How To Start an Online Business in the UK 2024
Last updated: 15/03/2024 Written by: Ruby Layram
Starting an online business offers numerous advantages that can be appealing to aspiring entrepreneurs. The key benefits of online business include the ability to work from anywhere in the world, time flexibility, low start up costs and scalability.
Starting an online business in the UK can be an exciting and rewarding venture.
In this guide, we will provide step-by-step instructions on how to start an online business in the UK in 2024. From choosing the right type of online business to registering your company, we will cover everything you need to know to get started.
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Disclaimer: What Can You Expect From Starting an Online Business in 2024
Before diving into the process of starting an online business, it's important to have realistic expectations. While starting an online business can offer many advantages such as flexibility and low overhead costs, it also requires hard work, dedication, and patience.
It's important to understand that success does not happen overnight and that building a profitable online business takes time and effort.
Understanding Online Businesses
An online business is an entrepeneurial venture that conducts its operations primarily over the internet. These businesses sell products or services online, reaching customers through websites, social media platforms, online marketplaces, and other digital channels.
Online businesses have the advantage of low overhead costs compared to traditional brick-and-mortar stores, as they often do not require physical locations. They can cater to a global audience, allowing for greater market reach and scalability.
Online businesses encompass a wide range of industries, from e-commerce to online service providers and blogs, providing numerous options to suit all types of entrepeneur.
Starting an online business has gained populairty with the rise of people wanting to work from anywhere in the world. Online businesses can be used as a full-time source of income or can be managed alongside a 9-5 job.
How To Start an Online Business Step-by-Step
Starting an online business can be an exciting and rewarding journey. Whether you have a unique product idea or want to offer your services online, the process of starting an online business in the UK requires careful planning and execution. In this section, we will guide you through the step-by-step process of starting your own online business.
Before you start
Before you embark on your online business journey, it is crucial to spend time assessing whether or not starting an online business is suitable for your current needs.
If you’re simply looking to make extra money online, it might be better to consider starting a side hustle. Side hustles require a lot less effort than businesses to be profitable and usually offer more flexibility. Once you have tested the water, you could consider scaling your side hustle into an online business.
Online businesses are an excellent solution for entrepreneurs who want to run their own businesses but don't want the overheads of a physical store or location. Thanks to advanced automotive tools, many online businesses can be run without employees and can generate passive income over time.
However, online businesses are not for everyone:
Online businesses require a fairly substantial time commitment. Most new entrepreneurs use their evenings and weekends to build their businesses.
You may not make money straight away. For example, The Rich Girl Guide took almost 1 year to make any money. All of the work up until tat point was unpaid.
Running a successful online business requires industry knowledge and a specific skill set. You may have to invest in courses and other resources to be able to compete with other businesses in your niche.
Step 1: Choose a type of online business
Before diving into the online business world, it's important to decide on the type of business you want to start. Consider your interests, skills, and the demand in the market. Whether it's an e-commerce store, consulting services, or digital products, choose a niche that aligns with your passions and has potential for profitability.
It’s important to spend time here researching your different online business ideas. Each type of online businesses comes with unique pros and cons that make the excellent for some people and unsuitable for others.
Here is an overview of the pros and cons of some popular online business models.
Drop shipping
Pros:
Low startup costs
The business can run itself through automation
There is high demand due to the growing size of the eCommerce industry
It is easy to market products through platforms such as TikTok and Pinterest.
Cons:
Success relies on your ability to market your products effectively. It may take a while to perfect your marketing campaign.
Running a drop shipping store requires extensive knowledge of eCommerce processes. You need to understand how to source products and organise fulfillment with the supplier.
Selling digital products
Pros:
You do not need to organize storage or fulfillment
Digital products can be made for free using Canva or similar tools
It is easy to scale by making more products
Cons:
Some products have a low ticket price which means that you will need to reach a huge audience to make any substantial income.
To sell eBooks or courses, you need to build authority in your niche which can be time-consuming.
Blogging
Pros:
Blogging is free to start.
There are multiple ways to monetize a blog including affiliate marketing, ads, selling products, and brand partnerships. This makes it a very scalable business model.
Cons:
It can take a very long time to build up enough traffic to make money.
Regular Google algorithm updates are making ti difficult for bloggers to maintain their traffic
Step 2: Conduct research and invest in resources
Once you have decided which type of online business to start, the next step is to spend time conduct thorough research to understand the market, best practices and what to expect from your business journey. You should also start to conduct market research to determine how to drive traffic and sell to your audience.
A good way to do this is to look at other, already successful, online businesses on your niche and try to emulate what they are doing right. Try to take what they’re doing and improve it so that you have a chance of competing in the market.
At this stage, you should also invest in courses and other learning materials that could help you to enhance your skills. Investing in knowledge is the best way to avoid running into common pitfalls or making bad decisions at the start of your business.
Step 3: Create a clear plan
Develop a comprehensive business plan that outlines your goals, target market, products or services, marketing strategies, and financial projections. A well-defined plan will provide direction and act as a roadmap for your online business, enabling you to navigate challenges and make informed decisions.
We recommend investing in a high-quality business planner that will guide you through the process and ensure that you don’t miss any crucial steps.
It is a good idea to revisit your plan throughout your journey. You will probably make slight changes as you learn and grow as an online business owner.
Step 4: Invest in resources
Determine the resources you need to start and operate your online business. This may include investing in equipment, software, inventory, and hiring freelancers. Allocate a budget for these resources and ensure you have the necessary funds to support your business initiatives.
It can be tempting to skimp on important resources at the beginning of an online business journey. This is usually done to save money. However, investing in the best resources from the start will help to accelerate your business success.
This is why it is important to make sure that you are in the financial position to start a business online.
Step 5: Build a website
A professional and user-friendly website is essential for any online business. Choose a reliable website builder or enlist the help of a web developer to create a visually appealing and functional website. Ensure your website is mobile-responsive, SEO-friendly, and optimized to showcase your products or services effectively.
Fro online businesses, a website acts like a shop. Therefore, you should spend time making sure that your website aligns with your brand. Use your logo, color palette and brand voice to ensure that customers recognize your website as part of your wider online business.
Step 6: Create a social media presence
Social media platforms provide a powerful means to connect with your target audience and promote your online business. Create profiles on relevant platforms and develop a consistent social media strategy. Engage with your audience, share valuable content, and build a strong online presence to attract potential customers.
Having a social media presence is crucial for online businesses in today's digital landscape. Social media platforms provide a direct line of communication with customers, allowing businesses to engage with their audience, build relationships, and foster brand loyalty.
Through social media, businesses can showcase their products or services, share valuable content, and interact with customers in real-time. Additionally, social media offers a powerful marketing tool to reach a wider audience, increase brand awareness, drive website traffic, and ultimately boost sales. By being active on social media, businesses can stay relevant, gain valuable insights into customer preferences and behaviors, and adapt their strategies to meet market demands effectively.
Some good social media platforms to start with include TikTok, Pinterest and Instagram.
Step 7: Develop a marketing strategy
A well-executed marketing strategy is vital for the growth and success of your online business. Identify the most suitable marketing channels for your target audience and implement strategies such as search engine optimization (SEO), content marketing, email marketing, and paid advertising. Constantly monitor and analyze your marketing efforts to maximize results.
A strong marketing strategy is the difference between online businesses that do well and online businesses that don’t. You could have an amazing product but, you won’t make any sales if your brand isn’t put in front of potential customers.
Step 8: Register your business
Registering your online business is a legal requirement in the UK. Research the necessary licenses, permits, and registrations for your specific business model and complete the necessary paperwork. Ensure compliance with all legal obligations to establish a legitimate and trustworthy online presence.
Registering your business will ensure that you pay the correct tax. It is important to sort this from the beginning so that you can avoid running into complications. You can register your business in four steps with 1st Formations.
Step 9: Monitor performance and adjust your strategy
The strategy that you follow at the beginning of your online business journey won’t always be the best option for your goals. This is why its important to monitor and analyze your performance so that you can adjust your strategy and make sure that you are on track.
Regularly monitor key performance indicators (KPIs) such as website traffic, conversion rates, and sales. Analyze the data and make adjustments to your marketing and business strategies as needed to improve overall performance. Stay updated with industry trends and continuously innovate to stay ahead of the competition.
How Much Does It Cost To Start an Online Business in the UK?
When starting an online business in the UK, it is important to consider the various expenses involved. The cost of starting an online business can vary depending on the type of business, scale, and industry. Here are some common expenses to keep in mind:
Website Development and Hosting: Building a professional and user-friendly website is crucial for your online business. This may involve hiring a web developer, purchasing a domain name, and securing reliable hosting services.
Marketing and Advertising Costs: Promoting your online business and reaching your target audience requires a budget for marketing and advertising activities. This includes strategies such as search engine optimization (SEO), paid advertising, and content marketing.
Inventory or Product Creation Costs: If you are selling physical products, you will need to consider the cost of inventory or creating your products. You may also need to buy samples of your product so that you can film content for social media and marketing campaigns.
Legal and Licensing Fees: Registering your business and ensuring compliance with regulations may require legal and licensing fees. It is important to research the specific requirements for your industry and business type.
Ongoing Operational Expenses: Running an online business involves ongoing expenses such as website maintenance, payment processing fees, shipping costs, and customer support.
It is crucial to budget accordingly and consider both one-time startup costs and ongoing expenses. Proper financial planning and budgeting will help you establish a solid financial foundation for your online business in the UK.
Interesting statistics about the costs of starting a business in the UK
The average UK startup budgets £5000 to launch
It costs £12 to register your business online or £40 if you do it by post
The average eCommerce website costs £176 a year to run
Top Tips for Making Sure That Your Online Business Is a Success
Seeing success in your online business venture will take time and a LOT of trial and error. I tried a handful of different online business models before finding something that actually worked. To be successful, you have to keep going and believe that things will work out.
To help you increase your chances of success, here are some top tips for new online business entrepreneurs.
Set clear goals and stick to them
Clearly define your online business goals, both short-term and long-term. Create an action plan and stay focused on your objectives to keep your business on track.
Make sure that your goals are clear and SMART, this will help you to stick to them and avoid falling off track.
Avoid taking shortcuts that could be damaging in the long run
Building a successful online business requires patience and hard work. Avoid the temptation to cut corners or resort to unethical practices that could harm your reputation or business in the long run. Maintain professionalism and integrity in all aspects of your online business.
Be generous with your marketing budget
Marketing is crucial for the growth and success of your online business. Allocate a generous budget for marketing activities to reach a wider audience, build brand awareness, and drive more traffic to your website. Consider various marketing channels such as social media advertising, search engine marketing, and influencer partnerships to maximize your reach.
Final Thoughts
Starting an online business in the UK can be a fulfilling and potentially lucrative venture. It provides the opportunity to reach a wide audience, operate with flexibility, and benefit from low overhead costs. However, success in the online business world requires careful planning, hard work, and dedication.
To ensure a successful start, it is crucial to follow the step-by-step process outlined in this guide. From choosing the right type of online business to registering your company, each step plays a vital role in building a solid foundation for your online venture. By conducting thorough research, creating a clear business plan, and investing in the necessary resources, you can position yourself for success in the competitive online marketplace.
Moreover, it's important to continuously monitor your business performance and adjust your strategies accordingly. The online business landscape is constantly evolving, and it's essential to stay up-to-date with market trends, consumer behavior, and competition. By adapting to these changes and constantly striving for improvement, you can stay ahead of the curve and maximize your chances of success.
FAQs
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No you do not need a license to start an online business in the UK. However, you will need to register your business as an Limited Company or Sole Trader so that you can pay the appropriate tax.
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One of the easiest online businesses to start as a beginner is offering freelance services. Freelance writing is a very in-demand service that pays generusly.
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eCommerce is the most profitable type of online business in the UK. The average revenue per customer is $89 for online eCommerce stores.
At The Rich Girl Guide, we aim to provide realistic and helpful content about online businesses and side hustles. Some of our content may mention potential earnings however, it is important to understand that profit is not guaranteed. The outcome of your online venture will depend on your ability to successfully follow the processes that are required to see results. Not all online businesses and side hustles will be suitable for you. Therefore, you must take time to carefully research different options before investing any time or money.
About The Author
Ruby is the founder of The Rich Girl Guide. She started her first freelance writing business in 2019 and created The Rich Girl Guide to help other women achieve freedom through online businesses and side hustles.
Before starting The Rich Girl Guide, Ruby studied Psychology at The University of Winchester. During her degree, Ruby developed an interest in consumer psychology and went on to work on the marketing teams for successful startups such as Cryptonary and Finixio Ltd.
Her role in marketing gave her first-hand experience in scaling and growing online businesses within the Fintech space.
Ruby started The Rich Girl Guide to provide realistic and helpful information about making money online in a space where there is a lot of misleading content and false promises. Ruby believes in the power of planning and strategy and wants to help other people achieve their online business goals in a way that is realistic, actionable, and sustainable.