Starting an Online Business: A-Z guide

Start Online Business

Starting an online business can seem like an impossible task if you do not know what to do, how to do it and when to do it. The truth is that almost anyone can start an online business from home itself if needed. Now, what exactly is an online business? Does your idea fall into the online business category? Here’s a basic guideline for you:

What is an Online Business?

An online business can vary in many different forms. You may have a product to sell, this product may be a physical one or maybe it might be a software product. Having a product isn’t actually a requirement for starting an online business. I have worked and still work as a part-time freelancer in my free time; this can be considered as an online business from home if properly conducted in a highly professional manner.

So, let’s look at the biggest types of online businesses:


  1. An Online Store where you sell physical products
  2. An online store with virtual products
  3. Consultation services (Whether as a personal consultation or via a blog/website)
  4. Affiliate Marketing
  5. Selling your services online (Freelancing, Online tutoring, Career/life advice etc.)
  6. Finally, any other idea that you have that is capable of making money using the internet.

Now, in this guide, I’ll deal with everything that you will need to start an online business. But, before looking into the “Hows” of starting an online business, let’s have a look at the all the different types of businesses possible and how you can make money off them.

Start new online business

An online store selling physical products

Here’s how you can make money selling goods online. You can do this on a third party store like Ebay or Amazon or you could set up your own online store and sell goods there. This is the most basic of all online entrepreneurship ideas. Selling stuff on a higher rate than their production cost and shipping costs will make sure that you end up with a profit.

An online store with Virtual Products

If you don’t have a physical product, you will definitely need your own custom website to sell virtual products such as online or offline software etc. This website will need to be brilliantly made and it should be centered around your product. Remember that if someone is not hooked within the first few seconds after they land on your website, chances of them buying your product goes down marginally.

Consultation Services

If you’re an expert in any field or have vast knowledge about something, you may want to earn money online by rendering your consultation services to others for a small fee. Unlike selling a service, you do not have to exactly “Do” anything apart from guiding your clients.

Affiliate Marketing

Let’s take my example here. I have created this website and I write about how anyone can become an online entrepreneur with some amount of dedication. What do I get out of it? While helping out others, I suggest them tools that will help them (I only suggest things that I have tested or my colleagues recommended). These tools are very helpful and upon buying them using my link, in most cases, the users get a discount and I get a small commission. It is a win-win situation for both me and my website viewers.

Selling your services

Are you a really great Graphic Designer, Web Developer or Transcriber? If yes or if you have some other skill set that you can leverage online for money, You’ll definitely find that freelancing is for you. In similar ways, online tutoring is also a viable option for you(if you have a mastery in a certain field).

Recommended : The Ultimate Guide to Freelancing

Take your Business Online

Starting Online Business

This is for those people who have a running business but is mostly offline. This would most probably be a small business in a local environment. If you are one of those kinds, you may not feel the need to go online since you already have a fixed customer base. The fact of the hour is that the world is going digital and so should you. People have started relying on online peer based review systems much more that even word-of-mouth. Need to go to a restaurant? Let’s have a look which one has the best rating…. This is the new norm and it’s better to adapt to it.

Legal Formalities

Before starting your business, take some time and jot down your complete B-plan on a sheet of paper. Based on your type of product or service provided, you may have to follow certain rules and regulations. Apart from that, if you are not alone and have partner(s), you’ll have to get your business registered according to your State and Country. Different countries will have different legal formalities that you’ll have to take care of before you can take your business online. For a very basic summary, the first thing would be to decide how you want to register your business. You have several options here, you can register your online business as a:

  1. LLC
  2. Corporation
  3. Partenrship
  4. Sole proprietorship

Remember that registering your business will require you to fill up some paperwork, but a simple google search within your country will pretty much resolve any questions that you might have. Once, you’ve taken care of, or have at the very least registered your “Business Name”, it’s time to take your business online and to the next level.

Purchase a domain name

What will be the one thing that will always define your online business? That would be your business name. When you think of a website that helps people make a living online, you think of Fanatic Entrepreneur (this website 😉 ). Similarly, you have to make sure that your business name is catchy and is pretty much self explanatory. If your audience is worldwide, make sure to use vocabulary that can easily be understood around the world. If your online business will be a local one, you can even include your city in it. It’ll help in SEO (Search Engine Optimization) but only include that if it suits the complete domain name.

A very poor choice would be : www.hannasbakerykansas.com

If Hanna’s bakery is a small bakery in Kansas, people will anyways figure it out. Hence, there is no need to include that in the domain name.

I always suggest people to buy their domain names separately. There are many web hosting plans that do give you a free domain name with a hosting plan. The problem with these is renewing your domain name before it expires. It usually tedious as they would gently nudge you to renew the hosting as well. Hence, I would suggest you to buy your domain name and your web hosting from completely different companies. I have all my domain names registered with 1and1.

Recommended Domain Name Registrar : 1and1Domains (Just $0.99 for the first year)

A Web Hosting according to your business needs

Out of all the different parts of this tutorial, this is the only one that will cost you money. Based upon your online business’s needs, you’ll have to invest some amount of money on this. Many people think the more the merrier. These new online entrepreneurs tend to spend a lot on their hosting needs irrespective of the overkill features of their web hosting. For starting online businesses, people should ALWAYS start with a shared web hosting. The only exception is if your online business is an online service that won’t run on PHP, python or Perl. Just as an example, if you have an online calorie counter built on Node.JS, you won’t be able to host it on any shared hosting. In such cases, I would suggest you to go for Amazon Web Services. For the other 90% budding online entrepreneurs, I would suggest SiteGround (This website is also hosted on SiteGround)…

Recommended Web Hosting : Siteground (Here’s a review of SiteGround, in case you are interested: SiteGround Review)

Taking your business online : Choosing a Web Host

Since, this is the only major investment you’ll have to do, I’m going to spend some time making sure that you do it right. There are basically 4 types of web hosting that you can invest in :

  • Shared Hosting
  • Virtual Private Servers
  • Private Servers
  • SaaS

Unless you have a very specifically coded application, you can host most landing pages, blogs, e-commerce websites on a shared hosting itself.

Now that you’ve taken your business online, there’s only one thing left to do. Proper marketing of your online business. I’ll soon be adding a new post that’ll help you to properly market your online business to the proper audience.

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