Your imagination is your most valuable asset when it comes to starting an online business. It’s all about that great idea. You don’t need cash in the bank, or a computer science degree, to make it happen. A spark of genius can ignite an empire.
Once you’ve set your target on what you want to achieve, time and energy will make up the initial investment. The beauty of doing business online is in how flexible it is. You choose the model and the hours. You’re the boss.
Good website builders make it easy to create and publish a professional website in a matter of minutes. There are thousands of great domain names to choose from — many of which costing only about the same for the year as a mobile contract costs per month.
If you’d prefer to sell on an existing marketplace and reach an audience right away, that’s an option, too. If you’re worried about stock inventory and storage space, a model like drop shipping is just one way to earn a profit without ever having to handle products yourself.
Easier said than done? Well, this is not to say there won’t be stumbling blocks. The competition is pretty fierce out there. And once you’ve decided to launch your online business, there’s the small matter of registering it legally and paying taxes correctly.
#1 Choose a business model
Think about the core of your business: the product or service you’ll offer. What are you passionate about? What skills and expertise do you possess? Consider the size of your venture: is this going to be a hustle on the side, or a full-time commitment?
You can scale up your business (and your website) as your success grows. Indeed, that ought to be the plan. As you gain more customers and generate revenue, you’ll be able to reinvest the profits into expanding operations — if that’s what you’d like to do, of course. Start small and dream big.
When it comes to no-to-low cost online business ideas, here are just some of the models to choose from:
Wholesale (Bulk Distribution)
Wholesale is about buying products in bulk from manufacturers or distributors, then selling direct to other stores. This could be clothing and apparel, electronics and accessories, food and drink… you name it. Success as a wholesaler depends on one very expensive thing, however: space. You’ll also need time to build a reputation before expanding into bulk distribution.
So, when it comes to ideas for starting an online business from zero, wholesale might be more of a medium-long term model to aim for. Luckily, there are easier ways to get started.
Dropshipping (Inventory-less Retail)
If you’d prefer to avoid managing inventory and shipping — or if you simply don’t have the space for all those boxes — dropshipping might be a better option.
The idea of dropshipping is that when a customer places an order, the product is shipped directly from the supplier to the customer. Imagine, for example, that you have an online clothing store. Through dropshipping, you can partner up with manufacturers to have items shipped straight from the factory to your customers. This saves storage space and cuts out the logistical headaches.
Dropshipping has a lower barrier to entry than wholesale due to the lack of upfront inventory and storage space costs. Profit margins tend to be lower, as you’re essentially paying the supplier to handle all the fulfillment. But it’s a great place to start.
Reselling
Reselling is about buying products, new or used, and selling them on at a higher price. While the word might conjour up images of selling second-hand goods on Ebay, a large proportion of online sellers are actually resellers. It’s a very common business model on online marketplace platforms.
For example, you might buy popular mobile phones from major retailers then resell at a higher price. The key difference between a reseller and a dropshipper is that resellers do keep stock (even if in small quantities).
“Arbitrage” is a specific sort of reselling where sellers take advantage of price differences in one global market and sell products on in a different market for a profit. While this can work for some, it’s important to keep it legit!
Private Label
Going private label is way to build brand identity without the hassle and expense of manufacturing products from scratch. Essentially, you partner with a manufacturer who produces a generic product, which you then customise with your own branding. You can offer unique products under your own name, even if you don’t have the resources to create them yourself.
Let’s say you dream of creating your own hair care line. Skipping the research and development stage, you can partner with a manufacturer that already produces top-quality shampoo. Then, design your own eye-catching labels and packaging to create a brand that’s all your own.
Handmade Goods and Custom Products
Artisans and craftspeople have long put their skills to work selling handmade goods online. This might includes unique jewellery, clothing, furniture, art, and more. You can add personalisation options for a special touch. A popular subcategory is Print on Demand (POD), where you sell custom items like t-shirts or mugs made especially to order.
Digital Products
This category encompasses a wide range of products, including eBooks, software, digital art, and more. Creating and selling digital products can be a cost-effective way to reach a global audience. Say you’re the author of a series of eBooks, for instance. You could sell your titles on platforms like Amazon Kindle Direct Publishing, Apple Books, or through your own website. Just be sure to use Digital Rights Management to deter any unauthurised copying and sharing.
Subscription Services (Physical)
Offering products on a subscription basis has the potential to bring in a steady stream of revenue. Subscription boxes filled with curated physical products, such as beauty samples, gourmet snacks, or hobby-related items, offer customers the excitement of receiving new surprises regularly. One popular example might be subscription cooking packs and spices.
Affiliate Marketing
Affiliate marketing is a performance-based way to earn, where you make commission promoting other people’s products or services. Typically, you’ll earn a little for each sale made through unique referral links. The key is to focus on products or services that align with your audience’s interests and needs.
Affiliate marketing can bring significant earning potential for popular bloggers and vloggers, Youtubers and social media influencers — which brings us nicely to the next category…
Freelance Creative
If you have talent and expertise in a particular area, freelancing can be a flexible and rewarding online business model. Freelancing allows you to set your own rates and work hours, giving you greater control over your schedule and income.
You can offer these services directly to clients on freelance platforms or through your own website. Creating a portfolio website allows you to showcase your expertise, the work you’ve done in the past, and customer testimonials.
Creative freelance services include:
✓ Graphic design
✓ Illustration
✓ Photography
✓ Video production
✓ Animation
✓ Music composition
✓ Voiceovers
✓ Blogging
✓ Copywriting
✓ Vlogging
See also: Portfolio Websites for Creatives
Freelance Services
If you have specialised knowledge, technical skills, or experience in a specific area, you can build a successful online business by offering your services to clients worldwide. Again, portfolio websites will make it easier to attract and secure clients. Platforms like Upwork and LinkedIn can also help you connect with potential clients and show off your skills. Examples include:
✓ Consulting
✓ IT services
✓ Virtual assistance
✓ Bookkeeping
✓ Translation
✓ Research
✓ Grant writing
✓ Editing
✓ Proofreading
Teaching & Online Courses
If you’re an expert in a particular subject (a ‘Subject Matter Expert’ as they like to say) you can create and deliver online courses, lead webinars, or offer one-on-one tutoring. This might be anything from one-on-one English classes to business skills seminars and higher education lectures. Platforms like Udemy and Skillshare provide opportunities for you to reach a global audience, while tutoring platforms can connect you with students seeking personalised instruction.
#2 Do your market research
The UK’s e-commerce market is one of the largest in the world, valued at over £200 billion in 2023, and predicted to keep on growing.¹
Thorough research is essential before starting an online business. To make an impact, look at trends where you might succeed and any challenges you could face. Research the gaps in the market to identify underserved areas where your business can thrive. Find the sweet spot where your interests align with market demand.
Narrow down your target audience. Instead of catering to everyone, it’s often better to pinpoint a specific niche. A focused approach will let you to tailor what you want to offer, stand out from competitors, and build a loyal customer base.
Building a strong network is essential for any aspiring entrepreneur. Connect with fellow business owners online through groups or forums relevant to your business model.
See also: 2024 Guide to Starting an Online Business
#3 Write your online business plan
Once you’ve settled on your idea, it’s time to create a comprehensive business plan. This will involve a concise summary of your idea, mission, and goals, and developing a solid marketing and sales strategy.
Set realistic goals that are challenging yet achievable, considering your available resources. Whether it’s sales targets, customer acquisition, or financial projections, ensure your goals align with your insights and capabilities to enhance the credibility of your plan.
Define your brand. Your brand is more than just a logo or a name — it’s the personality and values that your business embodies. Craft a compelling brand story, establish your visual identity, and define your brand voice. This will help you create a consistent and memorable brand experience for your customers, setting you apart from the competition and helping to bring brand loyalty.
The Prince’s Trust offers a comprehensive Business Plan Pack full of templates and essentials. The British Business Bank is also chock-full of excellent resources for start-ups.
An online business doesn’t always have to be about big investments. Start small, make use of free resources, and prioritse your most important expenses. With determination and the right planning, you can bring your online vision to life without breaking the bank.
#4 Choose your online platform
Option 1: Website Builder
Good in-browser website design tools are the easiest way to build a website and get it up and running quickly. They often let you select your theme and then drag-and-drop content so that you can easily create a website — without the need for IT teams or coding skills.
Website Builder from 123 Reg makes everything as easy as can be thanks to its user-friendly interface and intuitive features. You’ll find a wide range of themes and templates, making it easy to find a design that suits your needs. Most of the hard work of web design is done for you. Getting your business online is no more than a few clicks away.
You’ll get an email address to match your domain name, which is a great way to show your credibility and professionalism. You can scale up as your business grows, adding new features. You can even upgrade to a full ecommerce store with stock control and payment options. Website Builder offers robust SEO tools, helping your site rank higher in search engine results and attract more organic traffic.
Learn more about creating a website with Website Builder
Option 2: Managed WordPress
WordPress is a really versatile platform that allows you to build a professional-looking website. While it’s a powerful tool and capable of more advanced features, there’s still no need for coding or expert skills when it comes to getting your business online.
One of the coolest things about WordPress is the huge range of themes and plugins. Most are free and you can easily customise your site to suit the functionality you need, whether that’s a blog, an online store, or a portfolio. There’s also extensive support community and lots of tutorials available online to help you build a professional website.
Learn more about Managed WordPress from 123 Reg
Option 3: Online Marketplaces
If you’d prefer to find an audience right away, using online marketplaces like Amazon, Etsy, or Amazon can be a good alternative to creating your own website. Setting up a store on these platforms is straightforward and you can start selling almost immediately.
One of the main benefits of using these marketplaces is the ready-made audience. These platforms attract millions of visitors daily, offering a vast potential customer base without the need for extensive marketing efforts. As these marketplaces manage payment processing, that cuts out most technical headaches for sellers.
The major existing marketplaces already have established trust with consumers, which can help customer confidence. But even if you do sell through a marketplace, it can be a smart move to buy a domain name to help establish your brand and your credibility.
Keep in mind that marketplace fees can also eat into your profits. You’ll have less control over branding and customer relationships compared to having your own website.
Also: eCommerce CMS
Content Management Systems like Adobe Commerce (Magento) and Shopify offer robust features, but they’re often designed with bigger enterprises in mind. They tend to come with higher monthly subscription fees and may require technical expertise or a dedicated IT team. As such, they’re arguably not the best choice for budget-conscious startups, but options to consider further down the line.
#5 Buy a Domain Name
You can pick up a great domain name for cheap, perhaps even free (or practically free) for the first year. The right choice of domain can significantly impact the success of your online business.
For businesses in the UK, “.co.uk” or “.uk” domains are a great way to establish trust, but extensions, from “.abc” to “.xyz” offer eye-catching and budget-friendly alternatives. Consider creatively pairing your name or business focus with the extension. A yoga instructor could use “.guru,” a graphic designer “.design,” or a karate academy “.ninja.”
See our guide: Names That Click – How to Choose the Right Domain Name
123 Reg offers hundreds of domain extensions to suit any purpose, from traditional “.com” to more inventive options. With some of the UK’s most affordable domains, it’s easy to find the perfect name for your online venture.
#5 Soft launch
Before you go all-in on your online business idea, try it out with a smaller version or a simple website to see if people are interested.
Test your online business idea with a Minimum Viable Product (MVP). For instance, if you’re launching a clothing line, you can start with a limited collection of a few key pieces to gauge interest, before investing in a full stock inventory.
Create a simple 1-page website with a landing page as a tester. This way, you can get some feedback and see if there’s a demand before you invest time and money. If you buy a domain with 123 Reg, you get a 30-day free trial with Website Builder.
#6 Register your business
You’ll need to register your business according to your chosen structure, whether you’re a sole trader, partnership, or limited company.
Sole traders and self-employed individuals need to report their earnings and pay income tax through a Self Assessment tax return to HM Revenue and Customs (HMRC). It’s important to charge and report the correct VAT on sales. You should keep detailed records of income and expenses for accurate tax reporting.
For more, check out the official Companies House resources:
Setting up a limited company – step by step
Those selling through marketplaces like Amazon or Etsy will usually operate as sole traders without creating a formal company. However, it’s always recommended to check with Companies House and the gov.uk website for official guidance on starting a business in the UK. These steps will ensure legal compliance, clarify the financial obligations, and help you operate your business smoothly within the UK’s legal framework.
#7 Get funding
Many successful businesses started small and grew over time. When it comes to financing your online business, there are lots of options available, even if you’re trying to get going with little or no capital to begin with.
The UK government is keen to support budding entrepreneurs and offers a few different initiatives to help startups and small businesses grow. The Start Up Loans scheme provides funding and mentoring for those just starting, while Help to Grow offers free training and discounted software to boost management skills.
The British Business Bank offers various financing options and support for smaller businesses. Innovate UK is another organisation that supports businesses developing new ideas through funding and collaboration opportunities. Both of them have a lot of excellent online resources. Here are the links (they’ll open in a new window):
https://www.british-business-bank.co.uk/
https://www.ukri.org/councils/innovate-uk/
For local support and guidance, Local Growth Hubs can connect you with the right resources in your area. These government initiatives can be a lifeline for new online businesses, providing the funding, skills, and advice needed to thrive in the competitive online market. Google “local growth hub near me” for yours.
Explore Government Loans: The UK government offers Start Up Loans ranging from £500 to £25,000 with a fixed interest rate of 6%. Most UK banks also provide loans to new and small businesses, but it’s crucial to present a clear funding request with realistic financial projections. Be sure to understand the interest rates (they typically range from 3% to 7% depending on creditworthiness, loan amount and term).
Another option might be to seek professional investors. Angel investors can offer funding in exchange for equity or a share of your profits. They’ll want to see a solid business plan, but their experience and mentorship can be invaluable.
Crowdfunding platforms like Kickstarter or GoFundMe can help you raise funds from many people who believe in your project. In 2023, the average funding pot for rewards-based crowdfunding in the UK was around £12,000. This approach can potentially cover initial expenses and launch costs if you create a compelling pitch that clearly communicates your business idea, goals, and the benefits for backers.
#8 Build on your success
With your website up and running, it’s time to drive growth with social media. Social media platforms can drive traffic to your website and promote special offers or new product launches. Share engaging content to connect with potential customers and build brand awareness.
See also: How to Schedule Social Media Posts 2024
Happy clients are more likely to become repeat customers and recommend you to others. Testimonials and case studies showcasing your excellent service act as powerful “social proof” (as they like to say in marketing) and this can all help bring in new clients and give your reputation a boost.
Consider implementing a referral program that rewards customers for bringing in new business. This can create a snowball effect of positive word-of-mouth marketing and help your business thrive.
Build an email list and offer discounts or valuable content to encourage website visitors to join your email list. Nurture these leads with personalised messages and promotions to drive repeat business.
And finally: Be sure to start a blog. It’s one of the best ways to establish your brand authority and drive organic traffic towards your website. You might even partner other with influencers or well-known people who can also help you reach a wider audience.
See also: Blogging A-Z – Your glossary for success
Wrap up
Your online business dream is closer than you think. The biggest investment you’ll make is your time, energy, and that brilliant idea. With great domain names as affordable as a mobile sim, you can get up and running with practically no money in the bank. So, what are you waiting for? Turn your passion into profit and start building your online business today.
References:
- https://www.mordorintelligence.com/industry-reports/united-kingdom-ecommerce-market
