How to Start a Small Business Online

computer screen

The COVID-19 pandemic helped accelerate a trend that has existed for several years: the steady migration of business activity online. As customers increasingly rely on digital channels to access products and services, small business entrepreneurs could find significant commercial opportunities by building an online presence for their business.

The importance of having an online presence for your business

Small businesses are at a natural disadvantage. They often find it difficult to muster the capital needed to compete with bigger corporations for the same customers and market share. Fortunately, moving your small business online — or at least developing an online presence to complement your physical location — can help to even the playing field without causing you to go over budget.

A substantial portion of customers today are utilizing online shopping channels to learn about businesses and make purchases. McKinsey & CompanySM found a 15-30% increase in the number of consumers shopping online for different products and services. That presents a serious opportunity for small businesses to take advantage of the platforms and devices their potential customers are using to promote their offerings, increase engagement and generate more business.

10 essential steps to starting a small business online

Starting a new business online — or moving your existing business into cyberspace — is not as daunting a challenge as it might seem. The following steps serve as guidance for establishing and maintaining your online business:

1. Identify a need

Some entrepreneurs make the mistake of conceptualizing a business idea, manufacturing the product and bringing it to market — without actually considering whether there is a need for their offering. When identifying demand in the market, it is important to first put yourself in the customers’ shoes — what specific problems are they facing that the market is currently unable to help them solve?

You can learn this information through the following two techniques:

  • Use your own insights: You might be an entrepreneur, but you are also a customer. Take note of your daily activities and identify problems that could be solved with a new product or technology. These could be challenges in your personal or professional life. It is also worth asking your friends, family and colleagues if they experience the same problem to help narrow down a great business idea.
  • Interview existing customers: This technique is optimal if you already have an established business with a loyal customer base. It is worth taking the time to interview customers about their problems and challenges. Some of them might not express a desire for a specific solution but they might mention a problem that creates regular headaches (like long document-processing times), which could provide you with a business opportunity.

Once you have this information, you can use it to serve as a foundation for your new product or service, ensuring that it meets the specific needs of each potential customer to maximize its chances of success.

2. Obtain financing

Even though they are operating in cyberspace, online small businesses still have a range of costs they have to consider to ensure their long-term viability. A new website could cost a small business owner hundreds of dollars a year to start, maintain and upgrade. Of course, it will also cost money to research and develop new products, and even entrepreneurs that are primarily selling services will have to front costs related to lost economic opportunities (like taking time off from their regular job).

Budding entrepreneurs looking to start their small businesses online have a number of financing options, including:

  • Self-financing: Some entrepreneurs might already be seasoned investors with a large supply of liquid capital on hand that they can use to fund their startup costs.
  • Small business loan: The U.S. Small Business Administration partners with many commercial banks across the country to provide small business owners with financing. SBA-backed loans are partially backed by the government and typically have lower interest rates.
  • Venture capital: Securing funding from venture capitalists might make more sense when your business is already up and running, but if you are able to build one of these relationships, you could secure a healthy supply of capital.
  • Home equity loan or HELOC: Both home equity loans and home equity lines of credit (HELOC) allow you to tap into the value of your home equity stake and use that capital to fund portions of your business. It tends to be safer to use this capital for ongoing expenses as opposed to large upfront costs.


The goal of a small business in its earliest stages is to reach critical mass and become profitable and self-sustaining. While any of the above options are perfectly valid to start a business (or to pursue a new opportunity with a profitable business at a later stage), it is important not to rely solely on any of the above funding means. A successful small business should ultimately finance itself through the sale of its products and services.


3. Consider pricing structures

Price is often one of the deciding factors for consumers, and that is especially true in an online environment where customers have access to thousands of brands offering varying balances of price and quality.

When starting your small business online, it is important to conduct appropriate market research to determine the prices your competitors are offering. This will help you identify a clear industry benchmark that you can use to remain competitive.

Additionally, it is important to determine pricing structures, or the model you will use to charge for different products and services. Some of the most common pricing structures include:

  • Pricing tiers: Businesses that use this model offer variations of their products or services with an increasingly comprehensive suite of features. The more features a product tier contains, the more expensive it is for the consumer.
  • Freemium: Similar to the tiered model, businesses might offer a free version of their product or service that includes all basic functions, and then charge to access additional features or higher-tiered versions of the product.
  • Subscription: Most common for companies offering an as-a-service product, customers can pay a subscription fee to use the product for a limited period of time. This could either be a one-time fee or based on the customer’s usage of the product.

Regardless of the pricing structure you choose for your business, it is important to remember that online businesses often have to account for shipping costs. Whether you choose to cover those costs yourself or pass them down to the consumer, this will likely drive up prices for products that need to be shipped long distances.

4. Create your online brand

Similar to your in-store brand, your online brand consists of the images, logos, colors, tone of voice, writing style and other elements that demonstrate a consistent presence to customers across different channels. While your online brand should agree with your existing branding information, there will likely be several elements (like tone of voice and writing style) that need further refining for an online audience.

When building your online brand, you should start by developing a deep understanding of your target market to learn about the ways they speak (and would like to be spoken to) and what type of branding features resonate best with them. You can do this by:

  • Gathering data about the online content they are consuming to understand the style, voice and complexity of the information they like.
  • Speaking to them directly (either through direct conversation or customer feedback surveys) to learn more about their particular preferences.
  • Understanding their demographic information and drawing inferences about their online consumption habits based on that data.
  • Conducting competitor research and analysis to learn about the brands that are most successfully engaging with customers.

Creating an online brand could also be a good opportunity to conduct a complete rebrand. Maybe your logo and color palettes worked for your brick-and-mortar shop but look clunky and outdated in an online environment. This is a good time to take stock of these possible shortcomings and revisit some of the most cherished aspects of your brand, like your logo, colors and even your business name.

5. Build (and update) your website

Your website is a central part of your digital storefront[1] , and it is essential to your success as an online business. Just like your physical storefront, your website needs to be clean, inviting and easy to navigate. It should also provide a comprehensive set of information that enables visitors to learn about your mission, values, and each of your products and services.

A great website often includes the following elements:

  • Great imagery: People tend to be visual learners, and including high-quality images of your physical storefront, inventory and employees on your website could vastly enhance user engagement and promote greater business.
  • Easy accessibility: Enhance the accessibility and usability of your site by working with developers to increase your site’s page speed. Every additional second users spend trying to access information on your site could increase the chances of churn.
  • User-friendly navigation: It should be easy and intuitive for users to navigate between different pages on your site. In addition to a top-of-page navigation bar, you should also include relevant links throughout each of your pages to direct traffic to internal sources.
  • Mobile-friendly interface: Some customers (especially younger ones) might prefer to access your products and services via their mobile devices. It is important that your website is compatible with mobile devices to ensure a great user experience across all channels.

Conducting a complete website audit can be a helpful way to identify any problems that could create friction for the user and dampen the user experience. This can help you pinpoint where to focus your time and resources when upgrading your site.

6. Accept digital payments

In order to sell to online customers through your website, you will have to accept digital payments[2] . There are numerous ways today for customers to complete digital transactions, including:

  • Digital payment apps
  • Mobile pay
  • Digital wallet
  • Online transactions
  • Digital currency

Mobile commerce sales in 2022 are expected to increase by 22.3% compared to 2021 figures, according to data from OberloTM. Consider the following steps to start taking advantage of this critical business opportunity:

  • Determine which payments you will accept: There are numerous ways for customers to complete transactions online. Decide from the outset which of these your business will accept. This decision should be based on the channels your customers are currently using.
  • Create a secure payment gateway: Payment gateways gather and encrypt financial information from the customer once they have shared it with you. Many businesses implement gateways built by third-party providers to reduce costs.
  • Choose the right payment processor: Payment processors authenticate the information supplied by the gateway with the customer’s bank and enable the actual fund transfer to take place. It is important to remember that processing fees often apply.

Importantly, digital payments require the exchange of highly sensitive personal information, including bank account details and home addresses. You will have to ensure a high level of data security when integrating digital payment processing tools into your website.

7. Invest in cybersecurity

Cybersecurity events have increased substantially since the beginning of the COVID-19 pandemic. One report from VerizonTM found that ransomware attacks increased 13% in the previous reporting year. Some small business owners make the mistake of believing cybercriminals only target large corporations with deep pockets, but hackers often cast a large net, exploiting security vulnerabilities wherever they can find them.

For that reason, it is critical that you take the right steps to protect your customer and enterprise data and ensure that your online store can stay up and running despite the prevalence of cybersecurity threats. According to the U.S. Federal Communications Commission, some of the steps you can take to protect your online collateral include:

  • Invest in a firewall to prevent external actors from accessing your private networks.
  • Back up all consumer and enterprise data on a regular basis and store it in an offsite location.
  • Establish privileged access protocols to limit the data employees can access.
  • Institute good password policies to strengthen the security of company accounts.

Importantly, employees should receive regular training on all safety protocols and procedures to prevent inadvertently creating security vulnerabilities.

8. Create a content marketing strategy

Content marketing can be one of the most effective ways to engage with potential customers. It works by creating content (often in the form of blogs, whitepapers, e-books, case studies, video testimonials and more) that covers a compelling topic that your potential customers want to learn about. An effective content marketing strategy helps you build trust and rapport with each potential customer by demonstrating to them that you can provide value even when they are not in the market for a product.

Search engine optimization (SEO) is a critical part of content marketing. Optimizing your website for search involves enhancing elements of your website that search engines use to judge the value of your content, which could increase the chances of your content landing on the first few pages of search results. Among the elements you should consider optimizing include:

  • Site speed
  • Backlinks
  • Metadata (like meta descriptions and title tags)
  • Page readability
  • Mobile compatibility

Great quality, optimized content should help nudge potential customers down the sales funnel so that when they are ready to make a purchase, your brand is among the select few they consider.

9. Build an email list

Even if you have developed a content marketing strategy and you have optimized all of your pages for search, it will still be difficult to communicate with potential customers directly. It is important to build out an email subscriber list so you can market your content, products and offers directly to the inboxes of your customers.

Of course, some entrepreneurs find it difficult to obtain those emails. While you can encourage website visitors to sign up to a newsletter or other regular piece of content, the most effective way to obtain emails and other personal information is to gate your most high-quality content, like in-depth white papers, buyers’ guides or e-books.

Once you have their emails, you can send them periodic marketing materials to encourage further engagement with your website. Segment your email marketing lists based on engagement, lead score and other metrics that indicate their place in the buyer journey. Communicating directly with your customers using materials and language that are tailored to their specific needs and preferences can be among the most effective ways to market your online brand and build a loyal customer base.

10. Engage with your customers through social media marketing

In addition to providing value to your customers at all stages of the buying cycle, it is also important to engage with them across multiple different platforms and devices to stay connected with them. Social media marketing is one of the most effective methods businesses use to stay engaged with their customers around the clock. You should consider creating accounts across multiple platforms and aim to post at least once every day (or every couple of days).

Your posts should be platform appropriate and include information that users will find engaging and valuable. It should also periodically point to content (or products and services) on your website, driving more site traffic and possible lead generation.

The platforms you choose to give your focus should depend largely on the platforms your target market is using most. For example, younger, college-age customers are more likely to use TikTok and Instagram, whereas older professionals are likely spending their time on LinkedIn.

Maintaining a robust, active social media presence takes a significant amount of time, effort and money. It is a good idea to hire a full-time social media manager to handle all social media activities for your company, including drafting and publishing posts, responding to comments, gathering social media data and creating social media ads.

Budget-friendly tips for building your online presence

Creating and maintaining a highly engaging online presence can be a serious undertaking, but there are a number of budget-friendly tips you could consider to avoid going over budget. These include:

  • Starting a blog: Starting a blog is a central part of an effective content marketing strategy. It is also a cost-effective way to share valuable information informed by your business experience with your customers. This could help to increase engagement with your website and build trust over time.
  • Increasing page speed: Every second it takes for your pages to load increases the likelihood of customers clicking out of your website. According to MozTM, there are a few simple steps you can take to increase your page speed, including reducing redirects, optimizing images and using a content distribution network.
  • Focusing on SEO: SEO is one of the simplest and most cost-effective forms of online marketing. Ensure that every page on your website — from landing pages to blog content — is optimized for search. Routinely reexamine your pages to ensure they remain optimized over time and make adjustments as needed to maximize visibility and engagement.

Tips for enhancing your online presence

Once you have established a viable online store, your work shifts to tweaking and enhancing your online presence to remain relevant in the eyes of your customers. Here are some of the methods you can employ to keep your online business engaging and profitable:

Conversion rate optimization

Online customers have hundreds of thousands of options at their disposal when they take their business online, so every small inconvenience on your website — from a crowded interface to slow load times — could cause them to click out of your page. Investing in a conversion rate optimization (CRO) audit enables you to fully assess the factors on your website that are causing customers to bounce.

Importantly, your final CRO audit report should provide a series of recommendations based on your findings, which you can implement to increase user engagement, boost your conversion rates and ultimately funnel more qualified leads to your sales teams.

Simplify your website

When enhancing your online presence, you should always assess your pages with a view to the user experience. Today’s online users want simplicity and ease of use — they intend to find the information they need fast and with as few clicks as possible.

When enhancing your online presence, you should consider:

  • Removing any redundant or fluffy information
  • Creating clear, prominent calls to action
  • Including high-resolution imagery that draws users in
  • Limiting the amount of copy

Customers that feel like they can navigate your web pages simply and easily are much more likely to rate their experience highly and return to your page again.

Use a data-based approach

Many online businesses make key business decisions based on what they think they know about their potential customers. While this approach can lead to some results, businesses often miss critical opportunities for growth and success.

Data analytics tools enable the small business owner to track an extensive range of metrics that allow them to build a deep, precise understanding of how users are engaging with their website.

Some of the metrics data analytics tools allow businesses to track include:

  • Average session duration
  • Bounce rate
  • Goal completions

The analysis of this data (and more) helps you identify areas on your website that you can improve to enhance the customer experience, as well as critical business opportunities (like new market segments) that could help you grow and expand your footprint.

Create trust signals

Potential customers often lean on testimonials from other customers to build trust and confidence in your brand. You can start by including a trust signals bar on your homepage, populating it with the brand logos of your most recognizable customers. If your website visitors see that you are working with other reputable brands that they trust, they are more likely to make the decision to give you their business.

If you are still in growth mode and do not have a host of trustworthy brand logos you can readily deploy, you can create in-depth customer case studies that showcase the value you bring to other customers. Even if users do not recognize the brand you are highlighting, a case study is still a great way to detail what a relationship with your business could look like.

Staying ahead in a digital environment

Moving your small business online is an important decision that could help you identify lucrative new business opportunities. While this process can be challenging, diligent planning and careful action can help you make the move with as little risk as possible.

At Comerica Bank, customers with services and solutions that enable them to accelerate their digital transformation and take advantage of the opportunities the digital business environment can offer.

Contact us today to learn more about our products and services.

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice.

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.

Related Content