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If you want to start an online business, there’s no better time than now.

The eCommerce industry has grown rapidly over the past decade, especially since the start of the COVID-19 pandemic. In fact, traffic in the eCommerce industry increased by 8% in the first quarter of 2023.

However, eCommerce’s upward trend doesn’t guarantee success as an online business owner. If you want to venture into online entrepreneurship as a side hustle or a major source of income, you need to follow the right steps.

In this step-by-step guide, you’ll learn how to start a successful online business. We’ll also provide some best practices to ensure profitability, regardless of your niche.

How to start an online business 

Starting an online business requires time, effort and in-depth research. Follow these detailed steps to pave your way toward success.

How to start a successful online business.

1. Choose a business idea or niche

Every business venture starts with an idea.

However, as a beginner, it’s hard to tell whether or not a business idea will be profitable. Sometimes, the best online business ideas are innovative solutions that go against the norm.

When choosing a business idea, make a list of things you’re passionate about. Passion helps you stay motivated, increasing your chances of success.

For example, if you’re enthusiastic about writing, consider offering content writing services on freelancing platforms such as Fiverr and Upwork.

If you’re undecided about the online business to venture into, here are some eCommerce business ideas to get you started:

  • Sell physical products
  • Sell digital products
  • Offer online services
  • Create online courses
  • Offer membership programs
  • Offer SaaS (software as a service) solutions

Online entrepreneurship further requires you to define your niche — a small segment of the market with its unique needs and interests. For instance, if you’re a freelance writer, you can narrow down your services to the real estate industry.

2. Validate your business idea

To validate your business idea, you must ensure there’s an actual demand for the products or services you want to sell. Conduct keyword research to find out if people are actively searching for the product or service you intend to sell.

Next, dive deeper by conducting in-depth market research. Market research provides insights into your customers, competitors, industry trends and marketing strategies, helping you make rational business decisions.

Find out who your competitors are, their strategies, strengths and weaknesses. Analyzing your competitors gives you a deeper understanding of the market so you can identify and fill any existing gaps.

Next, craft your unique selling proposition (USP) — your brand’s secret sauce that makes it stand out. Not only does a well-crafted USP give you a competitive edge, but it also helps you position your brand in a way that appeals to your target audience.

3. Choose a business model

A business model is your company’s blueprint for generating revenue. It enables you to define your target audience, decide the nature of your business and set revenue goals.

Think of your business model as the foundation on which you erect your business for maximum profitability. By selecting the right business model, you essentially map out the path your business will take to generate income and sustain itself in the competitive market.

There are many business models to choose from, but the major ones include:

  • Business to business (B2B): In this model, your business sells products or services (e.g., software solutions, consulting services and wholesale goods) to other businesses. Shopify is a popular example of a B2B company.
  • Business to consumer (B2C): This business model involves selling products and services (e.g., electronics, fashion items and handcrafted products) directly to end users. Amazon is a great example of a B2C company.
  • Consumer to business (C2B): In this model, consumers sell products and services to businesses. C2B platforms include Upwork, Airbnb and Uber.
  • Consumer to consumer (C2C): C2C businesses facilitate peer-to-peer transactions between consumers. Examples include online marketplaces like Etsy, Craigslist and eBay.

For more information on how to choose the right business model for your small business, explore different business models and examples of companies that used them successfully.

Similar to brick-and-mortar businesses, running an online business doesn’t exempt you from state or local laws. To avoid legal issues down the line, take the necessary steps to cover your legal bases.

Even if you’re a small business owner, you need to select a legal structure for your business. Would you prefer the flexibility of a sole proprietorship? Or do you want the liability protection granted to a limited liability company (LLC) or a corporation? Or perhaps the shared responsibilities of a partnership are more suited to your needs.

A comparison of the different legal structures for businesses.

Your choice will influence your management setup, legal responsibilities and financial outlay. Each business structure has its pros and cons, so do your research before making a decision. The best choice for you depends on the nature of your business, your goals and your unique circumstances.

Once you’ve chosen a legal structure, find out the business licenses and permits you need to obtain to legally operate in your state. And don’t forget to research the right way to pay your business taxes.

5. Develop a business plan

Once your legal bases are covered, you’ve set the groundwork for starting an online business. Now, it’s time to develop a business plan.

A business plan is an overview of your business, which documents your goals, strategies and financial projections. Think of a business plan as a means of getting your online business off the ground and on the right path.

Here are eight main components of a business plan:

Components of a business plan.
  • Executive summary: Document your company’s mission, vision, core values and strategic goals. This serves as a concise overview of your business’s objective and direction.
  • Company description: Provide a comprehensive description of your company, including its history, location and legal structure.
  • Products and services: Describe the products or services you want to offer, explaining their features, benefits and unique selling points.
  • Marketing plan: Document the strategies and processes you’ll use to attract and retain customers.
  • Competitive analysis: Write a detailed description of who your competitors are, their strengths, weaknesses and strategies.
  • Financial plan: Provide financial projections, funding requirements, cash flow statements, balance sheets and break-even analysis proving your business’s financial viability.
  • Operational guidelines: Outline the procedures, guidelines and processes for running your business smoothly.
  • Appendices: Include any technical or complex information (e.g., market research data, legal documents and resumes of team members) that supports your business plan.

A business plan is a living document that must be updated as your business evolves. You may need to revise your business plan if your business operations change or if you need to adjust your financial projection.

6. Create a marketing plan

As you may have noticed, a marketing plan is a part of a business plan. However, it’s such a crucial part of starting an online business that it deserves its own section.

If you’ve been following the previous steps in this tutorial, then you’re well on your way to crafting a great marketing plan.

A marketing plan outlines how you intend to promote your business to your target audience. Approximately 80% of successful content marketers document their marketing plans, proving that a well-written marketing plan is crucial to eCommerce success.

Here are the main components of a marketing plan:

  • Market research
  • Target market
  • Competitor analysis
  • Unique selling proposition
  • Marketing strategies
  • Budget
  • Key performance indicators (KPIs)

7. Develop your offerings

Now that you have a business idea and a marketing plan, it’s time to create an offer your target audience can’t refuse.

For example, if you want to sell physical products, you need to decide how to source them. Would you like to source products directly from a manufacturer, or do you prefer getting them from a wholesaler?

Alternatively, if you intend to sell digital products, you need to figure out how to create them. For example, creating an online course requires you to decide what topics to cover, what format to use and what eCommerce platform to use.

You also need to choose which multimedia elements to incorporate in your online course and how to engage with your students.

8. Build your website

Your website serves as a digital storefront for your online business. A business website enhances your credibility and makes it easier for customers to trust you. It also gives you full control of your marketing activities, allowing you to generate organic traffic.

If you’re ready to build your eCommerce store, start with domain name registration. Choose a domain name that’s identical or similar to your business name. This makes your brand more recognizable and authentic.

Once you’ve selected a domain name, choose a web hosting provider that guarantees excellent uptime and maximum security.

At this point, you get to choose your web hosting plan. If you want to create an online store, the WooCommerce web hosting plan is a great choice. This plan is specially designed to optimize your website for a seamless online shopping experience on any device.

Regardless of the nature of your online business, you’ll need to use a website builder to customize your website and make it fully operational. Here’s where plugins, themes and templates come in handy. These specialized tools enable you to enhance your website’s functionality and operational efficiency.

However, if you have neither the time nor expertise to build your own website, there’s always the option to outsource web design services to a team of experts like Bluehost’s.

9. Launch your online business

After designing your website, the moment to launch it has arrived.

But before you launch your business, double-check to ensure everything is in place — your website, your social media accounts and your products or services.

Next, spread the word about your online business using social media platforms, email newsletters and other marketing channels you’ve established. This creates awareness about your business and helps you connect with your target audience.

To create more buzz around your online business, consider offering special deals, discounts and promotions.

After you’ve officially launched your business, sit back and celebrate your achievement. Pop some champagne or do some private ribbon cutting. Celebrating milestones boosts your enthusiasm for your entrepreneurial journey.

10. Implement your marketing strategy

The word is out. Now, it’s time to execute your marketing plan.

The plan, of course, is to communicate your brand message and promote your offerings in ways that align with your target audience.

With numerous competitors, there’s a lot of noise out there, so your prospects may be indifferent to new products. If you want your message to cut through the noise, consistency and authenticity are key.

But to fill your sales pipeline with relevant traffic and generate more revenue, you must choose the marketing channels where you’re most likely to find your target customers.

This necessitates the use of several digital marketing strategies:

  • Social media marketing: Use popular social media platforms like Facebook, LinkedIn and Instagram to increase your reach, engage with your target audience and market your business.
  • Content marketing: Create valuable content (e.g., blog posts, videos and podcasts) to attract your target audience and drive conversions.
  • Affiliate marketing: Partner with individuals and businesses who will promote your brand in exchange for a commission.
  • Email marketing: Build a targeted email list and send personalized emails to subscribers who are interested in your products and services.
  • Search engine optimization (SEO): Optimize your content for search engines and drive organic traffic to your online store.
  • Influencer marketing: Collaborate with public figures on social media platforms to leverage their credibility and popularity to reach a wider audience.
  • Paid advertising: Set up ad campaigns on different platforms (e.g., Meta Ads and Google Ads) to increase visibility and attract potential customers while monitoring results.

Best practices: How to start a successful online business

Following the right steps can only do so much in helping you launch a profitable online business. To increase your chances of success as an entrepreneur, make sure to follow these best practices.

Be authentic

Authenticity attracts customers to your brand. Approximately 88% of customers value authenticity when choosing which brands to support.

If you want your authenticity to shine through in your brand communications, you need to be transparent about your company, pricing, product benefits and features.

Authenticity also requires you to properly define your core values. Embedding your core values into your company culture builds up your credibility, making it easier for customers to trust you.

Be flexible

Market trends and customer preferences constantly evolve. So, if you want your online business to remain relevant and profitable, you must adapt to these changes.

This involves tweaking product offerings, adjusting marketing strategies and exploring new business models when necessary. You may also need to fine-tune your website based on its performance.

Your ability to adapt swiftly and ditch outdated processes can positively transform your business by enhancing brand perception and increasing conversion rates across all sales and marketing channels.

Focus on your target customers

When starting an online business, it’s easy to get bogged down with tactics and strategies to maximize profit. And if you’re not careful, you may end up losing sight of your target audience.

Your customers are real people with specific needs, challenges and desires. If you ignore their perspective, chances are there will be a disconnection between your offerings and what they truly seek.

So, connect with your customers and engage with them through different channels (e.g., social media platforms and online forums). Listen to their needs, respond to their concerns and celebrate their successes. This active dialogue not only strengthens your relationship with customers but also provides invaluable insights that can guide your business decisions.

Final thoughts: How to start an online business — a comprehensive guide

Starting your own business can be intimidating at first, but with the right steps, you have a roadmap that can turn your business idea into a profitable venture.

This guide provides everything you need to start a successful online business and remain profitable despite intense competition.

At Bluehost, we understand that your time and resources are best spent on core business activities: growing your online business and engaging with your customers.

That’s why we offer full-service web design solutions tailored to your needs. Our team of experienced graphic designers will handle the technicalities of starting a new business, ensuring your eCommerce website is not just functional but visually appealing and user-friendly.

FAQs: How to start a successful online business

How can I start an online business with no money?

Consider launching a dropshipping business. Unlike other online businesses, dropshipping doesn’t require you to hold any inventory, so you can get started with no money.
To cut down on startup costs, you can also offer professional services on freelancing platforms such as Upwork and Fiverr.

How much does it cost to start an online business?

Costs vary widely, ranging from a few hundred dollars to thousands of dollars, depending on the business you choose. You can start a low-cost business with free tools (e.g., Canva for graphic design and Shopify for setting up your eCommerce store).
Conversely, you can launch a capital-intensive company that requires you to invest in warehousing, inventory and shipping.

What is the best type of online business to start?

When choosing an online business to start, consider your passion and expertise. The most popular online business ideas include freelancing, dropshipping and selling digital products or services.

How can I legally start an online business?

Before starting an online business, cover your legal bases. This involves choosing a legal structure, registering your business, obtaining all necessary licenses and handling taxes. Always seek expert advice to ensure you don’t run into any legal problems.

  • Devin Sears

    Devin is a Senior Event Marketing Manager for the Bluehost brand. He is our brand steward for all things Bluehost and WordPress. You'll always see him supporting Bluehost at WordCamps around the world!

    Brigham Young University
    Previous Experience
    Social Media, Customer Experience, Field Marketing, Sponsorships, Event Coordinator