Category Archives: Getting Started

Keys to Starting an Online Business

Keys to Selling OnlineIf you’re thinking about starting an online business, here are some fundamental ideas to help you stay focused and grow.

1. Learn by Helping Others

An easy way to learn about online marketing is to help a friend, family member, or organization set up a website to promote their product or service. As explained in my story about how to learn by helping others, this is a low-pressure way to learn the basics, and it usually costs only your time.

2. Find the Right Product Idea

The first step in starting your own business is to come up with a new way to help people solve a problem. Your idea should make you feel excited enough that you’ll have no problem spending nights and weekends building a business around your concept. As detailed in my articles about your product idea, the challenge is to solve a problem where the current state of competitors’ service stinks.

3. Start with a Simple Website

There’s no need to spend lots of money creating an impressive website before you start selling online – especially since your first goal is to prove your product idea by acquiring your first happy customers.

If your products provide real value, and if the information on your website is useful and original enough to inspire confidence, then you can probably close your first sales without an expensive website design.

You can register your business domain name and then set up and host your website for less than $10 per month, and design an attractive website for free.

4. Focus on What’s Important: Winning Your First Customers

As you start setting up your first online store, focus on the needs of your customers – and don’t get too distracted by everything else.

The basics of what you’ll need to communicate online are the same regardless of the size of your business. The keys are to publish helpful and original information about your product; show some good product images; and provide the expected details about your company contact information, warranty and service terms.

As discussed in my article about evaluating your product idea, if you’ve thought out your unique selling proposition and know your competition, it should be easy for you to demonstrate your product’s advantages online.

5. Respect Other People’s Money

Consider opening an online store only if you can be guided by a real respect for other people’s money. Your online reputation and good word-of-mouth require you to always hate disappointing customers. You’ll find tips for keeping your customers happy in my article about giving great customer service.

6. Minimize Your Starting Costs

Your very first goal should be to spend as little money as you can while you prove your product idea. Don’t be lured into paying for an expensive website design, buying costly office equipment and software, or renting office or warehouse space until you’ve proven that you have a solid idea that can keep customers happy.

My article about how to keep starting costs low gives more of the details.

7. Don’t Quit Your Day Job

I believe that the best way to start an online business is to work nights and weekends while you keep your day job. That’s because:

  1. By keeping your day job you eliminate the pressure to immediately turn a profit. This gives you time to start small, develop good online content, create the right service processes, learn from customers’ feedback, and make better long-term decisions for your business.
  2. Without the pressure to immediately turn a profit, your work can be more for fun and less for survival. In this mindset you’re able to take sensible risks and even allow yourself to fail some of the time. In other words, you’ll be able to think like a CEO.

If your product idea excites you enough, you should have no problem finding the energy to work nights and weekends while you prove your idea.

For ideas to help juggle your daytime and moonlight jobs, see my article about moonlighting tips. And, for information about special tax advantages you can get while working two jobs, see my story about how to manage your money.

Next: Learn By Helping Others

Your Product Idea (1)

Find Your Product IdeaPart 1: Find Your Product Idea

Contrary to what you might think, it’s usually not difficult to come up with a great product idea for your new company.

Start by keeping notes about the products and services you’ve encountered in everyday life that really stink.

  • Are you frustrated because your car mechanic ripped you off? Then maybe the Internet needs a better way to find honest repair shops.
  • Is it impossible to find parts for your vintage wristwatch? Maybe you should start an online parts store for antique watch enthusiasts.

So long as you’ve found a problem that you can help solve, and you’ll be happy devoting lots of time to it every day, you’re off to a good start.

Online Success Story

Over the past few years I’ve started two online businesses. The first is a legitimate success.

The successful business was prompted by my urgent need for a particular kind of DIY home repair tool. It seemed impossible to find the tool I needed in local stores.

I did find the item for sale on a few websites, but they all gave too little information about how to select and use their tools. And when I purchased those products I received loose parts in a brown box without any instructions. There was no after-sales service and no warranty.

Because I was a frustrated customer it was easy to write down a simple plan to design and build more reliable products, sell them on a website that shows lots of information, and give the kind of service that customers would expect.

Until that time I’d never run a business. I started out building the products on nights and weekends, in a room over our garage. Then I launched a primitive-looking but informative website that used simple PayPal “Buy Now” buttons to receive payment.

Today the business is thriving. Our customer service, manufacturing and shipping have moved to a new facility with a staff of talented people. We have a much more sophisticated eCommerce website. And I genuinely enjoy running the company.

Unfortunately that experience didn’t teach me all that I needed to know about what makes a good product idea.

Next… Part 2: Good vs. Terrible Ideas

Get the Right Company Name

Get the Right Company NameChoosing the right company name, in the form of a web address (or root domain, as it’s often called) is essential for your online business. Your choice of web address should determine the legal company name that you register with your government, and not the other way around.

Just as important as choosing the right name is to research and register the name with care to avoid scam artists, as we’ll discuss in this story.

Guidelines for a Good Web Address

To help your online business grow, your web address should be:

  • Easy for visitors to remember, and preferably not longer than 15 characters for better search engine recognition.
  • Meaningful so that it includes one or more keywords that people can associate with your business. For example, “” would tell very little about your online fish food store, while “” does a much better job.
  • Free of confusion – without hyphens, abbreviations, potential homonyms (like “capital” or “capitol”) or anything else that could prevent someone from typing the correct address after hearing the name spoken only once.
  • Not similar to established business names that you know or discover, and not already taken as a “.com” Top Level Domain (TLD) name.

Brainstorm Your Ideas

Finding the right name can be a fun process if you work at your own pace, without feeling pressure. You can start by searching online for words that describe your business and then adding words of your own to create combinations that are memorable and easy to pronounce.

You’ll find that some markets – for example bicycle shops – seem to have enormous competition for domain names, while in other markets it can be easy to find a great name. After you write down a list of potential word combinations that sound good, are easy to remember, and follow the guidelines above, use only an encrypted domain name search to test if each combination is already taken as a registered domain. To avoid having your name taken by someone else:

  • Never type the name into a browser address bar to test if it’s already taken, since those results can sometimes be visible to others.
  • Never check the availability of a domain name with a web host provider unless you will pay to register the name at that exact time, since some providers reputedly sell those search results to outsiders.
  • Never check the name in your state’s online databases to see whether a similar company name has been registered until you already own the domain name. I learned firsthand that individuals can monitor those search results and will try to hold your name for ransom.
Address Bar
Never Test a Domain Name Idea by Typing It in Your Browser Address Bar

My advice is to settle on the best combination of words that’s not already registered as a “.com” name, check for potential conflicts by searching the phrase in quotes (” “) on Google, look for any conflicting trademarks on the USPTO trademark website, and if you’re satisfied that you have a great original name, register the .com domain online right away.

Next: Register Online First, then Everywhere Else

Set Up Your Website (1)

Set Up Your WebsiteWebsite Basics

When starting your first online store, it’s usually best to start simple and keep your costs low.

It makes little sense to hire an expensive web designer – or to sign up for an eCommerce service with high monthly costs – until you’ve proven that you can sell your first products and keep your customers happy.

What Is a Website, Really?

  • Sometimes a website consists of static pages that are similar to the pages you create with a word processing program. Although it’s not recommended, you could create a home page by typing a few lines in Microsoft Word and saving the document as index.html in the web folder you can access in the control panel of the web host that you chose when you registered online.
  • Instead of a word processor, professional website developers more often use Web development software. While this approach can provide a great deal of control, as described in the next article it can be very difficult to learn.
  • Today many websites consist of pages that are displayed on-demand by a content management system (CMS). The CMS gives you an easier way to create and organize your web pages, and uses a database to store the information. As described in the next article, we use a free CMS called WordPress for this website, but you can also pay an eCommerce service a monthly fee to host your website and give you their own CMS.
Online Store Diagram
Three Parts to Your Online Store
(Click to Enlarge)

What Makes an Online Store?

In addition to a working website, your online store will also need:

  • Shopping cart software that lets customers choose the items they want to buy and calculates shipping, tax, and any other costs.
  • A payment gateway that securely accepts payments and temporarily holds the funds in an account called a merchant account.

This chart shows some of your options, including software that you can install yourself and services that suppliers can host for you. We’ll explore these options the next articles, starting with alternatives to set up your website.

Next: Choose How to Set Up Your Website

Register Online First

Register Online FirstIf you’re going to own a web store, you’ll need a web address (often called a “root domain“) that will appear online in visitors’ search results, or when they type the name into their browser address bar.

As discussed in my article about getting the right company name, your choice of web address is critical to your business. Choose the name carefully, but when you’ve decided on a great name act right away to take ownership by registering it online.

Register Your Domain

Start by choosing the web hosting company where you will register your domain name. Your web host is an important decision, since you could be with the company for a long time. We use a web hosting company called 1&1 Internet* because they’ve been reliable and make it easy to upgrade service, but it’s important for you to research alternatives on your own.

Unfortunately, many websites that review and compare web hosting companies seem to provide incomplete and inaccurate information – possibly because they’re paid to do so. Don’t make your decision based solely on reviews from websites you don’t know well.

NoteOne way to learn about potential problems with a web host is to search their name and “sucks” (for example, “ExampleHosting sucks”) in Google. Typically the larger the company, the more negative results will appear. You’ll almost always see some complaints unless the company is very small, but it’s important to look through the negative comments, figure out how consistent and rational they seem to be, and use that as a guide.

Once you’ve decided on a web hosting company, compare the domain registration packages that they offer. Many hosts allow you to register a domain and get basic email service on your new domain for around $35 per year. Later on you can upgrade to a full web hosting package when it’s time for you to set up your website.

Having an email address on your domain (like can help you look like a legitimate company as you start your business. Most web hosts allow you to access this email account over the web, or you can set up an email client on your PC (like Microsoft Outlook). You can also forward your email to GMail and other accounts.

Register your “.com” domain name to start, and consider registering “.net” and alternate spellings as soon as it seems likely that your business will grow. Be sure to choose the option for private domain registration to avoid publishing your personal contact details online as the domain owner.

You’ll need a personal payment card to register the domain, but should change the automatic billing to your business payment card as soon as you set up your new bank accounts and business payment card.

Until you upgrade to a web hosting package, visitors will likely see a generic, domain parking page at your web address after you register the domain.

What Happens Next?

Your next step is to register your business with your government, just as a brick-and-mortar business does. We’ll discuss that next.

Next: Register with Your Government


*This is not a paid endorsement.

Advertise Online

Advertise OnlineAs discussed in the article about making your website visible, there are important reasons to buy online advertising from Google* and others.

The benefits of online advertising can include jump-starting traffic to your website, and keeping you focused on the key terms you’ll need to emphasize on your web pages and in your ads so that you attract relevant visitors.

Different types of online ads that you can buy include:

  • search ads that shows text-based ads to people who are searching for related terms online
  • product listing ads that show very prominent product images and descriptions to people who are searching for items like yours
  • content network ads that show text and graphical ads to people who visit other websites that might be relevant to your product, or to people who fit demographic or behavioral characteristics that you choose
Ads in Google Search Results
Paid Ads Can Be the Most Visible Part of Search Results (Click to Enlarge)

Online ads use a bidding system that costs more when visitors click ads that appear for highly sought-after keywords. Your cost for a single click can range from a few pennies to many dollars.

This image shows examples of the ads that Google displayed when I searched for particular keywords. As you can see, the ads can really stand out compared to the unpaid (also called organic) results that Google also shows.

Focus on Advertising

The success of your online advertising will likely be critical to your business, and in the beginning you can expect to spend lots of time studying different techniques to improve the effectiveness of your ads.

Especially at first, you should keep a watchful eye on advertising effectiveness and spending, as small changes can have a big impact. We’ve heard stories of Google charging unwary advertisers huge sums of money in a matter of hours when improperly configured campaigns caused big expenses without the desired results.

It’s important to set realistic goals for the cost per conversion you’re willing to pay for each sale, and to constantly monitor your campaigns to meet your goals. In the case of our business, increasing online ad budgets to the point where we maximized profits – and avoiding the emotional decision of how much seemed “fair” to pay Google – had a positive impact on our bottom line.

Measure Everything

Before you begin advertising online, you should paste small pieces of tracking code provided by Google and the others on each page of your website to help report how different types of visitors are using your website.

Start by visiting the Google Analytics page (and the analytics pages of other advertisers you will use) to sign up for a free account, and to find the instructions for adding the provided code to your web pages. You will also want to paste different code for conversion tracking on the page that customers will see after they complete a purchase; this helps you to measure the effectiveness of your advertising expenditures.

If your website uses a content management system (CMS), there will likely be a free module to do nearly all the work for you. In the case of WordPress you can choose one of several free plugins that handle the job.

Advertising Considerations

Every product is different, and the nature of your business and competition will determine how easy it can be to create effective online ads. Special considerations can include:

  • Selling a new type of solution whose category is known to few people can make it tough to create effective search ads. In the case of our products, it’s been necessary to aggressively bid for keywords that generally describe our solution, and to run print ads in magazines that prospective customers are likely to read.
  • Products or services that target a limited geographic area can sometimes be easier to advertise online. I’ve found that it can be simpler to compete against other online businesses if your product is focused on a particular territory, since you can design ad campaigns and website pages that appeal to local customers.
  • Competition from large, national companies can make it a real challenge to create cost-effective ads. Your careful planning of targeted online ads – and the quality of information and ease of navigation that people experience on your website – must be better than the competition for you to survive.

Recommended Reading

Online advertising drives a large percentage of our sales, and I feel we owe some of our success to a $49 eBook The Definitive Guide to Google AdWords (Basic Edition)* by Perry Marshall. While I personally have not liked any of the add-on modules or other products I’ve tried from this author and his affiliates, I think this basic $49 eBook is worth many times its cost.

Early on I was persuaded to pay $500 for a credible-sounding consulting company to study our Google AdWords campaigns and suggest some improvements. It quickly became clear that because I knew my customers and had studied that $49 eBook, my own planning and analysis was much better than what the consultants could provide.

Test Your Alternatives

In addition to online ads, there are lots of other advertising options that you can try. These include advertising in print publications, sponsoring publishers’ email newsletters, and even direct mail.

My advice is to try everything you reasonably can, and to always test your results. In the case of more traditional advertising like print ads, we found it necessary to publish different coupon codes that offer readers a discount so that we can track the effectiveness of those ads.

We did discover one iron-clad rule to save money on marketing. More about that next.

Next: Steve’s Marketing Rule

* This is not a paid endorsement.

Focus on Customer Service

Focus on Customer ServiceFor your business to succeed, you’ll need to build your online reputation like it’s your most valued asset. Achieving positive word of mouth requires you to respect customers’ money and time, and allows for very few mistakes.

Dealing with a constant flow of questions, feedback and criticism isn’t for everyone. Among other things, giving good customer service should require you to:

  • Respond to each customer message right away, with courtesy and enough detail to solve the issue – regardless of whether the request seems courteous or well thought out. It can sometimes take reading or listening to a message several times to determine how best to answer.
  • Fulfill orders promptly, and provide plenty of communication about order status. The right shopping cart can help automate this process, sending personalized emails as orders are received and then shipped.
  • Always be on the lookout for valid feedback that could indicate you’re not providing the right information on your website or enough communication after the sale; start with the assumption that customers are the experts on how your business looks to the rest of the world.
  • As soon as you can, publish a toll-free telephone number for customer service. You can start by getting a low-cost service that forwards the number to your cell phone, and then eventually forward those calls to trained staff that you contract, say, at an outsourcing service.
  • Provide a sensible money-back warranty and fast, hassle-free refunds.

You’ll find that some emails requiring individual answers – for example, requests for exchanges or returns – are repeated many times. For these questions, save examples of your best replies to paste into new messages.

Above all, start with the understanding that your real job is to make customers happy. Never allow a service issue to stay unresolved long enough to result in bad word of mouth or a customer calling the payment card issuer.

Our next article about problem customers talks about a few special cases.

Next: Problem Customers

Moonlighting Tips

Moonlighting TipsIt can be a challenge to start an online business while you keep your day job. At times the process could feel like a juggling act; you’ll need a lot of energy and determination.

The general rules for starting a company while you keep your day job might seem like common sense, but some of these items can be easy to overlook and dangerous to ignore.

  1. Get a decent smart phone with an inexpensive plan. Keep this phone completely separate from all day job activities and don’t share the number with anyone at your day job. Set the phone to vibrate, not ring, when you receive calls and emails during the day. Prepaid Android* smart phones with generous data plans are currently available for around $50 per month, plus the cost of the phone.
  2. Set up a primary customer service email address through your web host, carefully choosing one primary address for customer service inquiries (like ‘’). Configure your web host control panel to forward those emails to your smart phone.
  3. Rent a mail box service close to your home that offers addresses that don’t look like drop box numbers. Ideally the store can give you an address like “100 Main Street #1103” and not “100 Main Street, Box #103.” This helps you avoid looking like a tiny company online, and it prevents the rare problem customer from showing up at your home. Expect to pay around $100 per year in most areas to rent your drop box.
  4. Never publish your home address on your website for your own safety. The moment you do, web directories will capture that address and publish it online forever.
  5. Get an inexpensive toll-free number to publish on your website, and forward those calls to your smart phone – at least to start. You might not be able to answer calls and emails right away, so respond to the most urgent  messages during daily breaks from your day job. Answer every inquiry as soon as you can, and in every case within 24 hours. You can get a toll-free number starting at around $10 per month.
  6. Tell no one at work about your second career if you’re a salaried employee, and also avoid telling anyone who is even a casual acquaintance of your co-workers. Humans are naturally jealous, and you could quickly find yourself fired if you tell the wrong person.
  7. Keep online social networks separate, using care to never discuss your moonlight career on any of your personal social networking pages.

With some hard work and luck, your business will grow to the point where you can no longer handle all of the work and still keep your day job. Surprisingly this doesn’t mean that you have to quit your day job… if you find the right outsourcer.

Next we’ll talk about tactics to grow your business at a reasonable cost.

Next: Keep Starting Costs Low

* This is not a paid endorsement.

Grow Your Business

Grow Your Business

Once you start to sell online and prove your product idea, you can help your business grow by following some simple advice from a really smart CEO at a company where I once worked.

This CEO is unusual because he shares so much information about running a company with his workers. It’s no coincidence that so many of his former employees now run businesses of their own.

Here is a key piece of advice that the CEO told us about running a business.

A CEO really has only two jobs:

  1. choose a small number of real priorities to focus on right now, and
  2. find and retain the right people to work with.

This concept sounds simple, but it can be a real challenge in practice – especially since time is limited and new priorities often arise.

Choose Your Priorities

The CEO’s first job is to not get too distracted by day-to-day issues that don’t impact the survival of the business. There are plenty of things you can focus on that might bring some improvement; your job is to choose a very few priorities that can make the greatest impact.

That doesn’t mean that you should ignore the many lower-priority issues you’ll face every day. However, you should focus enough of your efforts so that those few really critical concerns get all the attention they need.

As our business grew we found that our top priorities changed significantly. When the company first started I had to focus on building enough products by myself to meet demand, and finding ways to begin advertising without draining the family’s savings.

Today the challenges have shifted because the business is so much larger. Right now the priorities include maintaining the same good levels of customer service, working with suppliers to keep enough components in stock, and positioning the company for longer-term growth.

Find the Right People

If you’re starting a company that sells physical goods, finding the right people at first will amount to choosing your suppliers carefully. Our early priorities were to find one or two reliable suppliers, and to treat those businesses unusually well by communicating frequently and paying promptly.

We found it very helpful to call key individuals at those companies often enough to develop a good business relationship. Eventually I asked those contacts to recommend other suppliers in the marketplace who didn’t compete. I’d also ask if I could mention the referrer’s name as I approached those new suppliers. With those introductions from other suppliers, I found it much easier to get larger, lower-cost vendors to work with us.

As your company grows, you may soon reach a point where you can no longer handle manufacturing, fulfillment, and customer service by yourself. At this stage you’ll need to decide whether to hire your first employees, or find the right outsourcer.

Next: What’s an Outsourcer?