Starting an Online Business
An overview of the models and the practical steps involved in getting started.
An online business is one whose selling, delivery or service happens primarily over the internet rather than in a physical location.
What counts as an online business
The boundary is blurrier than the term suggests. A shop that also sells online isn't usually called an online business; a consultancy that has never met a client in person generally is. The useful distinction is where the transaction happens, not whether a website exists.
This is a different question from taking an existing business online, which is about giving an established operation a presence. This one is about businesses that start there.
The common models
- Selling physical goods. An online shop with stock, packing and shipping. The most recognisable model and the most operationally demanding — inventory and delivery are real work regardless of how good the website is.
- Selling digital products. Templates, courses, software, ebooks. No shipping and no per-unit cost, which changes the economics substantially. The difficulty moves to producing something people will pay for and being found.
- Services. Consulting, design, development, writing, tuition — delivered remotely. Usually the lowest-cost start, because the thing being sold is time and skill you already have.
- Marketplaces and reselling. Selling through an existing platform rather than your own site. Lower setup effort, but the platform sets the rules and takes a share.
- Content and advertising. Building an audience and earning through advertising, sponsorship or affiliate arrangements. The slowest to produce income and the least predictable.
- Subscriptions. Recurring payment for ongoing access. Attractive for its predictability, and dependent on continuing to deliver something worth renewing.
What's genuinely easier
- Lower cost to start. No premises, and often no stock.
- Not limited by location. Customers aren't confined to who is nearby.
- Always available. Sales and enquiries aren't bounded by opening hours.
- Measurable from day one. You can see what people looked at and where they stopped — information a physical business has to infer.
- Cheap to test. Trying an idea and discovering it doesn't work costs relatively little.
Starting one
- Decide what you're selling, precisely. "Consulting" isn't a business; consulting on a specific problem for a specific kind of client is.
- Check someone will pay. Before building anything. The cheapest version of this is trying to make one sale.
- Handle the legal and financial basics. Registration, tax, and a business bank account, as applicable where you are.
- Get a domain and a site. It doesn't need to be elaborate. It needs to explain what you sell and let someone act on it.
- Set up payments. A payment provider for anything transactional, plus somewhere to invoice from for services.
- Work out how people will find you. Search, referrals, an existing audience, or paid advertising. This is the part most often left to chance, and the most common reason a launched business goes quiet.
- Start, then adjust. Ship the small version and let real customers correct your assumptions.
Being realistic
Low barriers to entry mean low barriers for everyone else too. The cost of starting has fallen; the difficulty of being noticed has risen to match.
The parts that actually determine the outcome are almost never the website: whether the thing is genuinely wanted, whether the numbers work per sale, and whether there's a repeatable way for people to find it. Those questions are worth answering before spending much on anything else.
This post is from infoMogli's earlier run and sits outside what the site currently covers. It's kept online because the page has been at this address for years — the writing has been cleaned up, but the subject hasn't been brought into the current editorial focus.