Starting a Business on the Internet

With a low-cost of entry and the ability to run an online store from anywhere, an Internet-based business has it all. This practical guide takes you through from honing your ideas to your first day of trading.

There are the same disciplines when operating an internet business as with a bricks and mortar business, although you won't get as close to customers as with BAM.

Low cost of Entry

The dot-com boom and low entry costs make an online business a great entry point but like with all businesses there are no easy ways to make money easily.

Whatever type of business you're thinking of developing, use these home-working guides to develop your internet marketing e-commerce site. Whether you're starting a blog, downloadable games, retail shopping site, home based business or an eBay store, then these guides are going to help.

Your Online Business Plan

Before you start you'll need a business plan for your venture. This essential document shows yourself and any investor your overall business objectives and financial summaries. No bank will lend without one so you should think about planning at the outset. Purchase software for the job or at least forecast your numbers on an Excel spreadsheet.

Online business on the Worldwide Web

Once you have your business plan ready you'll see just how many people you need to get buying your products each day to reach your profit numbers. This initial projection may come as a shock. Although margins can be high, you'll need thousands of visitors to your website.

Getting those visitors is where internet marketing and SEO comes into play, which we look at later.

Getting Started - Domain, Hosting and Website Design

If you know the products you want to sell, the first thing you'll need is a domain name, a hosting account and design for your website. The first two are easy and very cheap. Domain names should cost less than £5 per year and the same goes for hosting. Search for reviews for hosting companies to find someone suitable for you.

A web design can make or break your venture. You can do it yourself if you're prepared to learn HTML and some basic PHP coding (on Linux servers). You can also get someone to design a basic e-commerce site for you for £1,000 or less. Be careful of the template sites out there because they're not unique to your brand. The designs may also look nice, but most are bloated with code that's not required and images where you may not own the copyright.

If you're simply selling an ebook, then a simple header and sale letter page are usually all that's required. If you're new to direct selling (as in direct mail techniques) look at the pages from the Clickbank best sellers and see how the web copy flows to get ideas of what sells. The shopping channels use similar techniques (the 30-minute sales channels with tons of "fake looking" testimonials) where they repeat the offer and benefits over and over again.

If you're new to copywriting, then search online for copywriting examples especially with headlines and body copy. Michel Fortin is renowned and has a great blog.

Accepting Online Payments

With any product online you need to be able to take secure payments from your website. The easiest way to get started is to accept payments via PayPal. This bank was originally set up for eBay sellers, but now almost all websites accept PayPal. You'll find that you'll make a lot of sales this way as most people don't think of their PayPal balance as "real money".

To accept credit cards yourself you'll need a merchant account that you can obtain from your bank. Then you'll need an intermediary payment gateway that links your website to your bank. SagePay (Protex) is one option with low fees. Or, you can use a Worldpay account that does everything for you although the fees and set-up costs are very high. You can get the fees reduced if you negotiate with them after operating for six months.

Other Website Requirements

It's a legal requirement in the UK to have the company address posted on your website mostly under the contact us page. It's best if you can also have a telephone contact number, a VAT number if applicable and your company number. This information also adds to the credibility of the website to provide trust to the people who you want to purchase from your site.

Website Visitors - SEO

SEO stands for Search Engine Optimisation and summarises the methods required to get your site ranked on the free listings in the major search engines such as Google, Yahoo and MSN (or There are many falsehoods about SEO because nobody knows how the search engines rank websites but some simple tips should get you higher.

Start off with keyword research (i.e., the phrases that people type in to search for stuff). The page you're writing about for that word should have it in the TITLE meta tag of the page as well as the heading for the page. Then try to write naturally about that phrase, what it is about and other pertinent facts about it.

When you've developed your pages, you'll need to link from your own website to these pages using the terms you have targeted and get other websites linking to yours. Garnering links can be hard as most people know that on the whole links get websites ranked. Not all links are created equally so be careful not to get your site listed on spammy domains.

Pay Per Click - Adwords

Adwords is used by Google and Yahoo to show adverts on the search engine results pages to the top and bottom of the free search listings. It's a fine art getting your advert high without paying too much for it. Typically, the advert needs to be enticing enough for people to click on it and go to a page that solves the question they have in their mind.

These are called landing pages. It's no use if Ikea advertised about sofas and sent the person to their bedroom furniture page, or even their home page. Relevancy is key for both your visitor and for Google to rank the advert high on their SERPS and people running their AdSense programme.

Conversion Rates

Many people have lost a lot of money by using Adwords on their online businesses because their pages did not convert well. Remember that most people are looking for information first and foremost and if they land on your site and leave you'll most likely never see them again. Depending on your business you should think about capturing their details and using an autoresponder series to deliver email messages over time to build up to that all important sale. Certainly when you have customers you should keep in touch by using this method.

For regular shopping sites the following tips can be useful to improve conversions:

  • Have easy to find contact details with an address (not PO Box but a real address) and a real telephone number.
  • Have the "add to cart" button above the fold (and test other versions such as "buy now" and "add to shopping basket".
  • Ensure prominent placement of delivery information *before* checkout.
  • Don't ask your customers to open account if it's not required.
  • Keep the checkout process simple and a limited number of steps.

Start-up Costs

An online business can be one of the cheapest to start but keep in mind this is a real business and treat it as such. Some of the start-up costs are as follows:

  • Domain name, web hosting, and web design.
  • Company formation for limited companies.
  • Purchase of stock.
  • Advertising for pay per click.
  • Press releases.
  • Search engine optimisation costs.
  • Directory submissions costs.

Associated with start-up costs can be trying to find reliable suppliers. Try and negotiate credit terms so you are not always paying for your products up front.

Other Online Marketing Methods

With any new business you need to get people to know about your site and here are some other methods apart from getting high in the search engines.

  • Join and participate in industry forums -- this is a great way to become an expert in your field and you can promote your business via your forum signature.
  • Article marketing -- there are many article directories online that have great search engine rankings - if you write an article it will most likely rank high on their site, and with your resource box at the end of the article people will click through to your site.
  • Press releases -- if you write something real newsworthy it will be picked up by journalists -- telephone any publications online or offline that you want to know about your PR and make sure they get your release before the publication date.
  • Email marketing -- as mentioned above if you collect email addresses you should be sending out messages (not just sales messages) so people will remember your company.

We hope this has given you a taster in starting an online business as it's worth the hard work for the rewards you receive.