Starting an online business can be one of the best decisions you ever make in today’s digital age.
However, it can be risky if you don’t know what you’re doing. Not having the right plan or the necessary tools can be a recipe for disaster, costing you time and money trying to regroup.
I’m AJ. I’ve spent the last 10 years building a digital agency which I sold in a successful multi-million dollar exit.
I started Small Business Bonfire to help other like-minded entrepreneurs succeed in their endeavors with less risk and more reward.
Our platform strives to provide the best resources, hacks, and tools to get small businesses started on the right foot.
Here’s my step-by-step guide for starting an online business (the less risky way).
Let’s get into it!
- A great name can really help you stand out (just look at Google)
- Don’t strive for perfection. Instead, work on consistently improving
- Managing your finances is key (they can make or break your business)
- Social media marketing is essential for connecting with your target audience
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Start With Your Online Business Idea
The first step in starting an online business is to come up with an idea or product you can offer.
A great online business idea can end up revolutionizing the online shopping experience. Just look at some of the best companies in the game, like Amazon or eBay.
These companies started with a creative idea and have grown to become some of the most successful businesses online.
While you might not take over the world of online marketplaces as Jeff Bezos did, you can certainly make an impact with your business online.
Some things to keep in mind include the following:
- Popular online business ideas
- What online businesses are easiest to start?
- Service business vs. product business
Here’s an overview of each. Remember, play to your strengths when choosing the right business for you.
Popular Online Business Ideas
It’s a good idea to start with a business model that has proven to work.
Here are some of the more popular profitable business ideas:
- Dropshipping: Sell products from distributors and ship them directly to customers
- Career coaching/consulting business: Provide one-on-one advice or services through video conferencing, phone calls, or in-person meetings
- Digital products: Create digital products like courses or emails
- Affiliate marketing: Earn commissions from referring customers to other businesses
Picking one of these business ideas will give you a great starting point to build your online business, as you can learn from the successes of others.
What Online Businesses Are Easiest to Start?
Out of the options listed above, in our opinion, one of the easiest to start is affiliate marketing.
Affiliate marketing gives you the ability to quickly get your product in front of customers without having to create a product or spend money on advertising.
All you need is a website and some content, and you can be up and running almost instantly.
Another strong contender is dropshipping, as there’s no need to create or hold inventory. However, it’s more complex than affiliate marketing and takes a bit longer to set up.
It’s worth pointing out that finding a business niche that’s relatively untapped can have its advantages. If you find an area that’s been thoroughly tapped, you can gain a competitive advantage.
Service Business vs. Product Business
It’s critical to understand the difference between a service business and a product-based business. A service business primarily offers expertise, skills, and knowledge to customers in exchange for payment.
On the other hand, a product-based business focuses on creating and selling physical or digital products to its customers. Both business models come with their unique set of advantages and challenges.
As a service business, you have low upfront costs, flexible pricing, and the opportunity to build a strong online presence as a thought leader in your industry. However, you may face challenges in scaling your business due to the limited availability of your time and skills.
Creating and selling physical or digital products comes with unique benefits such as recurring revenue and scalability. However, you may face challenges such as high startup and inventory costs, ongoing maintenance, and competition.
Ultimately, understanding the nuances of each business model will help you decide which is the best fit for your online business idea and help you mitigate risks along the way.
Conduct Market Research for a Successful Online Business in Your Niche
Once you have some idea of what type of business you want to start, the next step is to conduct market research.
This will help you identify a profitable niche and determine if enough people are interested in your product or service.
Start by researching potential audiences who would be interested in your offering.
Here are some questions to keep in mind:
- Who are the biggest influencers?
- What do existing customers say about similar products or services?
- What keywords should you use when marketing your solution?
Market research can also include customer surveys, focus groups, and interviews with industry experts.
The key is to gather as much information as possible so that you can create a product or offer a service that meets the needs of the marketplace.
The more knowledge you have about your target audience and how they interact with similar products.
Market research can seem daunting to the uninitiated.
That’s why we broke it down into these four categories:
- Primary Research
- Secondary Research
- SWOT Analysis
- Find a Business Mentor
Primary research is kind of like a reconnaissance mission (or at least it’s fun to think of it like that). It involves collecting first-hand information from customers, industry professionals, and other stakeholders.
You’ll need to observe customer behavior, analyze buying trends, and gain insights into the market.
There’s no wrong way to go about primary research. However, some methods we recommend include the following:
- Focus groups
One benefit of primary research is that it doesn’t require a lot of resources. All you need to do is invest some time and effort into collecting data.
Secondary research leverages existing data to gain insights into the market or target audience. It’s relatively quick and cost-effective compared to primary research methods.
You can get started with secondary research by reading the following:
- Industry reports
- Case studies
- White papers
- News articles related to your niche
The SWOT analysis method evaluates Strengths, Weaknesses, Opportunities, and Threats associated with starting an online business in your niche.
This type of analysis can help you identify potential risks before launching your venture.
To start, assess your strengths and weaknesses based on factors such as the following:
Then identify the industry opportunities that could benefit your business. Finally, think about external threats that could impede success.
Find a Business Mentor
Having an experienced mentor to guide you through the process of starting an online business is invaluable.
A mentor can provide advice and insights on how to address potential risks and challenges while helping you stay focused on achieving long-term goals.
The great thing about shadowing a mentor is that they can help make sure you don’t make the same mistakes that they did. Failure can be an incredible learning experience, after all.
You can find mentors online or in your local area who have experience launching businesses in your niche. At Small Business Bonfire, we provide a lot of expertise on topics related to business, so don’t hesitate to reach out for some help.
Write a One Page Business Plan
Once you’ve done your research, it’s a good idea to create a one-page business plan.
This document will provide structure and help keep you on track. In our opinion, keeping it concise is key.
The plan should cover all the essentials, such as:
- Business goals
- Target market
- A timeline for success
Open With an Exit Strategy
Speaking of a timeline, it’s important to have an exit strategy.
This means deciding when and how you will exit your successful business once your goals are met or if things don’t go as planned.
Having a plan in place will help you stay focused on achieving success while protecting yourself from potential risks down the line.
Understand Your Financing Needs
This step is critical, in our opinion. You need to be aware of how much money you need for startup costs, ongoing expenses, and any other financial obligations related to your business venture.
Doing so will help you determine if your plans are realistic or if you need to make adjustments in order to reach success.
You should also explore different financing options, such as the following:
- Bank loans
- Venture capital
Knowing where to turn is key when starting an online business.
So many startups have good intentions but lack the financial resources to make their dream a reality. Don’t let this happen to you!
Create a Minimum Viable Product (MVP)
With your one-page business plan in hand, it’s time to create an MVP to put out into the world.
What is an MVP?
If you are planning to build an online business but don’t know where to start, you have undoubtedly come across the term “MVP” at some point.
No, not the most valuable player; in this case, we’re referring to the Minimum Viable Product. An MVP is a product version with enough features to satisfy early customers and collect valuable feedback for future product development.
It is an excellent way to test the sustainability of your online business idea without incurring significant costs or taking unnecessary risks.
By creating an MVP, you can minimize the risk of failure by:
- Validating your assumptions about your target market
- Identifying potential problems
- Learning from your users’ experiences
The beauty of an MVP is that it allows you to launch your product quickly and efficiently, with little investment and minimal features.
The goal is to gain traction while keeping costs low, which is essential for any bootstrapped entrepreneur.
When creating an MVP, you should focus on your core value proposition, which is the unique benefit your product provides to your customers. This will help you prioritize features and functionality to ensure that you deliver the most value with the least amount of effort.
How to Create an MVP for an Online Business
Now that we’ve gone over the definition let’s look at how to create an MVP for an online business.
The first step is to identify the core value proposition of your product, as mentioned above. This will help you decide which features are must-haves and what can be cut or left out for a later iteration.
Next, you should analyze your target market to understand their needs and preferences. Doing so will help you determine which features to prioritize in order to provide the best user experience possible.
Finally, it’s time to start building your MVP! It’s important that you focus on quality and ensure that all features are working properly before launching the product into the market. Your users will appreciate a well-crafted product, so don’t neglect this step.
Once you’ve released your MVP, it’s time to test the waters and see what people think. You should regularly update the product based on user feedback and continue to iterate until you have a polished product that appeals to your target market.
Some examples of an MVP can be:
- A simple website
- An email list
- A basic prototype
Pros and Cons of an MVP
Now that we’ve discussed what an MVP is and how to create one let’s take a look at some of the pros and cons.
Some pros include:
- Reduced risk: Launching an MVP allows you to test the waters before committing too many resources to your product. This can help reduce the risk of failure and allow you to pivot quickly if necessary
- Lower costs: Because it’s less complicated, creating an MVP requires fewer resources than a full-fledged product launch. This can save you time and money in the long run
- Faster feedback: With an MVP, you can receive user feedback much faster than with a traditional product launch. This helps you make more informed decisions about potential improvements and features for future iterations
However, there are also some cons to consider:
- Fewer features: An MVP will have fewer features or functions than a fully developed product, which can be a turn-off to some users
- Limited scalability: While an MVP allows you to test the waters quickly, it might not be suitable for long-term growth or scaling up due to its limited features and functionality
Get Your First Customers
In a lot of ways, this is the most important step to take when starting an online business. After all, you won’t have much of a business if you don’t have any customers.
The key is to start small and build momentum. Identify potential early adopters who are passionate about your product or service and offer them discounts or exclusive features in exchange for their feedback and reviews.
This will help you gain credibility and spread the word about your business quickly without spending too much on advertising.
You should also be active in industry forums, social media, meet-ups, networking events, and other venues where potential customers may be hanging out. Don’t be afraid to reach out and introduce yourself – you never know what could come from it!
Get Customers Offline
This may sound counterintuitive for an online business, but getting customers offline can be one of the most effective ways to grow your online business.
By leveraging traditional offline marketing tactics such as print ads, radio spots, and TV commercials, you can reach a larger audience and create buzz around your product or service.
Even if your goal is to have an entirely online business model, don’t discount the power of traditional media. It can be an incredibly effective way to get the word out about what you’re doing.
Get 3-5 Strong Customers
Now it’s time to focus on finding customers that will be with you for the long haul.
These customers are typically referred to as “power users”.
Power users are important because they do the following:
- Provide valuable feedback
- Use your product frequently
- Spread word of mouth about your business
Focus on customer retention by offering discounts and incentives, providing timely customer service support, and improving the user experience. This will help you attract more power users who can become loyal customers for life.
You should also consider introducing referral programs where existing customers can earn rewards for referring new ones. This is a great way to boost customer loyalty while growing your online business at the same time!
Continue to Refine Your Product/Service
At this stage, it’s important to continue listening to customer feedback and making improvements wherever possible. This will help you build trust with your customers and ensure that they stay loyal in the long run.
It’s also a good idea to leverage data analysis tools such as Google Analytics or Mixpanel to track usage trends and identify areas for improvement.
By continually refining your product/service over time, you’ll be able to keep up with industry trends and create the best user experience possible – something that will take your business to the next level!
All of the best businesses have a process of continuous improvement in place, and the same thing applies to online businesses.
As you refine your product/service, make sure to track usage data and customer feedback so you can identify potential improvements and features for future iterations. This will ensure that your business remains competitive and relevant in today’s marketplace!
Choose a Business Name
What’s in a name? It turns out quite a bit when it comes to launching your online business.
You want to choose a name that reflects the type of product or service you’re offering and resonates with potential customers.
How to Choose a Business Name
So how exactly do you go about choosing a name for your online business?
We recommend starting with these 3 steps:
- Step 1: Differentiate Yourself
- Step 2: Choose a Name People can Spell
- Step 3: Make Your Name Web Friendly
In our case, we went with Small Business Bonfire because it represents our mission of helping small businesses find success online.
The term bonfire represents a place where people come together to have conversations, build relationships, and learn from each other – something we strive for with our Bonfire Nation.
The phrase Small Business Bonfire is also easy to remember and rolls off the tongue — two important factors when choosing a name.
Step 1: Differentiate Yourself
It is especially important to differentiate yourself from the competition when choosing a business name.
In the online space, there are many businesses offering similar products or services. Make sure your business name stands out from the crowd and communicates what makes you unique.
Some examples of names that really stand out are Etsy and Google. They may not directly convey what the company does, but they are unique and memorable.
Step 2: Choose a Name People can Spell
Step 2 is to make sure you pick a name that people can easily spell. This might seem like a no-brainer, but trust us, spelling matters.
In today’s world of Google searches and quick typing, the last thing you want is for potential customers to have trouble finding your website because they can’t spell your name properly.
Imagine the frustration of seeing that dreaded “did you mean” pop up when you Google your own business. So, keep it simple, clear, and spelled correctly.
You might be tempted to get creative with spelling or use a play on words, but unless you’re an established brand with a cult-like following (we’re looking at you, Krispy Kreme), it’s best to stick to traditional spelling.
Step 3: Make Your Name Web Friendly
Finally, make sure your business name is web-friendly. This means that it should be easy to type into a browser and remember.
Avoid using hyphens or other special characters in your domain name (i.e., www.your-domain-name.com), as this can make it difficult for people to find you online and increase the chances of potential customers mistyping your URL.
Also, consider using something like .com instead of an obscure extension like .biz or .info, as users are more likely to recognize and trust a traditional domain suffix over an unfamiliar one. Choosing the wrong domain extension could hurt your credibility with potential customers and have them looking elsewhere for what they need!
Launch a Website for Your Business
Now that we’ve established the importance of choosing an effective business name, it’s time to launch a professional website for your online business.
Your website should be the home base for all your marketing efforts and will serve as an essential tool in helping you reach new customers and drive sales.
The best websites are mobile-friendly, easy to navigate, and have a simple checkout process. To achieve this, you’ll need to invest in web hosting and website design software.
Start with Squarespace, Wix, or Shopify
Speaking of website design software, there are a few options available to help you launch your online business without having to learn complex coding.
Squarespace, Wix, and Shopify are great platforms that we recommend for beginners looking to start an online business.
With these tools, you’ll be able to save time by avoiding the need to write code from scratch and build a professional-looking site in no time!
Launch Your Site Before It’s Ready
This one might sound a bit risky, but launching your site before it’s perfect can actually be beneficial.
By launching early and often, you’ll get feedback from your target market quickly, which will help you make improvements faster. Additionally, getting feedback as soon as possible can also help you identify new opportunities to grow your business that you may have overlooked.
Remember: don’t wait until everything is perfect because it never will be! Launch early and iterate over time – this is the key to success in the online world.
Get Feedback from Customers
Once your site is live, don’t forget to reach out to your customers and ask for their feedback. This is one of the most important steps in starting an online business, as customer feedback will provide invaluable insights into what works and what doesn’t.
You can use survey tools like Typeform or SurveyMonkey to collect customer responses quickly, or you could even host live Q&As on social media platforms like Instagram or Twitter.
Not only will this help you refine your products and services, but it’ll also show customers that you value their opinion – something which they’ll be sure to appreciate!
Start Marketing Your Online Business
Marketing can often be the difference between success and failure in the online world. Without an effective marketing strategy, your business can easily get lost among the competition, which is why it’s essential to devise a plan as soon as possible.
It’s like trying to find a needle in a haystack – you need to know where to look, or you’re going to just be wasting your time.
For this reason, we’ve listed our best tips on how to effectively market your online business:
- Read up on SEO
- Setup social media accounts
- Find referral partnerships
- Start a blog & do content marketing
- Build up an email list
- Spend money on AdWords
- Start a YouTube channel
Read Up on SEO
SEO (search engine optimization) is a critical part of any online business. By understanding how search engines work, you can ensure that your website is seen by more potential customers and help drive more traffic to your site.
Some important aspects of SEO include:
- Finding the right keywords
- Optimizing title tags and meta descriptions
- Setting up a blog
- Utilizing Google My Business
If you are just starting out, this is one area where we highly recommend you invest in professional help. Hiring a qualified SEO specialist can be worth the investment when it comes to growing your online business!
Plus, by working with a knowledgeable SEO expert, you’ll pick up some invaluable insights and learn how to optimize your business website for future success.
Setup Social Media Accounts
In today’s digital landscape, not using social media as part of your marketing strategy is like exploring a dark room without a flashlight! You’ll spend a lot of time and energy trying to find your way around, only to come up empty.
In addition to helping you market your products and services, social media can also be used to build relationships with customers, attract new followers, and increase website traffic. Just make sure that you’re utilizing the right channels for your target market.
For example, if you have a fashion store, focusing on visual platforms such as Instagram or Pinterest might be more effective than using LinkedIn.
Additionally, it’s important to remember that each platform has its own unique features, so make sure you familiarize yourself with them in order to get the most out of them.
Find Referral Partnerships
A referral partnership is when two businesses team up to refer customers to each other. For example, you could partner with a company that offers complementary products or services, such as an online travel agency & a hotel website.
Referral partnerships can be incredibly powerful and are especially useful for startups because they allow you to get the word out about your business without having to spend any money on advertising.
Plus, this business strategy helps build trust with your target audience since referrals come from sources they know and trust. This makes them more likely to take the plunge and purchase something from your store!
Start a Blog & Do Content Marketing
Content marketing is one of the most effective ways to grow an internet business.
By creating helpful, informative content that speaks to your target audience, you can accomplish the following:
- Help increase website traffic
- Build brand loyalty
- Establish yourself as an expert in your field
- Generate more leads
One great way to do this is through blogging.
Not only does this give you a platform for sharing valuable information with your customers, but it also helps boost SEO rankings by providing fresh content for search engines like Google.
We recommend regularly writing blog posts related to topics within your industry and including keywords throughout so that people can easily find your content.
Build Up an Email List
Email marketing is an incredibly powerful tool for any online business, and it is something that should not be overlooked.
By building up a list of email subscribers, you can keep them informed about new products or services and special offers.
Plus, having an opt-in form on your website allows you to capture leads who may not have purchased anything yet but still could in the future.
At Small Business Bonfire, we utilize MailChimp for our email campaigns and have had great success. We think that they are very beginner friendly and have plenty of customizable options.
To get started, you’ll just need to create an account, choose a template, write your email content, and send it out!
Spend Money on AdWords
In our opinion, it’s worth considering investing in search engine advertising.
Google Adwords is a great way to increase visibility and traffic to your website, as you can set up ads that target specific keywords related to your business.
This means that when people search for those keywords, they have the possibility of being directed to your website, which can lead to more customers and sales.
It’s important to note, however, that it can be pricey, so make sure you know what you’re getting into before committing to a long-term ad campaign.
Start a YouTube Channel
YouTube is a great way to reach a larger audience and generate more leads.
By creating informative, entertaining videos about your products or services, you can capture the attention of potential customers and establish yourself as an expert in your field.
Plus, YouTube videos are often much easier to consume than reading blog posts or long-form content.
We recommend starting with short “how-to” videos to help people understand how to use your products and then gradually expanding your channel by adding interviews and product reviews.
Understand Your Business Finances
Understanding and managing your finances is an essential part of running a successful online business.
Your finances and how they are handled can literally make or break your business, so you’ll want to make sure you understand the basics and that everything is set up correctly.
We’ll break this part down into the following sections:
- Get a business bank account
- Get accounting software (Quickbooks)
- Determine your break-even point
- Start with a business budget
- What expenses to track in your business
If this all sounds pretty new to you, we also recommend talking to an accountant or financial advisor who can help you understand your finances and provide helpful advice.
Get a Business Bank Account
A business bank account is essential for any online business. It will help you keep track of all your income and expenses, as well as allow you to deposit checks or receive payments from customers.
You can open a business bank account at most banks or credit unions. However, it’s important to note that some banks might require you to have a certain amount of money in the account before opening one.
Keeping your personal and business finances separate is an important part of being a successful entrepreneur, and having a separate bank account will help you do that.
We recommend doing research first and comparing different options so that you can choose the best option for your needs.
Get Accounting Software (Quickbooks)
As a small business owner, every tool in your toolbelt is valuable, and accounting software like QuickBooks is no exception.
It’s one of the best ways to manage your finances and keep track of income, expenses, taxes, customers, vendors, and more.
Quickbooks is the most popular accounting software for small businesses, but there are plenty of other options out there too.
Some features that make Quickbooks great are its ability to do the following:
- Generate reports
- Manage accounts receivable and payable
- Track sales tax
Again, we recommend taking some time to explore options and find the accounting software that works best for you.
Determine Your Break-Even Point
Your break-even point is the point at which your income and expenses balance out.
This is important to understand so that you can make sure you’re making enough money to cover all your expenses and still remain profitable.
To calculate your break-even point, you’ll need to know the total fixed costs for running your business (e.g., rent, salaries, etc.), as well as the variable costs related to each sale (e.g., materials, shipping).
Once you have this information, it’s just a matter of doing some simple math to determine how much revenue is needed for your business to break even.
Start With a Business Budget
Creating a budget is the best way to keep your finances organized and make sure you’re making enough money to cover all your expenses.
A budget will also help you anticipate cash flow challenges or opportunities.
It’s important to note that a business budget isn’t set in stone—it should be regularly monitored and revised as needed, especially if there are any changes in income or expenses.
What Expenses To Track In Your Business
Tracking and managing business expenses can be a barrier to entry for many small business owners, but it’s essential for success.
It’s important to keep track of all your expenses and understand which ones are tax deductible and which ones are not.
For the purposes of this guide, we broke it up into two types of expenses:
- Fixed Expenses
- Variable Expenses
Fixed expenses are expenses that remain the same each month (or quarter) and typically include the following:
- Insurance premiums
- Loan payments
These are costs that you will need to factor into your budget and should be accounted for each time you create a new budget.
Variable expenses are costs that vary from month to month (or quarter).
These can be things such as the following:
- Materials for products or services
- Shipping fees
- Marketing expenses
- Advertising costs
- Travel expenses
These types of expenses can fluctuate significantly, so it’s important to stay on top of them and make sure they’re not eating into your profits.
Register Your Business & Get Federal & State Tax IDs
Now it’s time to get some down to brass tacks (no pun intended) and get your business registered and above board.
You’ll want to make sure you understand the differences between being a sole proprietor, Limited Liability Company (LLC), Limited Liability Partnership (LLP), or corporation.
This can be a bit intimidating to anyone just starting out, so we’ll be sure to break down what each one is and how they can benefit your business.
What is an LLC?
An LLC (Limited Liability Company) is a business structure that provides limited liability protection for its owners (called members).
LLCs are popular because they don’t require the same level of paperwork and compliance as corporations.
It’s also much simpler to transfer ownership in an LLC, which can make it easier for businesses to grow and expand.
In order to register your business as an LLC, you simply need to visit the Secretary of State website for your state and file the required paperwork.
LLC Pros and Cons
- Limited liability protection for its owners
- Easy to transfer ownership
- Less paperwork and compliance than corporations
- It can be more expensive to set up and maintain than other business structures
What is an LLP?
An LLP (Limited Liability Partnership) is similar to an LLC but provides additional liability protection for its individual partners.
LLPs are typically formed by professionals such as lawyers, accountants, architects, and doctors who want to protect themselves from potential lawsuits related to their business activities.
Like an LLC, LLPs don’t require the same level of paperwork or compliance as corporations do.
To register your business as an LLP, you’ll need to file the appropriate paperwork with your state’s Secretary of State office.
LLP Pros and Cons
- Flexibility in how you structure your business
- Additional liability protection for its individual partners
- It may not provide the same level of tax benefits as a corporation or partnership
What is a Sole Proprietorship?
A sole proprietorship is a business structure where one person owns and operates the entire business.
This is the simplest and most common way to start an online business, as it requires very little paperwork or compliance.
To register your business as a sole proprietorship, you simply need to get a federal tax ID (also known as an Employer Identification Number) from the IRS. This can be done online or by mail.
Sole Proprietorship Pros and Cons
- Simple and inexpensive to set up
- No paperwork or compliance required
- Does not provide any liability protection for its owners
What is a Corporation?
A corporation is a business structure that allows for limited liability protection for its owners (called shareholders).
It’s also the most complex and expensive way to start an online business, as it requires extensive paperwork and compliance.
Unless you are expecting to have several shareholders, we generally recommend that you not form a corporation right away.
The process for registering your business as a corporation will vary depending on the state in which you are located, so be sure to check with your Secretary of State office for specific instructions.
Corporation Pros and Cons
- Provides limited liability protection for its owners
- Potential tax benefits
- Expensive to set up and maintain
- Requires extensive paperwork and compliance
Register Your Business & Get an EIN
After you decide what type of business structure you want to use, the next step is to register your business with the appropriate state and federal agencies.
In most cases, this will involve filing paperwork with your Secretary of State office and applying for an Employer Identification Number (EIN) from the IRS.
Your EIN allows you to open a business bank account and apply for any necessary business license(s) or permits that may be required in your area.
Get the Right Business Software
Once your business is legal and registered, the next step is to get the right business software to help you manage your operations.
Depending on your industry, there are a variety of accounting, payroll, and customer relationship management (CRM) tools available that can make running your small business online much easier.
When selecting the right software for your business, be sure to consider factors such as cost, ease of use, and scalability.
We’ll go over each type of software to make sure your specific business needs are covered.
When it comes to starting an online business, accounting software is one of the most important tools that you will need to help manage your finances.
Accounting software is essentially a program that automates many of the financial transactions that take place within your business and can help you with everything from invoicing to tracking expenses and generating financial reports.
This not only saves you time and effort when it comes to keeping track of your finances but can also help you make more informed decisions based on real-time data about your business.
At Small Business Bonfire, we highly recommend using accounting software to help manage your online business.
Some of our favorite accounting software options include QuickBooks Online (a great choice for small businesses and freelancers) and Xero (great for payroll and inventory tracking).
CRM (customer relationship management) software is an essential tool for marketing and sales-based companies.
This type of software helps you to do the following:
- Manage customer relationships
- Track sales and leads
- Automate marketing campaigns
Having a good CRM in place can help you streamline your customer service processes, as well as increase sales by leveraging key customer data.
If you’re looking for an all-in-one CRM platform, we recommend HubSpot. While it can be on the pricier side if you’re looking for robust features, HubSpot has you covered with a ton of useful tools.
If you have a smaller budget, we recommend either Less Annoying CRM or Pipedrive for simplicity and affordability.
Project Management Software
Finding the right project management software is vital to the success of any online business.
Project management software helps you to plan, assign tasks, and collaborate with team members on projects.
This type of software can be especially helpful if you have a distributed team working remotely or need help staying organized when juggling multiple projects at once.
Some popular options for project management software include:
- Trello (for basic task tracking and collaboration)
- Asana (for more robust features and integrations)
- Basecamp (which offers a range of project planning tools)
POS (point of sale) software is another important tool for running an online business.
This type of software helps you to manage things like:
- Inventory tracking
It’s especially helpful for those who are selling physical goods or services at a brick-and-mortar business as well.
For businesses that are just starting out, we recommend choosing a POS system with a low monthly fee that lets you scale up as your business grows.
Some popular options include Square (which is great for small retail operations) and Shopify (which offers more features if you’re looking to build an e-commerce platform).
Credit Card Processing Software
If you’re conducting any type of online business, having the right credit card processing software is essential.
This type of software helps you to securely process payments from customers and can help ensure that payments are processed quickly and efficiently.
We recommend choosing a provider with low transaction fees and plenty of features (such as fraud protection).
Some popular providers include:
VPN (Virtual Private Network) software is another essential tool for online businesses.
This type of software helps keep your data safe and secure by encrypting your connection and hiding your IP address so that no one can track you or hack into your computer.
An example of a great VPN software is NordVPN, which offers both security and privacy features at an affordable price.
In our opinion, it’s best not to skimp on security measures when it comes to running an online business.
This is typically one of the cornerstones of any online business.
Having the right merchant services provider in place will help you to securely and reliably process payments from customers.
When choosing a merchant services provider, it’s important to look for one that offers low fees, secure payment processing, and easy integration with your e-commerce platform or point-of-sale system.
Some popular options include:
- PayPal Merchant Services
- Stripe Payment Processing
- Square Payment Solutions
We previously mentioned the importance of having a powerful email marketing campaign in place. Email software helps to make this process a breeze.
Having the right email software in place will help you to track customer engagement, automate your campaigns, and personalize your emails.
Some popular options include:
- Mailchimp (which we mentioned that we utilize)
- Constant Contact (which offers great features and analytics tools)
- Campaign Monitor (which has powerful automation capabilities)
These services allow you to focus on creating content that resonates with your customers rather than worrying about the technical aspects of sending out emails.
SEO software helps you to monitor and improve your search engine rankings so that more people can find your website or blog.
We recommend choosing a service with features such as:
- Keyword research tools
- Link building capabilities
- Analytics reports
Popular options include Moz Pro and Ahrefs (both of which offer various levels of plans depending on your needs).
If you know what to pay attention to, having the right SEO software can really help your online business stand out from the crowd.
Website builders allow you to quickly create professional-looking sites without any coding knowledge. This is a huge benefit for startups that want the same capabilities as larger businesses without the need to hire a web designer.
We recommend WordPress if you’re looking for a free and easy-to-use site builder. However, if you want something more robust, Shopify is a great option (it also offers eCommerce capabilities).
No matter which route you choose, having a website that looks and works well will be essential for your business’ success.
Once you’ve built the site, you’ll need to find a reliable hosting provider.
We suggest selecting one that offers features such as:
- Secure servers
- Fast loading times
- Customer support
- A reliable uptime record
The easier it is for customers to reliably and quickly access your site, the more likely they are to return.
Some popular options include Bluehost and HostGator (both of which have plans for businesses of all sizes).
Fund Your Business Growth
You can’t start a business without the capital to back it up. Let’s go over some of the ways you can access the necessary funds to get your business off the ground.
When it comes to startup capital, there are a few internal and external options to consider.
Internally, here are some options we recommend:
- Personal savings account
- Credit cards
- Friends & family
Personal Savings Account
This is the most low-risk option.
Using your own money in a savings account to fund your business can help you to avoid debt and keep costs down.
Using credit cards for business purposes can be risky, but it’s a great way to access funds quickly when needed.
Just make sure you have a plan in place for repaying the balance within a reasonable amount of time.
Friends & Family
For some, having friends and family as investors can be an attractive option since they typically come with fewer strings attached than outside investments (such as angel investors).
Just make sure all parties are on the same page about expectations before accepting any investments from this group.
External Funding Methods
If you don’t have the resources to fund your business internally, there are several external options:
- Small business loans
- Small business grants
- Angel investors
- Venture capital
Small Business Loans
This is the most common external funding option for businesses.
Banks and other lenders will typically provide loans to small businesses with a good credit score, and the funds can be used for almost any purpose.
Small Business Grants
Grants are often available from government agencies, philanthropic organizations, and private foundations. They are relatively rare but can be a huge help when it comes to getting your business off the ground.
Angel investors are wealthy individuals who invest in startups in exchange for equity or a portion of profits.
These investments tend to come with more strings attached than bank loans or grants, so make sure you understand all of the terms before accepting one.
Venture capital firms invest in businesses with the expectation of a high return on their investments.
This is often seen as a more risky option than angel investors but can be very beneficial for startups that are able to make good use of the funds.
This is perhaps the most accessible external funding option for small businesses. Platforms such as Kickstarter and Indiegogo allow individuals to donate money to projects they believe in. This can be a great way to raise capital without relying on large investors or banks.
Scale Your Business
Now that you’ve ironed out the details, you can focus on the important aspect of scaling your business.
There are a few ways of doing this, but they center around hiring and training great employees and streamlining your business practices.
Create Standard Operating Procedures
Creating standard operating procedures (SOPs) is essential for scaling any business.
By having written processes and guidelines in place, you can reduce the need for training new employees and ensure that everyone is on the same page with clients and customers.
Build a Team & Hire Employees
Now it’s time to form a team of skilled employees.
Start by finding people who have the skills you need but also share your vision for the business.
Take the time to build relationships with them, and make sure they understand their roles and expectations from day one.
Here are some tips that we recommend:
- Create a one-page employee agreement
- Test employees for three months as contractors
- Hire employees on full time
Create a One-Page Employee Agreement
Creating a one-page document outlining the expectations of employees is a great way to make sure everyone is on the same page (literally). This will help avoid confusion and misunderstandings during the onboarding process.
Test Employees for Three Months as Contractors
To reduce risk, it’s recommended that you hire contractors initially and test them out for three months before offering them full-time positions with benefits.
This allows you to get an idea of their work ethic and capabilities without making a long-term commitment.
Hire Employees on Full Time
When you have identified someone who has proven themselves, you can offer them a full-time position with benefits and incentives. Make sure they are clear about what is expected of them, and provide the resources and support they need to succeed.
If you’ve followed the tips outlined above, you’ve already got a headstart in setting up your business for success.
It’s important to remember that nothing is guaranteed, so make sure you keep learning and refining your processes as you go along.
We’re always on the lookout for new tips and tricks to help business owners succeed, so feel free to reach out in the comments below if you have any questions or online business ideas of your own you want to share.
FAQs About Starting An Online Business
Starting an online business with no money can be a challenge, but it’s not impossible. The first step is to identify your niche and target audience. Once you have a clear idea of who your customers are, you can start building your online presence.
One of the most cost-effective ways to get started is by leveraging social media platforms to grow your audience. Create a Facebook page, Instagram account, and Twitter profile for your business and start engaging with potential customers.
Another low-cost option is to use free website building platforms like WordPress or Wix to create your online store. You can also sell your products on marketplaces like Etsy or eBay to reach a wider audience without investing in your own website.
Finally, bootstrapping your marketing efforts by creating your own content, utilizing email marketing, and taking advantage of free trials for paid services can all help you get started with minimal to no investment.
You’ll want to make sure you have a secure internet connection, a stable business website, and a profitable business idea as the bare minimum to start your small online business.
Starting an online business with $1000 can give you a significant advantage over starting with no money. With this budget, you can invest in a professional-looking website, paid marketing tools, and potentially even a small inventory of products.
The key is to use your budget strategically and prioritize the areas that will have the biggest impact on growing your business. For example, investing in a paid email marketing service can help you build a loyal customer base, while paid social media ads can help you reach potential customers more quickly.
You can also use your budget to purchase inventory, build connections with suppliers, and invest in branding and design for your business.
Overall, starting with $1000 gives you a solid foundation to build from and can help you get your business off the ground more quickly.
The cheapest online business to start can vary based on your skills, interests, and target audience.
However, some of the most affordable options include:
Dropshipping: This business model allows you to sell online products without physically stocking inventory. You simply create a storefront and order products from a supplier when a customer places an order. This eliminates the need to invest in a warehouse or inventory upfront.
Digital products: Selling digital products like ebooks, courses, or templates can be a low-cost option since there are no physical goods to manufacture or ship. You’ll still need to invest in marketing and design, but the startup costs are significantly lower.
Affiliate marketing: In this business model, you promote products from other companies and earn a commission on any sales made through your unique affiliate link. This can be a low-risk way to get started since you don’t need to create your own products or invest in inventory.
The cheapest, most profitable business to start can vary based on your skills and target audience, but some options to consider include the following:
Blogging: If you enjoy writing and have a passion for a specific niche, starting a blog can be a low-cost way to build an audience and monetize through ads, sponsored content, or affiliate marketing.
Online courses: Creating and selling your own online courses can be a profitable business as long as you have expertise in a particular area. You can use free tools like Teachable or Udemy to host and sell your courses.
eCommerce: Starting an eCommerce business can be affordable if you use a dropshipping or print-on-demand model. With dropshipping, you don’t need to invest in inventory upfront, while print-on-demand allows you to create custom designs without purchasing bulk inventory.
Starting a business with $100 requires creativity and careful budgeting.
Some affordable options to consider include:
Social media management: If you have experience with social media and digital marketing, you can offer your services to small businesses in your area. Use free tools like Hootsuite to manage multiple accounts and create content.
Freelance writing: If you enjoy writing, you can offer your services to businesses or individuals in need of content for their websites, blogs, or marketing materials.
Virtual assistant: Many small business owners need help with administrative tasks like bookkeeping, email management, and scheduling. You can offer your services as a virtual assistant and use free tools like Google Suite to stay organized.