How to start an online business in 2021: the complete step-by-step guide
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So 2020 has finally come to a close. (Heavy sigh of relief.) And it's time to make those new year's resolutions. Maybe even kick-off that online business you've been dreaming about for a while.
After all, there's no time like a pandemic to get yourself online; nothing could be more perfectly socially distanced.
So how do you make this new venture a success? Well, keep reading, my friend, because I've created a step-by-step guide on how to start an online business in 2021.
Step 1. Come up with a business idea
The first thing any good business needs is a grand slam idea. All entrepreneurs started somewhere. And who knows, maybe your idea will be worth a million bucks!
You might already have a business idea you've been itching to get started. But if you're struggling with exactly what you want to do, ask yourself these questions.
What do I already do that I truly love?
What do I get asked questions about most often?
What side projects do people want me to do for them?
Has it hit you yet?
Usually, the best business idea is already something that you're doing.
I've been the go-to person for graphic design in my family for all of their small business ventures. And then it hit me one day. "Oh yeah! I'm pretty good at that. Maybe I should start my own business..."
If you're feeling stuck, reach out to family and friends and ask them! It couldn't hurt. And usually, others see in us what we can't always see in ourselves.
Step 2. Pick a niche
Okay, so now that you have that million-dollar idea rearing to go, you need to niche it down.
What is a niche, you ask? It's a specialized section of the population you’re appealing to with your products or services. In other words “your people,” or “your tribe,” as the mom bloggers say.
You're trying to get specific so that your business will attract the kind of customers you want and scare away all those you don't. And I know, I know, it's scary as hell to get specific and turn away business. But trust me when I say that you don't want to appeal to everyone and their mother.
It's good to have some folks flee for the hills. Those people might bring in a little income in the beginning. But in the long run, it will save you time, energy, and massive amounts of therapy.
Step 3. Start investing in professional development
Now, I know what you're thinking, "Professional development?! But I haven't even started!"
Exactly. Which means there's a lot to learn. The business world is fast-paced, and the sooner you start to invest in your growth and education, the better.
Down the road, when you're making more money, I highly suggest that you enroll in online courses in your niche and industry regularly. But for the time being, there is a cheaper way to do this.
First, get a library card.
That's right! Head on over to your local library and snag some books to help you with finances, running a business, and topics related to your particular industry.
I would even grab some self-help books as well. It's good to have constant pick me ups when you're an entrepreneur. The business world is brutal, so a little meditation and positive thinking can go a long way!
Next, subscribe to blog posts in your niche and read, read, read.
There are so many free resources out there, and chances are there is someone in your field who has successfully made it and has some great and specific advice just for you. (Like this blog post, for example).
Take advantage!
Step 4. Prep your product or service
So now we're getting to the meat and potatoes. You have a great idea, you know who you're selling to, you've got a growth plan, and now you need to prepare what it is that you're going to sell!
Maybe you've decided to crochet custom kitten sweaters for all of those hipster cat ladies out there. Or you're going the digital route with an online course for cooking german schnitzel. That's great! Whatever it is, it's time to whip up that product and get it ready to go with some professional photos.
You might be thinking of selling your services. In which case, the product is intangible, and that's okay! You can create visual graphics to represent what it is that you'll be doing.
For example, let's say you've decided to offer Marie Kondo organizational services. You could take some drool-worthy sock drawer photos and title them "The Clutter Queen Package" and then post that bad boy to your website. This way, your potential customers can visualize what they're purchasing, even if it's not a physical thing.
Step 5. Pick a name
Best not to overcomplicate this.
While a punny or creative name might sound great to you, your potential customers might have difficulty understanding what it is that you offer.
Get some feedback on this from friends or family that fall into your niche market. Try out several different names and also practice saying it out loud. Nothing is worse than having a name so complicated that you have to repeat yourself and continually spell it for people.
Once you've landed on a potential name, do some mad googling to see what else comes up. You'll want to make sure that your new shiny business name isn't already trademarked or too similar to an existing corporation or LLC; the Secretary of State may not allow you to register it if it is.
Step 6. Get your legal ducks in a row
Disclaimer: I am not a lawyer, and this should not be considered legal advice from a professional. I'd suggest getting in touch with an attorney in your state for information on running your specific business. This post's advice is based solely on my experience as a website designer and is specific to online companies run in the United States.
Now that you have a snazzy name for your new business, it's time to tick the boxes on your legal checklist.
First is getting an Employee Identification Number (EIN). An EIN is a unique nine-digit number that identifies your business for tax purposes. It's similar to a Social Security number but for business entities.
You'll need an EIN any time you are selling products or services. As a business owner, it allows you to open a business bank account, apply for business licenses, and file your tax returns.
You can get your EIN online. To apply for an EIN, you need to fill out an IRS SS-4 form. You can get started here.
Next, you'll want a contract for use with clients (for service-based businesses). A contract is a must in my book. It lays out expectations upfront, helps prevent any surprises in costs, and will save your skin in a legal dispute.
I use and love The Contract Shop, which specializes in contracts for freelancers and small business owners.
Their contracts are attorney-prepared and reviewed, so you don't have to worry about all of the legalese; they'll take care of it for you. They also make it super simple to set up with step-by-step instructions, copy and paste documents, and quick fill in the blanks. You can check out their products here (That's an affiliate link!), and rest assured that your small business butt is covered.
As an online business owner, the next step is setting up your privacy policy. Yes, before you even have a website, and here's why.
A privacy policy is a federal mandate. It's a legal agreement between you and your website visitors that explains what kinds of personal information you gather, how you use this information, and how you keep it safe. Personal info might include collecting email addresses, passwords, Google analytics, etc. And the second you have a website is when you need a privacy policy in place.
It's essential to be specific about your business and not just copy a generic template. You can customize a privacy policy from The Contract Shop here (That's an affiliate link!)
The counterpart to a privacy policy is something called terms and conditions. While not required by federal law, it is still something that I recommend you have.
Your terms and conditions state how people can and cannot use your intellectual property, for example, your text and photos. And while you can't always stop website visitors from stealing, your terms and conditions give you license to send a cease and desist letter requiring that the offender stop their activity.
Pretty legit if you ask me. Check out terms and conditions at The Contract Shop here (That's an affiliate link!)
Separating your business and personal finances is next on the list.
Yep! Even if you're running a small side hustle, you'll want to make a distinction from the get-go. Opening a business bank account proves that you have a legitimate business and preserves the limited liability you will obtain through your business formation.
Basically, if things get hairy and you have to go to court, a separate bank account can help prove that your business is different from your personal funds and protect your assets from being taken. Pretty important, right?!
Call or visit your bank online to see what they offer and any other documents you might need to get started.
As your business grows:
Note that being a sole proprietor does not provide any liability protection. An attorney in your state call help you take the next steps of becoming a Limited Liability Company. It’s also a good idea to reach out to a financial advisor who can help with liability insurance.
No 7. Setup your website, domain, and professional email
Phew! So now that you have all the legal stuff covered, it's time to set up all of the tech so that you can sell your product or service.
First, you'll need a website. I use and recommend Squarespace because it is beautiful, modern, and easy-to-use. Squarespace also has built-in blogging, e-commerce, scheduling, IT support, and top of the line security so that you can sleep at night, knowing hackers aren't using your website under cover of darkness to sell drugs and baby cobras.
Plans range from $12-46/mo, depending on the needs of your business. I'd personally recommend going with a Squarespace Business Plan. If you'd like to give Squarespace a try, you can sign up for a free trial here. Save 10% off your first subscription to a website or domain using code PARTNER10. (That's an affiliate link!)
Once you've nailed down a website, you'll need to snag a domain. A domain is an address connected to your site, essentially www.yourbusiness.com.
While you may have thought of a killer business name, there is a chance that the domain has already been taken or will be soon. Best to get this taken care of as soon as you get a website. If you purchase a yearly plan through Squarespace, they throw in a domain name for the first year free!
After you have your domain, it's time to create a professional email account. By professional, I mean something like www.yourname@yourbusiness.com. You can easily do this through Squarespace as well.
If you sign up for a yearly business plan and register a domain, you'll receive a professional Gmail and Google Workspace account free for the first year. Here's the link again if you'd like to give it a go, Squarespace Trial (That's an affiliate link!)
Step 8. Start building an email list
I know, I know, you haven't even launched yet. So you're probably wondering, "Why the heck do I need to start building an email list?"
The answer: because email marketing is hands down the best way to connect with and sell to your customers!
Email is a great way to build your credibility, people check their email multiple times a day, you own your email list, meaning an algorithm does not dictate who sees your content, and it converts far better than social media, so more money in your pocket.
Building an email list is essentially a no brainer when it comes to marketing and making money online. Best to start collecting those addresses from the get-go.
I use Flodesk for my email marketing. Flodesk provides beautiful, modern, and intuitive email capabilities with unlimited everything! Meaning, you don't get penalized for growing your list. Use my link and get 50% off your Flodesk subscription! (That's an affiliate link!)
And a great way to entice website visitors into giving you their sacred email address? An opt-in gift.
An opt-in gift can be a checklist, a free course, a discount code, basically anything that your ideal client would want badly enough in exchange for their email address.
I like to create visuals for my freebies on Canva; you can check it out here (That's an affiliate link!). It doesn't have to be complicated. It can be as simple as a one page PDF. You just want to make it something that your target market needs.
Ask yourself these questions.
What is my ideal client's biggest problem? How can I create something to help them solve it? What is something my ideal client needs to do before purchasing my product or service? How can I prepare them for that?
Some examples:
"The Ultimate Website Homepage Checklist"
"5 Things You Need to do Before Hiring a Website Designer"
“The Dream Client Cheatsheet: The Step-by-Step Process for Landing Clients and Making Money.”
Once you've nailed that perfect opt-in gift put it into your email marketing system and then plaster it in conspicuous places on your website like your homepage, a pop-up, your footer, or your blog sidebar! (see my opt-in gift below)
Step 9. Create content (consistently!)
You've made it this far. Congratulations, friend, we're almost done. The next bit is about coming up with a plan to create content and create it consistently.
Content creation is great for boosting your SEO (search engine optimization) and getting organic traffic to your site. It also builds rapport around your business, letting your audience know that you are an expert in your field. All of this will, in turn, lead to money in your pocket.
So what exactly constitutes content creation?
Well, you could start a blog, create a YouTube channel, make a podcast, and so on. You're creating information that people within your niche market need and want to consume, and you're giving it away for free!
Now you are probably thinking, "If I give away all of this amazing content for free, why would anyone want to buy my products or services?" And I hear you. The thing with content creation is that yes, there are people that will consume your content and never hire you or buy your products, and that's okay.
Others, however, will surf the web looking for answers to questions that you have. They'll binge your content, download your opt-in gift, or straight out buy your products/services because you proved, through your expertise, that you know what you're talking about, and they saw the value in what you have to offer.
Makes sense, right?!
So, all you have to do is choose your primary method of creating content and then make a gameplan to show up consistently.
My method? I like to blog for my content creation, and I blog well in advance. I have several weeks of blogging material ready to go, and then I post it consistently twice a week.
I come up with my blog posts based on client questions, things potential clients might be searching for, and specific information I want my clients to have before hiring me as a web designer, essentially content for my niche audience.
I have all of this compiled in a calendar that I schedule three months in advance. It's called an editorial calendar. You can easily make one too in a word document or excel spreadsheet.
Then, on a consistent schedule, you'll launch your content and share it online via your social channels and the email list you've been building.
Step 10. Launch!
And that's it, folks! Once you've completed this list, you're ready to go live. Shout about your new online business from the digital rooftops and pop some bubbly!
Need help bringing your creative vision to life?!
I know how overwhelming it can be to start your online business. That's why I decided to create a simple and easy process. Together we’ll build a stunning website that you can launch in just two weeks!
Book your free consultation call today! Chat with me about your website goals and together we’ll navigate the best solutions for your business.
