How to start an online business

The internet has permanently transformed how we do business. Anyone with a laptop, an internet connection and a great idea can start a business online as online business models often require very few overhead costs.

Online business is booming too. In 2023, ecommerce sales in the UK had a growth of 4.4%, remaining consistent each year. As of January 2024, the percentage of sales made online is 24.8% according to the Office for National Statistics.

In short, if you’re looking to start an online business, there couldn’t be a better time than now. Internet sales and online activity have been rising exponentially, and the tools available to start an online business are stronger than ever.

Benefits of starting an online business

If you’re thinking about starting an online business, there are a huge number of benefits to be aware of:

Remote work opportunities

When you run an online business, you can work from wherever you’d like. This flexibility gives you the freedom to choose how you structure your day and what you spend your time doing. 


Working for yourself allows you to broaden your skills and expand your knowledge base. As you don’t need to take direction from a boss, every decision is your own. 

Financial freedom

Choosing how many clients to take on, how and when to scale, what you spend your business budget on and how much you pay yourself gives you a lot of freedom to adapt your business to your life. This also means that the financial gain is potentially a lot higher.

Opportunity for growth

Online businesses can often expand very quickly. Many companies such as Amazon began simply as an online business. By testing the waters with a small online business, you will be able to discover whether an even larger business is well-received by the market and whether there is the opportunity for growth.

Low overhead costs

A huge benefit of an online business is that you can start one with no money, as long as you have access to a computer and the internet. 

Many of the easiest businesses to start with no money begin online, such as freelancing or service-based work, as you don’t need to pay for any overheads. Even some businesses such as dropshipping often require no upfront investment. If you have a large online following, you can also leverage this for your business and look to land your first client this way.

How to start a business online

Starting a business online is simple, but there are a few things you need to do before you launch. You’ll need to choose the type of business you want to start, learn how to set it up, and then plan how to attract customers and clients.

Choose an online business model

The first step to starting an online business is deciding the model you want to adopt. There are many to choose from, so it’s important to find the one that is right for you.

These are currently the most common online business models:


Ecommerce is essentially selling products online, either through a dedicated site or via social media. This can either be physical goods or digital products, such as guides or courses.

The UK has one of the most advanced ecommerce markets in all of Europe and according to Statista is projected to reach $109.30bn in 2024.

According to Statista, the number of people using ecommerce in the UK will reach 62.1 million by 2025, leaving only a small amount of the population as non-digital buyers. Ecommerce is a booming industry, and only due to get bigger.

Top Tip: Interested in ecommerce? Learn about some of the top options for getting started in our guide to starting an ecommerce business⚡️


Advertising as an online business allows you to make money through other businesses paying you to advertise their products and services on your website or social media channels. 

Content creators and influencers who have an existing online following often use this business model.

Advertising can be done via:

  • Banner ads
  • Affiliate links
  • UGC content
  • Content campaigns

Businesses of all kinds are looking to advertise their products and services, and many are willing to pay a lot for it. According to Statista, businesses in North America and Europe allocated an average of 9.1% of their revenue to marketing in 2023, with UK ad spending estimated to have grown 6.4% to £37 billion according to data from the Advertising Association. These figures demonstrate just how much opportunity there is to generate an income in the advertising space.

Apps & software

Apps and software are a huge part of our everyday lives now. Designing an app or a piece of software which solves a problem can be a hugely profitable online business.

SaaS (software as a service) tools help businesses become more accessible and versatile. Many of them help to automate tasks, freeing up valuable time and resources. Others help businesses stay organised, remote-friendly, streamline processes or offer more user-friendly products and services.

Developers often aim to find a product or service that people will be willing to pay for on an ongoing basis, like an online security platform or a tool that collates API connection information into an easily navigable spreadsheet. 

The SaaS industry isn’t slowing down anytime soon, with the global SaaS market forecast to grow by $59.43 billion between 2023-2027.


Subscriptions can be an incredibly profitable model for an online business and can often have extremely high profit margins due to low maintenance costs.

The subscription business model fits into any of the businesses above:

  • Subscriptions to access digital products
  • SaaS
  • App content
  • Subscriptions to paid content

Many people also sell access to their newsletters, with some of the top creators on Substack earning six to seven figures from the platform.

Service-based business

Sometimes an online business can simply involve providing a service via the internet, and creating a business around it.

This could be anything from:

  • Consulting
  • Tutoring
  • Business support
  • Web design and development
  • Virtual assistance 

Once you have an established list of clients, you could even consider launching an agency and hiring other professionals to help you expand your online business.

Top Tip: Looking for inspiration? We’ve rounded up some of the best business ideas to get started with, including several great online business opportunities📌

Perform market research

Before starting an online business, make sure there’s a market for what you’re selling. Save time and resources by researching your potential customer base before you go all-in on starting a business. Here are a few tips on how to conduct market research around your idea:

Research keywords

Find questions people are asking online. This will help you recognise existing needs, and mean that you can tailor your business to fit a targeted audience or solve a specific problem.

Evaluate your market size

Going after too broad or too narrow a market can be a barrier. If you try to sell to everyone, you’ll have a hard time pinning down what problem your product solves. On the flip side, if your idea targets a pain point that only applies to a small demographic, you may not have enough prospective buyers to keep you in business. 

Check out your competitors

Look at competitor websites and see how they’re solving customers’ concerns. Make sure you can offer comparable solutions. Also take note of what makes your business stand out from your competitors, as this will inform your unique selling proposition.

Top Tip: For a more in depth dive into exploring your target market, check out our guide to conducting market research for your business idea 📌

Outline your business plan

Writing up a thorough business plan will help you stay organised as you build your business. Prepare for a successful launch by defining your product or service and outlining how you plan to roll it out, and include your projected expenses and earnings to get a sense of your financial needs. 

Having a solid plan in writing will give you a roadmap to follow, so put in the time now to eliminate a lot of guesswork as you launch. 

Top Tip: Learn everything you need to know about what to include in our complete guide to creating a business plan💡

Register your online business

Before you can officially launch, you’ll need to decide which business structure to adopt and register with HMRC to make sure everything is in place to meet your legal and tax obligations. 

For most new businesses, the choice is usually been registering as a sole trader vs a limited company, but partnerships are another common structure for those setting up with a business partner.

With Tide, you can register a limited company for £9.99 and open a free business bank account all in one quick and easy application, so you can be set up with everything you need to launch your new business within hours.

Top Tip: For more information on what is involved, read our guide on how to register your business in the UK 🌟

Build your business website

An online business needs a good business website. Getting one set up doesn’t have to be a chore, but it does require some thoughtful planning. There are lots of web hosting services and useful website builders out there that include ready-to-use templates to get you started, or you may wish to work with a developer to create something more bespoke. 

Whether you’re launching an informational site or an ecommerce store, users will only stay on your website if they find it engaging and useful, so make sure the design delivers a good user experience and the copy is compelling. 

To ensure your website meets current standards, you should make sure it is:

  • Easy to navigate
  • Quick to load
  • Responsive across different device types
  • Designed with accessibility and UX in mind
  • Safe and secure
  • Clear on its value proposition
  • Optimised for search engines

Market your online business

Once you launch your online business, the next step is to work hard to build a reputation and boost brand awareness so that you can start attracting people to your new website.

You want to establish yourself as an expert in your field so people have confidence in your offerings. That means providing valuable content and engaging with potential customers.

The style of marketing that you incorporate into your business will depend on the business model and target audience, so research what the most appropriate channels are for your product and niche.

Some of the most popular marketing methods include:

  • Email marketing
  • Social media marketing
  • Paid advertising
  • Search engine optimization (SEO)
  • Influencer marketing

Once you have an influx of customers, you can generate more income by focusing on reselling or upselling. Your existing customers can also be a great resource for finding new business, with many businesses incorporating referral programs into their marketing strategy.

Top Tip: Integrating social media into your marketing is especially important with an online business. Learn best practices by reading our guide to creating a social media marketing strategy 💻

Wrapping up

Starting your own online business can be a fantastic decision. You can earn a lot of money with very few overhead costs, and you have the freedom and flexibility to work as you like. With online sales and ecommerce activity increasing each year, there has never been a better time to start an online business than now.

If you’re considering it, then Tide has everything you need to get started.

Tide is an all-in-one finance platform specifically designed for small businesses. You can open a business bank account completely free of charge and even register a company. Pay £9.99 instead of £50, we’ll cover the rest.

Our accounting software has everything you need to keep on top of your finances, and you can use our invoice generator to send your first invoice straight from the Tide app.

Whether you need funds to get off the ground or help you expand we also have a range of business loans to help boost your business.

Valentine Hutchings

Valentine Hutchings

Head of Community and small business enthusiast

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