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How to Start an Online Business in the UK

Written by, Bojana Atanasovska

Updated June, 23, 2023

Starting your own online business is an appealing idea given the benefit and flexibility that the online world offers.

If you’re thinking of diving into the online world as a business, there are some things you need to know, including how to start an online business in the UK and the do’s and don’t’s of running it.

Read on.

How to Start an Online Business in the UK

Starting an online business in the UK can be a great way to make some extra money or switch to remote work full-time. Here’s how you can start a business online.

1. Choose a business type

The first step in starting an online business is deciding what type of business you want to build. The right choice is a business that matches your skills and interests. You also need to think about what services or products you want to offer.

2. Do market research

Combing through the market is crucial to determine whether there is a demand for your product or service. This involves studying the competition and gathering information about your target customer base. You can conduct market research in a number of ways, including online surveys, focus groups, and interviews with potential customers.

3. Consider the costs

Starting your own online business comes with a few costs, including registration, domain, web designing, and marketing fees. You’ll also need some equipment, such as a laptop, internet connection, or a camera.

4. Set up the infrastructure

The benefit of starting a business online is that you can do so from the comfort of your own home. You don’t have to worry about office space, but you will need to set up a business website and ecommerce payment choices.

5. Register your company

Business owners are legally required to register their companies with the Companies House, regardless of the type of business they have. You’ll need to pick a unique name that hasn’t been trademarked, select a SIC code, and create a share structure for your business, among other things.

What Are the Dos and Don’Ts of Operating an Online Business?

In most cases, online businesses are not that different from regular businesses. 

Here are some things you need to pay attention to when building an online business. 

Research your industry and competition
Create a business plan
Develop a marketing strategy
Make sure your payment processing system is secure
Be consistent
Focus on features rather than strategy
Stick to online marketing only
Avoid testing and trials
Neglect customer experience

Make sure you have the right tools and equipment to work from home. This includes a reliable computer and a stable internet connection, as well as office supplies such as a desk, chair, and printer.

You’ll also need to install some remote working software like Skype, Google Hangouts, or Zoom. These apps allow you to video chat with colleagues and clients, as well as share files and documents.

Another important part of online working is establishing working hours. If you have employees, you might want to consider creating a remote working policy that outlines your expectations for communication and collaboration.

Different Types of Online Businesses

The most common (and successful) types of online businesses are

  • Ecommerce: Operating an online store is probably the most popular way to make money online. You can do this by setting up a shop on a platform like Shopify, Amazon, or eBay or create your own website to sell your products. 
  • Affiliate and digital marketing: You can use your social media pages or blog to highlight products by other companies and get paid for them or start a business where you help other businesses to sell their products and services. 
  • Subscriptions: This business model charges customers a monthly or annual fee in order to have access to the company’s products or services. This type of online business is typically popular with content creators, such as bloggers, podcasters, and video makers.

Why Start an Online Business in the UK?

There are many benefits to starting an online business. 

  • You can reach a global audience: If you sell products or services online, you can reach customers all over the world. This is a great way to expand your business and increase your engagement and sales.
  • Low entry barriers: Setting up an online business in the UK is relatively easy and inexpensive. You don’t need to invest in premises or stock, and you can get started with just a few simple tools and resources.
  • You can work from anywhere: One of the great things about running an online business is that you can do it from anywhere in the world. All you need is an internet connection and you can work from home, a coffee shop, or even on the go.
  • You have more control: When you run an online business, you have more control over your work-life balance. You can set your own hours and work around other commitments.
  • There are tax benefits: If you’re based in the UK, you can enjoy a number of tax benefits when running an online business. This can help to reduce your costs and increase your profits.
  • The UK is a great place to do business: The UK is a great place to do business, with a strong economy and a supportive infrastructure. You have access to a wide range of resources and support, and there are plenty of opportunities to grow your business.

Bottom Line

The online world is a great place for savvy entrepreneurs, companies that want to take their business online, and anyone that wants to earn a little extra money. If you’re wondering how to start an online business in the UK, the process is simple – all you really need is a reliable computer, a good Internet connection, and the right idea to kick your business off the ground.

Bojana is my name and writing is my game. I am a content writer from Bitola who is always interested in the latest research in almost all areas of life. I have a Bachelor’s degree in English literature and a perfectionist character, both of which help me find the most accurate data and information available. Although I have my head stuck in studies and reports most of the time, I still have a bit of free time during which I enjoy knitting and watching classic 90’s Disney movies.