How to start an online business in the UK

January 8, 2020

Online use and shopping are getting increasingly popular, with consumers flocking to the internet rather than the high street. As the popularity of online shopping grows, businesses need to get online. You can either create an e-commerce website to be an addition to your existing business, helping to increase revenue, or you can start an online business from scratch. We have created this guide for those looking to start an online business in the UK.

Starting a business online will have similarities to starting a traditional brick and mortar business but you will also have to take a number of other factors into consideration. Here is how to start an online business in the UK.

Get your business idea

To begin with, like any business you will need a business idea. If you believe you have a good product or service which there is a demand for and which could work as a business, then there are a number of other factors that you need to consider. As a business, you will either offer a product/s, or a service, and you need to carry out extensive market research to decide if your business is possible. Market research can help you plan and map out how to set up a business, give you an idea into start-up costs, the type of funding available to you, the pricing that you should set, the potential customer base and your competitors.

Decide on a business name

You will also need to come up with a name for your business. When it comes to naming the business, make sure that both your business name and the domain for your business website are available. It’s easier for customers to find your website when the website domain name is the same as the business name. If they are not the same, it can lead to confusion and it could even lead to loss of business as many potential customers may be misdirected.

Create a business plan

After carrying out a sufficient amount of market research, you will need to create a business plan. A business plan is a great way to visualise and is essentially your business in a document. A business plan is a working document that you can always add to and change over the course of time. It’s also essential for when you are trying to get funding for your small business.

Decide on the business structure for your online business

When you start any sort of business in the UK you will need to decide on the business structure you will use. You have two main options which are the most popular:

Sole Trader – A sole trader is best for those starting small or running a very small business. This is because you the business owner and your company are seen as one entity, therefore any profit/loss made will affect your personal finances.

Limited Company – A limited company offers your protection as your company is seen as a separate entity, which means you have limited liability.

You can find a breakdown of the different types of companies you can set up in the UK as well as their advantages and disadvantages.

Consider the costs of starting an online business

The costs you need to consider for your online business will vary depending on the type of business you are starting and the scale of it. Here are some of the costs you will need to consider when starting your online business in the UK:

Company formation costs – if you decide to go with a limited company structure.
The costs of the actual products or services you will be selling.
Cost of building the website, whether you hire a web designer or use a website building tool.
The cost of the domain, which will likely be an annual fee.
The equipment you would use, for example, you would need a laptop, an internet connection, camera (if needed).
Marketing costs – will you by doing the marketing yourself or outsourcing it?

Build your own website or use a third-party platform

When it comes to starting a website for your business, you will need to decide whether you will build an entirely new website or use a third-party platform like Amazon, eBay or Etsy, which can offer you a place to sell your goods. There are both pros and cons of each.

Why you should build your own website:

You are able to have full control of the website
You will not have to deal with third parties
You can focus on building the best possible site for your customers
Your products will not be listed with other competitors
You will not have to pay a third party any fees

Why you should use third-party platforms:

Third-party platforms such as eBay, Amazon and Etsy have millions of customers which can help with the exposure of your business
Established sites that have been tried and tested
Good for the short term if you don’t have the time and resources to build your own website

It is advised that thorough research is carried out to find out the best option for each individual business idea. Every business differs and is unique, therefore careful consideration will be needed when deciding on the method of setting up an online business.

Build your website

If you have opted to avoid using third-party platforms then you will need to build your website. The type of website you create will depend on multiple different factors including your product or service, the funding available and the professionals involved. It is advisable to hire a web designer that has prior experience with building websites such as the one you want for your business. You will need to make sure that your vision is aligned with the web designers in order for the website to be right.

Although building a website for your online business seems like a mammoth task, it can be done quite easily and quickly, especially when starting out. There are a number of affordable website building tools such as Wix and GoDaddy to help you get started.

Some of the things you need to consider when designing your website are:

The user experience – The site needs to be easy to use and navigate to create a smooth experience for your customers.

The aesthetics – Does your website look appealing? You will also need to look at the colour theme, the setup and organisation of text and images.

The website logo – The logo again will need to correlate with the website aesthetic and the business name.

Mobile responsive – It’s essential that you have a website that is mobile responsive because it needs to allow customers to shop via their smartphones, which is becoming increasingly popular. Google also penalises websites that are not mobile responsive, therefore it can damage your Google rankings.

Find the best payment options for your website

You will need to consider what online payment system you will be integrating within your site. Some of the biggest names that provide payment services in the UK are Amazon Pay, Paypal, WorldPay, Stripe and Shopify. They all have pros and cons, and again this will need to be looked into as the best option for you will depend on your business. Some offer no sign-up fees, others offer competitive transactions fees. Additionally, the payment system is something you will need to think about when building your site to ensure that your preferred payment system is able to integrate easily.

Use SEO for your online business

Once you have your site put together, you will need to optimise your website for search engines with SEO (Search Engine Optimisation. A website can be brilliant, but if the SEO is neglected, it will simply fail to gain an audience and traffic. Therefore, it’s essential to build up the SEO of the website. For SEO purposes, you might even want to consider adding a blog to your e-commerce site. A blog can help you gain an audience, by providing relevant helpful content. For example, if you are selling baking equipment online, you might want to share recipes on your blog. When it comes to SEO, you will need to focus on both on-page and off-page optimisation to make your website ready for search engines.

Find our complete guide on SEO to learn how to build and site for success.

Figure out social media and marketing tactics

A social media presence is incredibly important if you want to get your brand out there and start attracting potential customers. Social media is one of the best ways to market your business. Therefore, once you have successfully set up your business website, it’s time to invest in social media. If you already have existing social media accounts because your online website is an addition to your existing business, you need to promote your new website. You can set competitions and incentives to get followers to visit your website.

Use the following guides to get your online business on social media in order to raise brand awareness and get engaging with your audience/potential customers:

More on starting up and getting your business on social media.

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