How to start an online business

Do you have an idea for starting an online business and need help getting online? In the past, all businesses needed physical locations, but as online shopping continues to rise, many people are making successful business on the internet. All you need is a good idea, some startup money, time to get started, and you can start an online business.

If you’ve always wanted to be an entrepreneur, starting an online business is one of the easiest ways to get your foot in the door. And online businesses, when run well, can be extremely profitable.

Ready to get started? Here are the first steps to start an online business.

  1. Start with a really great idea.
  2. Decide on a business name.
  3. Secure a domain name.
  4. Determine your income model, and develop a business plan.
  5. Select a web hosting package.
  6. Build your website.
  7. Prepare your inventory.
  8. Tell the world! Create and execute your marketing plan.
  9. Launch!

Download a FREE checklist to chart your progress!

Let’s dive in!

build your website

1. Start with a Really Great Idea.

Since you searched for this article, chances are that you already have an idea for your online business.

If you have a business or product idea that you think people will be interested in, confirm that with market research. You can get creative and do a little bit of online market research yourself.

For example, a couple of businesses like Ask Your Target Market and GutCheck will connect you with members of your target audience so you can ask them questions directly and gain a better idea of what they’re likely to think of your product.

If you already have an idea of your target audience, you can browse forums on Reddit to see what people are talking about. Are there hobby groups on Reddit related to your product? If so, they may talk about new products they would like to see or complaints about an old product. You can use these discussions to help refine your business idea. Or, if you’re looking for direct feedback, consider posting on Reddit about your product or idea and see how people respond to it.  

Maybe you want to start an online business for some passive income, but don’t have your idea fully developed yet? That’s okay too. Start by thinking about popular products in a hobby or niche area that you’re familiar with. How can you improve on those products or create a companion product that would make the experience better?

Maybe a service offering is more your speed. Consider these trendy online business ideas for your side hustle.

2. Decide on a Business Name.

As you’re steadily moving toward the point of your launch, it’s time to determine how your business will appear to the world. If you’ve gotten this far without settling on a name for your online business, then now is the time to make a decision. Choosing a name for your business is hard.

The name is the biggest decision to make as you work on your brand, and it’s likely the most important decision since it will set the foundation for your brand and other decisions you will make next.  

First, decide what needs to be in your online business name. For example, what keywords do your competitors use in their name? Are there key terms you should use or avoid? For example, your personal training business may get more traction and recognition if “personal training” is in the name versus something vague like “Bill’s Transformations.”

After you brainstorm a list of keywords to consider (and keywords to avoid), come up with half a dozen or more business name ideas with your keywords in mind. Next, you’ll need to see which business names are available.

Run your list of names through the trademark database search tool at the US Patent and Trademark Office. If your business name idea (or a close variation) is already in use, remove that name from your list of options. Do a similar search on social media and on Google to be sure someone else isn’t already using the name.

3. Secure a Domain Name.

You’ve decided on a business name – congrats! Now it’s time to claim your domain name.

You’ve spent so much time thoughtfully deciding on the name for your online business, and you don’t want someone else to buy it before you. Even if it may be a few months before you’re ready to start a website, that’s ok. Purchase your domain now so you know it’s safe and ready when you are.

Use HostGator’s domain name search tool to see if your top choice is available. Then follow the steps to purchase your domain.

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If your business name is unique enough, you can go straight for the most obvious choice:

If the most obvious domain is already taken, then you may have to get a little creative.  You can either go with one of the other domain extensions like .net or .me, use a hyphen or underscore between words to change things up, or add a minor addition to the name, like “go” at the beginning or a word that clarifies the industry afterward.

4. Determine Your Income Model and Develop a Business Plan.

So how will you make money? Are you selling products? Are you launching a blog and need to make money through an affiliate program or referral links? Do you want to earn passive income? Maybe you need investors?

The answer may determine the type of website you need (an online store and shopping cart function) or the type of partnerships you’ll need to find (sign up with a website that pays for purchases from referral links).

If you need investors to make a profit, a business plan will be one of the most important tools you have for convincing them to buy in.

Even if you aren’t explicitly looking for investors, creating a business plan will help you clarify your goals and figure out the specific steps you need to take to achieve them.

Make sure your business plan includes an analysis of the competition and a clear positioning statement of where you fit within the market. It should also include information on your target audience, which your market research should have given you a nice head start on collecting.

All of that gives you the information you need to make sure your approach is solid. With that in place, you’ll have an easier time working out the chronology of what to do when and what finances and resources you’ll need to complete each step.

In short, your business plan should do two key things:

  • Make a case for why your business idea is a good one, and
  • Provide the roadmap to turn your a good idea into something actionable.

Even if you never show your business plan to someone else, a business plan can help keep you mentally organized. As your online business grows (or experiences growing pains), your business plan can remind you of your goals and be a guide as you navigate how to approach decisions for the direction of your business.

5. Select Your Web Hosting Package.

Website hosting refers to the server space where you website lives. You can choose hosting based on the amount of server space that you need, how fast you want the website to load, or how private you want your online space to be.

You can choose 5 main types of web hosting:

For more details on the benefits of each package, read this article titled “What type of web hosting do I need?”  or check out the infographic below:

Web hosting infographic
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6. Build Your Website.

For an online business, your website is everything. You need it to look good, be intuitive to navigate, and make a clear case to visitors why they should buy.  Take time to get it right, and run the finished product by some other people (ideally people in your target audience) to get feedback.

Make sure the website design matches with your overall visual branding and your website copy effectively communicates your brand positioning.

No previous experience building a website? No problem. HostGator has a drag-and-drop website builder that makes building a website frustration free. It comes loaded with more than 200 free, professional design templates to choose from. Better yet, HostGator’s website builder has eCommerce website functionality.

If you have a little more technical knowledge and want more control of what you can do behind the scenes of your content management system, try a WordPress website. You can customize your WordPress website with many paid and free templates that are designed specifically for WordPress.

If you’re selling products, don’t forget a shopping cart function.

7. Prepare Your Inventory.

Now it’s time to create or stock up on whatever you’re selling. If you’re selling physical items, you want them ready to ship by the time any orders start coming in. If you’re launching a service-based business, this step is where you should clarify your process.

If you’re selling digital products, like SaaS software, then you need to make sure the product is ready. Do user testing to ensure that it not only does what you’re claiming it does, but that customers will be able to use it without confusion or difficulty.

Obviously this step will vary considerably depending on the type of business you’re launching. Just be sure that, before your actual launch date, you take whatever steps are necessary to ensure you’re ready to start providing what you’re selling by the time your first customer is ready to buy.

8. Tell the World! Create and Execute Your Marketing Plan.

Before you actually get going, you should establish your marketing plan. Every business is different and marketing isn’t one size fits all. Because you’re starting an online business, you will want to make use of a mix of content marketing, social media promotion, and paid search promotion.  

If you don’t know much about online marketing to start, this may be a step to hire out. There is a learning curve to get started and some mistakes of ignorance can cause serious consequences – you wouldn’t want to find yourself facing a Google penalty due to trying an outdated SEO strategy, for instance.

If you don’t have the money for a marketing agency, you can find affordable freelancers on websites like Fiverr. If you really don’t have the funding to outsource your marketing, then take some real time to research online marketing best practices. Sites like Moz, HubSpot and Copyblogger all have good, reliable resources for beginners.

9. Launch!

Launch day will be a big day for your new online business. If your website isn’t already live, then you’ll definitely want it up and running on launch day. You should put out a press release, set up any PR interviews you can get, announce the launch on social media, and start your marketing campaigns. And you should be prepared to start filling orders and fielding any questions that come through.

Your first day in business is a big day, but your success will depend on what you do for every day that comes after.  Be prepared to work hard, learn as you go, and make a point of providing great customer service. Running an online business isn’t easy, but if you take the right steps and do the work, the rewards can be great.

Ready to start your online business?

Step 1: Download our FREE checklist to stay on track!

Step 2: Build your website with HostGator.

Step 3: Launch!

Blair Williamson avatar

Blair Williamson is the content marketing manager for HostGator where she comes up with great ideas for blog content, webinars, and emails to help you rock your business.