Maybe their ecommerce store is badly designed and hard to use. Perhaps there’s a huge industry serving the masses, but customers who have more particular tastes or needs aren’t being well-served by the big companies. Those customers might spend more on something that delivers what they really want. 

Maybe your key competition has been rocked by scandal. Maybe a company went out of business, was sold, or closed down due to retirement and there’s an opening in the market you want to leverage. 

The main point of the competitive analysis is to persuade investors that there’s an underserved market that your business plans to cater to. You must be able to promise something that no one else is currently delivering. Otherwise, why should your business exist? Put them at ease by demonstrating proper market research.

Refer to your SWOT analysis and present any potential threats from the competition here, too.

Outline management and organizational structure

Next, present your management and legal structure. Is your company an LLC, sole proprietorship, S corporation, partnership, or some other arrangement? Who’s in charge of what? If you have different departments, list out the leadership for each one. If relevant, you might even include some information about the expertise of your leaders concerning the areas under their charge and the tasks they’ll be performing.

Remember — if your business plan will be used to persuade investors to help fund your business idea, this sort of information will reassure them that your company has strong and competent leadership. 

If there’s a chain of command, use a diagram or other method for laying out who reports to whom. 

List your products and services

What are you selling? You’ll touch on this briefly in the earlier sections, but here is where you’ll expand on the details. If you have an array of similar products, such as food flavors or clothing variations, list as many as seem relevant. But focus on the spirit of the business plan — you’re simply communicating what your business is about, not listing every SKU in your projected inventory. 

Also, include information about your products such as quality, durability, expirations, patents, and whatever else will give a clear picture of what you’re selling.

For service businesses and memberships that may include multiple packages, bundles, or tiers, describe each of these so your readers get a sense of how you’ll appeal to different types of customers and price points. 

Develop a sales and marketing strategy

Having products is great, but how do you intend to sell them? How will people find your business? How will anyone know you exist? And once they know, what will motivate them to buy from you and not from your competition? What is your unique value proposition — the thing that sets you apart from your direct competitors?

You’ll need to develop an initial marketing plan to help promote your business, products, and services to your target customers.

And remember, competition isn’t limited just to other businesses. Sometimes, competition is against the customer’s time, or their budget, or mere indifference — the conflict between doing something and doing nothing. Your SWOT analysis should touch on several of these potential barriers to the success of your online business.

Your marketing plan will obviously change over time, but give your readers and potential investors a sense of how you plan to launch and grow your business. 

Discuss media channels you plan to use, such as pay-per-click (PPC) ads , social media , email marketing , affiliate marketing , direct mail, referrals, joint ventures, search engine optimization (SEO), webinars, influencer marketing , and live events. Describe the ones you actually plan to use, and explain the core strategy you’ll begin with and how you will measure success. 

Also, include a sense of your marketing budget. If you will have a dedicated marketing team, or actual sales professionals using a particular process or sales script, discuss that as well. 

For ecommerce businesses, include a discussion of how you plan to leverage platforms like WooCommerce, which features a host of extensions that can help manage your business , engage customers, save money, and promote growth .

Make financial projections

You’ve made a lot of claims in your business plan, but how will your investors be convinced of your future success? At some point, you have to show them the money. 

If this is a brand new business with no income, where will your finances come from for the first year? Give realistic financial projections for anticipated profits and losses, as well as growth expectations for the first five years. Include financial documents if you have them, including profit and loss statements, balance sheets, and cash flow statements. Include costs of employment, manufacturing, and other investments both one-time and ongoing.

Your financial projections should reference your:

• market analysis 
• anticipated sales volume 

Investors will feel more confident when they can see your business plan does not rely entirely on just one or two ‘wins.’ For example, if your entire plan hinges on selling on eBay or Amazon , what happens if Amazon suspends your store, changes the terms, or you struggle to get noticed there? 

If your plan depends on winning over a few Instagram influencers, what if they don’t come through? It’s really easy to say what you hope will happen. But actually making it happen is another thing. Business success happens more easily when you apply a multi-channel marketing and sales approach. 

Your financial projections will feel based in reality, when you can demonstrate some prior successes, either in other businesses you’ve already launched, test audiences, local sales you made, prior experience, or data from other businesses. 

Explain your funding request — if applicable

If you intend to ask investors to help fund your business idea, present your request in the final main section of your business plan. If you’ve already secured funding from other sources, include that here as well. An investor will feel better knowing they are not the only one who believes in the potential of your business. 

Will your funding request be for a one-time payment, monthly, annually, or at some other interval? How do you plan to repay their investment? Will you allow them to charge interest? How much ROI can you promise them? 

How WooCommerce can help

WooCommerce can help you build a scalable online business that supports your business plan. No matter what you’re selling, WooCommerce offers a suite of flexible tools that allows you to customize your store to meet your needs and goals. 

Here are just some of the benefits your business will enjoy when you choose to build your store with WooCommerce:

• Sell absolutely anything you can imagine . From physical items and digital downloads to subscriptions, memberships, bookings, courses, and affiliate products, WooCommerce provides everything you need. Want to run a wholesale store? You can do that, too!
• Harness the power of WordPress . Since WooCommerce is a plugin specifically for WordPress, you can take advantage of powerful features like the block editor and blogging capabilities. 
• Capture payments securely. Choose from a large number of payment gateways, from popular options like PayPal and Stripe, to more niche processors for specific locations and types of regulated products. And with tools like WooPayments , you can keep customers on-site, capture a variety of currencies, and even accept digital wallets like Apple Pay and Google Pay.
• Customize your shipping options. Offer free shipping, charge based on weight, set fixed prices, or calculate shipping costs based on real-time carrier rates. You can even use extensions like Table Rate Shipping to create complicated shipping rules based on conditions that you set. And with WooCommerce Shipping , you benefit from discounted shipping labels and the ability to print right from your dashboard. 
• Connect to your social media channels. Use extensions to sync your store with social media platforms like Facebook, Instagram, and Pinterest. You can even sell on those platforms alongside your store without having to update inventory and information manually.
• Integrate with marketing tools. Quickly connect your store to any number of marketing tools, from email platforms like MailPoet to CRMs like Jetpack CRM . You can also implement a number of marketing strategies, from abandoned cart emails to loyalty programs.
• Keep track of your numbers. Ecommerce accounting is a big part of running an online business. While you can easily view data in your dashboard, you can also sync with tools like QuickBooks to make your accountant’s life a little bit easier.
• Manage inventory. Update your inventory levels manually or connect to tools like Scanventory to sync with your warehouse. Running low or out of stock? Add a wishlist option so customers get an alert as soon as it’s available.

As you can see, WooCommerce is well-equipped to handle any type of online store and support you as you grow. Here are a few more reasons that WooCommerce should be your go-to choice for implementing the ecommerce side of your online business plan:

WooCommerce itself is free! Many extensions for WooCommerce can also be found for free in the WordPress.org plugins library or on the Woo Marketplace . If you need to start your website with a limited budget, but want to build on a platform that can grow to support a thriving, high-traffic store, WooCommerce is an excellent option.

You have full control over your store

Unlike other ecommerce solutions that are tied to the platform’s own web hosting, WooCommerce is designed to be used with WordPress along with any hosting provider of your choice. You are also free to use whatever payment processor you want without any additional fees from WooCommerce. You can also customize your site’s appearance and functionality more extensively than you can with other ecommerce platforms and with less (or no) coding knowledge.

Thousands of free and premium extensions

There are over 800 free and premium extensions for WooCommerce on WooCommerce.com alone and over 1,000 in the WordPress.org plugins library . There are also hundreds of independent developers and agencies that offer premium and custom extensions for WooCommerce so that you can customize your store with the exact features you need. 

Excellent support and large community of users

WooCommerce is used by over 3.9 million stores — 23% of all online stores worldwide . The support team is available to answer questions and the documentation library is extensive and thorough. There are also plenty of independent resources for learning how to use WordPress and WooCommerce.

Dedicate time and resources to put your online business plan in action

A successful business plan is one that empowers and guides the business owner to launch their online or ecommerce business, and possibly secure funding. But it only works if you use it.

One advantage of starting an ecommerce store or online business is that you aren’t as locked down by deadlines. With a physical location, once you start paying the rent, you better have your business plan ready to put into action. 

But the beauty of being online is that you have more flexibility on the front end. Despite having more wiggle room with your timelines, you still need to keep your momentum going forward. Staying on track with your business projects and goals is one of the keys to reaching profitability sooner and turning your business plan into reality. A few quick tips:

• Schedule your time. Block out hours and specific days to work on your business.
• Treat it like a job, not a hobby. Build on your momentum week after week.
• Always keep learning. Research your industry, competition, target audience, and potential customers. Learn marketing — you can never know too much.
• Try stuff! Take risks, make calls, create campaigns, write content.

Your business plan template should give you a concrete list of tasks and business objectives. Once you write a business plan, then you can implement it.

Frequently asked questions about writing an online business plan

What are the seven steps of a business plan.

The seven key elements of a business plan are the executive summary, company description, market analysis, organization and management, services and products, marketing plan, and financial projections. If you’re making a funding request, that would be an eighth section.

Where can I find business plan templates?

You can find a free business plan template online, for general business plans as well as for specific industries. However, since each business is different and your plan must be authentic and specific to your company — a business plan template can only get you so far. 

If you need design inspiration for your own custom business plan template or want to start with a pre-designed template that you can customize, you can purchase one for a relatively low cost through a stock resources site like Envato Market or Creative Market .

Do I need a business plan if I am already running an online business or ecommerce shop?

Business plans aren’t only for people who are launching new businesses. You can create a business plan at any time to help you maintain or change the direction of your store or just to get a better picture of the health of your business. Below are a few different types of business plans that you might want to consider for your established online business:

• Operational business plan. Outlines the structure of your business operations, staffing, and logistics.
• Feasibility plan. Feasibility plans are like mini business plans that cover new business ideas and outline steps for implementation.
• Growth business plan. This plan is for businesses that want to demonstrate opportunities and plans for growth to attract investors.
• Maturing business plan. This plan is for businesses looking to merge with or acquire other companies, significantly expand, or go public.
• Strategic business plan. Any time your business wants to shift strategies regarding products or marketing or any other major changes to your previous business plan, you’ll want to create a new strategic business plan to address your new goals and the steps involved in achieving them.

What software should I use for my online business plan?

Your business plan should include some images, graphs, and graphic elements in the layout, so you’ll want to at least use word processing software to put your business plan together. If you have access to Google Workspace, Microsoft 365, Canva, or Adobe Creative Cloud, you’ll have some other options that might lead to a more professional layout.

Here’s a list of free and paid software that can help you put together your online business plan outline:

What do investors want to see in a business plan?

The most important piece of information to show investors in your business plan is potential for profitability. Investors don’t want to throw money at a sinking ship, no matter how cool and exciting the business sounds. 

Most investors also want to make sure that they’ll see a decent return on their investment in a relatively short time period — probably around 5-7 years. How much of a return they’ll expect will depend on your industry and what kind of investor they are. 

Investors will also want to see that you clearly understand your business, your industry, and that you have concrete, actionable steps for achieving, maintaining, and growing profitability. They’ll want to make sure that the key people on your team also understand your business and the roles they play and they’ll want to see that each person has a good amount of experience in their field and the required skill sets to fulfill their job duties, if not go above and beyond. 

Any details you can include that highlight unique aspects of your business will also be important. Any area where you have a competitive edge, are offering a unique or proprietary solution, have established any celebrity endorsements, have the backing of other investors, or have secured special grants will be of special interest to investors.

Create your plan for success

Now that you understand what goes into creating a formal business plan, it’s time to write one! Take the time to think through and consider each aspect of the list included in this article, and you’ll be well on your way to finding success.

And WooCommerce is here to support your business every step of the way, with powerful and flexible tools that help your business grow. Start selling online today !

Share this:

• 30-day money-back guarantee
• Support teams across the world
• Safe and secure online payments

• Credit cards
• View all credit cards
• Banking guide
• Loans guide
• Insurance guide
• Personal finance
• View all personal finance
• Small business
• Small business guide
• View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

41 Online Business Ideas You Can Start in 2023

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

Setting up an online business can help you become an entrepreneur without significant startup costs. The first step: figuring out the best online business idea for you.

What do you have expertise in? What do you love to do? Do you know someone who needs a type of support you could provide? Answering questions like these can offer inspiration as you prepare to start a business .

Here are 41 online business ideas to help you brainstorm. From side hustles to full-time enterprise, e-commerce businesses to services for remote clients, you may be able to run these from home on your own schedule.

Shopify Ecommerce

Basic Plan. Shopify & Advanced Plans Available.  

The 41 best online business ideas

If you're not totally set on going all-in on your online business, many of these ideas can be started part time. As you build your side hustle, it may be successful enough to turn into a full-time gig .

1. E-commerce store

Starting an e-commerce website is relatively easy and cheap — at least when compared with opening up a brick-and-mortar store. You can start with a limited amount of inventory, use an e-commerce website builder to set up your store, then market your products on social media and online marketplaces and see how customers respond. These platforms can also help you manage orders, ship your products and take online payments.

2. Social media marketing

If you’ve got a knack for getting likes, favorites, retweets, followers, shares, comments and clicks, then you might want to consider offering social media marketing services to other businesses. By consulting with companies to manage their social media profiles, spread their content across the web, keep their brands on track and respond to customer questions, you can turn your favorite hobby into your day job.

3. Freelance graphic design

Got an eye for aesthetics? Did you go to art school, or have you always spent your free time designing posters in Photoshop or Illustrator?

If so, then freelance designing might be a good choice. Take on clients at your own speed, build up a good reputation online and by word-of-mouth and work on projects that you find interesting.

4. Freelance writing

If you’re skilled in words instead, you might become a freelance writer . So long as you’ve got an internet connection and a keyboard, you can contribute all types of written content, from blog posts to feature stories to product descriptions. It helps if you’ve got a special area of interest or expertise so your employers will know you’re qualified to comment on certain topics.

» MORE: Best bank accounts for freelancers

5. E-book writing

With Amazon and other websites around, self-publishing has never been easier than it is today. If you think you’ve got something interesting or useful to say — and you believe other people will think so, too — then writing e-books could become a lucrative business.

With e-books, you don’t have to design, print or ship physical copies of your work. Of course, you will have to learn how to format an e-book correctly, pay for editing and cover design services and figure out an effective marketing strategy — but there are plenty of examples to learn from.

6. Translation

If you’re fluent in multiple languages, then translating could be the ideal online freelance job. You can do it from anywhere, so long as you’ve got the text you’re working on and you understand the goal of the translation.

» MORE: Check out 16 other e-commerce business ideas

Editing comes in many shapes and sizes, from copyediting a company’s marketing materials to proofreading novels to indexing academic manuscripts. As long as you have a sharp eye for detail, a strong grasp of grammar and a willingness to get in the weeds, then editing could be a great business idea if you’re interested in working when and how you want.

8. Writing a blog

Starting a blog can support other online business ideas by showing off your skills. Interested in coding, photography and video, fitness, food or anything else? Demonstrate your knowledge by writing great articles on those topics for others’ blogs.

If you choose to start your own blog, it can also generate revenue itself through affiliate links or advertisements.

9. Freelance researching

Whether you’re putting together documents for competitor or market research , answering tough technical questions on forums or analyzing statistics to point out trends, you can put your skills to work for your clients — with the freedom to work how you want.

10. Freelance coding and web design

If you’re seeking flexibility, diversity of projects, taking on work at your own pace and being your own boss, then freelance coding or web design for clients may be a good fit.

Plus, you can double down as a software consultant as well, offering your critical eye and expertise without writing code yourself.

» MORE: Best business credit cards for LLCs

11. Software and app development

Want to take freelance coding to the next level? Instead of helping clients, you can work on your own applications, programs, extensions and add-ons. Whether you sell your work in an app store or you’re holding out for the long haul and are hoping to get bought by a bigger company, the cash you make will be a direct result of your effort and ingenuity. App development is also a way to make money on Shopify .

Keep in mind, it’s not as easy to have a predictable stream of revenue until your app is already out and selling, and by then you’ve already invested a lot of time and energy. You’ll want to be sure that there’s a market out there for the product you’re creating, and that people are willing to pay for it.

12. Business coaching

You’ll need a good track record and a variety of testimonials to back you up, but if you’re already an entrepreneur, business coaching can provide an additional revenue stream. You can offer one-off sessions, small-group experiences or ongoing client relationships at a variety of price points.

13. College consulting

If you went to a top-tier university and have strong writing skills, you may be able to help applicants seeking admission to elite colleges. You might find yourself editing essays, steering students toward test prep courses and recommending scholarship programs, among other things.

» MORE: How to start a consulting business

14. Tutoring

For those studious entrepreneurs who scored highly on standardized tests, tutoring can pull in a lot of money without too much effort. The better your results, the better your reputation — which means the more you can charge per hour, session or package.

15. Online fitness trainer

If fitness and health is your passion, then serving as a fitness trainer to clients could be a fulfilling career. While training people online can be more difficult than being with them in person, this is an increasingly popular option for busy professionals. You can also consider related services like nutrition education.

» MORE: A step-by-step guide to starting a fitness business

16. SEO consulting

Maybe you’re a pro at SEO, or search engine optimization. If you’ve got loads of skill and experience in getting websites to rank highly on Google, and you understand how to turn searchers into customers, then there are plenty of companies willing to pay handsomely for your help.

Whether it’s by editing metadata tags, regularly updating the company blog or searching for smart keywords to rank highly on, a good SEO consultant can drastically change how a company’s website appears to search engine users — and just a few positions on Google can make a huge difference in traffic numbers. In short, you could have a big impact on a business’s bottom line, which means this online business idea is in high demand.

17. Selling handmade goods

If you’re handy or creative, you could craft your products and sell them on sites like Etsy, Amazon and eBay, straight out of your home.

Beyond that, if you’re a visual artist, you may also try selling print-on-demand products. That’s a type of e-commerce business where customers order mugs, T-shirts or other goods and with your artwork printed on them, then a third party creates the product and ships it to the customer.

18. Virtual thrift shop

Maybe you’re not into handicrafts but the idea of an starting an online store is still appealing? Selling clothes online using platforms like thredUP and Poshmark is one option.

If you're more interested in other types of products, you can scour local estate sales and secondhand shops for unique finds. You may also discover good finds on websites like eBay. As you present these products in compelling ways on your own site, good copywriting and a strong brand can go a long way to separating your site from the crowd.

19. Affiliate marketing

Social media pros, take notice: You can get paid by companies to highlight products on your blog, Instagram, Twitter, YouTube or other social channels. The more followers or site visitors you have, the more of an impact your brand recommendation will make, and the more you’ll earn with product placement.

20. Accounting or bookkeeping

Although entering the industry as a virtual bookkeeper or accountant can be tough because of competition from well-known brands in the industry, it can be done if you have the credentials or target clients in a specific niche. You’ll also need formal training and certification, and it may take time to build up a committed client base — but once you do, your clients may be with you for years.

» MORE: See our picks for best small-business accounting software

21. Telemarketing

If you’re a natural conversationalist who likes helping others, virtual telemarketing is another good online small-business idea to consider. Plenty of companies outsource some of their sales and customer service roles, so if you don’t mind working the phone at home or on the go, then try this option out.

22. Online personal assistant

Thinking about becoming a virtual assistant ? What exactly you’ll do depends on what your skills, experience and network of contacts are, but you can expect tasks from data entry to customer management, research, scheduling and other duties.

23. Data entry

If you’re looking for a job that offers a predictable income without requiring intense creativity, then data entry might be a good place to start. Try looking at online job boards for opportunities.

24. Transcription

Offering transcription services online can take many forms: You can transcribe audio interviews for reporters, create captions for TV shows and videos or develop transcribed versions of podcasts. Services like Rev or TranscribeMe can also send you work as it becomes available, which saves you the work of cultivating your own client base.

25. Travel planning

If travel is your passion, you might consider starting an online travel planning business . You can help clients plan every aspect of their trip — from flights to hotels to activities. You can work on itineraries, give tips about food, currency exchange and safety, and serve as a point of contact between your clients and any international contacts.

Not only can you operate your travel planning business at home, you can also do it while you travel. And more traveling will help you grow your business — you might even start a travel blog or photography site to supplement your planning business.

26. Cybersecurity and IT consulting

As a cybersecurity consultant, you can work with businesses of all sizes to evaluate their systems, run testing and offer tips on how they can improve their set up.

For those looking for something broader, you might consider serving as an IT consultant, assisting businesses or individuals with their technology — helping them get it set up, troubleshoot any issues and offer general operating advice.

With the proper computer set up, you can run your cybersecurity or IT consulting business from anywhere — including potentially traveling to clients’ offices for occasional on-site system assistance.

27. Online therapy

With the emergence of companies like TalkSpace and BetterHelp, you no longer have to have an office or your own practice to counsel patients. Again, you’ll need training and proper credentials. But you can explore the online therapy space by joining one of these new companies or another practice that offers virtual appointments.

28. PR consulting

If you're knowledgeable about business branding and marketing, you might start an online PR consulting business. You can assist businesses with their online presence — including social media accounts, press releases, web content and more — as well as advise them on campaigns, initiatives and overall public image.

As a freelance PR consultant, your hours and responsibilities may vary depending on the specific clients you're working with; however, you'll have more control than you would as part of a firm or agency.

29. Podcasting

Provided you have the right audio equipment and a quiet space, you can record your podcast from anywhere. You can then upload your content to various podcast apps and market your business on social media. Once you reach a certain number of listeners, some podcast platforms will help you sell ads and you'll begin generating revenue.

30. Life coaching

Looking for a way to offer advice and guidance to people without needing the extensive education of a medical professional? Consider life coaching . Although you may need a certification to become a life coach, you have much more freedom to find your niche and decide how you can help people through life's ups and downs.

As a life coach, you can also create resources like e-books and courses to give your clients additional resources outside of traditional phone call or video chat meetings.

31. Video production

As a video producer, you can work with different clients in various industries to shoot, cut and edit video to create the perfect final product. Video production can give you the opportunity to explore a unique medium of storytelling and exercise your creativity.

32. Resume writing and career coaching

If you have a background in human resources, or just know your way around formulating the perfect resume, you might consider starting an online resume writing and career coaching business. You can offer clients advice and guidance on their career path, job applications, resumes and cover letters.

LinkedIn is a great place to get started with this type of online business idea, as many professionals look for career help on that platform.

33. Dropshipping

If you don't want the responsibility of creating your own products or buying inventory upfront, you might consider starting a dropshipping business. With this kind of e-commerce operation, you create your own website, choose products from suppliers, list them on your site, and when an order is placed, the supplier will ship them directly to the customer.

You can get started by browsing dropshipping marketplaces or trying to work directly with manufacturers and importers.

» MORE: How to dropship on Shopify

34. Recruiting

If you're a people person and have good online research skills, you might consider a career as a recruiter. As an online recruiter, you can service different businesses looking to hire new employees and help them find and screen candidates. The more experience you have, the higher-level positions you may be tapped to help fill.

35. Marketing consulting

As a marketing consultant, you can provide guidance on a wide range of topics, depending on your specific expertise, and help businesses execute their online marketing strategies and campaigns. This could include email marketing, social media management and advertising, local marketing , event planning and more. You can specialize in a particular industry or geography, or market your skills to a variety of clients using a network like Upwork.

36. Online fundraising or grant writing

Are you passionate about helping mission-based businesses, especially nonprofits, getting the assistance they need? If so, consider a grant writing business. This requires you to work with clients who need help fundraising to identify grants suited to their needs, then apply for and hopefully win them.

37. Online course teaching

You can find information about practically anything online, but sometimes when you're trying to learn a specific skill or topic, it just helps to hear or see someone else explain it. So if there’s a subject you have specialized knowledge of — a particular software program, a craft, a particular historical event — consider designing an online course. If you have formal qualifications like an advanced degree, you might be able to work with an online course service to teach courses online for their students.

38. Online cooking instruction

Do you have an affinity for cooking or baking? Showcasing your skills online via virtual cooking classes is a great way to earn money while doing something you love. There are a variety of ways you can structure your cooking business: You can offer one-on-one instruction videos, host live classes and even create workshops and cooking programs.

This easy business idea could even translate into a cooking blog, e-books, cookbooks and linking your favorite cooking and baking supplies through affiliate marketing.

39. YouTube channel

One way to promote your new brand, service or message is by creating a YouTube channel. If you feel comfortable on camera, have a spot where you can film and love the idea of reaching a wide audience, YouTube might be the right platform for you. Note, though, that it can take some time for your channel to grow and you'll likely need to network on social media and blogging platforms in the beginning.

» MORE: How to make money on YouTube

40. Voiceover work

To start your own voiceover business, you'll need a microphone, sound editing software and the ability to lend your voice to ad agencies, production companies and anyone else looking for a voiceover.

Then, you can sign up for a freelance voiceover site like voices.com and start searching for the right opportunities. Once you've gotten your foot in the door, you'll have excellent clips to show potential clients.

41. Start a team

If you've been freelancing or running your own company for a while, you might be ready to take the plunge and start your own team of consultants or freelancers. For instance, if you have years of writing and editing experience and can no longer handle all your client inquiries yourself, you might be ready to hire your first employee and expand your capacity.

How to choose an online business idea

These online business ideas represent a variety of e-commerce business models . To choose the right one for you, ask these questions.

How do you want to make money?

Lots of business owners seek out predictable, recurring revenue so they can plan their personal finances. Keeping clients on retainer can help with that. But affiliate marketing, advertising or product sales may be harder to predict. Creating a business plan can help you think through your options and decide which you’re comfortable with.

How will you find work?

If you’re selling your skills as a freelancer, consider searching sites like Upwork and Behance to find the right clients. Networking in your local community, joining industry-specific LinkedIn groups and asking for referrals can be helpful, too.

If you’re selling products or building an audience online, you’ll need different tactics. Search engine optimization can help get your videos or product listings in front of people who will be interested in them. But you may need a significant marketing budget to develop an audience that’s large enough to generate revenue.

How much autonomy do you want?

With some online businesses, like selling handmade goods or creating online courses, you’ll have control over your products from start to finish — which can be freeing but also high-pressure. On the other hand, when you’re producing work for clients, you’ll have to conform to the client’s standards — which may feel confining, but you won’t have to do the work of coming up with ideas yourself. Some solopreneurs aim for a mix of client work and self-directed projects so that they have steady revenue while pursuing their passions.

A version of this article originally appeared on JustBusiness, a subsidiary of NerdWallet.

On a similar note...

How to Start a Business From Scratch in 6 Easy Steps

10 min. read

Updated April 30, 2024

Did you know that most of the world’s new businesses are bootstrapped ? 

That’s right, most business owners do not launch with loans or outside investment but instead use their personal resources and savings to get up and running. They start from scratch and reinvest in the business as it gains traction.

And you can do the same. 

Key Takeaways:

• Start with an idea that uses your experience, knowledge, or passion.
• Determine if there’s a need for your product or service.
• Create a plan and financial forecasts.
• Treat it like a side hustle until you get traction.
• What does it mean to start from scratch?

“Starting a business from scratch” does not mean:

• Using no money to launch your business.
• Getting no outside assistance.
• Inventing a business idea no one has done before.

Starting from scratch is about building a business from the ground up, using personal resources and minimal external financial support. The goal is to establish a sustainable business you control that satisfies a need in the market. 

• Why start a business from scratch?

Here’s why starting from scratch might be the right approach for you:

• Risk reduction: Control your initial investment and expenses and scale gradually, allowing you to avoid overspending.
• Full control: With no outside investment or stakeholders to please, you can shape your business how you see fit.
• Proves your idea has real customers: Test your concept with customers early to help refine your offering and validate market demand.
• Fast decision-making: Quickly pivot to meet changing market demands without the red tape of larger organizations.
• Potentially makes future funding easier: You take the time to prove your business model and profitability before seeking funding. Your track record reduces investor and lender risk and can lead to better funding terms.

Brought to you by

Create a professional business plan

Using ai and step-by-step instructions.

Secure funding

Validate ideas

Build a strategy

• 6 steps to start a new business from scratch

For this article, we will focus on the steps that take you from a budding business idea to generating sales. 

For additional resources, check out our starting a business guide .

1. Start with an idea

Do some self-reflection and choose an idea you’re passionate about or one that uses your existing skills and experience. 

This will make it far easier to execute and often requires less research, training, and upfront investment to get up and running than an idea completely new to you.

For example, service-based businesses, like accounting or consulting, often need just your time and expertise. If any cash is needed, it should be a small enough amount to fund yourself, giving you full control over the speed at which you grow your business.

As you explore possible ideas, create a one-page business plan to document how it could work. 

It doesn’t have to be an official plan at this stage; just fill in what you can, mark any assumptions, and keep adding details throughout the rest of this process.

What businesses can you typically start from scratch?

While not an exhaustive list, here are a few potential ideas that can be started from scratch:

• Freelance Writing or Content Creation: Offer writing skills to businesses and online publications.
• Consulting Services: Share your professional management, marketing, or tech expertise.
• Handmade Crafts and Art: Sell your unique creations on platforms like Etsy or at local fairs.
• Tutoring: Offer either in-person or online.
• Web Design and Development: Build websites for small businesses or individuals.
• Virtual Assistant: Provide administrative support to businesses remotely.
• Landscaping and Gardening Services: Turn your love of plants into a business with basic gardening tools.

For more business options and a process to generate ideas, check out our guide on developing good business ideas .

2. Find product-market fit

Landing on an idea is not enough to create a viable business. You need to determine if you have initial product-market fit—that your business satisfies and is demanded by a large enough group of people. 

This involves identifying your potential customers, understanding their motivations and needs, and determining whether they are willing to pay for your product or service. Additionally, spend time researching the market and understand who your competitors are. 

At this stage, you don’t need a fully fleshed-out business. You just need enough of an idea to start speaking to potential customers.  

This is where your one-page plan can be incredibly useful, as it helps you formalize enough information to have the working framework of a business. You can even add notes from your customer interviews to help adapt your plan.

Your goal, in this instance, is to:

• Hone in on pain points your potential customers have
• Verify that you can solve them
• Identify any gaps or issues with your idea
• (Bonus) Make initial sales 

Keep in mind that you may find none of that. Your solution may not be needed or is missing key components. You may even be targeting the wrong audience and need to change course.

That’s completely okay! Most businesses don’t get things right the first time. Be willing to refine and iterate on your initial idea. Verify what works and what doesn’t, and make the right adjustments to create a sustainable business that customers really want.

3. Examine your resources

While I have this as the third step, you’ll likely be doing this throughout every stage of starting a business.

Start by evaluating your funding sources. Personal savings are ideal as they keep you in full control of your business. If needed, consider asking friends and family for small contributions, as they’ll likely be much more flexible about repayment than traditional lenders.

Next, consider if a partner could benefit your venture. Do they bring complementary skills, share the workload, or offer additional resources? 

The right partner can fill crucial roles – like marketing or operations – allowing you to focus on your core strengths. They may even fill a necessary gap to get customers in the door.

Finally, don’t underestimate the power of your network. Reach out to former colleagues, industry peers, and mentors for advice, services, or referrals.

Why you need to know your available resources

Taking stock of your resources is the first step in understanding what is feasible for your business. It helps you determine whether you have enough cash, expertise, and support to meet your customers’ expectations.

For example, let’s say you want to launch an eCommerce website and have enough cash on hand to fulfill orders but require customers to pay for shipping. If you’re competing with similar businesses that offer free shipping, your lack of it could turn customers away.

Similarly, you have a solid understanding of product development and have already gotten pre-orders. But you have no idea how to set up an eCommerce site , keep track of orders, and ensure they actually ship.

In both circumstances, your resources fall short of the needs of your customers. You may have to explore funding ( it doesn’t have to be a loan ) and find a partner with the right skill set to get your site up and running. 

4. Write a business plan and develop financial forecasts

At this point, you need to finalize your business plan and create initial forecasts . 

If you’ve been using the one-page plan throughout the last few steps, then this shouldn’t be a time-consuming process. Your goal at this point is to clearly define:

• Business Model: Value proposition, customer segments, distribution channels, and revenue streams.
• Milestones: Set realistic goals (landing your first customer, scaling, etc.) with specific timelines and action steps to track progress.

For your forecasts, start by estimating your:

• Startup costs and ongoing expenses
• Revenue in the first year of operation
• Cash flow — how much money will be moving in and out of your business each month as you collect revenue and pay expenses

These numbers do not have to be perfect. You’ll likely be making educated guesses or using industry estimates. The point is to have something that you believe represents your business. It will help you maintain a healthy cash flow and understand what it will take to be profitable.

Remember, you don’t need to create an overly lengthy plan or complex financial statements. They’re your tools, so focus on usability – they should be flexible and evolve with your business, helping you make informed decisions.

Dedicate time ( at least monthly or quarterly) to reviewing and updating your plan and forecasts as you gather data to ensure your strategy aligns with real-world performance.

5. Protect your business

As a business owner, you must make your business legal and guard against liabilities. To keep things simple, we’ll assume you’re starting as a sole proprietorship for this article.

Check out our full guide to learn more about the specifics of each legal structure .

Necessary legal components for a simple startup:

• Business Registration: As a sole proprietor, you may not need to register your business with the state government if you do business under your legal name. However, if you operate under a name that’s not yours, you must file for a “Doing Business As” (DBA) name. This is often required to set up a business bank account.
• Licenses & Permits: Research local requirements for your specific business type. You may need a general business license, professional licenses, or specific permits (e.g., health and safety). Contact your city or county business office for details.
• Tax Registration: Report business income on your personal tax return. If you plan to hire employees, you’ll need to apply for an Employer Identification Number (EIN) from the IRS. Even without employees, an EIN can protect your personal information and may streamline certain business transactions. Check if you need to register for state sales tax collections.
• Insurance : Consider general liability insurance for accidents and negligence claims. Get professional liability (errors and omissions) insurance if you offer professional services.
• Contracts: Use written agreements for business partners and supplier or contractor transactions. This clarifies expectations, prevents disputes, and protects both parties. Contact a lawyer to review or help you write this documentation if needed.

6. Promote and run your business

At this point, you just need to run your business. You don’t need to go all in, either. Launch it as a side hustle until you hit the point where it can become your full-time focus.

Don’t overcomplicate it: Set up a simple website, payment system, and essential operational tools. You want to serve customers immediately and learn from real-world experience.

But unless you locked in pre-orders earlier in this process, you’ll need to market your business to do it. 

Select marketing channels you believe will reach your target customers. Start small — you want to avoid overspending while you determine the right mix of marketing tactics. If you’re unsure where to start, paid social media ads (Facebook and Instagram), email campaigns, and local partnerships can be inexpensive options.

Stick to the budget you created, run small, easily measured marketing tests, and look for a positive return on investment (i.e., bringing in more revenue from sales than you spent on advertising). 

Only consider increasing spending after you start bringing in customers.

• Continue to review and revise

You are on your way to running a sustainable business and may even have your first customers already! 

Just don’t get too far ahead of yourself. You’re still proving that there is traction that can be repeated with multiple customers. 

As you operate, review your plan and forecasts. Pay close attention to your cash flow and be willing to pivot if things aren’t working. 

That’s the benefit of starting from scratch: You are in full control and can scale and spend at a pace that improves your chances of success.

If you haven’t yet, download a free one-page business plan template to document your idea. The earlier you begin developing the plan, the more useful it will be throughout the startup process.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

Table of Contents

Related Articles

5 Min. Read

How to Start a Side Hustle

8 Min. Read

How Much Does it Cost to Start a Business?

11 Min. Read

7 Steps to Successfully Start a Business With No Money

2 Min. Read

What to Do Before Starting a Business

The Bplans Newsletter

The Bplans Weekly

Subscribe now for weekly advice and free downloadable resources to help start and grow your business.

We care about your privacy. See our privacy policy .

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

Discover the world’s #1 plan building software

Create Your Business Plan in Minutes

Type your business idea below.

What Our Users Say

Zakariya A.

How it Works

Questionnaire

Respond to a series of targeted questions about your business goals and objectives.

AI Business Plan Generator

The engine analyzes your responses and generates a business plan tailored to your vision.

SBA Approved Business Plan

Receive a detailed, tailored business plan that aligns with your requirements. Ready for funding.

WHO BENEFITS FROM Plannit?

Aspiring Entrepreneurs

Analyze your ventures through extensive business plans aligned with your vision and goals.

Business Owners

Back your business with a solid plan that aligns with your vision and goals. Perfect for startups and small businesses.

Educational Institutions

Develop your business understanding and vocabulary by analyzing your business idea and creating a plan.

Startups Accelerators

Work alongside your founders as they build their plan to ensure they have a solid roadmap for growth and scalability.

Try Plannit AI For Free

Funding ready business plan, executive summary, company overview.

Problem Statement

Business Description

Mission Statement

Business Model

Products and Services

Additional Features

Revenue Model

Market Analysis

Target Market

Market Size and Segments

Unique Value Proposition

Risks and Mitigations

Identified Risks

Mitigation Strategies

Financial Overview

Income Statement

Marketing and Sales Plan

Focus On Your Vision

Key features & benefits, ai editing companion.

Modify and regenerate sections of your business plan using premade or custom prompts. Our AI will help you refine your plan to perfection.

Multi-User Collaboration

Invite team members with easy sharing to collaborate on your business plan in real-time. Communicate and make changes together. Collaborate with your partners in real-time as you perfect your plan.

Education Center

Immerse yourself in a rich library of articles, tools, templates, webinars and resources for continuous business and professional growth. Learn all about the key aspects of starting, running and growing a business.

Powered by Chat GPT

Our algorithms are powered the latest in AI technology to ensure the most accurate and relevant output. We use OpenAI's GPT 4 and 3.5 engines for the perfect blend of accuracy and speed.

Business Resources

We recommend a variety of useful tools and resurces that help sustain your growth. We only recommend the best in the business. Filter your needs and equip yourself with the best tools.

Plan Samples

Explore a library of sample business plans we generated to get the idea of what to expect. Currently able to generate viable plans for 50+ industries.

Financial Projections

Take an additional questionnaire about your financial trajectory and get a detailed financial projection + 3 year income statement for your business.

Tools and Templates

Plannit's comprehensive suite that accompany business planning. From pitch decks to financial models, we have you covered.

Plan Export

Download your business plan in an editable .docx format. Fully edit & share your plan with investors, partners, and stakeholders.

Privacy & Security

Rest assured, your privacy is our top priority, and we're committed to keeping your information safe and confidential.

PLANNIT BUSINESS ECOSYSTEM

Frequently Asked Questions (FAQ)

• Initiate with Your Business Concept: Lay the Groundwork: Start by introducing your business idea into Plannit AI's Business Plan Generator. This first step is crucial, as it sets the tone for a tailored, insightful business plan that truly resonates with your vision. Capture the Essence: Our platform is designed to grasp the nuances of your concept, ensuring that the generated plan accurately reflects the core and potential of your business.
• Navigate Through the AI-Guided Questionnaire: Tailored Interactive Experience: Plannit AI’s AI-guided questionnaire is your interactive guide through the planning process. It meticulously gathers information about your business's objectives, strategies, and market positioning, ensuring a comprehensive and reflective plan. Intelligent Feedback and Suggestions: As you progress through the questionnaire, benefit from smart prompts and suggestions, ensuring that your plan is not just detailed but also strategically sound and aligned with industry standards.
• Generate Your Plan with Advanced AI: Intuitive Plan Creation: With the questionnaire complete, Plannit AI's advanced algorithms intelligently analyze your responses. They then craft a detailed, customizable, and strategically aligned business plan, providing you with a structured, coherent, and actionable format. Benefit from AI-Powered Insights: Plannit AI offers AI-driven insights and suggestions, ensuring your plan is not just a document but a strategic tool equipped with tailored AI prompts and an in-app plan editor. Get inspired by browsing through our sample business plans, a collection of successful strategies across various industries.
• Finalize Your Plan with Confidence: Dynamic Adaptation and Refinement: Plannit AI recognizes that a business plan is a living document. Our platform allows for continuous adaptation and refinement, ensuring your strategy remains agile, relevant, and aligned with your evolving business goals. Professional Presentation and Sharing: Once your plan meets your standards, utilize Plannit AI's export features to present your plan professionally. Choose between various formats for exporting your business plan, ready to impress stakeholders, attract investors, or guide your team. Review and Adapt: Ensure your business plan is a living document, ready to evolve with your growing business. Plannit AI's dynamic platform allows you to adapt your strategy as new opportunities or challenges arise.
• Roadmap for Success: At its core, a business plan acts as a strategic guide, providing detailed steps on how your business will achieve its objectives. It helps you navigate the startup phase, manage growth effectively, and tackle unforeseen challenges with a well-thought-out strategy.
• Securing Funding: For startups and businesses looking to expand, a business plan is crucial for securing loans or attracting investors. It demonstrates to potential financial backers that your business has a clear vision, a solid strategy for profitability, and a plan for delivering returns on their investment.
• Informed Decision-Making: A well-prepared business plan offers valuable insights into your market, competition, and potential challenges. This information is vital for making informed decisions, from day-to-day operations to long-term strategic shifts.
• Market Analysis and Strategy: It allows you to conduct an in-depth analysis of your target market, understand customer needs, and position your product or service effectively. The marketing strategy outlined in your business plan helps in identifying the best channels and tactics to reach your audience and achieve market penetration.
• Financial Planning: One of the most critical components of a business plan is the financial forecast. It outlines your funding requirements, expected revenue, profit margins, and cash flow projections. This section is essential for budgeting, financial management, and ensuring the financial viability of your business.
• Goal Setting and Performance Measurement: A business plan sets clear, measurable goals and objectives. It provides a framework for monitoring performance, measuring success, and making necessary adjustments to stay on track.
• Aspiring Entrepreneurs: If you're at the idea stage, looking to transform your vision into a viable business, Plannit AI offers the tools and guidance to bring your concept to life. Our platform helps you articulate your business idea, define your target market, and develop a solid plan to turn your dream into reality.
• Students and Educators: For students delving into the intricacies of business planning and educators teaching the fundamentals of entrepreneurship, Plannit AI serves as an invaluable resource. It provides a practical, hands-on tool for learning and teaching how to create detailed business plans, analyze markets, and understand financials in a real-world context.
• Startup Founders: In the dynamic startup environment, Plannit AI is the ideal partner for founders looking to pivot quickly, secure funding, or understand their competitive landscape. With our AI-driven insights and market analysis tools, startups can make informed decisions and adapt their strategies to thrive in competitive markets.
• Small Business Owners: For small business owners seeking to optimize their operations, expand their customer base, or explore new markets, Plannit AI offers targeted solutions. Our platform simplifies the planning process, enabling owners to focus on growth while managing the day-to-day challenges of running their business.
• Consultants and Freelancers: Consultants and freelancers specializing in business development, strategic planning, or financial advising will find Plannit AI a powerful addition to their toolkit. It allows them to provide clients with comprehensive, data-driven business plans and strategies, enhancing the value of their services.
• Non-Profit Organizations: Leaders of non-profit organizations can leverage Plannit AI to plan initiatives, secure funding, and manage resources more efficiently. Our platform helps non-profits articulate their mission, set achievable goals, and measure their impact, ensuring they can make a difference in their communities.
• Innovators and Inventors: Individuals looking to commercialize innovative products or technologies can use Plannit AI to navigate the complexities of bringing new ideas to market. From patent strategies to go-to-market plans, our platform covers all bases, ensuring innovators can focus on what they do best.
• Small Business Development Centers (SBDCs) and Government Agencies: Government and SBA backed entities can greatly benefit from integrating Plannit AI into their services, enhancing their ability to support a larger number of clients more efficiently. By facilitating quicker, more in-depth business plan development, these organizations can spend more time assisting with plan execution and less time on creation, ultimately serving their communities more effectively.
• Anyone with a Business Idea: Ultimately, Plannit AI is for anyone with a business idea, regardless of industry, experience, or stage of business development. Our mission is to democratize business planning, making it accessible, understandable, and actionable for everyone.
• Interactive Questionnaire and ChatGPT Integration: Plannit AI transforms the business planning process into an engaging conversation. Through our advanced ChatGPT integration, we offer a questionnaire that dynamically adapts to your responses, ensuring your plan is personalized, comprehensive, and aligned with your business goals.
• Dynamic Planning Environment: Unlike static templates provided by many, Plannit AI introduces a living platform that grows with your business. It features real-time updates, strategic insights, and a feedback mechanism that keeps your business plan current and actionable.
• Extensive Educational Resources: Our Education Center is packed with articles, guides, and sample plans to bolster your planning process. It's designed to arm you with the knowledge to navigate the complexities of your industry confidently.
• Enhanced Collaboration and Customization: Recognizing the collaborative essence of business planning, Plannit AI supports team efforts with multi-user editing, annotations, and feedback features, ensuring a comprehensive approach to your strategy.
• Customer Success Stories: Our users' achievements are a testament to Plannit AI's effectiveness. These success stories illustrate how diverse businesses have utilized our platform for strategic planning and growth.
• Tailored Business Plan Creation: Our platform stands out with its tailored approach, featuring customizable templates that directly cater to your business type and industry, making plan creation straightforward and relevant.
• Content Generation:: ChatGPT helps draft various sections of a business plan, from executive summaries to marketing strategies, by providing structured and coherent text based on the prompts given.
• Strategic Insights: It can offer suggestions on business strategies by analyzing trends and providing examples from a wide range of industries.
• Financial Planning: While it can't replace professional financial advice, ChatGPT can guide the structure of financial projections and statements, helping you consider important financial aspects of your plan.

Take The First Step Towards Success With our AI-Generated Business Plans

• Integrations
• Sustainability & ESG
• How to Videos
• Developer Platform
• Zoom Ventures
• Zoom Merchandise Store
• Zoom Rooms Client
• Browser Extension
• Outlook Plug-in
• Lync Plug-in
• Android App
• Zoom Virtual Backgrounds
• 1.888.799.9666
• Contact Sales
• Plans & Pricing
• Request a Demo
• Webinars and Events
• Support Center
• Learning Center
• Zoom Community
• Accessibility
• Developer support
• Privacy, Security, Legal Policies, and Modern Slavery Act Transparency Statement
• Bahasa Indonesia
• US Dollars $

Upcoming Meetings

rue21 files for bankruptcy for the third time, all stores to close

rue21 has filed for Chapter 11 bankruptcy and is closing all of its over 500 stores.

Reuters reported that the teen fashion retailer plans to close all of its 543 U.S. stores within the next two months while conducting large "going out of business" sales, according to court documents filed in U.S. Bankruptcy Court in Delaware. rue21 also plans to sell its intellectual property.

rue21 has not issued a press release or commented publicly on the bankruptcy as of Friday morning. The company's website appears to be down.

rue21 has filed for bankruptcy twice before

This is not the first time the retailer based in Warrendale, Pennsylvania has filed for bankruptcy, previously filing in 2003 and 2017, when it closed 400 stores and cut about $700 million in debt. Reuters reported that rue21 currently has approximately 4,900 employees and $194.4 million in debt.

The company was founded in 1970 as Pennsylvania Fashions Inc. and operated under various brand names until it filed for bankruptcy in 2002. It exited bankruptcy in 2003 and was renamed to rue21.

rue21 tried to sell its business but could not find a buyer willing to pay more than it would earn by liquidating its inventory and shutting down stores, Reuters reported. It has hired the financial consultant Gordon Brothers to help with store closing sales.

Other retailers file for bankruptcy

rue21 is the latest retailer to file for bankruptcy and close stores. In April, longtime mall retailer Express filed for Chapter 11 bankruptcy and is closing approximately 95 Express retail stores and all of the brand's UpWest stores. The fabric and crafts store Joann filed for bankruptcy in March, although its stores are not expected to close, and the U.K.-based The Body Shop announced in March its U.S. subsidiary was no longer operational and will be closing all stores.

Here's the latest on Buc-ee's plans to build one of the world's largest gas stations in Wisconsin

It’s been about a year since Buc-ee’s revealed its plans for its first Wisconsin gas station and convenience store, which would be among the largest in the world.

Since then, news has been relatively quiet, but that doesn’t mean excitement isn’t lingering among Wisconsin residents hoping to find out what all the buzz is about.

The planned site in DeForest, near Madison, is northwest of the Interstate 39/90/94 and County V interchange. There are still hopes construction will start this summer. When it opens, it'll become a major hub for travel commerce.

In September, the Journal Sentinel detailed exactly why there’s so much buzz around the company’s plans. As we wrote then, “Everything is bigger in Texas – Buc-ee’s is, too.”

So here’s what to know about Buc-ee’s as we near a potential construction start date:

So, what is Buc-ee’s again?

The Texas chain's stores are, first and foremost, massive. The site for the planned location is around 74,000 square feet and will have 631 parking spaces.

It'll be a contender for the largest gas station in the world, which already happens to also be a Buc-ee’s. Compared to ubiquitous Kwik Trip, Buc-ee’s is about the size of eight combined.

More than that, Buc-ee’s is known for its popular mascot, a beaver named Bucky; its wide range of snacks; and very clean bathrooms. Check out our prior breakdown of the store — from a native Texan, to boot — for the full rundown of what makes this place so popular.

It’s worth noting that the Wisconsin location is quite expensive, too, with a projected cost of $20 million.

Why is Buc-ee's planning a location in DeForest, Wisconsin?

While the company hasn’t explicitly said why it picked the interchange for its location, there are some details that offer solid hints.

It’s about 39 miles from the Wisconsin Dells, a very popular tourism hub in the state, and near the intersection of three major interstates. In fact, that interchange had an average daily traffic count of 59,000 cars in 2023, per the data from the Wisconsin Department of Transportation.

When will the Buc-ee’s in Wisconsin open?

The Journal Sentinel first reported on Buc-ee’s Wisconsin plans in August 2023. A that time, the company hoped to receive final approval in the fall and had received a conditional use permit in March 2023.

As of April, the company had not yet submitted for site plan review and approval, said Alex Allon, DeForest's community development director, in an email.

As for when it would begin construction or open, that’s still up in the air. The company can “hopefully” start building this summer, said Jeff Nadalo, Buc-ee’s general counsel, in a March email. In April, he said there were no new updates on the project.

Could there be more Buc-ee's in Wisconsin?

We can’t give a clear answer here, either. However, Nadalo said they “are interested in additional locations in WI, though we do (not) have any confirmed projects to announce.”

Isn’t Kwik Trip competing with Buc-ee’s nearby?

Sort of, but not exactly. Let us explain.

In late March, the Journal Sentinel reported that Kwik Trip bought 151 acres in Dane County for a new distribution center. That building is planned for the southwest quadrant of the intersection between U.S. 51 and State 19 and cost Kwik Trip $14.1 million, according to the Wisconsin State Journal.

Sixty of those acres are planned to develop into a satellite distribution center and fleet services center, DeForest village administrator Bill Chang said. Between the two, the facilities will serve 350 Kwik Trip stores in southern Wisconsin and bring about 400 jobs to the area.

That project is scheduled to take at least a year and a half, with construction starting this spring or summer.

Now, back to how that plays into Buc-ee’s. The proposed Kwik Trip site is about 10 minutes away from the proposed Buc-ee's site. Chang said the plans by both companies should have zero effect on one another.

Press Herald

Account Subscription: ACTIVE

Questions about your account? Our customer service team can be reached at [email protected] during business hours at (207) 791-6000 .

9 places to nosh on bagels in southern Maine

From old-school spots to foodie favorites, there's a 'hole' lot to try.

You are able to gift 5 more articles this month.

Anyone can access the link you share with no account required. Learn more .

With a Press Herald subscription, you can gift 5 articles each month.

It looks like you do not have any active subscriptions. To get one, go to the subscriptions page .

Loading....

Bread and bagels at The Works Cafe in downtown Portland. Photo by Aimsel Ponti

From New York-style boiled bagels to Montreal-inspired wood-fired ones, there’s lots of great bagels in southern Maine and several shops have the accolades to back that up.

In 2023, Bon Appetit named bagels from Rose Foods and Rover Bagel among the best in the country.

Two years before that,  Food & Wine Magazine put Rover, Forage and Scratch Baking Co. on its list of best bagels in the U.S.

Whether you like yours toasted with cream cheese or as the bread for your breakfast sandwich, you can find plenty of styles and flavors from Biddeford to Brunswick.

BEACH BAGELS

The offerings at Beach Bagels include a French toast and marble bagel, and the cream cheese menu comprises spreads like strawberry, olive and honey walnut. Along with breakfast sandwiches, Beach Bagels has hearty breakfast options like omelets and pancakes. Best of all, you’re steps away from a beach stroll. Just don’t let the seagulls steal your bagel. Advertisement

WHEN: 7 a.m. to 3 p.m. daily WHERE: 34 Old Orchard St., Old Orchard Beach. beachbagels.yolasite.com ______________

Dutchman’s opened in 2022 as a pop-up housed at Nomad pizza in Brunswick’s Fort Andross building. It’s since become a permanent fixture there and uses the pizzeria’s wood-fired ovens to bake its bagels. The hand-shaped, honey-boiled bagels come in plain, roasted garlic, poppy and a bagel-of-the-day flavor.

WHEN: 8 a.m. to 1 p.m. Thursday to Sunday WHERE: Fort Andross, 14 Maine St., Brunswick. dutchmans.me ______________

FORAGE MARKET

Making bagels at Forage Market involves a two-day aging process. The bagels are naturally leavened with wild yeast starter and baked next to a hardwood fire. There are usually five flavors available, including sesame and garlic. Breakfast sandwiches (including vegan options) are available. Forage also has a location in Lewiston. Advertisement

WHEN: 7 a.m. to 1 p.m. Monday to Friday, 8 a.m. to 1 p.m. Saturday and Sunday WHERE: 123 Washington Ave., Portland. foragemarket.com _____________

MISTER BAGEL

There are 10 or so Mister Bagel locations in Maine, including South Portland and Falmouth. It all began with the Portland location, which was the first bagel shop to open in Maine. The late Rick Hartglass started Mister Bagel in 1977, and it is still a family business. Music fans will appreciate the breakfast sandwich menu, which includes The David Bowie (bacon, egg and American cheese), the Jimmy Buffett (egg with roast beef and cheddar) and The Lady Gaga (avocado, salt and pepper, with or without egg).

WHEN: 6:30 a.m. to noon Monday to Friday, 7 a.m. to noon Saturday and Sunday WHERE: 599 Forest Ave., Portland. misterbagelforestave.com ______________

At Rose Foods, the menu varies depending on the day, but there are usually six to eight flavors available. For example, should you pop in on a Friday, you’ll find a poppy and onion bialy (a cousin of the bagel that is not boiled). Rose Foods also makes a number of bagel sandwiches, including the Classic Nova with Nova lox and the Classic Whitefish. Advertisement

WHEN: 7 a.m. to 2 p.m. daily WHERE: 428 Forest Ave., Portland. rosefoods.me

______________

ROVER BAGEL

At Rover Bagel, you’ll find wood-fired plain, poppy, sea salt, sesame and everything bagels available most of the time, and the spread game here is strong with cream cheese options like lemon-thyme-honey cream and chili-garlic.

WHEN: 7 a.m. to 1 p.m. Wednesday to Friday, 8 a.m. to 1 p.m. Saturday, 8 a.m. to noon Sunday WHERE: 10 West Point Lane Suite 10-204, Biddeford (Pepperell Mill). roverbagel.com

______________ Advertisement

SCRATCH BAKING CO.

You haven’t lived until you’ve experienced the line of devoted fans waiting for Scratch Baking Co. to open, especially on weekend mornings. Along with the popular Maine sea salt, plain and other everyday flavors, Scratch has a daily special bagel. There’s honeyed rosemary on Wednesday and jalapeno cheddar on Thursday. Scratch is also famous, at least to locals, for its P-Cheese spread. It’s a pimento cheese recipe made with cheddar, mayo, roasted red peppers and seasoning and was passed down to co-owner and head baker Allison Reid by her grandmother, Mern.

WHEN: 7 a.m. to 1 p.m. Wednesday to Saturday, 7 a.m. to noon Sunday WHERE: 416 Preble St., South Portland. scratchbakingco.com ___________

THE MAINE BAGEL

The Maine Bagel is a drive-thru with several breakfast and other kinds of sandwiches available. With a bagel list that features egg and bialy among the standards, the family-owned spot is the perfect place to stop on your way to Pine Point Beach. The Maine Bagel really shines with a dozen kinds of cream cheese spreads, including raisin-walnut, lox, strawberry, cranberry-nut and bacon-chive.

WHEN: 6:30 a.m. to 2 p.m. Tuesday to Friday, 7 a.m. to 1 p.m. Saturday. WHERE: 117 Route 1, Scarborough. themainebagel.com Advertisement

THE WORKS CAFE

The Works Cafe is an institution on the edge of the Portland’s Old Port. It opened in 1990 as Bagel Works before it changed its name in 2002. The original shop in this regional chain opened in Manchester, Vermont, in 1988, and there are 11 locations around New England, though just the one in Maine. Gone are the ’90s-era banana-walnut bagels and cold pizza cream cheese, but The Works Cafe is still a reliable place to grab a salt, multigrain or cinnamon raisin bagel, among others. The menu also has bowls, sandwiches and smoothies.

WHEN: 6 a.m. to 7 p.m. daily WHERE: 15 Temple St., Portland. workscafe.com

Success. Please wait for the page to reload. If the page does not reload within 5 seconds, please refresh the page.

Enter your email and password to access comments.

Forgot Password?

Don't have a commenting profile? Create one.

Hi, to comment on stories you must create a commenting profile . This profile is in addition to your subscription and website login. Already have a commenting profile? Login .

Invalid username/password.

Please check your email to confirm and complete your registration.

Create a commenting profile by providing an email address, password and display name. You will receive an email to complete the registration. Please note the display name will appear on screen when you participate.

Already registered? Log in to join the discussion.

Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why .

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.

Send questions/comments to the editors.

Member Log In

Please enter your username and password below. Already a subscriber but don't have one? Click here .

Not a subscriber? Click here to see your options