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How do I Start an Online Business?

Mary Elizabeth
Updated Feb 04, 2024
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An online business is also known as ecommerce or e-commerce or etailing. It means that a company has its primary, if not its only, customer contact through the World Wide Web on a website that is capable of handling whatever goods, services, or both that the business sells. In order to start an online business, there are some basic steps that should be taken.

First, you need to know the legal ramifications of what you’re doing in the location where your online business will operate. This includes understanding matters such as registering a business name and the online business itself, collecting sales tax, legal issues regarding employees if you have any, guidelines for accepting credit cards if you plan to do so, and any issues specific to your location. In whatever way or ways you plan to communicate with customers — for example, via email, telephone, and snail mail — you need to be familiar with laws governing, limiting, and/or guiding the use of those communication methods, and the rights of consumers not to receive such communications in the locations in which your place or places of business will be set up. The services of a lawyer and an accountant may prove valuable, depending on the size and intricacy of your online business.

Second, you need to set up several accounts in the name of your online business. A bank account is generally necessary at a minimum as far as financial accounts go, but you may also need one or more credit card accounts in order to make business purchases. You certainly need an ISP (Internet Service Provider) account with enough bandwidth and data transfer for your business, a telephone account, and a webhosting account to build your ecommerce website.

Third, you need to create the online presence of your online business. This has several facets. It’s a good idea to research the competition for your business, and keep in mind their choices and features as you choose and register your domain name or domain names and begin to design or have someone design your site. Think about how your customers are going to come to know what products or services you have to offer, how they will shop for these items, what payment options you wish to offer, how you plan to deliver the products or services, and how you plan to provide customer service for ordering and technical support for any website issues that may arise. Keep in mind that ecommerce sites can be built from templates, using website building software applications, or through the use of blogging software with an ecommerce theme, and that you can have as generic or as unique an online business website as you choose, depending on the way you choose to go about it.

With your plan somewhat prepared, you will have enough information to research ecommerce webhosting options. You should comparison shop, both among and within webhosts. Many offer multiple ecommerce options, and add-ons allow fine-tuning, but prices vary widely. Before you choose, become familiar with the terms shared server, where all the resources of a single server are shared among many accounts, virtual private server, where accounts share a server but have dedicated resources, and dedicated server, on which only one account resides. You should also check the disk space, data transfer amount, maximum number of products, transaction fees, and, of course, the cost of the webhosting options you are considering.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary Elizabeth
By Mary Elizabeth
Passionate about reading, writing, and research, Mary Elizabeth is dedicated to correcting misinformation on the Internet. In addition to writing articles on art, literature, and music for WiseGeek, Mary works as a teacher, composer, and author who has written books, study guides, and teaching materials. Mary has also created music composition content for Sibelius Software. She earned her B.A. from University of Chicago's writing program and an M.A. from the University of Vermont.
Discussion Comments
By BrickBack — On Oct 18, 2010

Suntan12-They not only provide training and advertising support, but they also provide you with ongoing support. The downside of a franchise it that it is more expensive and you tend to have to pay royalty fees.

Whatever you decide a certain level of online business writing is necessary. You will want to create newsletters and articles about your product or service in order to bring in more business.

Blogs are also a great way to talk about your business and you only need Word Press to set one up.

By suntan12 — On Oct 18, 2010

Oasis11-You can also seek online business ideas from entrepreneur magazine. They offer the top home based businesses and provide information regarding the start up costs and training.

Sometimes it is easier to start working with a franchise instead of your own business idea from scratch. Franchises are like a business in a box. They have a proven business model that you have to follow to the letter.

By oasis11 — On Oct 18, 2010

Sneakers41- One great thing about an online business is that the expenses are low. In order to really market your business you will need a website to direct people to when discussing your products or services.

You can also check with the nonprofit organization called SCORE. They are made up of retired business owners and executives that mentor new business owners on their area of expertise.

They have weekly seminars and meetings and the networking is invaluable for any budding entrepreneur.

The mentors are referred to as counselors and they have many that have run successful home based businesses. This online business management advice is invaluable especially when you take your first steps as a business owner. Online business planning is essential for success.

By sneakers41 — On Oct 18, 2010

You should really do an online business search in order to find online businesses in the area that you intend to focus on.

Performing online business analysis helps to determine if your business idea is able to generate the income that you need. You really have to create an online business plan that outlines who your business will serve, how you will conduct your online business marketing and how many advertising dollars will you allocate for this venture.

In addition, you will need to determine your break even point and how long will it take you to earn a profit. Forecasting realistic revenue is important to determine if the business idea will work over time.

Mary Elizabeth
Mary Elizabeth
Passionate about reading, writing, and research, Mary Elizabeth is dedicated to correcting misinformation on the...
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