Starting an online business is a bit different from starting a traditional bricks-and-mortar business. For example...
- An online business requires lower start-up costs than a traditional business.
- An online business offers instant international exposure.
- Tracking customers and monitoring a business's performance are easier for online businesses.
Here are 10 steps for starting an online business..
1. Write your business plan. This plan should detail the "who, what, where, when, how, and why" of your business. Don't worry about how long your business plan needs to be. It should be clear, focused, and should define your specific business goals. Having a good business plan adds the logical frame on which you build your business. You can find helpful templates for writing a business plan from the U.S. Small Business Administration (SBA).
2. Name your company and register your business's domain name. You can register your domain name through any number of registration services. A list of domain registration services accredited by the U.S. Department of Commerce can be found here.
3. Choose a web host. Web hosts provide you with the server space and technical support you need to build your website. Which web host you select will depend on how much server space you need, your budget, and what you need your website to be able to do.
4. Design and create your website. For online businesses, the website is the business's store front. Many web hosts have tools to help you create a professional-looking site, but if these tools don't meet your needs, you can also hire a site designer. You must ensure that your business website does not infringe on someone else's trademark or copyright. You can find information on trademarks, copyrights, and service marks on the U.S. Patent and Trademark Office website.
5. Market your business. As with any business, an online business only succeeds if customers know about it. Generating a healthy level of web traffic is the key to gaining customers. You can use search engine optimization (SEO) techniques and register your site with the major search engines to bring traffic to your site. In addition to the usual advertising media of print, television, radio, and web, social media sites are becoming a powerful medium for marketing.
6. Make sure your website and business operate legally. Your online business has to comply with laws and regulations that apply only to online businesses. You can learn more about these laws from the Federal Trade Commission. Your business also needs to comply with any applicable state, city, and county laws, and if you sell internationally, you have to be sure to follow international trade laws.
7. Be ready for the tax man. Your online business must follow the federal, state, and local tax laws that apply to traditional businesses. If your online business is operated in a state that charges a sales tax, excise tax, or gross receipts tax, you may have to register with your state's revenue agency or apply for a tax permit. You will need to determine whether you will have to collect state and local sales taxes and pay them to the appropriate revenue agencies.
8. Arrange for online payments. Online transactions are the foundation of online businesses. Many web hosts offer "shopping cart" software that you can put on your site. You may choose to accept online payments through third party merchants like PayPal or Google Checkout, or you may set up your own merchant account with a bank. Requirements and fees for setting up a merchant account vary. Often, your best starting place is with one of your local banks.
9. Determine your product delivery methods. If your products and services are electronic, "delivery" may only involve email or an FTP site for downloads. If you have physical products, you need to determine if you're going to use a fulfillment company, courier, the post office, or other delivery service.
10. Get a mentor. Of course you're not required to have a mentor, but it certainly helps. If you can get to know someone who has successfully run an online business, you will have an easier time learning the skills you need and will waste less time on trial and error as you ramp up your business. Besides learning valuable skills, a good professional relationship with a mentor helps when you hit roadblocks or become discouraged.