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Starting an eCommerce business has gained tremendous popularity over the last few years. After all, the allure of online entrepreneurship lies in the accessibility it offers. Additionally, online business owners can start operating from the comfort of their homes for a limited initial investment. This article will consider the key stages of starting an online business, from generating a great online business idea to selling to your target customers.
This guide sets out how to set up, finance and grow an online business in the UK.
1. Conduct Market Research
Begin by identifying your niche and sharpening your idea. You can do this by conducting market research and finding your target audience. Consider aspects such as:
- the market competition;
- the qualities that make your idea unique; and
- whether there is potential to grow your business.
2. Create a Business Plan
You can start creating your business plan by identifying the aims of your new business and working backwards, thinking about how you can achieve these goals. Also, incorporate marketing strategies into your plan. The popularity of online businesses has saturated the eCommerce market, so how you will spread awareness and capture your target audience is a crucial consideration.
Your complete business plan should include:
- an outline of your business idea;
- a detailed description of your business and the current market;
- your market research;
- information about your products or services;
- your marketing strategy;
- your business model;
- financial projections; and
- the business’ funding needs.
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3. Website Creation
Once you have completed your business plan, the next step is to create a website or decide which eCommerce platform you wish to host your business on. You should prioritise building and managing your online store on a user-friendly website. You should also allow your website to reflect your brand identity.
4. Payment and Shipping
Before your online business becomes operational, consider how customers will pay. If you are hosting your business on a ready-made platform, it will likely already come with payment processing services. Whether you have created a new website or are using a hosting platform, ensure that your payment services are secure and protect customer’s sensitive information.
If you are selling physical goods, you will also need to consider shipping. You may be starting on a small scale at home. If this is the case, have a look at relevant shipping options that are fit for your business’ needs and reliable but are also cost-effective. As your business grows, you may want to consider external shipping and fulfilment options.
5. Market Your Business to Potential Customers
You can now start to build your customer base. Consult the marketing strategies you outlined in your business plan, as you should now begin marketing your business. With your marketing and advertising, ensure you are honest and do not mislead customers.
eCommerce businesses tend to opt for methods such as:
- social media marketing;
- brand partnerships;
- advertising through search engines; and
- email marketing.
When starting an online business, there are some essential legal aspects you should note. The following table outlines some of these legal considerations.
|Choosing a legal structure for your online business
|Choosing the right business structure is essential whether you operate an online or brick-and-mortar store. You can register your business as a:
+ sole trader;
+ limited company;
+ general partnership; or
+ limited liability partnership.
Each structure has different legal implications and tax obligations.
|Business name and trade marks
|Ensure that you select a unique and new name for your online business. It must not infringe on the trade marks of an existing business.
Once you have picked a name, consider trade mark registration to safeguard your online brand’s identity. The same principle stands for your business’ logo.
|Both online and offline consumers are legally protected. To build a solid foundation to uphold consumer rights, you need to:
+ provide products and services of good quality;
+ be honest and transparent with the descriptions of your products and services;
+ ensure that your products do what they are supposed to do (for example, if you sell a water bottle, it must be able to hold liquids); and
+ have a transparent returns policy.
|You must display specific information on your website, such as your:
+ business name;
+ company address; and
+ contact details.
You must also have a robust terms and conditions document and make these easily accessible to customers of your site.
|Online businesses collect customer data. You will likely handle sensitive information like customer email addresses, home addresses, and payment information.
You must process, store, and handle personal data in compliance with data protection law.
Starting a successful online business involves several key steps and legal considerations. Begin your new venture by conducting thorough market research to define your business’ niche and target audience. Then, develop a comprehensive business plan that outlines your goals, market research findings, product or service offerings, marketing strategies, and financial information. To bring your online business plan to life, create a user-friendly website or choose an appropriate existing eCommerce site. Ensure secure payment processing and reliable shipping options. Then, implement your marketing strategy.
If you need legal advice when setting up your online business, our experienced startup lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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