How to Start an Online Business

The Ultimate Guide on How to Start an Online Business in 2023

When it comes to business, the internet is the ultimate equalizer. It levels the playing field so that everyone stands a fair chance of success. So many successful online businesses have started with unbelievably small budgets.

That’s not the only upside of an internet business. Learning how to start an online business will give you the freedom so many people dream about. You have to know what you’re doing, though.

Building an online business takes time, thorough research, and a confidence that you’ll be able to connect with your potential customers. If you’ve decided that it’s time for a business online, we’ve prepared this in-depth guide to help you on your journey.

Want to Jump Right In?

  • LivePlan is a software we recommend for anyone wanting to know how to start an online business. LivePlan provides you with a great platform to plan, fund and grow your online business. We love their Business Plan generator and this is one of the first things you should look at doing when starting a business.

Who Should Start an Online Business?

It has never been easier to start a business than it is today. We have so many website-creation tools at our disposal that allow an instant worldwide reach. All you need is a solid business plan, and you’re off to the races.

However, even with all the access and tools you need to create an internet business, it doesn’t mean it’s for everyone. Who makes an ideal online business owner? Here are a few descriptors that can help you evaluate your own position.

You should start an online business if:

  • You don’t have a big budget but still want to build a business
  • You already have some flexibility of time and want to have more
  • You want to have the freedom to choose a location for your business
  • You welcome the fact that your business will run 24/7
  • You want to be able to outsource your work eventually
  • You are committed to spending time to grow this business
  • You understand that the business may not generate revenue for months at the beginning

These are all great reasons that can prompt you into the world of online businesses. Still, all of that won’t mean much if you don’t feel like you have something to offer an audience. The possibilities are indeed endless, but you still need to find your unique path.

Check out our free business start-up checklist here

Steps to Start an Online Business

Let’s move on to specifics. If you want to learn how to start an online business with zero experience and as few expenses as possible, we have prepared a comprehensive step-by-step guide.

Some of you might already be familiar with the business structures of an online enterprise and have been entertaining several online business ideas already.

Others are entering this realm with just a desire to start something new. Either way, these steps will help you move forward.

1. Choose What Type of Online Business Works for You

Before you go any further, you should decide on the type of online business. Fortunately, there are many options to choose from, as well as many ways to monetize them. Here are the few most popular choices.

eCommerce Store

This type of internet business takes many forms. Generally, you need a self-hosted website that has a shopping cart feature. You have the list of products and services on the website, and you ship the product directly to your customers, either from your own storage or a fulfilment warehouse can do this for you.

The crucial benefit of the eCommerce online business is the complete control of the product and services you include. The most famous eCommerce stores are Amazon, Etsy, eBay, etc.

surfercta 1

Dropshipping Store

If you still like the idea of selling products, but not all the risk that comes along with physically buying and storing them, dropshipping is a viable alternative. You take the orders and send them to your dropshipping partner, who sends the product to the customer from their own inventory.

You need to rely on third-party suppliers and services of a dropshipping company. This is a fulfillment-based type of online business that can pay off substantially if done right.


Without a doubt, one of the most popular routes to a successful online business is blogging. It’s an incredibly competitive industry, but one that allows for a lot of creativity as well.

If you have a blog, one of the main concerns is how you can monetize it. In comes affiliate marketing. This is an industry in its own right.

As a blogger, you can recommend products and services to your readers and earn commissions from product creators. You can also rely on affiliate networks which makes this process much more manageable.

Coaching and Consulting

So much of the consulting and coaching business has moved online. You can hire a life coach, presentation coach, and even a fitness coach online.

You can also offer your consulting services in groups or one-on-one. If you have specific expertise and want to use them in total capacity, there’s a vast online market for it.

Selling Services

This type of online business covers digital marketing and web design agencies, software development businesses, and similar service-providing companies.

Search Engine Optimization or SEO agencies are other profitable options, as long as you have the necessary knowledge to run such a business.

How to Start an Online Business

Subscription-Based Model Businesses

This category encompasses different types of online tools, SaaS, and anything else that requires customers to sign up for recurring membership. For example, some of the big names in this business are Grammarly, Slack, and Zoom.

2. Pinpoint Your Niche

Once you figure out the type of online business that works for you, it’s time to find the right niche. To put it a little differently, if you have several online business ideas, you need to decide on one.

For future business owners, there can be a lot of uncertainly around choosing your niche product or service. There are no guarantees, as no one can look into the crystal ball and tell you whether your idea will work.

As with any business, this is the risk you have to be willing to take and not allow anything to hold you back. That all sounds great, but how do you find your niche? Here are a few tips that might help:

Find Your Passion

Sometimes the desire to be successful and the need to be authentic collide. We’re here to tell you that you don’t have to compromise.

If you know exactly what you’re passionate about, it can only help you develop a better product or service. If you’re not sure what to focus on, think for a moment about what you'd do if money wasn't an object.

Be Honest About Your Strong Suits

Having passion is vital, but you also have to be aware of where your strength lies. How are you with solving problems with other people, for example?

Whether you can teach others, help them complete a task, or create a product they’ll want to use – it doesn’t matter. What’s essential is to know what your forte is.

Look for the Gap in the Market

Many people got their ground-breaking internet business idea because they were unable to solve a problem they had. So, they developed a solution and took it to market.

Have you have spotted a lack of resources on a specific topic or couldn't find a product to service you needed? Think about what you can do to fill this gap with high-quality content or product.

3. Test Your Idea

Finding the perfect online business idea means you already made significant progress. The next big step is to test the idea and evaluate it via thorough research. This process has several stages.

Google Research

Where would we be without Google? Use the power of Google search to check out what content or product related to your idea already exists.

We don't just mean checking out the first couple of hits from search results either. Go ahead and dig deeper, move onto the second and the third page of search results.

You may be surprised what you find. Use other search engines as well, such as Bing or DuckDuckGo, and compare notes.

Don’t Forget About Social Media Platforms

Social media engagement is a big part of building and managing an online business. That’s why you should examine what type of content these platforms offer when it comes to your business idea.

Is the focus on video, images, or products? You should observe what gets the most likes and comments because it provides valuable insight.

Affiliate Marketing Research

You don’t have to decide right away if you’ll incorporate affiliate marketing in your business. Looking at various affiliate marketing websites can tell you a lot about what types of products and services are being sold and promoted.

If you're offering a product or service of your own, it can tell you a lot about your product viability and how well you’ll be able to partner with affiliates in the future.

4. Check Out the Competition

When you’re trying to figure out how to start an online business, taking a closer look at the competition might have a demoralizing effect. It’s essential to keep this in mind going into this process.

The key is to view the competition as a good thing, in fact. If you run into many other successful online businesses, that means your niche is actually profitable. Hurray! That’s just the one side of things, though.

You still have to invest time and effort to analyze your competitors. This will allow you to see how you can stand out from the crowd.

How can you differentiate yourself in a saturated market and create a unique offer? A well-organized spreadsheet will do a lot of heavy lifting here. There are signs that you've chosen a niche with a lot of potentials, even when there are many competitors:

  • Low-quality content – this is an excellent sign as it opens up the space you can fill with valuable content your audience will appreciate.
  • No transparency – you have a chance to disrupt an entire industry that seems too corporate and faceless with your authenticity and transparency.
  • Unpaid competitors – you've found plenty of competitors, but many of them don't feature paid advertising.
How to Start an Online Business

5. Define Your Target Audience

What does the term “target audience” mean exactly? We hear it a lot in the context of learning how to start an online business. Your target market needs a specific group of people with similar characteristics or needs which your business can serve.

They are the individuals who are most likely to buy your product, hire you for a service, or read your blog. Identifying your target audience can be done by asking the following series of questions:

  • Who are your potential customers?
  • What are their common complaints or pain points?
  • What are their age and gender?
  • Where do they live?
  • What is their native language?
  • What is their ethnicity?
  • What is the estimated education level of your customers?
  • What is the social media platform they prefer?
  • Who are the social media influencers they are most likely to follow?
  • Which forums or online groups do they belong to?
  • What are their favorite websites?

We recognize that it’s not easy to get completely straight answers to these questions. Sometimes your chosen niche will attract a diverse audience.

Other times it will help you discover unexpected results, which will help you refine your message. This is why competitors' analysis is so critical.

It can give you the starting version of your target audience. Once you generate enough traffic to your online business, answering mentioned questions will become easier because you can find a lot of these statistics via Google Analytics (yes, you need to ensure to connect up your website with this free software from Google).

6. Choose a Name for Your Business and Register a Domain

Everything you’ve done for your internet business up to this point falls into research. From this moment on, you’re embarking on the exciting journey of setting up your online business.

You may already have a name for your brand, which is excellent. Before you jump the gun and register a domain, make sure that the name you've picked will increase your chances of success. Here are a few valuable practices to consider when choosing a name for your business:

Firstly, you have to make sure that your domain name is available. Most of the domain name providers have search functions to find if the domain is available. GoDaddy is a good provider to do your domain searches on. You also should research whether another company is using the same name on a different domain.

  • Something catchy is easier to remember
  • When in doubt, always choose a shorter rather than longer name
  • Ensure the name is easy to read
  • Incorporating a relevant keyword from your niche is a plus
  • Hyphens and numbers can create confusion

Take the time to research social media platforms and check if the username you intend to have is taken. Remember, you'll need to create social media presence and have a consistent brand name.

All the variations of the top-level domain should be available too. So, if you’ve chosen to register your domain name with .com, make sure that someone hasn’t previously registered it with .net, .info, .org, or others.

It would be ill-advised to register a name that already exists on a different top-level domain. This can be confusing both for potential customers and search engines.

If you're looking for domains, here are a few suggestions to try:

How Do You Register a Domain Name?

You might have had to go through several working versions of your brand name before settling on the perfect choice. However, once that’s done, you can officially secure the domain.

Choose a domain registrar service provider and create an account. This is usually a straightforward process that requires you to enter personal details and the brand name you've selected.

surfercta 1

7. Setting Up a Website for Your Business

One of the more exciting steps in bringing your business to life is setting up your website. This doesn't have to be a daunting task, as many services can make the process a lot more simple.

If you're thinking about starting an eCommerce business that sells physical products, there are two main options on the menu. You can go with WordPress, which 40% of all websites on the internet already use.

Alternatively, you choose an eCommerce website builder such as Weebly and ClickFunnels. Website builders are a faster option and perhaps suitable in the beginning. As your traffic increases and your business grows, you'll want more flexibility and customization options in WordPress.

Niche bloggers and websites that specialize in selling services will likely be more comfortable with WordPress as well. Apart from being the most popular website creation platform, why is WordPress the superior choice for your business? You have access to a wide selection of themes optimized for search engines. The other benefit is the sheer number of plugins available. They have a Google Analytics plugin, conversion rate optimization plugin, and many other plugins that allow automatic backups and website speed improvements.

8. Become Acquainted With Digital Marketing

Without digital marketing, you’ll have a difficult time lifting your business off the ground, regardless of how well you’ve set up everything up to that point.

People tend to believe that you’re either good at marketing or not, but that’s not actually how it works. Like most things, it’s a skill any online business owner can master.

Digital marketing is how you’ll promote your business online and attract customers. There are several key components of digital marketing:

  • Search engine marketing
  • Website marketing
  • Email marketing
  • Social media marketing
  • Content marketing
  • Video marketing
AdobeStock 109401734 1

Why Is It Important to Understand Digital Marketing?

The first reason you should learn everything you can about digital marketing is to help you grow your business. That's obvious enough.

However, even if you don't want to invest in digital marketing yourself, you should familiarize yourself with basic principles. Do you want to reach out to a digital marketing agency and employ their services?

You still need to know what to ask them. If you just need someone to run your email marketing campaign, having enough knowledge about digital marketing will be beneficial. Content marketing is also particularly relevant as high-quality content is one of the basics of search engine optimization. Neil Patel has a great blog about digital marketing and he goes through how to set up your digital marketing in this article.

9. Creating a Digital Marketing Plan

The business plan should contain an outline of your digital marketing plan. Once you've taken the time to understand the basics, you should develop an online marketing strategy. Here's what this plan should look like.

Paid Ads are the Norm for Quick Growth

Some marketing tools work faster than others, and none are faster than a paid advertisement. Once you get enough traffic to your website, you can explore other venues.

Using channels like Bing Ads, Google Ads, and Facebook Ads will likely bring in some revenue quickly for starters. As you make a profit from sales from these ad campaigns, you can increase your ad spending as well. If it costs you more than it should, consider a more cost-effective approach, such as affiliate marketing.

Build Brand Awareness

Brand awareness is the buzz term of the decade, so it seems. What does it mean precisely? Basically, it’s doing everything you can to ensure others hear about your business.

This takes time and money. It can also be complicated to do if you don't use a specialized tool, such as Facebook brand awareness ads. However, if you're pinching your pennies, here are a few other ways you can build brand awareness:

  • Well-designed infographics (Canva is the best option here)
  • Impressive guest content
  • Giveaways
  • Social media contests
  • Efficient and creative storytelling
  • Podcasts
  • Influencer marketing

Build a Community

For long-term success, your internet business will need an internet community. This can only happen organically and over time.

When people start following your work on social media and searching for your brand online, it leads to an opportunity for a better connection.

You can engage with loyal customers by sending a monthly newsletter to your entire email list or by offering special discounts.

CTA coaching

10. Your Website Needs SEO

We’ve touched on the power and efficiency of search engine optimization earlier. You might be asking yourself whether all websites indeed do need SEO. The answer is yes. Every type of business online, big or small, can benefit from intelligent SEO tactics.

You can have the best business idea ever and invest time and money in building your website and still not reach the visibility required for success. SEO helps you reach your target market and audience faster, leading to more sales and securing you a place in your niche.

The truth about search engine optimization is that it's not terribly complicated, but it will take time. Unlike paid advertisements, SEO pushes your website to the top via organic traffic. You can apply SEO tactics on your own if you have the experience.

However, an experienced and well-established SEO agency like Human Proof Designs can also do all the hard work and leave you with more time to focus on other areas of your online business. What are the most critical SEO practices? Here’s a list for your consideration.

  • Website audit
  • Keyword research and implementation
  • Page speed optimization
  • Title tags and meta descriptions
  • Search intent and content alignment
  • Internal and external linking
  • Long-form content
  • Image and video optimization
  • User experience optimization

11. Publishing Content

We've circled back to content once again. To increase the chances of your website's success, you'll need a well-developed content marketing strategy. Regardless of what type of marketing channel you go through, content is the common denominator.

You've probably heard of the term “content creation,” which covers pretty much everything you read, watch, or listen to online. Bloggers, digital artists, and influencers are under the umbrella called “content creators.”

As an online business owner, your task is to deliver high-quality and engaging content to your audience. The versatility of content marketing is what can make this process exciting for the up-and-coming business owner.

You can orient yourself towards blogs, videos, images, infographics, social media marketing, and everything else in between. Also, having a publishing calendar can be immensely helpful, as it will allow search engines to use that for better rankings.

People visiting your website will also appreciate the regularity of content publishing. Your content marketing plan doesn't need to be overly complex. A spreadsheet with publishing dates and ideas for the following weeks and months will be more than enough in the beginning.

12. Your Social Media Presence Matters

We’re way past the point of whether promoting your business on social media is an option. Put yourself in the shoes of a consumer.

If you buy a pair of shoes from a business online, you’re very likely to look for them on Instagram or Facebook as well, or have made the purchase from a advert on these platforms.

You not only need to secure your business’ presence on all social media platforms, but you should do it strategically. That means regularly updating your business pages and engaging with your followers. Make sure that all the contact information is accurate in the bios as well.

If you have a logo, ensure that it's the same across all platforms, so there's no confusion among your customers. More than anything else, keep the fresh content coming.

Empty or outdated pages are not a good look, and they do not instil brand trust among your customers. Also, a part of establishing your social media presence is paid advertisement. Initially, you can rely on Instagram and Facebook ads to create targeted campaigns and attract more followers.

Looking to automate your social media posts, so you don't have to worry about remembering to do it each day? We use Missinglettr as we've found this to be the best platform around as it uses artificial intelligence to generate posts from the webpage URL you enter when setting up the posts. Its super easy to use and saves a lot of time. Check it out here.

13. Your Email List Is Incredibly Valuable

Even today, one of the most effective sales channels is email. Regardless of what type of business you’re creating, email marketing will help you build it faster.

There are many useful ways to utilize email for your marketing efforts, but you first need to grow your email list. You can go about doing it in many different ways, but here are several straightforward strategies:

  • Ask website visitors for feedback
  • Link to offers that capture email signups
  • Create a subscription for your blog
  • Add customer reviews on your website landing pages
  • Host offline events
  • Add engagement feature on your YouTube channel
  • Add calls to action on the Facebook Business page
  • Promote an online contest
  • Offer a free course or online resource
  • Use exit pop-ups

Remember that people are more likely to sign up for your email list if you offer them real value in return. Growing your email list and starting an email marketing campaign is not easy, but it can pay off tremendously.

14. Optimizing Your Website for Conversions

Does more traffic lead to better conversion rates? Yes, but that’s not the whole story. If you want to improve your conversion rates without increasing traffic, you need conversion optimization.

You need more visitors to buy the product or service, not just more visitors. The problem is that there's no secret ingredient in conversion optimization.

Every website is unique, and many factors will impact the conversions. That includes the price of the product, quality, and even the reputation of the vendor.

You can change parts of your website and track changes to better understand what affects conversions. This needs to be planned carefully, as you're looking at specific and isolated metrics.

15. Hire a Team

Though not precisely impossible, growing an online business entirely by yourself is very difficult. You can be your own digital marketing expert and have killer entrepreneurial instincts, and it still might not be enough.

It will especially be true as your business starts growing. You might not be able to have full-time employees immediately, but you can hire freelancers for all sorts of work from platforms like Fiverr.

Web designers, content writers, and even video editors should be a part of your team. If you’re struggling with your marketing strategy, hiring a consultant with experience can be just the right move.

Finally, you can completely outsource online promotion to a digital marketing agency. You’ll get the full service, starting from strategy development to implementation.

Keep in mind that this is a more expensive route, though the actual cost will vary with your needs and budget.

AdobeStock 215197104 1


What is the Best Online Business to Start?

There isn’t one correct answer to this question. The best online business to start will depend on your interest, skills, market research, and initial budget.

If you want to start a clothing line, it will cost you more upfront and require tons of preparations before the launch. On the other hand, you can create a podcast with a high-quality microphone and a passion for a topic.

Many people gravitate to the idea of starting a YouTube channel or selling their creations online. Ultimately, finding your niche and strategically building your business are crucial elements of success.

What Kind of Online Business is Most Profitable?

While many online business ideas can turn a profit, several categories currently stand out. Some of the most profitable businesses online are:

  • Training courses
  • Selling digital products
  • Business and life coaching
  • Dropshipping
  • Digital marketing
  • Micro-niche blogging

How Much Does it Cost to Start Up an Online Business?

That, too, will depend on what type of online business you're starting. An eCommerce store might be the most expensive route, as you're dealing with actual physical products and shipping logistics.

A professionally build eCommerce site can cost anywhere between $5,000-10,000. Plus, you'll have to pay for the domain name and hosting services each month.

This doesn’t count for marketing expenses and a professional team if you choose to hire one. Technically, you can start an online business with a budget of a few hundred dollars if you don't have any upfront expenses and plan to do most of the work by yourself.

Do I Need an LLC to Sell Online?

The answer is no. You don't have to have an LLC to sell products online. However, it's still advisable to consider forming an LLC because it brings some significant benefits to your business.

First, LLCs are flexible when it comes to taxes. If you're the single owner, your LLC is taxed as a sole proprietorship. Furthermore, LLCs are easy to start and run, unlike corporations.

How Do I Start an Online Amazon Business?

Fulfillment by Amazon (FBA) is the online business of choice for many. If you're curious about starting an FBA business, here are the crucial steps to take:

  1. Open an Amazon account.
  2. Select the product niche.
  3. Conduct product research.
  4. Establish sourcing of your products.
  5. Build your brand.
  6. Create listings for your products.
  7. Advertise.

Recommendations for Creating a Business Plan and Starting Your Online Business


LivePlan is a cloud-based application that can help striving online business owners create a comprehensive business plan. It uses a subscription-based model.

You can opt for the $15 per month Standard package that provides step-by-step instructions on turning a bare-bones something into a large and successful company.

This package includes 500+ sample plans, a complete financial forecast, a one-page pitch builder, and an automatic financial statement. With the Premium package at $30 per month, you also get industry benchmark data, key performance indicators, the performance dashboard, milestone planner, and so much more.

We like LivePlan because:

  • Very customizable
  • Many tutorials
  • It makes formulating strategies easy
  • Great value for money
How to Start an Online Business

Start Building Your Online Business Now

This comprehensive guide on how to start an online business contains all the critical elements of the endeavor. As you can assume, no one can predict everything that will happen along the way.

You might run into some unexpected obstacles, but things might go more smoothly than you anticipated. Still, luck has nothing to do with building an internet business.

It’s all about research and finding that winning idea. Another crucial ingredient for the success of your business will be digital marketing and search engine optimization.

The main takeaway of this article is that all the tools are at your disposal if you want to run an online business. It can be a thrilling and eventful ride that can lead to a profitable enterprise.

Want More Online Tips?

Sign up to receive our weekly email with the latest episode release, tips and freebies