How to Actually Run an Online Business the Right Way

Starting an online business today isn’t the same as it was a few years back. The ingredients for success have changed. You cannot run an online business merely on guesswork. It needs strategic and targeted effort.

Last year, 1.61 billion people worldwide purchased online which resulted in 1.9 trillion dollars in global sales. It’s estimated that online retail sales will hit $4.48 trillion by 2021.

Entering into a trillion dollar annual industry and running an online business isn’t a piece of cake. It’s indeed challenging.

But having your own fully-managed online business has its own luxury benefits. You get all the freedom in the world, you can manage it from your home, you become a part of a trillion dollar ecommerce industry, and the chances of growth increase exponentially every year.

It’s truly a dream start for any entrepreneur.

The big question is: how do you run an online business successfully and thrive in the face of stiff competition?

That’s exactly what you will learn in this guide. I have simplified the complicated processes to make your learning experience memorable.

Note: It won’t teach you how to buy a domain and set up a WordPress theme, instead, you’ll learn how to create and run a legit online business like a pro.

Here’s an overview of what you’ll learn in this guide:

  1. How to find a profitable niche for your online business
  2. How to conduct market research
  3. Equip yourself with online business laws
  4. Create a professional website
  5. Source your products
  6. Understand your target audience
  7. The art of promoting your business online
  8. Scale-up

1). Define your niche

From the Shopify Encyclopedia,

A niche is a subset of a large industry or a market segment with its own preferences that might be different from the large market.

To be run a successful online business, you have to find and target a specific niche — don’t even try to sell to everyone because that’s the quickest way to fail.

There are several benefits to targeting a niche:

  • Reduced competition.
  • A customized product that helps you build better relationships with customers.
  • More focused approach.

The best thing about pursuing a particular niche is that you don’t have to compete with the big guns. A niche is usually an ignored market segment. You can easily capture entire market if you have a valuable, insightful, timely, and effective product and business model.

Bonobos is a perfect niche business example. It targets a specific problem that men have with their pants. The founders, Andy Dunn and Brian Spaly, surveyed their Stanford classmates and found that a lot of boys had problems with their pants. Their pants didn’t fit properly.

They came up with a solution to this very problem and Bonobos generated $1 million in revenue in 6 months.

So how can you define a niche for your online business that will deliver exceptional results?

The Staff of Entrepreneur Media Inc. in their book Start your Own Business has listed 7 steps to defining a niche market for your business. Let’s pick their brain:

Step #1: Make a wish list

Who do you want to do business with? Define the type of customers you intend to target. Be specific.

For instance, married men living in North America having one or two kids with an average income of $50K or above. This seems to be a specific customer type you want to do business with.

Step #2: What you plan to sell

You don’t have to define your product but you should know what you intend to sell to a specific group of people.

The best approach is to do what you have an interest in. What are you passionate about? Think of what you do best. Here are a few techniques to decide what you want to sell:

  • List all the skills and things you’re best at.
  • List your achievements in life, job, home, and society.
  • List lessons you have learned in your life.
  • List all the things you have interest in.

This will help you identify your core interest and passion.

Step #3: Need identification

Survey potential customers identified in Step #1 and ask them what their biggest need is with respect to what you intend to sell them.

This step will be discussed in detail in the next section – keep reading.

Step #4: Niche identification

This is the stage where your niche will start taking a shape. According to the authors, a great niche has 5 qualities:

  1. Your customers want it.
  2. It is viable in the long-run.
  3. It is well-planned.
  4. It is the only solution.
  5. It has the potential to evolve and grow.

Step #5: Evaluate

Evaluate your niche on the 5 points discussed above. If it doesn’t qualify as a good niche, repeat Steps #1 to 3. It might take time but it is essential for your online business.

Step #6: Test

Create a sample, model, or run a pilot study with your primary customers and see how your niche idea performs.


For instance, if your niche is ‘socks for cab drivers’, you need to create samples of socks, ask a few cab drivers to test them, and see how they respond.

Step #7: Implementation

Once your sample passes the test successfully, you have your niche. You can now move ahead.

The above process might not result in a niche instantly. You may have to repeat it several times for several weeks before you will get a hint of the ideal niche.

In other cases, you might not get any clue at all. If you get a whole new idea every time you go through these steps, don’t panic. Market research will help you refine your niche and business idea.

2). Market research

Market research is an essential part of running an online business the right way. You have tested and validated your niche, it’s time to go deep and do some market research.

Just to give you an idea of how important market research is, let me share an example.

In the 1980s, the Coca-Cola Company decided to introduce a new beverage, “New Coke.” The new beverage was sweeter than the original Coke. The company conducted around 200k taste tests throughout the US. These tests revealed people liked the New Coke more than the original formula.

The New Coke was launched and the original formula was withdrawn. Soon the company realized that it had made a big mistake. The New Coke was then withdrawn and the original formula was re-introduced.

The Coca-Cola Company later found that:

  • The taste wasn’t the only reason people buy their beverage.
  • The emotional involvement of the consumers with the original Coke was not realized at all by the company.

Marketing research has to be conducted carefully else, you might end up wasting money.

Market research, when done right helps you to collect hard data on whether your niche is worth pursuing or not.

2). Study trends

Google Trends should be your starting point. It can reveal trends over the years that people have in your niche.

Enter your niche (not the field) in Google Trends and see how it has moved over the years. In this example, “socks for cab drivers” is no longer trending. So there’s no need to venture into this niche.

Here’s another example. I searched for “workout sneakers for women” and the trend shows that people are interested in it.

3). Keyword research

For an online business, you have to find keywords that people use to search what you’ll be selling. These keywords will help you check competitiveness, customer behavior, search volume, cost per click (CPC) when you want to run ads on Google, and several other variables.

Google Keyword Planner should be your starting point since Google is the leading search engine so it has a wealth of information.

Search for new keywords using a phrase.

Enter your niche to get started. Click Get ideas.

You’ll get Keyword ideas, Ad group ideas, Average monthly searches, Competition, and Suggested bid.

Download list of keyword ideas. These are the keywords that your potential buyers use to find products.

4). Quora and social media

Quora is the world’s leading question and answer platform. This is where people ask questions that they have. It is the best place to find problems and questions that people may have about your products and niche.

It will provide you with queries that Keyword Tools can’t give you.

Social networking websites can provide you with a wealth of knowledge about your niche and what people are saying about it. Use Facebook, Twitter, Instagram, and other social sites. Run search queries and hashtags.

Add all these queries, issues, thoughts, views, and whatever you find in your keyword list sheet.

5). Competitor analysis

You should consider yourself lucky if you don’t have any competition in the niche you’re pursuing. If you’re about to come up with a new product in a new niche, you won’t have any competition but it is highly unlikely.

In reality, your competitors are your best friend.


Because they teach you what works and what doesn’t. An in-depth analysis will help you get on track immediately.

A competitor spying tool like SpyFu will help you see what keywords your competitors are targeting, how profitable these keywords are, and a ton of other information.

But first, you have to identify your competitors.

Refer to the keyword list you prepared. Run search queries on Google. You’ll see a few websites will appear for most of these keywords. These are your competitors.

Once you have identified your top 5 competitors, head to SpyFu, and starting with the first competitor, enter the website URL and hit the “Enter” button on your keyboard.

You’ll get a complete overview of what your competitor is doing.

Click Organic Keywords.

You’ll see the top keywords your competitor is ranking for, the worth of the keyword, and its difficulty level.

You can then inspect the backlinks they used to rank for these keywords in Google search engine.

Data from market research should be compiled and a list of all the keywords that you have identified should be prepared. If you’re excited already, it’s time to be patriotic and learn how you can make our society better by running your own profitable online business.

What’s the relationship between your online business and laws? Well, it’s a tricky question — but one that’s so important.

3). Understand online business laws

So you have a great niche idea which has been tested and validated and you have equally conducted market research and have all the data that you need to get started.


Most entrepreneurs will create a website and will get to work right away — and this is where they get it wrong.

You cannot and should never start an online business without having a clear understanding of the basic online business laws. You don’t want your business to receive a lawsuit like these companies.

Before you go any further, it is better to understand the online business environment and laws guiding it.

Trademarks and Copyrights

Understand the basic patent and trademark terms, their definitions, and see which ones apply to you and your online business. The official US Patent and Trademark Office website is an ideal portal where you can learn so much.

Here is what you should do:

  • Read and understand the definitions on this page.
  • Understand how these apply to your online business.

You don’t want to run into issues right from day one so be sure to get things right.

Besides, having an understanding of trademarks, patents, and copyrights will help you come up with better business name ideas and it will help you safeguard your online business too.

Consumer Laws and Rights

Understand consumer laws and rights so that you don’t end up receiving a lawsuit from your consumers.

You must have a deep understanding of consumer laws in your parent country, and that of other geographical regions as well since you’ll be selling online.

Read this page to get an overview of what rights a consumer in the US has. FTC has a lot of information about consumer rights and consumer protection. This will help you understand what not to do to avoid getting into a legal issue.


Doing business online doesn’t mean you aren’t eligible for tax. You are.

The first step is getting an employer identification number.

Second, get in touch with a professional tax consultant or maybe an agency. Why?

Because there is no simple rule.

For instance, you have to show prices to the US consumers exclusive of tax while Australian consumers are used to seeing prices inclusive of tax. Similarly, VAT is applied in EU for a whole lot of products.

If you can figure it out yourself, do it.

However, it’s best to let an expert guide you accordingly. You should keep your focus on business, and not worry your head over tax issues.

PCI Compliance

Make your store PCI-Compliant. You cannot go without it.

Any online business that accepts credit card payments should be in compliance with PCI standards. It includes secure checkout, encryption, data privacy, and other security standards that your online business should adhere to.

Make sure your online business doesn’t violate any PCI security standards.

License and Permit

Yes, you’d need a license or maybe a permit to run your online business. If you’re planning to run your online business from home in the US, you’d need a Home Occupation Permit from the local government, according to SBA.

Depending on the type of product or service you intend to sell, you’ll need a professional license, sales tax license or a permit, or a state-specific license.

You can find most of these details on SBA website. It depends on where you’re located. The best approach would be to get in touch with a professional.

Customer Data and Privacy

At any time, your online business website should follow consumer protection and privacy standards. It’s your responsibility to protect consumer data. HG and ICLG have compiled lists of data protection laws that will help you get a better understanding of laws in your country.

Here are a few more online business laws to learn and understand:

  • Inventory
  • Shipping restrictions
  • Business insurance
  • Employment laws
  • Telemarketing sales law
  • International sales law

The truth be told, it’s challenging to go through all these laws. The best approach is to get in touch with a professional who will assist you with everything. It’d be best to spend your time wisely but make sure not to take online business laws lightly.

4). Create a Website for Your Business

Time to create a professional website for your online business.

The website is your business’ face. It has to be great!

Before you create a website, you need to name your business. This is the first step towards building a strong brand.

i). Choose a business name: Every time you have the opportunity to talk about your business, you’ll have to say its name. It has to be awesome. There are a few characteristics of a good business and brand name:

  • It has to be pleasing and must sound well.
  • Easy-to-remember.
  • Easy-to-pronounce.
  • Unique and creative.
  • Must have a meaning.

Start by brainstorming a list of names for your business. Use keywords, niche, ask friends, and ask potential buyers for a name.

You can use business name generators as well. Some of the leading ones include Bust a Name and Wordoid. To save time, you could purchase a brand name and logo from BrandBucket. Though it’s pricy.

Prepare a list of potential business names and pick the one that best describes your business.

Once the business name has been finalized, you need to immediately register its domain name. One easy approach to name your business is to head to a domain searcher such as Lean Domain Search. This will ensure that the domain for your business name is available.

If you have selected a name for your business and its domain name isn’t available, you’ll have to change it. At the end of the day, for any online business, its domain name becomes its name and brand name so make sure the domain name and the business name are exactly the same.

Register a .COM domain and buy a suitable hosting plan.

ii). Website development: WordPress is the leading CMS with a market share of 59%, while Woocommerce has the highest market share among all ecommerce platforms.

So your best bet is to choose WordPress and Woocommerce. Both are open source and free to use.

You don’t need a coder and designer instead you can do it yourself.

  1. Install WordPress on your domain. You’ll find a step-by-step guide from your host.
  2. Choose a WordPress theme for ecommerce and install it. There are thousands of themes available to choose from.
  3. Install Woocommerce.
  4. Install must-have WordPress and Woocommerce plugins.
  5. Add content.

You’re done.


5). Source Products

You have the website and your store ready but you haven’t started with product development or sourcing. Well, here is how to do it.

There is a reason to have your website created first before sourcing your products.

You can get the word out about your online business and start building an email list of potential buyers as soon as you have your website ready.

Now, let’s source products to sell.

You have 3 choices:

  1. Manufacture products
  2. Outsource or partner with a manufacturer
  3. Dropship

Product Manufacturer

If you’ll create your own products, you’ll have to find suppliers, source raw material, arrange for product design and packaging, deal with warehousing and inventory management, ship the products, and must deal with every other manufacturing related variable.

Being a manufacturer is hard but it has its own perks. For instance, you’ll have full control over everything and the chances of growth are potentially unlimited.


Manufacturing a product is usually challenging and costly, therefore, a fairly large number of entrepreneurs prefer outsourcing. Particularly in Amazon FBA ecommerce model, this method is referred to as white label products. You simply have to add your logo and brand, and you’re in business.

You have to find a manufacturer or a supplier who will create products for you based on your requirements or you can choose an existing product to sell in your store.

In this case, you’re a reseller and you don’t have a lot of control over inventory. The profit margins will be at the low-end. But it is cost-effective and you can get started immediately.

Etsy Wholesale is a perfect place to find wholesalers and manufacturers.


Dropshipping is a great option for online businesses and it is recommended that you start with this business model.


Because you don’t have to deal with product manufacturing, shipping, returns, packaging, or anything else.

The manufacturer will handle everything. You’ll get orders on your website, the supplier will ship products to the customer with your brand name, and you get your share. This illustration shows you how it works.

Aliexpress is the leading dropshipping platform where you can find a lot of manufacturers who will fulfill your orders.

Though it is fairly cheap, quick, and hassle-free business model, it provides you with limited flexibility with no control over the product, inventory, and other variables.

Source your product wisely and move to the next step.

6). Define Your Target Audience

You cannot sell to everyone. You need to reshape your website and business strategy to suit a specific group of people who will buy your product.

Defining your target audience will help you to find, reach, and show your products to the right people at the right time.

Where can I get started?

Use existing data

If you remember, you already know a lot about your target audience. Refer to niche identification and market research discussed above.

Use this information to make a clear description of your target audience. This includes:

  • Average age
  • Gender
  • Hobbies
  • Interests
  • Issues and challenges
  • Where they get their information
  • What motivates them

Conduct surveys (use SurveyMonkey), interviews, and focus groups to understand your target audience better. It’s best to get data from customers instead of relying on third-party sources and guesswork.

Buyer Personas

A buyer persona is a semi-fictional representation of your ideal customer that you create from data collected. Statistics show that 90% of businesses that are using personas are able to better understand their buyers.

Buyer personas help you with targeting the right people who are most likely to buy your product. Here’s an example of a buyer persona.

Include as many details about each buyer persona as you could. The more information you have, the better it is. Create multiple personas to cover your entire target market. According to Rob Peterson, 3 to 4 buyer personas account for as much as 90% of business’ sales.

This buyer persona template will help you in creating killer personas.

7). Promote Your Online Business

Marketing is the backbone of any online business. Having a professional and high-converting website, multiple buyer personas, and one of the best products won’t drive sales.

You need to promote your online business to reach your target audience and show them your product. Here’s how to start getting traction online for your business:

Blog religiously

The founder of Buffer, Leo Widrich, reached out to several tech blogs when he created the Buffer App. These included all types of websites like Mashable, TechCrunch, and several small tech websites. But nobody talked about Buffer despite it was a great scheduling app.

Leo then created a blog and started publishing high-quality content on the blog. He wrote 3 to 4 new articles every week for the blog.

Once the blog has published helpful and interesting content, Leo, again, reached out tech blogs and showed them Buffer’s awesome content. This time it worked.

This strategy helped Buffer jump to $5 million in yearly revenue. And the startup has grown even bigger.

Here is the takeaway:

Create a blog and post new content regularly so that people have something informative and helpful on your website to talk about and share.

According to HubSpot, businesses that publish 16+ blog posts a month get 4.5X more leads than businesses that publish 4 or fewer posts a month.

Set up your blog and get cracking. You have the list of keywords. Write content around those keywords so that potential buyers can find your content via search engines.

Guest blog

Publishing content on your blog isn’t enough. You have to reach out to other authority and niche relevant blogs, show them your content, write for them, build relationships, and grow your online business.

Guest blogging can help you increase organic traffic and improve ROI.

Here is a case study where guest blogging helped boost traffic by 342.35% in a year and this guy helped a brand increase its ROI by 23.85% in a year with the help of guest blogging.

To get started, you have to first publish awesome content on your blog just like Leo did. Then reach out to other blogs in your niche.

This guest posting guide by Brian Dean and this guide by Pratik Dholakiya are the best ones that will show you how exactly you can guest blog like a pro.

Guest posting has several benefits such as:

  • Referral traffic.
  • Reach your target audience via different authority blogs.
  • Get backlinks that will improve your website’s ranking in Google.
  • Build relationships.

Pay Per Click (PPC) Advertising

Pay Per Click is one of the easiest ways to promote your online business and drive targeted traffic to your store. Guest posting and SEO are relatively slow in terms of traffic generation but a PPC campaign can send traffic your way instantly.

The two best PPC networks are Google AdWords and Facebook ads. Pay per click advertising works. No wonder 91% of businesses have annual PPC budget of more than $500,000.

If you don’t have any experience with running a PPC campaign, it’s best to start with Facebook as it is affordable and flexible. You can target anyone based on your buyer personas.

AdWords is expensive and it is not one of the easiest ad networks to get used to so only jump to AdWords after you have used Facebook ads and generated results from it. AdWords Search campaign will help you drive traffic to your website from Google search. This is another viable way to capture traffic from search engine.

This infographic by Wishpond compares the two ad networks and is very helpful in understanding the differences between the two.

Here are a few other ways to promote your online business:

  • Social media marketing
  • Email marketing
  • Influencer marketing
  • Content marketing
  • Video marketing
  • GIF marketing
  • Infographics marketing

8). Scale Your Business

When you strategically use different marketing techniques to drive traffic and generate sales for your online store, you’ll see that not every marketing campaign deliver results.

Some are more effective than the others.

You need to find what works best for your business and target audience.

For instance, if Facebook ads deliver high ROI, you need to scale up to grow your business. Increase ad budget, create more ads, do A/B tests, and optimize your campaigns so that you can increase ROI exponentially.

If everything is working well, don’t just stick with it instead, move ahead and grow your business by doing more of what works.

The challenging part is finding the most profitable marketing channels for your business. You need to try and test several marketing channels to come up with the best solution for you. This is what will help you generate leads, improve ROI, and grow your business and thrive even in the face of adverse competition.


The 8-step plan covered in this guide can help any online business run successfully. When you run your business the right way, your life, as an entrepreneur, will get better.

It feels great to see your business growing and moving in the right direction. The feeling is awesome.

Give yourself a chance to experience this exact feeling.

You know the steps. You have to stick to it.

Be patient and consistent. Your online business will move in the right direction if you don’t break the rules. Let me know what your thoughts are in the comment box!

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