10 Steps To Starting an Online Business in 2024

Starting an online business can be a fulfilling and profitable venture, but it's important to do it right. Follow these 10 steps to starting an online business in 2023 and give yourself the best chance of success.

Reasons You Should Start an Online Business

Starting an online business in 2023 offers numerous advantages that make it an appealing option for entrepreneurs. Here are a few reasons why you should consider starting an online business:

1. Reasonably affordable

Compared to traditional brick-and-mortar businesses, starting an online business is generally more affordable. The initial investment costs are lower, as you don't need to pay for a physical storefront or incur expenses like rent, utilities, and maintenance. With online platforms and tools readily available, you can create a professional website and reach customers without breaking the bank.

2. Continuous development and growth

The online business landscape is constantly evolving, meaning you’re overrun with opportunities for growth and development. The digital world offers access to a global customer base, enabling you to scale your business quickly and expand beyond geographical limitations. With the right strategies and marketing efforts, you can adapt to market trends and stay ahead of the competition.

3. Always available to close a deal

Unlike traditional businesses with fixed operating hours, online businesses have the advantage of being accessible 24/7. Your website becomes your virtual storefront, allowing customers to browse and make purchases at their convenience. This flexibility gives you the ability to generate sales even while you sleep, ensuring that your business is always open to close a deal.

How To Start an Online Business in 10 Steps:

We spoke to Mosan Ali, Osome’s expert Accounting Manager in the UK to see what he had to say about starting an ecommerce business:

“Starting a new online business requires a solid base. As an accountant, I see these two key factors as the most important: maintaining financial discipline and practising meticulous record-keeping. By maintaining a clear understanding of revenues, expenses and cashflow, and by implementing robust accounting practices from the outset, you’ll not only establish a strong financial foundation, but also pave the way for sustainable growth.” — Mosan Ali, Accounting Manager

1. Understand the Essentials of Starting an Online Business in the UK

Starting an online business in the UK can be wildly exciting and incredibly lucrative. But it's important to understand the legal requirements before diving in headfirst. One of the first steps to take is to register your business with Companies House. This is a legal requirement for any business operating in the UK, and it will give you the legal protection you need to operate your business.

Another important aspect of starting an online business is to file for taxes. You will need to register for VAT if your turnover exceeds a certain threshold, which is currently £90,000. You’ll also need to keep accurate records of your income and expenses, as well as file annual tax returns.

When starting an online business, it's crucial to make sure that your website is compliant with data protection laws such as GDPR. This means that you need to get consent from your users before collecting their personal data, and you need to take measures to protect their data from unauthorised access or theft.

It's also a good idea to get insurance for your business, so you're covered in case of unexpected incidents. This could include things like damage to your equipment, loss of income due to business interruption, or liability claims from customers or clients.

By taking these essential steps, you can ensure that your online business is legally compliant and protected, giving you the peace of mind to focus on growing your business and serving your customers.

To start your online business in the UK, it's important to familiarise yourself with the essential requirements and legal obligations. Here are the key steps to consider:

Choose a business entity

Decide on the legal structure of your business, whether it's a sole proprietorship, partnership, limited liability company (LLC), or another entity type. Each has different implications for taxes, liability, and governance. Find out which company structure is best for your business with our guide.

Choose the company name

Select a unique and memorable name for your business. Ensure that it's available and compliant with the UK's naming conventions and legal requirements.

Here’s a comprehensive guide to choosing your company name. And we’ll even let you check your company name’s availability — completely gratis.

Use incorporation services

Consider using incorporation services or consulting with an accountant or lawyer who can guide you through the process of registering your business with Companies House. They can help with paperwork and ensure compliance with legal regulations… Hint hint, you know how to get in touch with Osome, and we know how to start an ecommerce business.

Provide the required documents

Prepare the necessary documents, such as identification proofs, address proofs, and any additional paperwork required for your chosen business entity.

Get a certificate of incorporation

After submitting the required documents, you'll receive a certificate of incorporation from Companies House, officially recognising your business as a legal entity.

Apply for a corporate account

Open a business bank account to keep your personal and business finances separate. This will simplify accounting, tax filings, and financial management.

2. Do Your Research

Researching your target audience and competitors is the foundation of starting a successful ecommerce business. It is essential to understand who your potential customers are, what they are looking for, and how you can meet their needs.

One way to conduct research is to use Google AdWords and SEMrush to explore keywords and analyse your competitors. Google AdWords provides valuable insights into the search terms people use to find products or services similar to yours. SEMrush, on the other hand, is a powerful tool that allows you to analyse your competitors' online presence, including their search engine rankings, backlinks, and advertising strategies.

Additionally, conducting surveys and focus groups can also help you gather valuable information about your target audience's preferences and pain points. This can help you tailor your marketing messages and product offerings to better meet their needs.

It's important to keep in mind that research is an ongoing process. As your business grows and evolves, so too will your target audience and competitors. Regularly conducting research can help you stay ahead of the curve and make informed decisions about your business strategy.

Conducting thorough research is essential for the success of your online business. Here are some key aspects to consider:

Understand your competitors

Analyse your competitors' online presence, products or services, pricing, marketing strategies, and customer reviews. This will help you identify areas where you can set yourself apart and create a competitive advantage.

Conduct product research

Understand your target audience's needs and preferences, and conduct market research to identify trends and demand for your products or services. This information will guide your product selection and positioning in the market.

3. Determine Your Online Business Concept

When it comes to starting an online business, one of the most important steps is determining your concept. This means deciding what you will sell and how you will sell it. Will you offer a service or a product? Will you focus on a niche market or appeal to a wider audience?

Take some time to research your industry and competition to see what is currently available in the market. This will help you identify gaps or areas where you can offer something unique or different. It's also important to consider the needs of your potential customers. What problems or challenges do they face that your business can help solve?

Once you have a clear idea of your concept, it's time to think about your branding and marketing strategy. Your branding should reflect the personality and values of your business, and it should be consistent across all of your online platforms. This includes your website, social media profiles, and any other channels you use to communicate with customers.

When it comes to marketing, there are many different strategies you can use to promote your business. Some options include social media advertising, email marketing, content marketing, and search engine optimisation (SEO). Think about your target audience and the channels they are most likely to use, and focus your efforts on those platforms.

Remember, your online business concept is the foundation of your entire operation. Take the time to research and develop a solid plan, and you'll be well on your way to success.

To establish a strong foundation for your online business, focus on these key steps:

Evaluate product viability

Assess the demand and profitability of your chosen products or services. Consider factors like market saturation, target audience interest, and potential profit margins.

Define your brand and image

Develop a unique brand identity that resonates with your target audience. Create a compelling brand story, design a captivating logo, and establish your brand's tone and values.

4. Choose Your Sourcing Methods

Choosing the right sourcing methods is crucial for the success of your online business. It can determine the quality of your products or services, the level of customer satisfaction, and ultimately, your profitability.

One option is to manufacture your own products. This gives you complete control over the production process and allows you to create unique and customised products. However, it can be time-consuming and expensive to set up a manufacturing operation, especially if you're just starting out.

Another option is to outsource your products from other manufacturers. This can be a cost-effective solution, as you won't have to invest in expensive equipment or hire additional staff. However, you'll need to carefully vet your suppliers to ensure that they meet your quality standards and can deliver products on time.

When it comes to offering services, you can choose to provide them in-house or outsource them to freelancers or agencies. In-house services can give you greater control over the quality of work and ensure that your team is aligned with your business goals. On the other hand, outsourcing can provide you with access to specialised skills and expertise that you may not have in-house.

Before making a decision, consider your budget and the time and resources you have available. It's important to choose sourcing methods that align with your business goals and can help you achieve long-term success.

Ultimately, the quality of your products or services is what will set you apart from your competitors and drive customer loyalty. Make sure that your sourcing methods align with your commitment to quality and customer satisfaction.

Selecting the right sourcing methods is crucial for product quality and customer satisfaction.

Consider the following options:

Work with a wholesaler

Partner with reputable wholesalers who can provide high-quality products at competitive prices. This allows you to focus on marketing and customer service without the need for extensive product development.

Make your own products

If you have the skills and resources, you can create your own products from scratch. This gives you full control over the production process and allows for customisation and unique offerings.

Finding a dropshipper

Another option is to work with a dropshipper who will handle product fulfilment and shipping on your behalf. This can be a convenient solution, particularly for businesses with limited storage space.

Become a digital nomad

Embrace the digital nomad lifestyle by partnering with suppliers or manufacturers in different locations worldwide. This can provide access to unique products and allow for diverse offerings.

5. Create Your Website and Choose Your Online Platform

Your website is the foundation of your online business, and it's important to get it right. Choosing the right online platform can be a daunting task, but it's essential to ensure that your website is easy to navigate and provides a seamless user experience.

If you're looking for a platform that offers a range of features and customisation options, Shopify or WordPress might be the perfect fit for you. Both platforms offer easy-to-use templates and a variety of plugins and integrations that can help you build a professional-looking website quickly and easily.

Once you've chosen your platform, it's time to get creative and start building your website. Make sure that your website is mobile-friendly, as more and more people are using their smartphones and tablets to browse the internet. A mobile-friendly website will ensure that your customers can access your site from any device, at any time.

Another important factor to consider when building your website is the call-to-action (CTA). Your CTA should:

• Be clear and concise;
• Encourage your customers to take action, whether that's making a purchase, signing up for a newsletter, or filling out a contact form.

Intuitive navigation is also crucial to the success of your website. Your customers should be able to find what they're looking for quickly and easily, without having to click through multiple pages or menus. Make sure that your website's navigation is simple and straightforward, and that your pages are organised in a logical way.

Finally, it's important to optimise your website for search engines, so that your customers can find you easily. This involves using relevant keywords throughout your website, creating high-quality content that is both informative and engaging, and building backlinks from other reputable websites.

By following these tips and building a website that is both user-friendly and optimised for search engines, you'll be well on your way to building a successful ecommerce business!

6. Add Your Products

Adding your products or services to your website is a crucial step in building an online presence for your business. By showcasing your offerings online, you can reach a wider audience and make it easier for potential customers to learn about what you have to offer.

When adding your products to your website, it's important to make them easy to find. Consider organising them into categories or collections that make sense for your business. This will help customers navigate your website and find what they're looking for quickly and easily.

Another important aspect of adding your products to your website is using high-quality images and descriptive text to showcase them. Customers want to know what they're getting before they make a purchase, so be sure to provide plenty of details and images that show off your products in the best possible light.

In addition to images and descriptions, including reviews and testimonials from satisfied customers can help build trust and credibility with potential buyers. Consider reaching out to past customers and asking them to share their experiences with your products or services.

If you're looking to incentivise first-time customers, consider offering promotions or discounts. This can be a great way to encourage people to try your products or services and can help build a loyal customer base.

Finally, make sure that your checkout process is simple and easy to navigate. A complicated checkout process can lead to abandoned carts and lost sales. By making it easy for customers to complete their purchases, you can increase your chances of making a sale and building a happy customer base.

Showcasing your products effectively on your website is crucial for attracting customers and driving sales. Here's what to consider:

Double-check all the facets

Ensure that your product descriptions, pricing, and images are accurate and compelling. Pay attention to details such as product dimensions, materials, and variations (if applicable).

Optimise the content on your website

Optimise your website content for search engines by incorporating relevant keywords and providing informative descriptions. This will improve your website's visibility in search results and attract organic traffic.

7. Cover Your Online Business Legal Regulations

Running an online business can be a great way to reach a wider audience and increase your profits. However, it’s important to ensure that your business is compliant with legal regulations to avoid any potential legal issues.

By taking the time to ensure that your online business is compliant with legal regulations, you can help to protect your business and build trust with your customers. This will help to ensure the long-term success of your online business and help you to achieve your goals. Consider the following key regulations:

General Data Protection Regulation (GDPR)

Understand and implement the necessary measures to protect the personal data of your customers in compliance with GDPR.

Privacy and Electronic Communications (EC Directive) Regulations 2003

Ensure that your email marketing and electronic communications comply with the regulations outlined in this directive.

You should also ensure that your website’s terms and conditions are clear and transparent. This will help to avoid any potential misunderstandings with your customers and can help to build trust with your audience.

The Electronic Commerce (EC Directive) Regulations 2002

Comply with these regulations regarding your website's content, terms and conditions, and information disclosure.

Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

Familiarise yourself with the regulations that protect consumers' rights, including the provision of clear information, cancellation policies, and transparent pricing.

Secure payment methods

When it comes to payment methods, it’s important to ensure that they are secure. This will help to protect your customers’ financial information and prevent any potential fraud. You should also have a clear refund policy in place to ensure that your customers know what to expect if they need to return a product or cancel a service.

8. Distribute Your Online Business on Social Media Channels

Promoting your online business through social media channels is an effective way to reach and engage with your target audience. Here are some tips:

• Choosing the right platforms is key. Conducting market research to determine where your target audience spends their time online can help you make informed decisions about which platforms to focus on. For example, if you're targeting a younger demographic, platforms like TikTok and Instagram might be more effective than Facebook or LinkedIn.
• When creating content for social media, it's important to keep your branding and messaging consistent across all platforms. This helps to build brand recognition and establish a strong online presence.
• Consider using a social media management tool to schedule posts in advance and ensure that your content is being published at optimal times for maximum engagement.
• In addition to organic social media posts, running social media ads can be a highly effective way to reach a larger audience. Platforms like Facebook and Instagram offer a variety of ad formats, including video ads, carousel ads, and sponsored posts, that can help you target specific demographics and interests.
• Interacting with your followers is crucial for building a loyal customer base and fostering a sense of community around your brand. Responding to comments and messages in a timely and friendly manner can help to build trust and establish a positive reputation on social media.

9. Draw Traffic to Your Online Business

It can be challenging to get customers to visit your website. Fortunately, there are many effective ways to draw traffic to your online business and increase your chances of success.

One of the most popular methods is search engine optimisation (SEO), which involves optimising your website's content and structure to rank higher in search engine results pages. By using relevant keywords and phrases, creating high-quality content, and building backlinks, you can improve your website's visibility and attract more visitors.

Another effective strategy is pay-per-click (PPC) advertising, which allows you to place ads on search engine results pages and social media platforms. With PPC, you only pay when someone clicks on your ad, making it a cost-effective way to drive traffic to your website.

Content marketing is another powerful tool for attracting visitors to your online business. By creating valuable and informative content, such as blog posts, infographics, and videos, you can establish yourself as an authority in your industry and attract a loyal following of readers and customers.

However, creating a comprehensive marketing strategy that incorporates all of these methods can be challenging, especially if you're new to digital marketing. That's why it's a good idea to consider hiring a digital marketing agency or freelancer to help you develop and execute a plan that aligns with your budget and goals.

A digital marketing agency can provide you with a team of experts who specialise in SEO, PPC, content marketing, and other digital marketing techniques. They can help you identify your target audience, develop a content strategy, and create compelling ads that drive traffic to your website.

Alternatively, you can hire a freelance digital marketer who can work with you one-on-one to develop a customised marketing plan that meets your specific needs. Freelancers often have lower overhead costs than agencies, making them a more affordable option for small businesses and startups.

Ultimately, the key to drawing traffic to your online business is to create a comprehensive marketing strategy that incorporates a variety of techniques and channels. By investing in digital marketing and working with experts in the field, you can increase your visibility, attract more visitors, and grow your business over time.

Here’s a few marketing ideas that might help get your business seen on a budget.

10. Set Up Your Payment Methods

Setting up your payment methods is a crucial step in starting your online business. It's important to choose a payment gateway that suits your needs and ensures that your checkout process is secure and easy to use.

One popular payment gateway is Stripe, which allows you to accept credit card payments and offers easy integration with many popular ecommerce platforms. Another option is PayPal, which is widely recognised and trusted by customers around the world.

It's also a good idea to offer multiple payment options to give your customers flexibility and convenience. In addition to credit card and PayPal, consider offering Apple Pay, Google Wallet, or other digital payment methods.

Remember to clearly communicate your payment policies to your customers, including any fees or restrictions. You should also have a system in place for handling refunds or disputes, to ensure that your customers have a positive experience with your business.

By taking the time to set up your payment methods properly, you can build trust and credibility with your customers, and increase your chances of success in the competitive world of ecommerce.

And There You Have It

Follow these 10 steps to starting an online business in 2023, and give yourself and your ecommerce business the best chance of success!

“At Osome, we offer tools such as our Osome app to assist you in keeping track of your records and generating reports. Additionally, our experienced accountants can provide you with valuable guidance and advice throughout your entrepreneurial journey.” — Mosan Ali, Accounting Manager