How to start an online business

7 min read
Curtis McHale

Canadians are among the heaviest users of the internet and have embraced eCommerce as a way to get products easily and quickly. This is good news for Canadian entrepreneurs itching to get into online sales. In this post, we’ll explain how to start an online business.

Running your business online has some advantages over a typical brick-and-mortar business.

First, you don’t have to buy or lease expensive commercial real estate. Secondly, you can reach more people online because it’s global. You’re not limited to a small geographic area.

There are five broad steps to starting an online business, which I’ll walk you through.

How to start an online business in 5 steps

Thanks to recent advances in do-it-yourself website builders, creating an online business is no longer difficult or complex.

  1. Find a need you can fill.
  2. Build a website.
  3. Make a content plan.
  4. Promote your new business.
  5. Cover your legal and financial bases.

Ready to dip your toe in the eCommerce waters? Let’s get to it!

1. Find a need you can fill

First up is finding a need that you can fill. This involves figuring out what type of online business you want to run. Do you want to sell physical products, and if so do you need to keep stock on hand or can you use a drop-shipping service?

How to Start an Online Business Ski Gear
Thanks to drop-shipping, you can sell items you never even touch.

Or maybe you want to sell online courses. The first step is to identify what you know so well you could teach it. Don’t get scared off if there are a few courses on the topic out there already. Some people will like your style and gravitate to your course.

You can update/add new courses regularly or provide ongoing value in exchange for a membership fee. Your customers pay to get access to course updates and new courses that you offer, or tips from the forums that you run.

Another option is to start an affiliate store, where you sell others’ products and earn a commission on each sale.

One big caution here: While stores like Amazon may be the big opportunities on the affiliate block, building your income stream around a single vendor means that if they suddenly change their rules so you no longer qualify, you could be in trouble. Better to sell products for more than one vendor.

2. Build a website

Once you’ve identified what you want to sell, it’s time to look at a software platform to build your online business. A good option is WordPress to power the main site, and WooCommerce to run the store component.

WooCommerce has a huge set of extensions so you can build pretty much any type of store you want. Out of the box WooCommerce can sell products and be an affiliate store.

If you add Subscriptions and Memberships to WordPress, you have a membership site. Then add LearnDash and you have an online course site for less than the deposit you’d pay to start a brick-and-mortar business.

Related: How to make a website — a complete guide.

3. Make a content plan

Once you have your sales platform picked out, it’s time to build your content plan. This involves not only the words on your product pages, but how you’re going to use articles, videos and other types of published content to bring in customers.

This is often called content marketing because you gain new customers indirectly rather than in response to a Facebook ad or email. They happen to type a question into Google that one of your web pages or blog posts answers. Once their question is answered, many people will click through to your business website. Voila! A new lead.

How to Start an Online Business Man with Camera
Sharing articles and videos online can bring customers to your business.

For an online course, providing a free download that aligns with your course is a solid idea. For example, let’s say you offer a course on using book writing software — your free download might talk about how to plan and write books. Just be sure to include a call-to-action in your freebie encouraging readers to subscribe to your online class.

Giving away your expertise for free helps people trust you.

When users are ready to jump into the writing process, they’ll get your course to learn to use the software you recommend.

4. Promote your new business

With your content plan ready, it’s time to do a bit more thinking about the other parts of your marketing like:

  • How do you get your name out there on day one?
  • How can you use email campaigns to reach potential clients?
  • How do you recover abandoned carts?

Many people turn to Facebook or Google Ads for their initial promotions, but those aren’t the only options.

For our fictional online course, we could join Facebook groups or forums for writers. Include the URL of your website in your group’s description and then start answering questions about the writing process as they come up. By simply taking part in group conversations, occasionally mentioning your business, you are promoting your expertise.

Don’t be a blatant sales machine. If you start helping people, then you’re going to see them come to you for your products or services.

When I started my WordPress development business, I spent lots of time on the support forums answering common questions. One single person that I helped in my first year turned into my first $15k contract and then referred over $20k of work the following year.

I’ve left this until the end, but it’s arguably one of the most important items on the list. While the GoDaddy blog has a great resource about the various business structures, talking to a lawyer or accountant about the financial implications of each will help you make a smart decision.

If you incorporate, your taxes are much more complex, but you limit your personal risk. Sole proprietors and partnerships can have lighter tax requirements, but they also entail more personal risk for owners.

You’re also likely to need a GST number so that you can charge GST to Canadian customers. When I needed this, my accountant got everything together for me and helped me change my bookkeeping practices so that I could stay abreast of GST requirements in BC.

Don’t forget to look at a business license for your city. It costs me about $100 a year to have a business in my home. That’s far cheaper than any brick-and-mortar lease.

Once you’ve tackled the legal requirements, you should also start your finances on the right foot. The best resource that I’ve found is Profit First, a cash management system created by author and entrepreneur Mike Michalowicz. I didn’t start making more money right away when I used Profit First, but I instantly felt financial relief in my business.

A smart startup option

How to Start an Online Business Person Shopping Online

When you build an online business, you’re building a future asset at a much lower initial investment than a brick-and-mortar store.

Here are the steps again:

  • Start by finding a need you can fill
  • Choose how to run your store
  • Make a content plan to bring in customers
  • Promote your products or services
  • Cover your legal and financial bases

If you can do all this successfully, you can have a great entrepreneurial ride. Best of luck!