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Starting an online business

Consumer habits have changed dramatically. By 2020, some experts predict that 90% of transactions will take place online or be internet-influenced.

Many businesses have long used their websites to generate additional revenue, yet in recent years there has also been significant growth in businesses that start up exclusively online, which can involve less risk, cost and effort.

Creating an online business

As with any small business, the first steps to starting to trade online involves conducting market research to identify your target market, assess demand, competition and reaction to your prices from potential punters. You also need to produce a business plan.

If sales are likely to exceed the annual threshold (currently £79,000), you must become VAT-registered. You’ll also need to pay tax, in accordance with your status as a sole trader, limited company, etc. Online traders must also observe data protection legislation, of course, when storing important information about customers.

Marketing will largely determine your business website’s success and search engine optimisation (SEO) is crucial to this. Basically, it means using words on your website that ensure high placing in lists on search engine (eg Google) results pages. You could also use paid-for advertising services such as Google Adwords, for which you’re charged on a pay-per-click basis.

Getting your site up and running

You must decide whether to create your own business website or get someone else to do it for you. Doing it yourself can save money, but the results might not be great.

There are many ready-made online solutions that allow people with little experience to create their own website. However, these are only likely to provide you with a couple of formulaic template pages with stock text and photos. With this in mind, you might prefer to pay a professional website designer. This should give better results, and will cost around £300-£600 per day. For around £2,000 you should get a service which includes design, domain name registration and arranging hosting of your site by an internet service provider. Setting a budget and a clear brief can help you minimise the costs. Read more about creating a business website.

Website information you must include

Your business website must include your address and contact details, privacy policy, terms and conditions, exchange and refund policy, quality commitment and information about delivery and payment. Stock availability and pricing should be kept up to date and you must state how much VAT and post and packaging is payable per item.

To collect payments you need to include a shopping cart function, as well as a secure means by which customers can enter their card details when paying. Most website designers provide a shopping cart function and payment facility as part of their service. Online website-building packages do, too.

You also need a merchant account to collect payments. Providers such as PayPal are popular, but you should also enquire at your bank. You pay a service charge on each transaction, a set-up and monthly service fee.

Test and protect your website 

Be sure to test your website site thoroughly before you launch. Ask potential customers what they think, too, and act on their feedback if valid.

And remember – running an online business isn’t without risk. Serious technical or security issues can have a disastrous consequence, so make sure you protect your website from online threats and back up important data.

More on this topic:

Find more articles, videos and tools in the Resources box on the right.

You can also find more information on selling online on our IT Donut.

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We all want to pay as little as possible but one needs to accept you get what you pay for. A website needs to have a combination of presentation flair and key word & SEO attributes. the cheap deals you see advertised for £400 are usually produced by rote. If you look at their example sites, they are almsot all the same design.
I would recommend you find a firm that specialises in SEO as well as web site design as they will intrinsically understand what needs to be done to make a website a success.

Fri, 16/09/2011 - 17:53 — mattjeff1

Interesting item. Agree with James in terms of costs etc. There are a lot of web sites out there that look very "pretty" but no one can find them - need to be built correctly!

It's also a good idea to try and include one or more "Key Words" in your domain name.

Before anything else you need a decent broadband connection! Believe it or not there are a lot of places in the UK where that is still not available, even in built up areas. We are currently installing 10MB satellite broadband to businesses in highly populated, built up areas that can only get 0.5MB download speed! If you are rural it used to be a real challenge, but our new satellite service is making a big difference.

Wed, 29/06/2011 - 10:14 — Ivatec

£300-400 won't get a full-on ecommerce site. It will get you a few basic pages of content but not all the requirements of an e-comm site. Especially if you want to do more than just take Paypal. If you're planning on a real online business then you need to take credit cards. Budget for £2000+. Try to choose a company whose work you have seen, if you can find someone that is recommended then that's even better.

Wed, 29/12/2010 - 14:44 — short couture

Some straight forward practical advice

Fri, 25/09/2009 - 12:38 — 4little1s

Thanks for the article - one of the first steps should be to decide the name and then reserve the domain name that is closest - you could find that your ideal domain has already been taken/reserved. If that is the case, you then need to decide on an alternative or contact the domain name owner and see if you can buy it off them.

Tip - don't take second best and end up with a long domain name - customers don't remember long URLs easily, so make it short and snappy (also helps on offline marketing).

I agree that using a professional web designer makes a difference - just ensure that this designer has a detailed knowledge of accessibility and usability guidelines - you don't want to pay for a design that compromises accessibility rules - check out www.W3.org for info.

Also, paying £300 - £400 is highly unlikely to get you a professional web designer to design your website and sort your hosting. A freelance web designer will charge at least £100 per day and a basic site (static html with forms and checkout) will take at least 5 working days just for design (conservative estimate). Do not compromise quality - invest upfront to avoid having to pay more later to bring the site to a professional standard. Remember, first impressions last - if you walk into a house and see the walls have not been painted and look shabby, it makes you question the quality of the rest of the property. Online is no different.
Happy to discuss further if anyone has thoughts on this.
Keep the articles coming, thanks
james

Fri, 25/09/2009 - 12:20 — jamesgurd

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