How to start an online business in 6 steps

Publish your site in just 2 minutes with GoDaddy Airo®.

Try Airo

If you want to step out of the corporate office, stop commuting, work independently of location, and become your own boss, starting an online business may be the right path. This guide walks you through each step — from validating your idea to making your first sale.

Starting an online business comes with its own set of steps and considerations that differ from a traditional storefront. If you're exploring a physical location instead, check out our guide on how to start a brick-and-mortar business.

TL;DR — 6-step launch checklist

Use this as your quick-start roadmap. Click any step to jump to the full section.

1. How do you research online business ideas?

To make your online business succeed, you need a clear plan for generating revenue. Here are the four main models to consider.

Sell products online

Consumer comfort with online shopping has never been higher, making it an ideal time to launch an online store or add ecommerce functionality to your existing website. Platforms and tools have also lowered the barrier of entry significantly for small businesses.

If you don't want to manage the logistics of physical products, you can sell digital goods — such as SaaS platform subscriptions, templates, or online courses — with no inventory or shipping overhead.

If you're new to ecommerce, explore how to sell online, including selecting the right products, choosing platforms, building your storefront, and converting your first customers.

Takeaway: Selling products — physical or digital — is the most scalable online revenue model, but requires the most upfront setup.

Offer services

You can build an online business around consulting, coaching, freelancing, or any service delivered digitally or by phone. You can find clients independently or through platforms like Upwork, Fiverr, or Toptal that connect you to clients and manage contracts.

Takeaway: Service businesses require the least capital to start and can generate revenue within days of launch.

Become an affiliate

Affiliate marketing means you promote another company's products on your website, social channels, or email list and earn a commission — typically 3%–30% depending on the industry — when someone purchases through your unique referral link. You never handle inventory, fulfillment, or customer service; the merchant manages all of that. Amazon Associates, ShareASale, and CJ Affiliate are popular networks to get started.

Takeaway: Affiliate marketing is a low-risk way to monetize an existing audience without managing a product.

Try dropshipping

With dropshipping, you list products on your site and take orders, but your supplier ships directly to the customer — you never hold inventory. Margins are typically 15%–45%. You can build a dropshipping store with WooCommerce, Shopify, or similar platforms. Be aware that because entry is easy, competition in popular niches can be high.

Takeaway: Dropshipping is a practical entry point for first-time ecommerce entrepreneurs who want to test products before investing in inventory.

2. How do you choose a niche and check the competition?

The best product ideas often emerge from hobbies and passions — places where you spot a gap no one is filling well.

For example, the general pet products category is enormous and fiercely competitive. But niching down to organic pet supplements or eco-friendly dog toys means fewer direct competitors and a clearer customer to market to. The goal is a niche big enough to generate sustainable revenue but specific enough to own.

Quick idea-validation plan

Use this three-part framework before committing to a niche:

1. Run a mini-survey (1 week, $0–$50)

• Post 5 open-ended questions in relevant subreddits, Facebook Groups, or via a free Google Form shared to 20+ target customers.
• Key questions: What's your biggest frustration with [niche]? What would make you switch brands? What would you pay for a solution?

2. Check search volume (1–3 days, free tools)

• Use Google Keyword Planner, Ubersuggest (free tier), or Keywords Everywhere to find monthly search volumes.
• Target niche keywords with 1,000–50,000 monthly searches and a keyword difficulty below 40 as a starting point.
• Flag highly saturated terms (large established brands dominating page one) vs. underserved ones.

3. Identify 5 competitor gaps

Use this table to evaluate your top 5 competitors:

Fill this in by reading 1-star and 3-star reviews on Amazon, Trustpilot, and Google Reviews, and scanning social comment sections.

Competitive research checklist

• Search your top keywords and note who ranks on page one
• Visit top competitors' websites — note their keyword usage, brand voice, design, and UX
• Subscribe to at least 3 competitors' email lists and track their promotions for 2–4 weeks
• Check their social media for engagement, complaints, and response rates
• Note pricing strategies and any obvious gaps in their catalog or content

Pro tip: Once you have positive product feedback, use your competitor analysis to sharpen your positioning — focus on what they consistently get wrong.

Takeaway: A niche is viable when you can find 1,000+ monthly searches, real customer frustrations, and at least one gap no top competitor is addressing well.

3. How do you choose a business name and legal structure?

Choosing a business name and domain

Your business name must work on multiple levels simultaneously: it should be brandable, available as a domain, clear of trademark conflicts, and registerable as social handles. Run through this checklist before committing:

Domain and name checklist

• Domain availability: Search your preferred name on a domain registrar. If .com is taken, .shop, .store, .co, or niche extensions like .jewelry, .clothing, or .tech are viable alternatives. A standard .com domain costs $10–$20/year at registration; premium or aftermarket domains can run $500 to $50,000+. Watch for first-year promotional pricing that jumps at renewal.
• Trademark search: Check the USPTO Trademark Electronic Search System (TESS) for conflicts.
• Social media handles: Search Instagram, X (Twitter), Facebook, TikTok, and LinkedIn for handle availability.
• State business name availability: Search your state's Secretary of State database to confirm the name isn't already registered.
• Memorability test: Say it out loud. Can someone spell it after hearing it once?

Choosing a legal structure

Once you have a name, you need to decide how to legally organize your business. This affects your taxes, liability exposure, and how investors or lenders perceive you. Here's a snapshot built specifically for online businesses:

Business structures at a glance

Recommended path for most online businesses: Start as an LLC. It's simple to form, limits your personal liability, and can be taxed as a pass-through entity. As revenue grows, consult a CPA about electing S-Corp status to reduce self-employment taxes. (SBA: Choose a business structure)

After you choose your structure

• Get a free EIN: Apply at IRS.gov/EIN — it's free, takes ~10 minutes online, and is required to open a business bank account.
• Open a business bank account: Separating personal and business finances is essential for clean bookkeeping and protects your LLC's liability shield.
• Get required licenses/permits: Some industries require state licenses or federal permits. Check USA.gov/business-licenses for guidance.
  

Takeaway: For most online business owners, forming an LLC costs $50–$500, takes 1–3 weeks, and provides meaningful legal protection that a sole proprietorship doesn't offer.

4. How do you fund an online business and write a business plan?

Unless you have a wealthy benefactor waiting in the wings, you'll need to secure funding and create a solid business plan before you successfully launch. Here are your main options:

Funding options

Lean business plan outline

If you're seeking funding, investors expect a thorough plan. If you're self-funding, even a lean version keeps you accountable. Use this outline:

If you are ready to start planning, check out our post on how to write a business plan (step-by-step) and find free business plan templates to help you get started.

Takeaway: A lean business plan doesn't need to be 30 pages — a clear, data-backed 5–10 page document is often more compelling to investors than a bloated one.

Unless you have that rich uncle everyone dreams about, you’ll need to secure funding and create a solid business plan before you successfully start an online business. While there are plenty of small business ideas for low budgets, reliable funding helps future-proof your online business. There are a few routes you could take here:

• Secure a loan: If your business idea is compelling and you have a rock-solid business plan, you might persuade a financial institution to front you the startup funds. Just be sure to understand any interest and potential penalties. 

• Attract investors: Investors also could show interest if you have a great idea and business plan to put in front of them. However, you might need to relinquish some control of your venture to accommodate them. 
• Bootstrap it: This would be the most direct route. If you have savings, investments, or other assets, using them to bootstrap your idea gives you total control. But you need to consider the ramifications if your business idea falls through. 
• Get a small business grant: Unlike loans, grants don’t need to be repaid, making them a great option for eligible online businesses. Many are offered through government agencies, nonprofits, and private organizations, but they can be competitive. To improve your chances, focus on crafting a strong application and aligning with the grant’s mission. Learn more about how to get a grant.

Now is the time to create a business plan. A business plan can be like a roadmap that guides your business from starting to succeeding. And if you’re planning to apply for a loan or attract investors, a solid business plan is evidence that you’re a safe bet. At a minimum, your business plan should include these sections: 

• Executive summary: Be brief in describing, from a high level, what your business will do or sell. 
• Organization and management: Introduce key members of your team and explain how their skills and experience will help you succeed. 
• Service or product line: Describe your offering, how it works, and why there’s a demand out there for it. 
• Marketing and sales: Explain how you’ll get your product or service in front of the largest possible audience. 
• Funding request: If you’re seeking external funding, specify your needs and what the funding will support. Note: GoDaddy offers a merchant cash advance service based on your future sales.
• Financial projections: State how much revenue you expect to generate. This can strengthen your case for funding. 
• Appendix: If you have reference materials, technical specs or certifications, include them here. 

If you are ready to start planning, check this post on how to write a business plan (step-by-step) and find free business plan templates to help you get started. 

5. How do you build your website or online store?

Your website is your storefront, your first impression, and your primary sales channel. How you make money online will largely dictate which platform you build on, so evaluate your options carefully, weighing cost and complexity before committing.

Register a domain name

Choose a name that is short, memorable, and searchable. A standard .com domain costs $10–$20/year at registration. Alternative extensions like .shop, .store, .co, .tech, .ai, and .dev typically cost $5–$50/year. Premium or aftermarket domains can run into hundreds or thousands.

Editor's note: Check out GoDaddy Airo, our AI-powered website solution that brings your idea online in minutes — including domain search, website creation, social media setup, and more.

Design your website

With an online business, your website is your storefront and a customer's first impression. Make sure you:

• Choose a template that fits your brand and industry
• Keep the layout simple and easy to navigate
• Use clear navigation so visitors can quickly find what they need
• Prioritize fast load times and full mobile responsiveness (Google uses mobile-first indexing)
• Make calls-to-action (CTAs) prominent and easy to understand
• Enable HTTPS/SSL — required for customer trust and payment processing

Add essential pages

The content you include on your website is just as important as how it looks. Your site should have these pages:

Target your main keywords

Research the exact words and phrases your customers type into Google. Use tools like Google Keyword Planner (free), Ahrefs, or SEMrush to find high-intent keywords with real search volume. Integrate them naturally into page titles, headers, meta descriptions, and body copy. Connect your site to Google Search Console (free) so search engines can find, crawl, and index it.

Create content that ranks

Whether it's a shareable infographic, an entertaining how-to video, or a blog post solving a problem your customers face, prioritize content that people can't find anywhere else. This is the kind of material that earns backlinks, builds domain authority, and keeps visitors engaged longer — all signals search engines reward. Optimize every piece for both readers and search bots.

Source products

If you're planning to sell physical products, a reliable supply chain is essential. Here's a quick comparison of your main options:

If you're not sure where to start with a supplier, learn more about how to find a manufacturer that fits your product and budget.

Write compelling product descriptions

Since you don't have a sales clerk to answer questions, your product pages have to do that work. Think through every question a customer might ask in a physical store — materials, sizing, origin, compatibility — and answer them proactively. Use this template as a starting point:

AI tools like GoDaddy Airo AI Builder can help generate or refine product copy at scale — always review for accuracy and brand voice. Your website's visuals are just as important as its words: use high-quality photos from multiple angles and in-use shots. If you're selling clothing or accessories, consider photos on different body types to make the experience more relatable.

Takeaway: Your product page is your virtual sales clerk — the more questions it answers proactively, the higher your conversion rate.

Set up payment processing

The key to closing an online sale is a seamless, trustworthy checkout experience. When evaluating payment processors, use these benchmarks:

• Typical card processing rates: 2.3%–3.5% + $0.10–$0.30 per transaction for most small businesses (rates vary by provider, card type, and volume)
• GoDaddy Payments offers competitive rates with no hidden fees and integrates natively with GoDaddy stores; it also supports in-person payments via a POS system
• Look for: SSL certificate support, acceptance of major cards (Visa, Mastercard, Amex, Discover), PayPal, Apple Pay, and Google Pay, plus a real-time payment gateway

Key questions to ask any provider:

• Does the platform accept all major currencies and offer SSL certificates?
• What payment forms are supported — credit cards, PayPal, Stripe, Apple Pay, wire transfers?
• Does it offer a real-time payment gateway to verify and process charges?
• Does it integrate with your existing website platform?
• What are the per-transaction fees, monthly fees, and chargeback policies?
• What do other merchants say about the checkout experience?

Takeaway: Evaluate payment processors on total cost (not just the headline rate), integration ease, and the currencies and payment methods your customers actually use.

Build a brand

Even if you hire a professional to build your site, you'll need to make — or at least approve — decisions about the overall design. Here are the key elements:

Logo

If you don't have a logo or would like a new one, try GoDaddy's logo maker , where you can create one in minutes. Think carefully about how your logo will appear at different sizes — on your website header, favicon, social profiles, and product packaging.

Colors

Choose a palette of 2–3 primary brand colors. Consider the emotional associations: blue conveys trust and professionalism; green suggests health and sustainability; orange projects energy and enthusiasm; charcoal and navy signal authority in professional services. Match your palette to the feeling you want customers to have when they land on your site.

Fonts

Choose 1–2 fonts — one for headings, one for body copy. Bold, geometric sans-serifs convey modernity and confidence; serif fonts signal tradition and credibility; script fonts feel personal and creative. Avoid novelty fonts that hurt readability at small sizes.

Layout and whitespace

Consider the amount of whitespace (space between elements) in your design. Generous whitespace signals clarity, simplicity, and a premium feel. A tighter layout can feel active or content-rich. Other elements — background colors, gradients, and overall texture — all contribute to your online impression and brand personality.

Takeaway: Consistent branding across your site, social channels, and email builds recognition and trust — both of which directly impact conversion rates and repeat purchases.

6. How do you market and grow an online business?

Once you have a product or service to sell, a place to sell it, and the peace of mind that you're operating legally and strategically, it's time to get customers. Tell family and friends, market yourself, and seek out potential clients. Here are the main channels to consider:

Start with two channels — SEO and one social platform where your audience is most active — and master them before expanding. Consistency across two channels beats a scattered presence across six.

One big 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 business is accessible to a global audience of potential customers around the clock.

Not sure which platform to use to build your store? We've compared leading ecommerce website builders to help you choose:

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

Takeaway: Consistency across even two marketing channels beats a scattered presence across six — pick your two, commit for 90 days, and measure results before adding more.

Step 1 — Research your business idea (↑ back to Step 1 )

• Identify your revenue model (products, services, affiliate, or dropshipping)
• Validate demand with keyword research (target: 1,000–50,000 searches/mo)
• Run a 5-question survey with 20+ potential customers
• Confirm there's a path to profitability (estimate margins)

Step 2 — Choose a niche and size up competition (↑ back to Step 2 )

• Define your specific niche (not just "pet products" — "organic dog supplements")
• Complete the 5-competitor gap analysis table
• Subscribe to 3 competitor email lists
• Identify 3 keywords you could realistically rank for within 6–12 months

Step 3 — Name your business and choose a structure (↑ back to Step 3 )

• Run domain name availability check
• Search USPTO for trademark conflicts
• Secure matching social media handles
• Choose legal structure (LLC recommended for most)
• File with your state ($50–$500)
• Get your free EIN at IRS.gov (~10 min, free)
• Open a dedicated business bank account
• Check for required licenses/permits at USA.gov

Step 4 — Fund your business and write a business plan (↑ back to Step 4 )

• Choose a funding path (bootstrap / loan / investors / grant)
• Complete lean business plan using the 10-section outline above
• Set a 12-month financial projection
• If seeking a loan: research SBA loan programs at sba.gov

Step 5 — Build your website or store (↑ back to Step 5 )

• Register domain ($10–$20/yr for .com; $5–$50/yr for alternatives)
• Choose and launch a website/store platform
• Design site with brand colors, logo, and fonts
• Add all essential pages (Home, About, Products, Contact, FAQ, Blog, Privacy Policy)
• Connect to Google Search Console (free)
• Write keyword-optimized product descriptions (use template above)
• Add high-quality product photos (multiple angles, in-use shots)
• Set up payment processing (confirm rates: typically 2.4%–3.5% + $0.10–$0.30/transaction)
• Enable SSL certificate
• Test full checkout flow on both mobile and desktop

Step 6 — Market and grow (↑ back to Step 6 )

• Pick your primary 2 marketing channels
• Publish at least 3 pieces of SEO-optimized content before launch
• Build and segment your email list from day one
• Set up Google Business Profile (free, if applicable)
• Ask your first 10 customers for reviews
• Track core KPIs: traffic, conversion rate, customer acquisition cost, average order value

FAQ about starting an online business

Sources and further reading

The facts, figures, and guidance in this article draw from the following authoritative sources. Bookmark these for reference as you build your business:

• IRS — Apply for an EIN (free, online, ~10 minutes):
  irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
• SBA — Choose a Business Structure (pros/cons by entity type):
  sba.gov/business-guide/launch-your-business/choose-business-structure
• SBA — Funding Programs and Grants:
  sba.gov/funding-programs/grants
• Grants.gov — Federal grant search database:
  grants.gov
• USPTO — Trademark Electronic Search System (TESS):
  uspto.gov/trademarks/search
• USA.gov — Business licenses and permits by state:
  usa.gov/business-licenses
• Google Search Console (free):
  search.google.com/search-console
• Google Keyword Planner (free with Google Ads account):
  ads.google.com/home/tools/keyword-planner
• State LLC filing fees: Vary by state; verify current fees at your state's Secretary of State website. Examples at time of publication: KY ~$40, WY ~$102, DE ~$90, CA ~$70 (+ $800/yr franchise tax), MA ~$500.
• Card processing rate benchmarks: Drawn from published rates of major processors (Stripe, Square, PayPal, GoDaddy Payments) as of mid-2026.

This article is for informational purposes only and does not constitute legal, tax, or financial advice. Consult a licensed attorney or CPA for advice specific to your situation.

Products Used

Sep 19, 2017 · 1 min read

DomainsLearn more

Jun 28, 2021 · 1 min read

GoDaddy PaymentsLearn more

Sep 19, 2017 · 1 min read

Websites + MarketingLearn more

Sep 19, 2017 · 1 min read

Websites + Marketing EcommerceLearn more