How to Start An Online Business From Scratch!

A Solid Foundation

Starting an online business is a challenge if you haven’t done it before. Perhaps you already have a physical business (a.k.a. Brick and Mortar), and would like to supplement that by selling your products online. The key to success is making informed decisions. A solid foundation to any business is a good plan. You should lay out what you are going to do, step by step, in a concise manner.

You should first decide what to sell. The steps required for selling tangible products, as opposed to selling a subscription or service-oriented product, are vastly different. When selling a physical product, you have to figure out whether or not you’ll be stocking inventory (if you don’t already have a store), how you are going to ship that inventory (shipping costs are a killer), and how to provide customer service or technical support.

All of these things are more complicated than selling an intangible product or service. This is why many online entrepreneurs go into business selling subscription based products, and premium services. Take the online adult industry as an example. Billions are made every year by online adult businesses because it is the perfect industry for the online business model. A customer can discreetly use their credit card, and fulfill any fantasy they choose to, all without leaving the comfort of home. Other products that do well with the online model are e-books, freelance writing, online casinos, advertising, affiliate marketing, and auction sites.

Payment Processing

Once you decide what you’ll be selling, you can move on to online payment processing. You can accept credit cards online even if you have bad credit or no merchant account.

Any decent online business accepts and processes payments online automatically. Most online purchases are made using credit cards. A much smaller percentage of those are made using online checks and EFT’s (Electronic Fund Transfers). Therefore, if you are going to succeed, you need to be able to accept these forms of payment from your customers.

Payment processing can be accomplished many ways. The first, and most complicated (but worth it if you have good credit and expect a monthly sales volume of $10,000 or more), is to open up a merchant account under your business name. You can use the Internet to find a reputable merchant account provider. When using this method, you become a merchant that accepts credit cards and will pay a low percentage of each sale to the credit card company (or the bank that issues the merchant account). These rates vary so shop around a little. There is a drawback of doing it this way; you are on your own as far as setting up your payment processing software is concerned. This software completes the transactions for you. The merchant account company can do it, but the software is never cheap and usually costs over $1000.00 in monthly fees. If you are experienced in merchant accounts and credit card processing, then you will find this process easy. The problem is most people have zero experience in this field. Even more people have bad credit, forcing them to find a different way to process credit cards.

That other way is third party payment processing. This is where a third party (not you or the customer, but the processing company) acts as an escrow service for your business, and processes the credit card transactions for you. This means you don’t need to acquire a merchant account or payment processing software because the third party P.P. already has that taken care of. The only drawback to something like this is the fees that you incur for having them process your payments for you. Since they assume 100% liability for fraudulent transactions and refunds, webmasters are all too happy to pay. When using your own merchant account you will be responsible for all of these things.

A perfect example of a reputable third party P.P. is CCBill. They will manage all of your transactions for you, provide the shopping cart software, and pay you on a weekly basis with proceeds from your transactions. Another good example of a third party P.P. is Paypal, this is a payment system devised as a convenient, safe method for sellers and buyers to exchange currency with one another, regardless of country of origin. Paypal is different from CCBill in that Paypal accounts have the functionality of normal checking accounts at a regular bank. They even issue you a debit card with a Visa/MC logo on it that is directly linked to your Paypal balance, just as if you’re using your checking account card. You can even withdraw money at ATM’s with it. Paypal takes a small percentage of each transaction as well as a little of the balance but their services are well worth it. Paypal does enable you to put shopping cart buttons and other software modules on your site, but it is more involved than traditional third party P.P. software.

Regardless of which option you choose to process payments, the focus should always be on providing a smooth checkout process for your customers; if using a credit card on your site is a hassle, the customer will just go to another website.

Domain Name and Web Hosting

Now that you’ve know what product you’re going to sell and who’s going to process your transactions, you can move on to acquiring a domain name and web hosting for your business

Domain name, URL (Uniform Resource Locator), web address, address; they all refer to the name of your website. There are plenty of places that you can buy a domain name, do a web search on “Domain Name Registrars” and you will have no shortage of options. Prices can range anywhere from $0.99 for a .info URL, to thousands of dollars for a URL that is already taken but for sale privately. Unless you have money to throw around, don’t spend a lot of money on a domain name for your web store. There are so many better ways that you can spend that money for your business, save it and reinvest in your company later down the road when you become more successful.

Once you get a domain name, you should login and lock your account. This will prevent any changes being made to your domain name account unless you unlock it yourself. This will stop hackers from changing the address of your hosting company’s Names Servers (which tells the server where to look for your site when someone types your URL into the address bar in the web browser). Always remember that an ounce of prevention is worth a pound of cure, never underestimate the potential of your account to be hacked, it happens all the time.

Now for the hosting, first decide how much you need. There is simply no sense in spending $2000.00 per month on hosting when your website has hardly any visitors. Start out with a small virtual hosting account for between $10.00 and $50.00 annually. You can always upgrade to accommodate the growth of your site; it is a pain to shrink file space. Virtual hosting is where your site is on the same server as a bunch of other sites, thus you share the resources of that server. This is more than enough for most new commercial non-adult websites. This is cheaper than dedicated hosting, where you have your own server and only your site(s) running on it. Dedicated hosting is expensive; if your site requires a dedicated server because you are getting a lot of traffic, then it is a justified expense.

A great web hosting company for web merchants should have both Virtual and Dedicated hosting options at whatever budget you can afford. They should also have excellent support, which is crucial if you are trying to earn money with your site.

Creating Your Website

Once you have a hosting account, you are ready to start building your website. For this, you could use a WYSIWIG (What You See Is What You Get) web page editor for a regular website, or blog software if your site is going to be a blog. One great method for building a website quickly is to use web templates. Templates are graphic images (in layered format for easy editing) that make up a complete website design. These usually include the background, header (also called the logo), buttons, and navigation menus. All you have to do is use photo-editing software to plant your website’s information onto the pre-existing templates and upload the pages to your web server. Web templates have varying degrees of quality. Many sites offer free templates that are good, and then advertise premium templates that can be used for a fee. The objective is to find a set of templates that you like for little or no cost.

Paid templates usually permit you to remove any copyright notifications from the templates. Before you decide on a set of templates to use, estimate how many pages you will be creating and what will be on those pages. You don’t want to have pages looking mismatched from the rest of your site because you had to use a second set of different templates. Uniformity and consistency are important for site design, you want your surfers to know that they are on your site still when they browse your pages, and a consistent design will achieve this.

Another method for easily creating a website is to use Content Management Software (CMS). This software runs either directly from your computer, or on your website server in the form of scripts. It will assist you in creating, managing, and growing your website. There are countless versions of these software programs, some of them are even open source, which means they can be used at no cost to you.

The CMS holds your entire site’s content: articles, pictures, music, and any other type of file. You can then apply a set theme to your entire website, a very powerful feature that has caused CMS’s popularity to surge in the last few years. The CMS might call the theme section the template section instead, it depends on the version you use but both terms mean the same thing. Graphic designers from around the world will create themes or templates that are compatible with the CMS that you are using. Then you can download them free, or for a small fee, and change the look of your entire website with the click of a mouse! There is no other design option that affords you this kind of versatility with your website. Changing the design of an entire website that does not use CMS is normally a colossal undertaking; it can get expensive also if you are not doing it yourself. It is for this reason that many people choose this option when looking to create a website.

Another method of creating your website is using blogging software instead of CMS. Blog creation software is very much like CMS, but the difference is the format of the site it creates. Obviously, this is a blog format. Right away, you might be wondering why you would want to use blog software if your site is not a blog. This is a common misconception; many websites are created with blog software that are not really blogs at all. There are many ways of removing the characteristics of a blog from your site. For instance, you can set it up so that each “post” you create is not marked by a signature or the date, and is created on a separate web page. This way when you want to add a new web page all you do is create a “post.” If your site contains a lot of article copy or lengthy product descriptions, then this might be the option for you. Granted, this is a more technically involved way of doing things, but there are unseen benefits to this method. For instance, if you use some of the open source blogging software (yes, also free) that is on the web, then you could use any of the modules or plug-ins that programmers create for it. Many of these add-ons enable you to promote your site as if it were a blog. This should promote some brainstorming on your part.

The last method of creating your website is having someone build it for you, a professional. This is the last option for a reason, not everyone has the financial means to hire a web designer. Many people go into business because they have no money; many entrepreneurs will tell you that they were penniless when they first started out. Many of them will also tell you that this is what motivated them to succeed, so don’t get discouraged if you are broke, thrive on it.

If you do have the resources and would like to hire a web designer, then a freelance auction marketplace might be your best bet. There are websites that serve as a meeting place for industry professionals who are looking to make money as freelancers. Doing a web search for freelance auction websites will provide you with a list of ideal websites. The idea is simple; you have a project you need completed, and you post your project details on the site. A bunch of qualified professionals will then bid (give you an estimate) on how much they will charge to complete the project.

After a predetermined period, you will select the winner of the project, the professional you have chosen to do the work. Both of you then communicate through the website until the project is finished; in the meantime, the project fees can be held in escrow by the website. You will work out these details with the selected winner. Some professionals have a preferred method of payment or might want the project fee paid in defined increments, either way you have full control over what is paid and how it is paid.

Word of advice about freelance auction sites, do some research on each bidder before you make any decisions. The lowest price is not always the best option. Most of these sites will have a feedback section where past customers can write about their experience with the professional. Be thorough and read all of these feedback postings before you select the winning bidder. Like anything else, there are dishonest people who look to take advantage of others. Be firm and clear about your expectations; don’t leave room for misinterpretation of your project terms.

Now you should have a broad selection to choose from when it comes time for site creation. Once you create the site, you will have to add your products, and setup your site for transaction processing. It is for this reason that using some of the third party processing companies will make your life easier. Most of these companies have software that easily integrates into your site, and will help you add your products. If not then you will have to either do it yourself, which will take time, or purchase shopping cart software. Do yourself a favor and go with a third party processor to start out, wait until you are experienced enough to try one of the other methods.

Site Promotion

By now, the day has arrived where your site is ready to open for business and accept purchases. This is where the true work really begins. You can have the nicest website in the world, but if you don’t have any web traffic, it will fail. In the physical world, most small business owners fail because they don’t control their expenses. Online businesses fail because the owner fails to promote it. The acquisition and application of web traffic is the most important aspect of your online business. Remember this fact, burn it into your subconscious if need be. Traffic building will compose the majority of your workday.

There are plenty of ways to get web traffic; some of them are free, and others are not. Your budget will dictate which option you choose. In fact, even if you have money to spend on traffic, hold off at first. Unless you are skilled in this area, it is all too easy to waste money on useless traffic. Shady traffic brokers lick their chops when they see an inexperienced online business owner heading their way. They would be glad to provide you with thousands of visitors for what would seem like a great price. The only catch is that, unknown to you, these visitors will be coming to your site from places that have absolutely nothing to do with your product’s market. Many of them will be spammed through mass unsolicited email campaigns, and tricked into clicking on links that promise one thing but deliver another (the “other” being your site.) Now that you know this, prevent it from happening to you.

The best places to start are free. Entire professions have been born based solely on site promotion. Do yourself a favor and become a student of these methods. Read every blog post, article, and e-book that you can get your hands on related to website promotion.

One topic that will come up first will be search engine optimization (SEO). This is where a site owner will design their site with the thought of getting it listed on the pages of popular search engines. More specifically, they will try to get it listed in the highest placement possible when a surfer is searching for certain keyword phrases. For example, if their site sells DVD movies, then they will design their site to place in the highest position possible when a surfer goes to a popular search engine and types in “DVD.” People rarely search beyond the second page of the search results to find what they are looking for. Keep this in mind when designing your site. Make a list of keywords that will be used to promote your site on the search engines. SEO is a very involved practice, being listed on the search engines can sometimes be accomplished without doing anything; this is because the search engine sites send out scripts called “spiders” that catalog each site on the web that they come across. Some have had their sites listed in great ranking positions and they didn’t even know! They just figured their site was popular!

Your site will not likely be this lucky; to get traffic from the search engines, you will have to do your homework and put in the grunt work. Learn the basics of SEO from the web, and apply those methods to your site. Figure out what meta tags are and how to use them. Research link popularity, one of the ways a search engine determines how relevant your site is to certain search terms. The search engine looks at your site and looks to see how many other sites link to you. They figure that the more sites link to your site, then the more value your website has to offer the web surfing community; which bumps your site’s position in the search engines result pages (SERP’s). Many webmasters spend countless hours building link exchanges with other websites in their target market to boost their search engines rankings.

Learn about keyword density, the percentage of the content on the site that is relevant to certain search terms. For instance, if your site sells dollhouses but throughout your website, most of your articles are about leather belts; your keyword density stinks and people who find your website will be looking for leather belts, not dollhouses. There is much more to be learned when it comes to keywords, and there is a ton of free information on the web to take advantage of.

Figure out how to write a press release, a one-page article about your website and how it will benefit everyone who visits it. This is a common technique used by offline businesses as well as online ones. Better yet, it is free, and everyone likes free. Speaking of free; offering something free on your site is great way to get people to visit it. Most, if not all, search engines prove this fact. They are offering the service of you being able to search their database of websites for specific information, and then they sell ad spots to advertisers. This economic model is so profitable that a couple of search engines have become industry giants and symbols of American prosperity using it. You might not be able to offer a huge search engine to your visitors, offer other freebies instead. Some ideas are free email accounts, newsletters, free graphics, free stock photos, free chat rooms, and these are just a drop in the bucket. Don’t be afraid to get creative, if you only do things that other people have done before, then you will never pioneer anything!

One effective, yet often avoided, way of promoting your site is with discussion forums. The reason this is avoided is that it takes time to sign up for the forum, fill in your profile information, read the forum postings, and then go about the business of softly promoting your site. “Softly” promoting your site means that there is a way to do it and a way not to do it. One thing you don’t do is sign up for a forum, then rush right to one of the forum boards and post a message saying, “Hey, visit my site at ijustspammedyou.com!” This is spam and it will just get your post deleted, and you just might make quite a few people mad on top of it all. The best way is to follow the discussions, and become actively involved in the forum. Read the posts and offer your opinion on things; at the same time place a link in your profile signature to your website if the forum moderator lets you. If you provide valuable input, then people are more likely to visit your site. If you are active in many forums, it will boost your search engine ranking as well. Every time you post a message in the forum, your link is being posted too, which increases your site’s link popularity.

Another promotion technique is article marketing. If you can write well, and not everyone can, then you have a perfect vehicle for website promotion. There are article directories that will accept your articles and in return, they will let you mention your website with a link and some text. Then other webmasters, who run blogs or websites, will come to the article directory and use your article on their website to fill their site with content for their customers. Their visitors will read your article and then come to your website. All of this can be accomplished at no cost to you but your time and effort.

If you haven’t noticed already, many of these promotion techniques are based on viral marketing, which means word of mouth. One person tells another person, and that person tells two more, doing the marketing for you. The underlying idea of all promotion methods is exposure, the more people hear of your site then the more visitors you will get.

Don’t place a value on the time you spend promoting your website. Be prepared to spend a lot of time promoting your site and getting nothing in return. It is the nature of the beast. Learning website promotion takes time. There is only one way to get that experience; you have to put in the time. The online business world is not for people looking to make a fast buck. There is no easy money anymore; if someone tells you that there is, then you should run. Anything worth your while will take effort on your part, but this is what makes it all so sweet when you succeed.

After reading this article, you should have a solid foundation to build upon. Don’t get discouraged if you fail; keep plugging away. Every failure is a lesson learned, which could be applied in the future to prevent more failure. Eventually, if you work hard enough, you will find a formula that works. All you have to do then is replicate that formula, repeatedly. Use the web as a research tool; read everything you can find related to website promotion. Join discussion groups, and participate in blog comments related to website promotion. You will often learn the best techniques from another webmaster. Stay positive!