How to Start an Online Business (Turning $100 Into)

Did you know that many online businesses cost less than $500 to start?

We talked to Kevin Espiritu, who started Epic Gardening with less than $100. Today, he’s working on growing his brand from $7.3M in revenue to $100M. We asked about his exact process to help you understand how to create an online business.

Whether you plan to launch an online store or a YouTube channel, we’ll show you how to start online business operations. You can either keep reading straight through or click on any of the links below to jump to the section that interests you:

What is online business?

Online businesses rely on the internet to connect with customers and sell their products or services online. They can be independent businesses or a segment of a larger company.

The main aspect that defines online businesses from traditional businesses is that everything from customer acquisition to the sale itself is performed without face-to-face interaction. Online businesses are easier to scale than local businesses because they aren’t confined to serving a geographically limited area.

Some of the best online business examples include:

Selling physical products: This business model involves creating and selling products on eCommerce sites like Amazon or Etsy. You can use print-on-demand or dropshipping to make this business strategy more effective.
Business or customer support: You can help clients with their business or customer support needs via live chat, video calls, or email. This can include marketing and freelancing as well.
Selling digital products or services: Software as a service (SaaS), creating online courses, and selling other digital products can also be highly profitable.

Learn About Online Businesses

How much does it cost to start an online business?

You can start an online business for free, but it will take a lot of hard work and creativity. As long as you have a couple hundred dollars, you can start your online business idea and upgrade the software later. A successful online business should expect to have at least the following expenses:

Domain registration: $10 to $20 per year
Website hosting: $5 to $30 per month
Ecommerce platform: $0 to $200 per month
Web design and development (optional): $500 to $25K one-time cost, may also incur additional monthly costs
Product inventory: $100 for print-on-demand or dropshipping, $250+ for bulk orders
Marketing and advertising: $0 to 20% of desired revenue
Legal and regulatory costs: $0 to $10K
Payment processing fees: 5% of desired revenue
Customer support: $0 at first, then goes up
Education and training: $0 to $150K, depending on whether you need a degree

As you can see, you can easily start an online business for under $1,000 upfront. However, you’ll find it much easier to succeed with your online business idea if you have enough for an entire year of operating costs.

How much do online businesses make?

Online businesses can make substantially more than local businesses. Amazon made $148 billion in the second quarter of 2024. While most online businesses won’t make anywhere near that, most online business segments have examples of companies that earn millions of dollars in revenue.

Try to set realistic goals when you’re first starting out. Despite the ability to make substantial revenue, 67% of online businesses only make $1K to $2K per month.

How profitable is an online business?

Online businesses can see net profits between 2% and 70% depending on whether they’re selling products or services. You can learn about specific segments of online businesses by checking out the UpFlip Academy business ideas database.

Case Study: Epic Gardening

Kevin Espiritu started Epic Gardening as a blog with only $100. His original intent was to make some extra money from his gardening hobby. Today, the company makes $7.3 million annually and is working to grow to $100M.

Kevin has never pursued funding but has received private equity investments because investors approached him about the business. Since starting a blog, he told us:

[su_quote]We have four channels and we produce a video each week, five products a week, and around 120 blogs monthly. Plus, we have our online seed sales.[/su_quote]

Check out our video with Kevin to find out how he started Epic Gardening:

How to Start an Online Business

You’ll want to follow the steps below when starting an online business:

Consider online business ideas.
Conduct market research.
Write a business plan.
Choose a business model.
Choose a business name and domain.
Register your business.
Build your online presence.
Set up eCommerce functionality.
Create quality content.
Establish a strong social media presence.
Implement marketing strategies.
Manage your business finances.
Ensure legal compliance.
Provide excellent customer service.
Monitor and analyze performance.
Hire employees or subcontractors.
Scale and grow.

Let’s look at how each of these steps will help you start a business online.

Step #1. Consider Online Business Ideas

You should consider your interests, skills, and experience while coming up with online business ideas. In addition, you might want to think about your passions and the problems you know how to solve.

You’ll also want to look at potential markets and industries to identify trends, demand, and competitors. Looking at these before you start an online business can help you find ways to speed up your growth and increase your odds of success.

Kevin explained that there weren’t really a lot of gardening blogs when he was starting an online business. He decided to share his experiences to help people learn how to create their own gardens.

Some of the best online business ideas include:

Step #2. Research the Market

Before you become an online business owner, you need to understand your target audience. Think about their needs, pain points, and where you can find them online.

You’ll also want to analyze your competitors to understand what they’re doing well and how they can improve.

Step #3. Write a Business Plan

Create a detailed business plan that outlines your goals, target market, and business model. Remember to include a marketing plan and financial projections.

This will help you stay on track and establish how much money you need. You’ll also have something to show potential investors if you seek funding.

While it can be helpful to have a business plan for an online course or other small business, Keving warned that it can block you from starting an online business.

[su_quote]I haven’t written a business plan in my life. Sometimes, people spend more time planning than doing, and that can prevent success.[/su_quote]

Step #4. Choose a Business Model

There are multiple ways you can make money online. Some of the most popular include:

Ecommerce: Sell your products or services online for a one-time fee. You’ll need to include the costs of shipping and packaging for physical items, but digital products won’t have those fees. Some companies are also testing a concept called phygital products where you can buy an item like a T-shirt that you can wear as both a physical product and in online worlds.
Subscription services: Selling subscription boxes for physical products or SaaS offerings is a popular business model that helps you get recurring revenue from customers.
Affiliate marketing: Content creators use affiliate marketing when they recommend products. It helps them earn more money. Blog writers and video creators need to disclose that they’re being paid to market products.
Advertising: Online marketplaces and content creators often sell space on their web assets for other companies to market their businesses. You can use software like Google AdSense to allow advertisers to buy space.

Many businesses use a combination of these strategies. For instance, Epic Gardening earns revenue from selling products and advertising.

Step #5. Choose a Business Name and Domain

You’ll want to choose a business name that reflects your brand and is easy to remember. Try our business name generator for ideas.

Simply click on the associated domain names to make a purchase. If you don’t want to finalize your domain just yet, visit DreamHost whenever you’re ready to buy.

Step #6. Register Your Business

Registering your business is a multi-step process. Remember to check the state-specific requirements for your area.

Create Your Business Structure

First, you’ll need to legally register your business and choose a structure like a limited liability company (LLC) or corporation. Then it’s time to register with your local secretary of state.

Get an EIN

Next, you’ll want to get an employer identification number (EIN) from the Internal Revenue Service.

File Beneficial Ownership Information

As of January 1, 2024, most LLCs and corporations must file a beneficial ownership information report with FinCEN to help prevent financial crimes.

Open a Business Bank Account

In many cases, your online business will need its own bank account to keep your business and personal expenses separate. Some business structures require this level of separation. For others, it just simplifies your taxes.

Get Business Insurance

Even though you’re probably excited about your new online business idea, it’s important to consider insurance to protect against lawsuits and unfortunate events. You’ll probably want a business owner policy that combines general liability, physical property coverage, and income interruption protection.

You might also need other insurance like unemployment, workers’ compensation, professional liability, or cybersecurity insurance. We suggest using Simply Business to find the best rate for your online business idea.

Get Tax Permits and Local Business Licenses

An online business will likely need a business license and sales tax license. At first, you’ll just want to get them for your business location. As your business grows and starts making more money in other locations, you may need to get sales tax licenses in every state.

We recommend working with a business lawyer or accountant who has experience working with eCommerce stores that have a substantial presence in every state.

Step #7. Build Your Online Presence

You’ll want to create a business website, sign up for business directories, and create social media accounts when you sell online. A successful business will use all these strategies to do business with potential customers.

Make sure that your information is consistent and up to date across platforms.

Website

You’ll need to create your own website when you run an eCommerce business. Many successful online businesses use platforms such as WordPress or Wix.

Depending on the complexity of your online business, you may want to hire a web development company to assist you. Make sure you own the web assets because some development and marketing companies will take the work with them if you end your contract.

Use search engine optimization (SEO) to improve visibility. This involves conducting market research to understand what your target audience searches for to find the products you sell. From there, you optimize your website, content, and online store to match that search criteria.

Business Directories and Ecommerce Platforms

You’ll want to list your products or services on popular places to sell online. In addition to selling on your own website, many online stores sell on marketplaces like Amazon and Etsy.

Choose platforms based on your online business model. For instance, if you run a podcast, you’ll want to get your content listed on sites like Apple Podcasts and iHeart.

Check out BrightLocal for directories to list your business. Some work for an eCommerce business even though they’re meant for local businesses. BrightLocal categorizes listing sites by business niche and whether you have to pay.

Social Media Accounts

You’ll want to sign up for the social media platforms that are popular with your customers. Websites like Facebook and Instagram are useful for consumer-focused companies, while LinkedIn is best for business services.

You can start with one of the social media platforms and expand from there. Software like Later allows you to manage multiple platforms all in one place. Alternatively, you could hire a social media consulting company to help you manage your social communications.

TikTok and YouTube are particularly effective if you prefer to create video content. To learn more, check out our TikTok dropshipping course in the UpFlip Academy.

Step #8. Set Up Ecommerce Functionality

You’ll need to provide ways for people to pay for your products and services when you start an online business. There are numerous options for payment processors. You can choose one or customers to pick between multiple different payment options.

Make sure your checkout process is secure. To help protect your customers and your business, you may also want to get cybersecurity insurance.

Step #9. Create Quality Content

Develop high-quality content that provides value to your audience. This can include blog posts, videos, and podcasts. As we discussed earlier, Epic Gardening uses all media formats to help their target market learn how to become more successful gardeners.

I know small business owners don’t have a lot of time to spend creating content consistently. As a new business owner, you might want to follow the content strategy below:

Record a long-form video and post to YouTube.
Convert videos to audio and post as podcasts on Podbean.
Use AI to transcribe the video and clean up errors. Post as a blog and link to YouTube.
Convert long-form videos to short-form video content by connecting your YouTube channel to Vizard. Then share it to TikTok and other social channels.

With this process, you can use the same piece of content to get up to 20 pieces of content in other formats. Sometimes, you have to be a little creative when thinking about how to start an online business.

Step #10. Establish a Strong Social Media Presence

As a new business owner, you might think we’re spending a lot of time talking about social media while explaining about how to start a business online. That’s because an online startup business has two main marketing options: content marketing or pay-per-click advertising. In other words, you can either use implement marketing strategies like this to generate awareness for free or you can pay for it.

Make sure to post 1 to 6 pieces of content per day to make the most of social media marketing when you start an online business. The content should be relevant to your target market and help them get familiar with your product.

Every post doesn’t need to be an attempt to sell products. Make sure to also share things like positive reviews, feel-good stories, and social impact programs that are part of your branding. These can help people feel like they are part of a community and make them want to buy your product because they like your business values.

Step #11. Implement Marketing Strategies

While your overall business strategy should start with SEO and social media marketing, you’ll want to collect emails to send product offers using email marketing. You should also consider paid advertising for remarketing to people who have checked out your small business online without making a purchase.

Many online marketing strategies are similar, but make sure to look for software that’s specifically focused on your type of online business. For instance, an eCommerce site has different needs than a brick-and-mortar business that’s creating an online store to supplement its income stream.

Online courses, eCommerce store ideas, podcasts, and other online business ideas all have platforms that are specifically intended to make running that type of business easier.

You’ll use a lot of digital marketing channels to generate revenue when starting online business operations. Let’s look at some of them in greater detail.

Content Creation

Kevin explained:

[su_quote]The content is what builds the awareness, but the product is the actual business.[/su_quote]

The key here is to understand what people are searching for. Then you want to create content that helps them get the information they need. You can also provide the information they’ll be searching for next to help save them time and make your content more valuable.

Paid Ads

Using paid ads on social media and search engines can be a highly successful way for product-based online businesses to get in front of people and sell products online. Kevin explained that he took a different approach:

[su_quote]I sold 500,000 seed trays without a dollar of ads. We sold $20K in 90 seconds every time they were released.[/su_quote]

Now, Epic Gardening uses paid ads to sell their products, but they mostly focus on remarketing:

[su_quote]Most direct-to-consumer brands spend 10% on customer acquisitions. We spend about one-third of that. Our [return on advertising spend] is higher than the 2.5x to 3x most people [get].[/su_quote]

Influencer Marketing

Many people work with influencers to market their business ideas online. You’ll need to do online market research to see if each influencer has a similar target market to your product.

Then you’ll want to reach out, start building a relationship, and send your product for them to test it. This strategy can work well when you start your own online store or clothing line.

Step #12. Manage Finances

When you start your own online business, you’ll need to keep track of your finances. That means you’ll need a business bank account and accounting software to track your income and expenses. We recommend using QuickBooks.

Simply connect your small business bank accounts to QuickBooks and assign your expenses to different categories. Using software makes it easier to track your gross profit margins, operating margin, and net profits. These metrics will help you establish where you’re spending too much money compared to industry benchmarks.

You should also consider providing an accountant with read access to your books so that they can help you manage your taxes more effectively.

Step #13. Ensure Legal Compliance

Familiarize yourself with local, state, and federal regulations. As your internet business grows, you’ll need to comply with a growing set of online business laws.

Most countries and states levy sales taxes or value-added taxes that you’ll have to pay when you meet that region’s definition of an economic nexus. This is typically decided by the number of sales or the amount spent in that location. Cities and counties may also have their own taxes.

Software like Avalara can make it easier to know when you need to file tax returns in other states and segment your earnings by location.

Step #14. Provide Excellent Customer Service

Customers normally go through the following process before buying from an online business:

Recognize the problem and the need for a solution.
Research possible solutions.
Compare the possible solutions.
Choose which product to buy and where to buy it.

To provide the best customer service, you need to put yourself in the position of the customer and think about what you would want to know in each of these stages. Then it’s time to figure out how to deliver solutions in the most efficient way.

Think about your customer journey for a minute. Ask yourself the following questions and write down your answers:

Where are potential customers to look when they realize they have a problem? What are they going to search for?
What are the potential solutions to the problem? What platforms are customers using to learn about their options?
Which methods are better or worse? Help them understand the benefits of each solution.
What makes you different from the options? What are your competitors doing? How do you stand out?
Are there too many steps in the process to buy from the best online businesses?
After the customer has made a purchasing decision, what do they need to know? You should confirm the purchase on your website, send a confirmation email, and notify them once the product or service is about to be delivered. Send an additional email once the product is delivered. Verify that it satisfies their needs before asking for a review.

The key is to focus on building strong customer relationships. Quickly responding to questions and concerns shows that you care.

Step #15. Monitor and Analyze Performance

You’ll want to use tracking pixels, analytics software, and customer relationship management tools to track key performance indicators. Measuring website traffic, conversion rates, and revenue will help you establish how effectively you’re getting people to your website and converting them into customers.

Step #16. Hire Employees

One of the things you need to consider as you learn how to start your own business online is whether you’ll eventually hire employees. Kevin explained:

[su_quote]It was just me at first, but it got too busy for me to run by myself.[/su_quote]

He hired an employee. As the business grew or it reached the point where he needed skills he didn’t have, Kevin hired more people. Now, he has a team of 75 people.

When you start hiring people for your internet businesses, you might find it frustrating because they don’t do the job as well as you. Kevin explained:

[su_quote]If I can hire someone who can do a job 80% as good as me, it’s a good hire.[/su_quote]

There are lots of laws you have to follow when you hire employees. Make sure to work with a HR professional, accountant, and lawyer. You can incur lots of fines if you don’t manage payroll properly.

Step #17. Scale and Grow

As your business matures, explore opportunities for expansion. You might consider adding new products or services, entering new markets, or improving existing offerings.

As you’ve learned, Kevin grew his business using the following strategy:

Write blogs.
Record YouTube videos.
Record podcasts.
Start selling raised garden beds.
Start selling seeds.

Running an online business requires flexibility and the ability to keep an open mind. Don’t hesitate to pivot when you need to adapt to changing market trends.

Online Business FAQ

How to start online business operations from home

For those wondering how to start an online business from home, you’ll have some special considerations. You’ll want to:

Choose the best online business to start.
Verify that your neighborhood allows that type of online business.
Perform market research.
Write a business plan.
Choose a business model.
Choose a business name and domain.
Register your business.
Create a space to work in your home.
Build your online presence.
Set up eCommerce functionality.
Create quality content.
Establish your social media presence.
Market your business.
Manage your finances.
Comply with all laws.
Provide excellent customer service.
Monitor and analyze performance.
Hire employees or subcontractors.
Scale and grow.

Next, let’s look at how to start an online business with no money.

How to start an online business with no money

Starting an online business with no money requires some creativity. Follow this process to come up with ideas and launch your online venture without a significant investment:

Identify a profitable niche.
Sign up for free tools and platforms.
Use social media and online marketplaces.
Take advantage of your personal network.
Create quality content.
Optimize for SEO.
Offer services or consulting.
Explore affiliate marketing.
Think about pursuing dropshipping or print on demand.
Offer presales or use crowdfunding to raise money.
Bootstrap and reinvest your profits over time.
Keep learning and adapting.

While it’s possible to start a business with no money, it will likely require more time and effort to grow. Be patient and do your best to provide value to your audience. As your business gains traction, you can consider reinvesting profits to scale and expand.

What feature can connect offline business systems data with online data collected by Google Analytics?

You’ll need either the premium version of Google Analytics (Google 360) or Google Analytics 4. Then you’ll want to use the data import feature to bring offline data into Google Analytics.

You’ll need to :

Log into your Google Analytics account.
Go to the Admin section.
Under the Property column, select Data Import.
Choose the data set type.
Configure your data import.
Format and upload data.
Review and process data.
Use combined data in reports.
Analyze and gain insights.

Become a Successful Online Business

At this point, we’ve discussed how to start an online business by explaining what an online business is and how much it costs. We also shared a case study about how Epic Gardening grew from a small blog to an online store that’s worth $7.5 million.

By now, you should understand how to research your target audience and choose a business structure. We also covered how to create a web presence and market your business to help customers learn more about your products and services.

What type of online business are you thinking about starting? Let us know in the comments below.

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