How to Start a Business Online: Step by Step Guide in 2020
In this blog post I cover the steps how to start a business online. Before we go through each step, let’s talk about the market.
As of August 2018, 57 million people in the world were part of the gig economy, otherwise known as the worldwide free marketplace where freelancers provide independent work to companies, startups, and corporations.
It’s expected that this number will continue growing, with 50% of the U.S. workforce to take part in this kind of online business by 2020.
More people than ever before want the freedom of owning their own online business – and with good reason.
With an online business, you can travel when you want, make your own hours, and work according to your needs and passions.
It’s entirely online, which means you can manage the business with just a laptop or phone, providing services, refilling orders, or accessing fulfillment companies, like Alibaba.com.
What’s not to love? It’s created an amazing lifestyle for me where I was able to travel the world and fish.
That’s why so many people are wondering how they can start their own business online today. They ask me all the time, “Brandon, how do I start an online business?”
Like anything, owning your own online business takes some preparation and proper organization to ensure compliance in accordance with local and national legal requirements. A
fter that, it gets more fun, as you develop its branding and blog, outreach program, and software that’s going to automate the whole process for you.
So if you’re ready to start an online business in 2019, here’s our step by step guide.
How to Start a Business Online
There’s a proven series of steps, that when pursued fully, will guarantee your success at starting your very own online venture. Here’s our outline for covering all the bases as you embark on your new small business digital company:
- Find a Need and Fill It
- Pick a Name
- Build Your Business Plan
- Test Your Business
- Pick a Legal Structure
- Obtain Licenses and Your Tax ID
- Set Up the Business Bank Account
- Secure Accounting Software
- Create Your Website
- Build a Blog Strategy for SEO
- Configure an Email List Provider
- Fill Out the Remaining Details
- Measure Business Metrics
- Make It Happen
Although this might seem like a lot of preparation, if you lay the proper groundwork now, you’ll provide your business with the best possible chances of success moving forward. Put in the work now – reap the benefits later. Let’s look at each of our 14 steps with further detail:
Find a Need and Fill It
The sky is the limit when it comes to online business options available to you today. As the gig economy swells in participants, so do the types of online businesses. Before you can own an online business, you need to first know about the online businesses that you can own.
Here are some of the most popular options for you to consider:
- eCommerce platform
- Affiliate marketing
- Personal brand
- Amazon FBA business
- Buy and sell domains
- Create and sell online courses
- Start a podcast
- Monthly box subscriptions
Remember: select something you are passionate about.
If you hate writing, don’t opt for a blog. I
f you hate the sound of your own voice, don’t opt for vlogging or a podcast.
Think about what makes you happy.
Once you do that, read about industries that bring you joy, and see where there is a “need” that is not presently being filled. It’s time for you to fill that gap.
Pick a Name:
Before you decide on your services or products, brand theme, ideal consumer, or logo, you need to first identify the name of your online business. As one of the first parts of the “how to start a business online” series, this is potentially the most important part of the equation – and somehow, the simplest. Although the name may be just one to three words, these words are going to carry powerful memorable properties that either “stick” or “don’t stick” in consumers’ minds.
Naturally, there a billions of business online today, which is why you want to research your business name before you decide on it. You might come up with a name that seems like a surefire winner to you; but after a thorough Google search, you discover that 4,000 other businesses have that name. Search through social media sites as well to see if the username/handle is still available for the name. Consistent branding is key.
Once you pick the name, it’s time to register it.
Build Your Business Plan
Here comes the hard part – now that the name has been selected, you need to really dive deep into your market and ideal consumer persona.
In order to own your own online business, you need to know everything about your business.
You need to look at the competitors, marketing problems, potential revenue, costs, marketing budgets, proposed timeline for growing the business, and the list goes on.
We have an entirely separate article and I teach an online course that outlines specifically everything that should be included in the business plan.
When it’s all done, you write the “executive summary,” which is a paragraph synopsis of your business plan, what you plan to achieve, and what you need to get there.
Writing this summary will force you to really understand your business and its potential, as well as the important stats you would want to present to any investor or partner.
Once you feel like the plan is presentable enough to show a business partner or investor, that means you are ready to move onto the next step.
A business with out a business plan is like a boat without a rudder.
Test Your Business
Next, it’s time to the mini-test your business on a small scale. Sometimes, we can’t possibly know what we need to change or fix until we jump into the deep-end. As opposed to a full-scale launch of production, fulfillment, marketing, and so forth, this is the part in launching your business where you “spread the word” without investing any money into marketing or advertising yet.
Social media is a great place to freely post. You can also tell friends and family. Aggregate everyone’s feedback and take it into account as you move forward with the more important parts of finalizing the launch of the business. This can be a critical junction where you realize something glaringly obvious was being overlooked with each passing day. A little perspective is incredibly important for honing in on your target market.
Pick a Legal Structure:
When it comes to the legal structure of your business, you have four options to choose from:
- Sole Proprietor
If you elect not to proceed with a corporation or LLC title, then you will be automatically assumed as a sole proprietor, or partnership, by the IRS for taxation purposes.
Do note: if you operate as a sole proprietor, then your personal assets are at risk.
If someone attempts to sue your company, the court can seize your personal assets if there is not legal structure selected to protect you from lawsuits.
Once you decide on the structure that is right for you, you can register the business on your own by filling out the necessary paperwork available at IRS.gov.
You can also hire a company to do the filing for you. If you are pressed on time, outsourcing the task can save you frustration. However, it is possible, with a little patience, to figure out the registration process.
Obtain Licenses and Your Tax ID
Depending upon the type of business you plan to operate, and your city, county, and state, license requirements and registrations may vary.
Be sure to check with all three levels of government to see if there are any sales tax licenses, or home licenses, that you need to secure before you can legally operate the business.
Next, you will need an Employer Identification Number (EIN) to open a business bank account for filing your taxes every April.
The EIN is similar to a social security number – it’s a completely unique number assigned to your business that helps you sort sensitive paperwork.
Every single business needs one, whether you have employees or not.
You can apply for your EIN online through IRS.gov. A valid Social Security Number (SSN) is required for the application.
Another option is applying in person at and IRS office within your region. Call before showing up, not all offices service walk in customers.
Set Up the Business Bank Account
Once you get your EIN, you can take it straight to the bank with you. You will need a business bank account for all purchases and expenses, so that they stay separate from your personal expenditures.
This makes it easier for accountants to prepare your taxes, as well as for you to monitor surpluses and losses over time.
Call your nearest bank and schedule an appointment with one of the tellers.
They will sit down with you and tell you about any business bank account requirements with the bank – they may require a certain deposit, and so forth. Be sure to ask for free checks associated with the account – most banks can provide you with these checks if you remember to ask.
Be sure to also ask about any potential penalties if the bank account amount falls below a certain level and so forth. Provide you address where they can mail the card attached to the account.
Secure Accounting Software
Nothing is more frustrating than attempting to work as an accountant and business owner at the same time. The “less sexy” side of business is all of the accounting and bookkeeping that needs to be carefully monitored in order for you to legally report income, while also monitoring gains and losses.
Major accounting software tools today include Freshbooks, Quicken, and QuickBooks.
These technological tools make it easy for you to track invoicing and other exchanges of money, compiling the final results and reports at the end of the year for you to easily export and file.
That way, you don’t have to waste time every single day tracking expenditures and payments down to the last second.
You can also send out payment reminders to clients to ensure they stick to the proper payment schedule.
Create Your Website:
Considering 88% of consumers are unlikely to return to a website where they had a bad layout or user experience, the design and formation of your website is incredibly important.
Websites are the windows to your business; it’s where you’re going to make all of your sales as an online business.
Since websites are so important, it’s wise to seek the support of a website design artist or engineer. There is both a front-end and back-end to your website, working seamlessly together to create the “user experience” that either makes it easy or complicated for consumers to purchase your product or service. Websites are important lead funnels that require professional input from start to finish.
Your website can be built on a variety of platforms, from WordPress to SquareSpace and GoDaddy. Consider reading more about your platform options, considering which one makes the most sense for your business. For example, WordPress is the most commonly used website builder for blogs, newspapers, magazines, and so forth.
Collaborate with your website builder and inform them of your website platform decision.
They will collaborate with you on design preferences, content, images, etc.
Be sure to spend some time with them – you want to get your website right. Website designers are verified excellent and affordable on major freelancing platforms today, like Fiverr.com or Upwork.com.
You don’t need to break the bank to work with them.
Build a Blog Strategy for SEO
SEO is short for Search Engine Optimization – the very algorithm leveraged by Google, and other search engines and sites like Amazon, that determine which websites end up on the first page results.
Naturally, websites on the 45thor 67thpages of Google are never seen.
That’s why SEO is so critically important. Its why I spend tons of time on it myself.
Although Google never releases their algorithmic formula, we do know that natural, organic content is a great way to get your SEO moving.
By writing blogs with your keywords, otherwise known as the terms that consumers search in Google to find your product or service, you can slowly build an SEO strategy that will continue to improve your ranking.
Blogging frequently, with the right configuration, with new, fresh content, is an important part of your overall marketing strategy.
So far so good? Hopefully you feel like I am doing a good job teaching you how to start a business online.
Let’s keep going.
Configure an Email List Provider:
Email is one of the most effective ways to interact with consumers today. It’s so effective, in fact, that with every $1 spent on email marketing, you receive a $38 return.
It’s the most lucrative outreach available to you. Not to mention, it’s an easy way to keep track of your customers.
Therefore, you want to ensure you have a database set up that collects all subscribers from the moment you launch your website.
Common tools include ConvertKit, MailChimp, etc. These tools will track all of your subscribers, as well as make it easy for you to send out blast emails, design email templates, and manage all other analytics that tell you how successful certain emails are or are not.
Email subscription companies make it very easy to sign up and integrate their service into your business.
I’ve listed all the resources that I use in my Tools of the Trade Page
Fill Out the Remaining Details
This is highly specialized depending upon the kind of online business you choose.
For example, if it’s an eCommerce business, you want to get your product descriptions and pictures set-up.
A blog, you want to configure your blogging categories and plug in all social profiles to ensure everyone can follow along.
If you’re teaching an online course, you will want to build out your course content and create a curriculum with a timeline.
Selling on Amazon, eBay or Etsy, then you need to set up your profile and read up on marketing tips specifically reserved for these sites.
During this part, you will want to also consider photography or videography to add to your website, selling profiles, and social profiles. Stock photos are a thing of the past, so it’s really in your best interest to upload some of your own photos.
Of course, they need to be high quality and edited, which is why you might want to consider talking to a photographer.
For those with eCommerce businesses, commerce photography is an absolutely critical part of selling your products.
Measure Business Metrics
Thanks to technology today, you no longer have to wonder how certain services or marketing tactics performed after they were launched. Now you can know right away with the cold, hard data.
Websites, social media profiles, and eCommerce profiles generate free analytics you can export and study at any time.
Email subscription services provide the same kind of insights. This means the answers to all of your questions are right in front of you.
At the very least, it’s important to look at your website analytics. And study where buyers are falling off of the site before checking out with a product or service.
If they all seem to fall off at a certain point, it’s worth considering reconfiguring the page or content on the page.
As for your products, which products are selling more than other products? Do you have an idea why?
Moving onto social profiles – which content performs the best? Are you investing money into boosting any posts? Which boosted posts do the best?
What time of day is the best time to post?
There are also business dashboard services you can integrate into your business.
These software options track everything related to your business and sales, compiling all information in one feed that makes it easier for you to track business success and performance.
Make It Happen. Execute.
This is the final part of how to start an online business: making it happen.
This is a kind of innate requirement that can’t be read; it’s something you have to go out there and do.
Are you a shy or hesitant person, it’s time to rise above those instincts and hit it hard.
If you are starting it as a side hustle and putting in a few hours a day, that’s great. Can you squeeze in fifteen minutes during your lunch break to do some more work?
You might be surprised at the results when you work to make it happen.
Although an online business can be a side hustle to start out, you still need to operate according to a schedule – much like a regular job.
It’s wise to create the same schedule you can access every day, no matter where you are, ensuring you are monitoring your inventory, answering inquiries, and constantly improving upon your business model.
I can tell you first hand, online businesses require the same amount of discipline as in-person businesses.
Remember: if you aren’t constantly making improvements, someone else, somewhere in the world, is. There’s no time to get complacent.
Own Your Own Online Business
Now you know the basics of how to start a business online.
If you follow this carefully curated 14-part formula above, your small business will be positioned perfectly to succeed when the idea pops into your head.
Take time to really do your homework in the beginning and understand the industry from which you will be operating.
Bring in professionals when it comes to the digital experience of your company. Sometimes it can get expensive, but it’s worth shortening your learning curve. You’ll get to results faster and learn along the way.
Don’t forget the legal and tax requirements that keep your business in compliance at all times.
And as important as anything, have a business plan to follow and execute against.
Half of the worldwide workforce will make an income remotely by next year.
If you want to join these kinds of professionals, know that you are not alone.
Put in the work now, and reap the benefits down the line – anywhere in the world.
I’m rooting for your success＼（＾ ͜ ＾）／
References from the article on this page
57 million in the gig economy
88% of consumers are unlikely to return to your website where they have a bad experience because a bad layout etc…