How to start an online business in 4 easy steps

5 min read
Raubi Marie Perilli

If you want to step out of the corporate office, stop commuting, work independently of location and become your own boss, you may want to start an online business. If you are ready to take the plunge, follow these four steps can show you how to start an online business.

1. Before you learn how to start an online business, decide how you will make money.

To make your online business succeed, you need to make money. So, the first step in starting your business is deciding how you will generate revenue. When it comes to online business, you have a few options.

Sell products.

Types of online products you can sell include:

  • eCommerce products that you make or purchase from a wholesaler and then sell on your site. For this type of business, you may need to store and ship products to customers.
  • Affiliate products that you sell on behalf of another business. When selling affiliate products, you usually don’t have to store or ship products. The merchant deals with delivery, and you simply receive a commission for helping sell their product.
  • Digital products and ebooks that you create yourself or sell on behalf of other writers and producers. Digital products don’t require physical delivery so you can automate the process to send products to customers as soon as they make a purchase.
  • Online courses that you create yourself or sell on behalf of others. Like digital products, online courses can be set to automatically deliver to customers upon purchase.

Sell services.

You can start an online business based on selling consulting and freelancing services that are completed online or over the phone. When you sell services online, you can find customers and make sales on your own. Or you can sign up for sites that manage the process and allow you to connect with clients through their platform.

Sell memberships.

An offering that falls somewhere between a product and a service is a membership site. A membership site is a private online group where users pay to access exclusive content, advice or relationships. The value of the membership site is in the perks that each member receives.

Sell advertising and paid sponsorships.

You can turn a website into a business by selling space on your web pages for advertisements and paid sponsors. Online platforms can connect you with sponsors and advertisers, or you can seek them out on your own.

2. Choose your platform.

Once you decide on a business model, you need to choose the best place to build your business online. How you make money online will dictate which platform you should build your business on. Choosing where to build an online business is just as important as learning how to start an online business.

How To Start A Business Platform
Photo: Casey Hugelfink Flickr via Compfight cc

Platforms to consider include:

Your website.

Your website is usually the home base of your online business. Even if you conduct most of your business using other platforms, you will likely still need a strong online presence established through a professional website.

eCommerce platform.

An eCommerce solution, like GoDaddy’s online store, gives you the ability to sell products online. eCommerce software can be added to your website so you can make sales directly from your site. Or you can choose to use third-party platforms like Etsy or eBay.

Learning management system.

If you sell online courses, you will need a place to house your content and classes. You can deliver your content directly through your website or choose to use a learning management system such as Teachable or Udemy.

Peer-to-peer service exchange platforms.

If you choose to sell services through your online business, you can collect payment and provide services on your own. Or you can choose to work through a peer-to-peer service exchange platform that manages the process for you. Sites like Fiverr and Upwork act as a middleman for freelancers and their clients.

Online task sites.

To make money online, you can also use platforms that directly hire freelancers and contractors. Sites like and use online workers to provide services for their websites and businesses.

How To Start An Online Business Paperwork

Once you decide how and where you will bring in revenue, you need to legitimize your business. Your plan to make money online will officially turn into a business when you go through the following steps.

Register your business.

Separate yourself from the business by setting up a C-Corp or LLC status that limits your personal liability for the company. This protects you and makes you appear more professional to customers and clients.

File for an EIN number.

Once you establish your business as a separate entity, you can get a tax ID number for the business, allowing you to better manage your taxes and open a business bank account.

Open a business banking account.

Separating your personal and professional finances will make it easier for you to file your taxes and keep an eye on your financial situation.

Learn the federal, state and local guidelines and tax requirements.

Talk to a local small business assistance group or attorney to make sure you are legally providing services, selling products and paying appropriate taxes.

You can find a downloadable checklist for starting a business here.

4. Get to work.

Once you have a product or service to sell, a place to sell it and the peace of mind that you are operating legally and strategically, it’s time to get some customers and get to work. Tell family and friends, market yourself and seek out potential clients and customers.

The perk of having an online business is that you can take your work with you just about anywhere. But one of the best perks is that your online business is accessible to a massive audience of buyers. You have the opportunity to connect with customers and clients around the world.

So, set up shop and get to work on building, marketing and growing your online business.