It can be frustrating and confusing when you’re first starting a business — you may not know what skills and tools you need to succeed. Even worse, it can seem like other entrepreneurs have all the answers, while you’re left stuck in the dark. Luckily, there are a few accessible resources and strategies you can rely on to ensure that your business is a success.
As businessman Roy Ash famously quipped, “An entrepreneur tends to bite off a little more than he can chew hoping he’ll quickly learn how to chew it.” This guide will help you navigate the first steps to online entrepreneurship and discuss common questions and concerns that come up along the way.
Table of Contents
Exploring Online Business Ideas and Finding Your Niche
One thing you’ll want to consider when first starting an online business is whether you’ll focus on commoditized or niche products and services. Commoditized products and services refer to items that everyone needs and uses, such as food and clothing items.
Niche products and services refer to one-of-a-kind products and services that fill a specific need, and may not have a direct correlation to products offered by other companies. When determining what kinds of products and services to sell online, you should keep in mind several considerations, including:
- Your objectives: What are your objectives? Are you looking for a long-term source of passive income, or do you have an “exit strategy?” Long-term business ideas might include blogs, websites, and e-commerce businesses, while short-term business ideas might include freelancing or consulting.
- How many resources you’re willing to invest: The success of your business will depend in large part on how much time, energy, and money you’re able to invest. Some businesses have much higher startup costs than others, so you should be sure to pick a business that fits your particular situation. In addition, some business ideas are essentially passive investments that require little time and effort, while others may require a full-time commitment.
- The competition: Saturated markets are less viable for turning a quick profit, but investing resources to build your brand can result in gains in such industries, which can be lucrative. If you’re thinking of starting a business in a particular niche, you should be sure to research the competition and evaluate whether your business meets a unique need or can compete with companies that are already established.
- How you can distinguish yourself: To make your business stand out from the crowd, you should have one or two things that make you unique. This may mean extensive experience and expertise in your niche, leveraging your contacts to make connections, or unique patents or product ideas.
- What your interests are: If you’re not interested in your online business, chances are it won’t last long. You should pick a business idea that excites and inspires you. While your business doesn’t need to tap into an already-established interest, it helps if you’re passionate and interested in what you’re working on.
Conducting Market Research
Market research is extremely important when it comes to launching a new online business. Conducting research can help you identify business opportunities, estimate approximate costs, and develop a plan for your new business. Helpful market research resources include:
- The Census Bureau’s Business Help Site;
- 411 Small Business Facts;
- U.S. Bureau of Labor Statistics Business Employment Dynamics;
- The Global Entrepreneurship Monitor;
- SBA Economic Studies.
Conducting market research is also a great way to identify potential competitors and find competitive gaps in your industry. The more you know about your field, the better able you’ll be to position your business as competitive and unique.
Steps to Establish Your Online Business
There are a few steps you’ll need to take to establish your business online. These include:
- Creating a website and choosing an e-commerce platform: One of the very first things you should do when starting an online business is to create a website and decide on an e-commerce platform. Some popular website builders like Squarespace provide domain registration, hosting, and e-commerce capabilities all in the same place. Another popular option is to register and host your domain and then integrate it with an e-commerce platform such as Shopify.
- Selecting a payment gateway: A payment gateway is a service that processes payments for e-commerce sites. Popular payment gateways include services such as PayPal and Stripe.
- Setting up shipping integrations: If you plan on selling and shipping physical merchandise, you’ll need to set up shipping integrations that make it easier to print labels and fulfill orders. Popular shipping integrations include Shippo, ShipStation, and ShipperHQ.
- Setting up taxes: You may have to charge taxes on the product that you sell, especially if you live in a state that charges sales tax and you sell to local customers. You should consult a tax professional to make sure that you’re charging the appropriate taxes and setting away enough money to pay the bill come tax time.
Online Business Regulations You Need to Know
If you’re planning on launching an online business, there are a variety of rules and regulations to keep in mind. You should be sure to comply with any laws that apply to your business, and seek professional help if you’re unsure whether you’re adhering to the letter of the law. Applicable regulations may include:
- Charging the appropriate amount of tax to local, national, and international customers;
- Complying with shipping restrictions on certain goods;
- Obtaining any necessary licenses and permits;
- Applying for patents, copyrights, or trademarks related to your product;
- Complying with age restrictions on certain products;
- Purchasing insurance;
- Protecting customer data and ensuring you’re PCI (Payment Card Industry) compliant.
How to Source Products for Your E-Commerce Website
How you source goods for your online business will depend on your personal preference as well as what niche you’re in. For example, if you make custom art or jewelry, you’ll be providing DIY products and services and won’t need an additional source.
If you’re selling a particular product or good under your own brand, you may want to work with a variety of wholesalers for both raw materials and finished products. You may also want to consider dropshipping items that are then fulfilled by a third party.
Tips to Grow Your Business
Growing a small business takes a lot of determination and persistence. You should continually assess your performance and make informed decisions based on hard data. This can include factors such as quarterly sales numbers, upward or downward trends, and particular sales channels that are performing well or poorly. If you’re not sure how to make sense of your business’s trajectory, consider asking for help or hiring a consultant to help advise you on how to move forward.
When it comes to scaling up a business, you should be sure to stay organized from the very start. Invest in accounting software to manage your finances and track financial information about your business. Many small business owners use QuickBooks or other computerized accounting software solutions.
You should also consider various funding options and small business loans that may have the power to catapult your business to success. If you’re ever feeling stuck or confused, there are plenty of free resources online when it comes to learning more about running a small business. And whether your business is a lucrative side hustle or a full-fledged career, you’ll have the satisfaction of knowing that you started a business from scratch and helped it grow into a success!
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