How to start an online business

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Join the e-commerce generation

Thinking of starting an online business? Then your thoughts are moving in the right direction, as these days running a business online can be very profitable. So in this post, we will explain how to start an online business.

India’s e-commerce revenue is expected to grow at an annual rate of 51%, the highest in the world.

Other than the growing demand for online services and products from consumers, online business have many more benefits like:

  • No spending money on buying or renting huge business premises
  • Saving on hiring many employees, paying utilities, etc
  • Requires less capital investment to start the business
  • Provides flexibility as you can work from anywhere at anytime
  • Global sales, with business operating 24/7

Definitely, online business has many more advantages as compared to a brick-and-mortar business.

Related: Where to find SME business loans

How to start an online business

Before jumping right in, it’s important to understand how to go about selling online — below mentioned tips will help you in that.

  1. Choose the right business.
  2. Build a simple and attractive website.
  3. Get business licenses and permits.
  4. Sign-up with online payment gateway.
  5. Promote your business to grow.

Let us look more closely at each element of a successful online store.

1. Choose the right business

The first step in how to start an online business is to decide whether you want to sell a product or service — or both — online.

How to Start an Online Business Pink Baby Clothes
Retail goods like electronics and clothing are popular online purchases.

Make sure you do enough research about the market and demand of the business you are looking at.

There are a lot of companies doing online businesses.


Hence, to make your business exclusive and profitable, it’s imperative to have a unique business idea that can address the problems or fulfill the requirements of your prospects. It is equally important to learn a lot about your target audience and competitors.

The traditional e-commerce model

You can sell products that you make or buy from a wholesaler and then sell on your website. For this business type, you might need to store and ship products to customers.

In this case, you would need some courier companies that can deliver the products to customers. There are a few specialist companies in India that handle logistics and product delivery for e-commerce like, and

The low-cost option

Another option is selling affiliate products and in this case, you usually don’t have to store or ship products. The merchant deals with delivery, and you simply receive a commission for helping in selling their product.

You can even start an online service business like providing eCourses or consulting services that can be delivered online.

2. Build a simple and attractive website

Nowadays, building and designing your website is very easy as there are many companies like GoDaddy that can help you in doing so. You simply have to set up an account, register a domain name for your business and pay an annual fee.

Use an e-commerce website template to get your online shop up quickly.

Remember to keep your website simple. Configure the site to look the way you want and include the features, logo, catchy text and design to attract more customers to your website. Read this post for a step-by-step description of how to get a website.

3. Get business licenses and permits

How to Start an Online Business Computer Screen Showing Player
Offering online courses can be a lucrative internet service business to start.

It’s very important to get the required business licenses and permits. The first thing to know is, any online business that wants to accept online payments needs to set up as a registered company.

Once you set up your business as a separate entity, get a tax ID number known as Employer Identification Number (EIN) for the business. EIN will allow you to manage your taxes and open a business bank account.

The business licenses and tax required to be paid for an online portal depend on the type of products being sold at the site. Some such taxes include CST/VAT, service tax and professional tax. Service tax is applicable only on services being provided. For the sale of goods, VAT, excise and sales tax must be charged.

The taxes and registrations policies differ from state to state.


So, it is advisable to check your respective state policy about these registrations.

4. Sign up with online payment gateway

Whenever a customer is buying your product or service, you want them to pay for it. To do so, you will need to have a payment gateway to accept debit cards, net banking and credit cards on your website.

A payment gateway helps to process different types of payments — without it, you won’t be able to securely charge your customers when they buy items from your website. There are many payment gateway providers in India like Instamojo, PayPal, CCAvenue or BillDesk.

Editor’s note: Easy store builders like GoDaddy’s Online Store take care of this step for you. Payment processing is built right in.

5. Promote your business to grow

Just having good products and a website will not cause the customers to come to you. It is important to have more visibility of your products and service amongst a wider audience.

How to Start an Online Business Wrapped Soaps
Many companies give away free gifts to promote their product or service early on.

Digital advertising can help you promote your products/services on social media such as Facebook, Instagram, Twitter and LinkedIn or via pay-per-click (PPC) ads.

Also, make sure you implement right SEO techniques and strategy across your website and products to help them turn up organically on search engines like Google.

In conclusion

Always remember that the internet is a busy place and a lot of companies are doing business online. Hence, keep growing your business constantly by learning new things and refining your skills every day. All the best.