Want to learn how to build an online business? There’s a lot that goes into creating an online business—and if you’re new to the game, it can be hard to know where to start.
Should you start with developing a product? Identifying your target customer? Building your website? There are so many things to do!
We’ve got you covered. Let’s take a look into how to create an online business, so you understand the step-by-step process of launching a successful online venture.
The 8 steps of building an online business:
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1. Pick the right type of online business
2. Identify a need in your market
3. Develop your product or service
4. Build your brand
5. Build your website
6. Take care of the legal side of forming a business
7. Get your logistics in place
8. Develop your marketing strategy
1. Decide what type of online business you’re going to create
There are a huge variety of online business types—and before you take the steps to build an online business, you’re going to want to figure out what type of business is right for you.
Here are the 5 most common types of online businesses you might want to consider.
a. Ecommerce. Ecommerce is the business of selling physical products online. If you’ve got products to sell, building an ecommerce shop can be a great business model.
b. Digital products. Physical products aren’t the only products you can sell online! Digital products—like e-books, educational courses, or design templates—can be a great way to drive revenue online.
c. Affiliate marketing. Don’t have any of your own products to sell? No worries! With affiliate marketing, you can sell other people’s products—and get paid a commission every time you make a sale.
d. Freelancing or consulting. If you have an in-demand skill, building a freelance or consulting business—and then promoting that business and finding new leads online—might be the business model for you.
e. Social media-based businesses. If you have a large social media following (e.g. Instagram, Facebook, YouTube, Twitch…), there’s also an opportunity to build a social media-based online business. You can monetize your social media following in a variety of ways, from brand partnerships to subscription groups to premium content.
Once you’re clear on what type of business you want to create, it’s a lot easier to flesh out a strategy to bring that business to life.
2. Identify a need in your market—and create an online business that satisfies that need
It doesn’t matter how great your idea for an online business is—if it doesn’t fill a need in the market, it’s not going to be successful.
There are a few different ways to figure out if your business idea aligns with a genuine need in the market, including:
a. Competitor research. Look at what your competitors are doing. What products or services are they providing to their customers? What needs are they fulfilling? And how does that align with the need your business idea fulfills? While you never (ever!) want to rip off your competitors, identifying the needs they’re fulfilling in the market will give you insights into what your customers are looking for—and how your business can fulfill that need.
b. Market research. Market research can give you insights into what people are talking about in your industry—which can then give you insights into which direction to take your business and whether your current idea is going to connect with that market. For example, you can look on Quora and see what questions people are asking in your industry—and then reverse engineer how your business can answer those problems. Or you can research what complaints customers have about your competitors—and then figure out how you can improve and deliver a better customer experience with your business.
c. Customer surveys. If you want to know what your customers need, the best thing you can? Ask them. Customer surveys will give you first-hand information on what your customers want, what they need, and how your business can deliver on those wants and needs.
Once you’ve gathered all that information on your customers and what they need, you can use it to clearly define your customer pain points, how your business provides a solution to those pain points, and create an ideal customer avatar or user persona (a composite character that acts as a representation of your ideal customer).
Knowing who your ideal customer is will help you drive your business strategy and make sure that the online business you’re building really speaks to the customers you’re building the business for.
3. Develop your product or service
You can’t have a business if you don’t have anything to sell. So before you get started, make sure you put the time, effort, and resources into developing an unparalleled product or service.
This step of the process is going to look different for every business. If you’re looking to sell your products online, that could mean investing in research and development. If you’re launching a digital products business focused on e-books, it could mean hiring a top-notch editor to go through your copy and make sure it’s up to par before you go live.
If it’s an affiliate marketing business, it could mean taking the time to really research the affiliate opportunities available in your niche—and making sure that you’re only promoting the highest quality products to your audience.
The point is, your online business is reliant on your ability to effectively sell your product or service—so don’t cut corners and make sure that whatever product or service you are selling is something your customers are going to be excited to buy.
4. Build your brand
Your branding is what’s going to help you stand out, break through the clutter, and grab your ideal customer’s attention—so it’s important to take the time to put some serious thought into what kind of brand you’re trying to build.
To start off the branding process, first, really dig deep on who you are as a brand. What are your mission and values? What makes you different from your competitors? What’s your brand personality? What do you do better than anyone else?
Once you have a clear idea of who you are as a brand, you can use it to drive the other part of building your brand: your visual brand identity and brand design.
There are a few key brand design elements you’ll need to launch a successful online business, including:
a. Logo
b. Brand color palette
c. Website
d. Business cards
e. Other branding elements as necessary (for example, packaging, marketing brochures, or branded t-shirts)
All of these elements are what make up your brand identity. They’re the elements that are going to tell your customers who you are and broadcast your brand message to the world—and it’s important to have them in place so, when you do launch your business, you’re in control of the message.
5. Build your website
Because you’re building an online business, your website is arguably the most important element in your brand identity; it’s the place where customers will get to know your brand, explore your products and services, and ultimately decide whether you’re a brand they want to do business with.
When you’re building the website for your online business, there are a few things you’ll want to keep in mind, including:
a. Keep your design on-brand. Your website is the hub of your online business; you want your customers to get to know you and you are branding—so it’s important that you keep the design on-brand. Feature your logo prominently, use your brand color palette in your design, showcase your brand typography…whatever you need to do to brand your website thoroughly and consistently, do it.
b. Make it responsive. Just as many people are going to be viewing your website on a mobile device as they are on a computer—so it’s important that your design looks just as good on an iPhone as it does on a MacBook. When you’re creating the website for your online business, make sure it’s fully responsive—and make sure to view it on both a mobile and a desktop device to make sure the design is on point before you go live.
c. Make purchases simple. The purpose of your website is to drive sales for your online business—so it’s important to create a great user experience and make purchasing your products or services as simple as possible. For example, if you have an ecommerce website, organize your product categories in a way that makes it easy for customers to find what they’re looking for—and then simplify the shopping cart process, so they can add the product, enter their information, and make the purchase in a few quick, easy steps.
Want more details on how to build a website from the ground up? Check out our article on how to create a website.
6. Take care of the legal side of forming a business.
You want your online business to be successful. But you also want it to be legal; otherwise, you run the risk of dealing with a lot of frustrating, expensive headaches down the line.
Before you launch your online business, it’s important to take any necessary steps to ensure your business is legally compliant. While every business is different, some common steps you might need to take include:
a. Legally forming your business. If you decide to form an LLC or a corporation, you’ll need to file the appropriate legal paperwork to establish and register your business with your state.
b. Apply for your tax identification number. As a business, you may be required to pay separate taxes. Check with your government to see if you need to establish a separate tax identification number—and, if so, apply for that TIN before you start your business operations or collect any money.
c. Setting up a business bank account. It’s important to keep your personal finances and your business finances separate. Setting up a business bank account—and funneling all your business profits and payments into that account—will make that process a lot easier.
d. Talk to an accountant about your tax responsibility. It’s important to understand your tax responsibility before you launch your business. Do you need to charge sales tax to your customers? Do you need to pay quarterly estimated taxes to your federal or state government? What tax paperwork do you need to file? Talking to a qualified small business accountant can help you get clarity on your tax responsibility—and make sure you don’t run into any issues come tax time.
7. Get your logistics in place
There’s a lot of logistics that go into running a business—and when you’re creating an online business, it’s important to get a logistical strategy in place before you launch.
Again, the actual logistics you need to get in place are going to depend on your business type. But some logistics you may need to explore include:
a. Manufacturing. If you’re selling physical products, you need a way to manufacture those products—and, as you grow and scale, to manufacture those products in larger quantities.
b. Shipping. Again, if you’re selling physical products, you need a way to get those products into your customers hands—and will need a reliable, affordable shipping solution in order to make that happen.
c. Packaging. If your products are going to be packaged in branded packaging, you may need to partner with a professional printer.
Digital platforms. There are a variety of digital platforms you may need in order to effectively manage your online business, for example, a learning platform to host your online course or an ecommerce platform to sell your products.
d. Payment processing. You need an easy, safe, and reliable way for your customers to pay you—so before you launch, it’s important to get a secure, user-friendly payment processing option in place.
8. Develop your marketing strategy
You have your product or service. You have your logistics, legal, and branding in place. Now, it’s time to get your brand out into the world and start marketing your online business.
There are a huge variety of ways you can connect with your customers and market your online business.
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