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Starting a Business

How to Start an Online Business – In Plain English

Starting an online business can be fun and exhilarating. It’s like taking life by the horns and going for it!

Among the staff here at CashBlog, we’ve got a lot of experience with each step of the business-building process. We’ve been there and done that, and we can help you understand how to start an online business.

Come Up with an Online Business Idea

If you are still trying to find the right business idea, here are some insights that could help.

First: it helps a lot if you base your online business around something you love and know inside out. For example, if you are an expert at mountain biking and it’s your passion, that might be an excellent place to start.

What we’ve found through experience is 1) if you don’t love what you’re doing, then it’s going to be hard to stick with it long term, and 2) if you know a topic inside out, then there is likely a need in the world for someone with your expertise.

Sometimes it can be surprising to people that others covet their expertise. Sticking with the example of mountain biking, it may be that you love it and you’re around mountain bikers all the time, and all your friends are experts. Maybe you’re not even the most knowledgeable in your friend group.

But whether it’s apparent to you in your everyday life, others are not mountain biking experts and may covet your expertise. Regarding how much demand there is for your expertise, that can vary based on the topic. But in general, people can’t be experts at everything; therefore, someone who is looking to gain expertise in that area will covet anything you have expertise in.

Your expertise is a significant part of the value you can offer with your online business!

Second: Within your expertise, you may have noticed ways other online businesses don’t adequately meet your needs. If you can address this need with your business, it might allow you to carve a niche in the industry. It also makes you different than others, which can be a key to business success.

Sticking with the mountain biking example, you may have noticed that online retailers of bike parts use plain vanilla part descriptions, which aren’t personalized enough. Or you noticed there isn’t a service out there that teaches you in one set of tutorials how to start from square one and go on to become an expert at mountain biking.

If you have ever felt that there is any lack in the field of your expertise, that might be where you can carve a niche for your online business.

Third:  make sure you have the financial resources for your business idea.  If you’re low on funds, consider ideas for how to start a business with no money.  You can still create a business within your area of expertise, but you might have adjust your business model to be one that can fly without much or any initial cash investment.

Choosing a Business Name

As your business idea starts to come into focus, then you get the fun task of choosing a business name.

Using a business name generator tool like this can be helpful. You can populate the tool with some relevant keywords, which will spit out many ideas. Most ideas will not work, but you might get some inspiration.

Before you get hooked on any given business name, make sure that the domain name is available for it! For any online business, you must have a domain name that ties to your business name.

We like to have our Namecheap domain name search engine open while we think of business names so that as each idea pops into our minds, we’re checking to see if the domain name is available. Domain name availability can be crucial in choosing a name for your online business.

Choosing an Online Business Model

Okay, so now you’ve got an idea for your business and a name in mind. It’s an excellent time to figure out which business model you will use.

Ecommerce Website

Are you going to sell merchandise online? Then an e-commerce store is a way to go. It is the type of business where you list products for sale, and when a customer orders an item, you have the item shipped to the customer.

There are a lot of platforms out there designed to make it easy to set up an online e-commerce business. We made a list of the best e-commerce platforms that should prove helpful.

Note: these days, with e-commerce businesses, you don’t necessarily need to warehouse the products yourself. Many manufacturers or wholesale distributors will warehouse the products for you and ship them directly to your customer on your behalf.


If you do not sell physical merchandise, you may sell information. If you are an expert at something, you can take your knowledge, articulate it, and publish it on a website to sell it.

One way to do this is to create an e-book. It allows people to pay a one-time fee to access the information you publish. It might work well if the content you write is entirely in the form of text and pictures (no videos) and if the information stays the same over time.

Check out our guide about How to Create an Ebook for helpful tips.

Online Subscription Business

Another way to generate income from selling information online is to create a subscription-based business. It’s one where people pay a recurring fee each month or year to access your expertise.

It might work well if a lot of your content is in the form of videos. It also works well if there is an ongoing community element involved with your service or if you regularly provide ongoing expertise.

You need a website with a login feature (such as a WordPress site) and a payment processor that can manage automated subscriptions (such as Paypal). Then you can load up the login section with all the content you are selling.


Another way to sell information online is to publish it on a blog.  We have an article that describes how to start a blog in fine detail.

Earning revenues on blogs typically comes differently. Instead of charging people to access your information, you give it to them for free and charge advertisers to get in front of your audience.

If this is up your alley, check out our guide about the best blogging platforms.


Forming a Business Entity

Okay, so at this point, you’ve got a name picked out for your online business, the domain name secured, and you know what business model you plan to run. It’s time to form an actual legal business entity.

You can only collect revenues if you have a formal business entity. You need it to set up a bank account.

Another critical aspect of starting an online business is deciding whether you need liability protection. Starting an online business already comes with risk in the form of your time and any money you put into it. On top of that, if your business somehow ends up inadvertently harming someone else, the risk could be immense unless you have the right entity type.

There are different types of business entities, and for each one, there are different rules and regulations in each state. Popular entity types include sole proprietorships, LLCs, and corporations.

Choosing which one is right for you can be challenging. This article does not offer legal advice, but we can at least break down a couple of typical generalities between them. Remember that these may only hold for some states, so you still have to check with your state to be sure of the differences.

Cost: Sole proprietorships are the least expensive to set up typically. LLCs and corporations usually have annual fees required.

Liability: Sole proprietorships don’t offer personal liability in case something goes wrong with your business. LLCs and corporations typically do.

Taxes: Corporations require separate tax returns, whereas, for LLCs and sole proprietorships, the income and expenses will flow through your personal tax return. That said, some types of corporations (S Corps) have income that flows through to your personal tax return even though they require their own tax return as well.

Paperwork: Corporations require a lot of formalities, like annual company meetings and minutes. LLCs require less, and sole proprietorships require almost none.

The entity types we’ve used most often are LLCs for online businesses. They’ve provided a nice blend of features. There’s not too much cost and work to maintain, yet they provide liability protection.

Setting up Email for your Online Business

If you have your domain, you can set up an email account for your online business. Not only will this allow you to start corresponding with people using a business email, but it will also unlock your ability to track your website’s performance.

For us, the obvious choice for setting up an email is Google’s Gmail service. At first, you may think, “Hey, I don’t want a Gmail account. I want an email that uses my domain name.” But that’s what you can do with Gmail.

Let’s say your domain name is You can create a Gmail account with that domain name to have email addresses like You can set up an email account like that by going here.

Setting up Website Tracking for Your Online Business

Once you have the domain name and the email account, you can now go in and set up Google Analytics. It’s free!

Google Analytics allows you to see all visitor activity on your website. There may be little to see on Day 1, but as you build up the business, you might get a lot of pleasure from seeing what’s happening here.

You can see which pages people visit, how they got there, how long they stayed, and whether they bought anything. You get all the data you need to make informed business decisions. Here is a link to Google Analytics.

Building Out the Website for your Online Business

You have your domain locked up at this point, and you know the business model you want. It’s time to build the website.

Some services make it easy to set up a website.  Wix is one we like a lot. You can just cut and paste stuff onto the website like you would in a Word document.

Shopify is probably the biggest name for offering an e-commerce website solution. They have all the technical work done on the back end, and all you have to do is populate the product information.

WordPress is the undisputed king of blogging software if you’re going with a blog.

Some online businesses don’t want to use a service like those mentioned above. There could be several reasons for this:

  1. It costs money to have the website run through one of those platforms, and once you build the site with one of them, you’re sucked into their ecosystem and financially deterred from leaving.
  2. Even though these services make it easy to build a website, they still might require more work than you want to put into them.
  3. Since these services are “out of the box,” it is harder to customize them to stand out from the rest of the websites.

If you don’t want to use any of the software mentioned above, you could custom-build your website. If you aren’t already a programmer, you could hire one to do it for you.

We like Upwork and have hired programmers from there before for some of our projects. What’s excellent about Upwork is that you have total control over the time spent. You can hire a programmer for 1 hour or 100 hours. You make the call.

No matter which route you take, you will need a web hosting company. You can’t have an online business if you don’t host the website somewhere.

You can think of it like this: all the content of your website (images, text, videos) needs a home. When you save the content for any given page, it has to get saved to a computer somewhere. That’s what the web host provides, and you can check out our guide for the best web hosting companies to find the one that’s right for you.

Marketing Your Online Business

Once you get your website up and running, it’s time to start getting the word out about your new online business!

Your website might never feel truly “finished” or perfect. It’s constantly evolving. If you wait for it to be perfect, you might never get it off the ground.

Once you feel like it at least embodies what core concepts you wanted, then it’s a good time to start sharing it with friends and family. You could invite their feedback and expect that there will be constructive criticism.

For most of us here who have experience setting up online businesses, this stage of sharing with friends and family was a major one. It gave us a lot of valuable feedback. We had to leave our ego at the door and focus more on hearing the feedback and using it to improve the business.

After incorporating that feedback, you can start marketing your business. For a startup online business, our inclination has typically been to begin with low-cost initiatives like these:

Join an Affiliate Program

Affiliate programs give others a split of the profit if they help get the word out about you. We like this approach because it allows you to generate new sales and profits without any upfront risk. It is particularly good for business models that sell information.

To learn more, you can check out our article about the best pay-per-lead affiliate programs.

Start Doing SEO

SEO stands for search engine optimization. It’s the process of getting your website to show up for free in Google’s search results.

It’s a long-term game, but the payoff can be noticeable over time if you keep planting the seeds. You can hire an SEO expert to guide you along the way. We like SEO Dude.

Join Facebook Groups

You can join Facebook groups related to your niche and start talking with people there. Everyday conversations can generate leads if you have a link to your business in your profile. You can also try to help people who are expressing a need that matches a service like yours.

Doing some of these low-cost marketing methods might help you collect essential stats, like which products convert the best, how many visitors are turning into customers, etc. It might give you enough ammunition to make an informed decision about paid marketing.

When it comes to paying upfront for advertising an online business, the opportunities are abundant. You could do social media ads, Google Adwords, or buy any other online ads.

The key to doing paid ads is to have a handle on your metrics. If you throw hundreds of dollars at a prepaid ad and you don’t have a way to track how it performs, then it might be a total waste. Those ads can serve as a learning mechanism to teach you about your core audience.


So there you have it. Those are the critical building blocks to setting up an online business. A number of us have followed these exact steps, and in some cases, the result ended up being a thriving business. You’re now well-equipped to start this exciting adventure!




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Brian Renfrow

Brian Renfrow has more than 20 years of small business experience. He's been involved in entrepreneurial roles for more than 10 businesses since graduating from college with a degree in Economics.

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