Want to Start a Small Business Online? Here's how. Follow this plan to attract visitors to your small business's site — and ensure they make a purchase once they're there.
By Allen Moon Edited by Melissa Malamut
Key Takeaways
- It takes different skills and website features to run a successful online business or store.
- Start by finding your target audience and carving out a niche.
- Starting an online business can be lucrative, but it can also come with expenses such as tech support and website maintenance.
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Did you know there's a proven sequence of steps you can follow to guarantee your success when you're starting a small business online? It's true. Thousands of people start and grow successful businesses full-time or on the side every day. Here are 10 steps to get started.
- Determine a niche and find the ideal market
- Conduct market and product research
- Write a business plan
- Source products or materials
- Design and build a website
- Define the brand with dynamic copy
- Use search engines to drive targeted buyers to the site
- Establish the company (or brand) as an expert
- Use email marketing to turn visitors into buyers
- Increase income through back-end sales and upselling
Whether you're a newbie entrepreneur or a seasoned business owner, everyone can benefit from following these steps when starting or growing a business online.
Step 1: Determine a niche and find the ideal market
Most people who are just starting out make the mistake of looking for a product first and a market second. To boost your chances of success, start with a market. The trick is to find a group of people who are searching for a solution to a problem, but not finding many results. The internet makes this kind of market research easy. To find a market, follow these steps:
- Visit online forums to see what questions people ask and what problems they're trying to solve.
- Do keyword research to find words people are searching but that don't have a ton of competition with other sites.
- Check out potential competitors by visiting their sites and taking note of what they're doing to fill the demand. Then use what you've learned to create a product for a market that already exists — and do it better than the competition.
Finding your niche is key to earning a devoted and passionate client base. The more specialized you are, the more you can stand out from competition. But don't get too niche. Your target audience should be broad enough to find diverse customers but focused enough to not compete with major companies or brands.
Related: 8 Great Time-Tracking Apps for Freelancers
Step 2: Conduct market and product research
Don't pour thousands of dollars into an idea you haven't properly researched. Part of determining your niche involves digging into the data: how similar businesses fare, potential expenses, product viability, market demand. Much of this research can be conducted online, but it never hurts to tap into your outside networks. You can do this by:
- Setting up informational interviews with similar business owners
- Reaching out to potential suppliers for estimates
- Starting conversations with members of those niche online communities
- Surveying target audience groups for what they want in a certain product or service
You can hire market researchers to help, but it's not difficult to do on your own work. It takes a bit of outreach and organization to compile the necessary information, but doing proper research will save you plenty of money (and time) in the long-term. This is also the time to dig into online business laws to ensure you run your company legally. Learn more about secondary market research and how it can validate a business idea.
Step 3: Write a business plan
You may be running a business from home, but you're not off the hook from writing what is essentially a roadmap for your company. This document acts as a guide and provides space to set goals (short- and long-term) and outline how you plan to achieve them. A business plan should also include:
- Financial projections
- Specific metrics to reach
- Potential challenges
- Contingency plans for unexpected situations
- A growth model
A business plan generally runs between 15 and 20 pages, and it can also help you secure funding. If seeking outside investors or lenders, you'll need to show them how their money will be spent. Having a professional business plan will add clarity and structure for your business.
Step 4: Source products or materials
If you're physically selling and shipping products, you'll need to find a wholesale source. Ideally, you can lean on connections you made in the product research stage of starting your online business. Having spoken with similar business owners and possible suppliers, you should have a number of sources to contact. Before making any big purchases, though, consider doing the following:
- Visit trade shows and check out online directories to get in touch with possible sellers.
- Seek out multiple quotes (at least three to five, if possible) to find the best and most affordable option.
- Get in touch with other business owners, using that seller to gauge their quality and reliability. If possible, request samples to evaluate the quality yourself.
- Negotiate pricing, quantities and contract terms.
It's best to start with a smaller pilot order, especially if you're just getting off the ground. This is like a final test for the seller, and if you're happy let them know: A good relationship with wholesalers will pay dividends down the road and can lead to priority service, better contract terms and more grace if you're ever struggling.
If your online business deals with a service rather than selling products, this is also the time to find people to help with tech support, taxes, payroll (if necessary), digital marketing, legal compliance and graphic design.
Step 5: Design and build a website
Once you've got your market and product, you're ready for your small business web design. Remember to keep it simple. You have fewer than five seconds to grab someone's attention before they're gone, perhaps never to be seen again. Some important tips to keep in mind:
- Choose one or two plain fonts on a white background.
- Make your navigation clear and simple, and the same on every page.
- Only use graphics, audio or video if they enhance your message.
- Include an opt-in offer so you can collect email addresses.
- Make it easy to buy — no more than two clicks between potential customer and checkout.
- Your website is your online storefront, so make it customer-friendly.
Professional web design services can cost thousands of dollars, but it's often worth it. Unless you're a web designer yourself, it's best to leave this step to the professionals. Your website is a first impression, and you want it to be easy for customers to navigate. Also, it's a pain to redesign and rebuild the entire thing, so do it right the first time.
Related: Ultimate Guide to Shopify by Jason R. Rich
Step 6: Define the brand with dynamic copy
Ask yourself: How are you different from the competition? To start, build a brand with personality. This could be done through sleek design, provocative imaging and, at the very least, website copy that sells. In fact, there's a proven sales copy formula that takes visitors through the selling process — from the moment they arrive to the moment they make a purchase:
- Gain interest with a compelling headline.
- Describe the problem your product solves.
- Establish your credibility as the solution to this problem.
- Add testimonials from people who have used your product.
- Talk about the product and how it benefits the user.
- Make an offer.
- Make a strong guarantee.
- Create urgency.
- Ask for the sale.
Throughout your copy, you need to focus on how your product or service is uniquely able to solve people's problems or make their lives better. Think like a customer and ask "What's in it for me?" It also helps to have a story: How did you get into this work? Why? People can relate to personal experience, so lean into your own unique background.
Related: Write Your Business Plan by The Staff of Entrepreneur Media, Inc.
Step 7: Use search engines to drive targeted buyers to your site
Pay-per-click advertising is the easiest way to get traffic to a brand-new site. It has two advantages over waiting for the traffic to come to you organically. First, PPC ads show up on the search pages immediately. Second, PPC ads allow you to test different keywords, as well as headlines, prices and selling approaches. Not only do you get immediate traffic, but you can also use PPC ads to discover your best, highest-converting keywords. Then you can distribute the keywords throughout your site in your copy and code, which will help your rankings in the organic search results.
Step 8: Establish the company (or brand) as an expert
People use the internet to find information. Provide that information for free to other sites, and you'll see more traffic and better search engine rankings for your own site. The secret is to always include a link to your site with each tidbit of information.
- Give away free, expert content. Create articles, videos or any other content that people will find useful. Distribute that content through online directories or social media sites.
- Include "send to a friend" links on valuable content on your website.
- Become an active expert in industry forums and social networking sites where your target market hangs out.
You'll reach new readers, but even better, every site that posts your content will link back to yours. Search engines love links from relevant sites and will reward you in the rankings, whether you're selling a service or a product.
Step 9: Use email marketing to turn visitors into buyers
When you build an opt-in list for your website, you're creating one of the most valuable assets of your online business. Your customers and subscribers have given you permission to send them an email. That means:
- You're giving them something they've asked for.
- You're developing lifetime relationships with them.
- The response is 100% measurable.
Email marketing is cheaper and more effective than print, TV or radio because it's highly targeted. Anyone who visits your site and opts into your list is a very hot lead, and there's no better tool than email for following up with those leads.
Step 10: Increase income through back-end sales and upselling
One of the most important internet marketing strategies is to develop every customer's lifetime value. Closing that first sale is by far the most difficult part — not to mention the most expensive. Once they've made the first purchase, use back-end selling and upselling to get them to buy again:
- Offer products that complement their original purchase.
- Send out electronic loyalty coupons they can redeem on their next visit.
- Offer related products on your "Thank You" page after they purchase.
- Reward your customers for their loyalty and they'll become even more loyal.
Why you should start an online business
Whether you want to change careers or earn a bit of passive income, there are numerous reasons to start an online business. However, keep in mind that starting a new business does have its challenges. More than 20% of small businesses fail in their first year, according to data from the U.S. Bureau of Labor Statistics, and even without a storefront the costs can add up: website design and maintenance, shipping, taxes, fees to platforms like Shopify, etc.
Pros and cons of starting an online business
| Pros | Cons |
Reach a global audience Rather than attracting customers in a specific neighborhood, you can use online marketing tools to find potential customers anywhere in the world — utilizing specific keyword searches and targeted advertising. | Steep competition |
Work from anywhere You can work from home, sure, but running an online business also allows you to work from anywhere in the world with internet access. Not everyone is built for the digital nomad life, but you can give it a try with the flexibility offered by this kind of business. | Tech issues Any issue with your website — slow load times, glitches, plug-ins not working, cyber attacks — will have a major effect on your bottom line. Running and maintaining a website isn't cheap, and the importance of cybersecurity shouldn't be lost on you. Tech complications will inevitably arise, so build these into your business plan ahead of time. |
Make money while you sleep You can earn money any hour of the day running an online store, as customers around the world can make purchases. With a service business, you can also hire outside help to cover work done during off-peak hours. | Little to no physical interaction It can be hard to build trust and a positive reputation when you rarely, if ever, meet customers (or employees) face to face. Your reputation will entirely rest on what you can deliver, which might be out of your control: shipping issues, warehouse complications, tech headaches. This makes it doubly important to be responsive to customers and address issues within 24 hours. |
What you'll need to create an online store
There are a few major differences between running an online service and an online store, from web design to promotional copy. But perhaps the biggest difference is the need for payment platforms and special ecommerce features on your site. Including:
Website builder
Whether you're building your site on Wix, Shopify, Squarespace or one of the many website platforms, it's best to choose a service you're comfortable using. After the initial build, there may be times when you have to go into the back-end to fix or adjust something, so use a platform you understand.
Payment platform
Ecommerce sites need a way to process customer payments, so it's essential to incorporate a payment platform into your site. Options include PayPal, Stripe, Square, Apple Pay, Authorize.net and others. This takes the hassle out of handling customer payments, but it's essential to start early, as it can be a slow process to get approved.
Drop-shipping service
Unless you plan on renting or buying a warehouse, you will be drop-shipping products to customers. This means utilizing a third-party that carries the actual products and ships them for you, such as AliExpress, DSers, SaleHoo, Sprocket, Inventory Source and Modalyst.
24/7 customer service
Customer service can make or break your online store, so it's essential to go above and beyond in this category. Provide places to reach out on all major social media platforms, in addition to the bottom of emails and on your website itself. Popular customer service providers include Help Scout, Avochato, Zendesk and Live Agent.
It's time to launch
With a greater understanding of what it takes to start an online business, you're ready to launch. And remember: these steps aren't just for starting out. This advice will help as your online business grows and evolves, regardless of what you're providing.
