With e-commerce growing by 14 percent year-on-year in the UK and online shopping at an all-time high (estimated at over £750 billion in the UK as of 2022), there has never been a better time to think about starting an online business. Whether you are feeling the strain of your current job or simply considering other options available, you are not alone in wanting to explore e-commerce opportunities. Research from online payment service provider PayPoint.net shows that as many as 50 percent of Britain’s office workers are frustrated entrepreneurs, who have considered setting up their own business, with the most popular choice of a business start-up being an online venture.
Many would-be entrepreneurs can face a range of obstacles when trying to join the e-commerce revolution and some fail to understand the number of steps that need to be completed before an online business is ready to start trading. It can often feel overwhelming, which discourages them from pursuing the venture. However, knowing what processes are involved is generally half the battle.
Fortunately, there are a few simple steps, which if followed correctly, can ensure that setting up an online business is easy and hassle-free:
- Register a company
- Write your business plan
- Register a domain name
- Create your website (and make it secure!)
- Set up an Internet Merchant Account (IMA)
- Start your online and offline marketing to drive traffic to your site
Step 1: Registering a company
Firstly, you will need to set up a legal entity which is required if you want to trade online. Happily, registering your company and getting a company registration number is relatively straightforward in the UK. You can start the process by visiting the .gov.uk web portal.
Your other option is to use a Company Formation Agent; the cost of this starts from about £15, or for a full package that takes away all the admin, up to £90 (and can even be arranged on the same day if required.)
Step 2: Write your business plan
Writing your business plan enables you to be prepared for every eventuality. Ask yourself questions such as:
- Who is your target audience?
- What are your sales forecasts?
- What are your future plans for the company and how are you going to get there?
- How much is it going to cost you to set up and run your online business?
Related: Writing a business plan: The basics
Step 3: Register a domain name
Once all of the basics have been covered, you will need to begin setting up your online presence. The first step is to choose and then register your domain name:
- Select your web address carefully as a good name or brand will help you drive traffic to your site
- If possible, try to get a TLD (top-level domain) like a dot com – but if you intend to only sell in the UK then a .co.UK is perfectly fine (or even the super-short, and hence easy to remember domain ‘.uk’).
- Registering your domain name is relatively easy and costs £3-£25 depending on the type you require
Related: Nominet’s domain look up tool – The WHOIS lookup tool will return domain information for .uk, .co.uk, .org.uk, .me.uk, .sch.uk, .plc.uk, .ltd.uk, .cymru and .wales – more advice also available here.
Step 4: Create your website
You have two main options here: either get a pro or DIY. Working with a web developer will ensure that you get a bespoke site that meets your business needs. However, there are now a number of excellent website builder software platforms on the market that can help you get a functioning and reasonably good-looking website up and running.
NB: To ensure your start-up online business has the best chance of succeeding your website absolutely must be ‘Mobile friendly’ and ‘Secure’ (https). Do not skip these steps when building the site.
Step 5: Set up an Internet Merchant Account (IMA)
An online merchant account, often known as an internet merchant account, must be opened (IMA). This is necessary for internet trade and is independent of your corporate bank account. Although setting this up might take up to a few weeks, some options are speedier.
New internet firms may use services to set up an IMA and begin trading within 24 hours. You must: for your IMA application to be approved.
- Give a detailed overview of your prior business experience and a business strategy.
- Provide personal identification proof to support your claims.
- Decide if you want to collect payments by phone, online, or mix the two. You should also consider whether a multi-currency platform is required.
- Verify that you adhere to PCI compliance. Visa and MasterCard require all businesses that handle or store credit card information to adhere to this security standard. When it comes to daily penalties and even suspension of your card scheme processing capabilities in the case of a security breach, noncompliance may cost your firm dearly.
- Be mindful of the security hazards involved with internet trading. It is crucial to choose a risk management platform that lowers the risks associated with ID theft and enables you to swiftly and securely accept online payments since fraud is a huge problem for online shops and may lose merchants’ precious cash.
- And last, be accessible. While awaiting paperwork and signatures, many accounts are left unattended for longer than required. Therefore, to hasten the approval process, make sure you are reachable.
Step 6: Start marketing to drive traffic to your site
Onsite you should make sure you have a basic analytics package running so you you can analyze your visitor stats. Try to plan a structured content strategy that focuses on publishing useful and informative pages. Use compelling headlines and focus on benefits in your copy. Make sure to include testimonials and any relevant credentials that will build trust with your potential customers.
Offsite, you might want to look at PPC (pay-per-click) advertising with Google AdWords and Microsoft Advertising. They both have introductory offers for new websites but beware of bidding too high initially. Make sure you create accounts with all the main social media sites and link them to your website. If you are selling products rather than services highlight your pictures and images – particularly good for Instagram and Pinterest. And be sure to brand all your offline marketing materials with your website details.
While there are a number of hurdles that would-be entrepreneurs have to overcome when starting a new online business, the process should be exciting and not painful. To ensure that the new online business is given the best possible opportunity for success it’s vital that you understand the basic operational requirements and know where to turn for advice when it’s needed.
This article was contributed by Michael Norton