How to Start an Online Business

Most online businesses either sell products or services. Finding an underserved need in the market is a good way to ensure that your business will have a consumer base.

Once you've decided what to sell and to whom, you need to decide how you're going to reach the market and make a profit. There are a number of types of online businesses including software-as-a-service, affiliate marketing, e-commerce, online tutoring, freelancing, etc.

When naming your online business, find a name that is simple, memorable, and compelling. It should in some way reflect the product or service you offer.

Once you've found a name for your online business, check to see if the domain is available. Ideally, you'll want the .com, .org, or .net suffixes. These are the easiest for people to remember.

Once you've found a good name, and have seen that the domain is available, trademark it with the U.S. Patent and Trademark Office.

Start with the business description section. This section includes legal structure, location, the expected launch date of the website, and all sources of revenue.

Describe the leadership and management structures of your online business. Make the case for why those in leadership positions are a good fit. Include information about the major departments such as sales, legal, marketing, design, etc.

In another section, discuss your marketing strategy. Include information on the target market, promotional opportunities, marketing goals, and relevant metrics.

In the next section, write in detail about industry revenues for the last few years, particularly areas of growth. Then, describe what you know about other similar online businesses. Note what aspects of their business may be in direct competition with yours.

Discuss all the financial implications of starting your online business. Include things like start-up expenses, funding, financial operations, revenue projections, and break-even point.

Without going into too much detail, write about where you see the company heading and what you plan to do next once your online business has covered all opening costs and is able to maintain strong cash flow. This includes hiring staff, adding products or services, leasing office space, etc.

With the information from writing the rest of your business plan still fresh in your mind, go back to the very first page and write the executive summary. It should summarize the most important information from the business plan. Include your mission statement, investment opportunities, and anything that sets your business apart.

Choose the legal structure that suits your business best. Your options include a sole proprietorship, partnership, limited liability corporation (LLC), or corporation.

Visit the website of the business formation agency in your state to find out what formation documents and supportive material is needed for you to form your legal entity. Some states allow you to file online. Others simply make the documents available for download.

If you are filing an LLC or corporation, you will need to appoint someone to accept official government notifications, usually legal documents and tax forms, on your business's behalf. The person you choose must live in the same state your business operates in. You, as the owner, can be the registered agent.

Once you've gathered all the information required, and you've filled in the forms, submit them along with any filing fees. Processing times take between five working days and four weeks depending on the state.

Register for an Employer Identification Number (EIN). It is a nine-digit number issued by the IRS to businesses for tax identification purposes. It is legally required by businesses looking to employ people and those operating as partnerships or corporations. However, most businesses, even those without employees, will register for an EIN.

Create accounts on the most popular social media platforms, which are Facebook, Instagram, X formerly known as Twitter, TikTok, Pinterest, and LinkedIn.

Share a mix of original and curated content. Be daring and creative with your posts and try to maintain a human voice.

Aside from sharing content, spend time engaging with your audience directly. Leave comments, share, and like other people's content. Engaging with your audience should be seen as a way to create relationships, not a fingerhold to a potential sale.

Use social media to listen to your customers. Hear their concerns and complaints and respond with solutions. Keep an eye out for where you can be of assistance.

Consider paying for a social media ad to get an initial push behind your new brand. Platforms including Facebook, Twitter, and Instagram have paid advertisement services that may be useful for reaching a wider audience.

If your target market is a specific group of hobbyists or professionals, approach dedicated news hubs and social media groups for advertising opportunities.

Make it easy for people to subscribe to your newsletters by setting up a sign-up form on your social media platforms. And then use incentives to give people that extra little push.