How to Start a Small Online Business

Why start an online business?

There are quite a few reasons why it can be smart to start an online business. It can be much more convenient than running a brick-and-mortar business, and this is why it appeals to so many people. But starting a small online business can also offer a sense of satisfaction that working for someone else doesn't offer.

Here are just a few reasons why you may consider starting an online business:

• Allows for flexibility: When you run an online business, you can work on your terms. Anywhere with an internet connection can serve as your office. You can make money online without having to manage a storefront or commute to an office space.
• Reach a wide audience: While a brick-and-mortar storefront is somewhat limited to a local audience, an online business can be patronized by people across the globe. Reaching a larger audience increases the likelihood that you connect with individuals who want to buy what you’re selling.
• Minimize expenses: A physical storefront can be expensive when you take into account rent, upkeep, and other expenses. Starting an online business is one of the least expensive ways to launch your venture.
• Access in-depth marketing insights: By using digital marketing tools like the ones offered by Mailchimp, you can gain insights that help you better market to your target audience. From launching e-commerce marketing campaigns to creating on-brand designs to using campaign templates to design marketing emails, Mailchimp gives you the tools needed to grow your business.

How to start an online business: 5 tips

If you are wondering how to start a small business online, it pays to follow some tried and true tips. These tips come from those who have already established an online business successfully. With that being said, check out the following five tips for how to start an online business.

Know your market

Customers today want to feel like brands are talking directly to them. Consider the fact that:

• 91% of consumers are more likely to buy from brands that personalize their outreach
• 72% of consumers only engage with marketing that is geared toward their interests

When you take the time as a brand-new small online business to learn about your audience, you can offer that kind of appealing personalized content from the get-go.

Identify your audience

If you have customers already, you can use their data to create a preliminary audience profile. Useful data points include:

• Age range
• Family status
• Occupation
• Spending patterns
• Interests

How you collect this information is up to you. Some new businesses like to go directly to their customers and survey them. For other companies, it makes more sense to draw from social media marketing and use the analytics tools on Facebook, Twitter, or Instagram.

Don’t have a customer base yet? No problem—you can learn a lot about your customers just by analyzing your product or service offering and your target market. If you’re launching a city bike-share startup, for example, you can safely assume that your audience includes physically fit urban dwellers. With this idea in mind, take a look within your network to find people who match that persona and ask them to participate in your market research.

Create your website

Especially for an online small business, building a website that’s visually pleasing and easy-to-navigate is crucial. Keep in mind the kind of customers you’re trying to attract and what they want in an online experience. Should the tone be more relatable or informational? Are they mostly doing research online or will they want to order products directly from your site? If you already have an existing e-commerce website, be sure to connect your store to Mailchimp to maximize your marketing.

Think about your customers’ needs while planning and designing your new site—this inherently leads to effective search engine optimization (SEO). When you know more about your audience, you can create the content they’re looking for, driving traffic and conversions. The first step is to use the right keywords to improve your site’s search engine rankings and get your brand in front of the right audience.

For example, if you're selling women's clothing, your customers might be looking for you by entering phrases like "fashion retail" or "women's blouses." Adding these keywords strategically to your content may improve your ranking on search engine results pages (SERPs) and broaden your audience. Google’s keyword planner will help you find the right words to use.

Choose a relevant domain name

For your customers to find you online, you first need a domain name. When you buy a domain name, you want it to be memorable for your customers. It should be as close to your company name as possible—an exact name if possible, or a logical approximation if your business name is already taken as a domain.

For example, you might be the only Rick’s Pizza in your town, but someone in another state has already registered rickspizza.com. Not to worry—you can pick something like rickspizzaboston.com or rickspizzarestaurant.com and customers will still be able to find you.

It’s also good to get some of your keywords into your URL. Using a keyword in the domain name can help a site to rank, but it’s not strictly necessary, so don’t force it if it doesn’t fit naturally.

Save money by building your own website

Web design can be expensive—up to $10,000 even for an online small business. You’ll save a lot by using a tool like Mailchimp's website builder that lets you customize and update your website. If you need to get your business and start selling online quickly, consider creating some shoppable landing pages so you can get started selling and building an audience while you're creating your website.

On all of your landing pages, including your home page, you’ll want to create engaging content that will help your site rank in SEO. Follow SEO best practices, such as hyperlinking to other landing pages on your home page. Remember to use Google’s keyword planner so your site will appear in front of the right audiences.

What to avoid

Avoid building your website and forgetting it. Your site is your online storefront, and it needs to be in good shape. Once a month, check on what pages are doing well—driving sales, getting email list sign ups, etc.—and which are causing people to bounce.

You can get a lot of this information using Mailchimp's data and analytics tools. On your personalized audience dashboard, you can find out who has engaged with your content, what they've seen, and whether they've bought. With that information, you can refine your pages so they resonate with audiences.

Avoid testing your website on desktop only. Your customers are more likely to find you on mobile, and 88% of them won’t come back if they have a bad experience. That means your site needs to be tested and optimized for mobile use.

Grow your customer base

As a new online small business, you’ll want to attract the attention of new customers with lots of top-of-funnel content. That includes organic and paid social media campaigns tailored to your audience.

You can design these posts any way you feel will best show off your brand personality and products. It's easy to add your campaign images directly from Mailchimp's content studio. Make sure each post links back to your site, ideally to a page where they can buy products, sign up to receive emails from you, or both.

Once you start cultivating a list of customer emails, you can begin creating engaging email campaigns designed to target your customers’ interests. Start segmenting and personalizing these campaigns as early as possible.

What to avoid

Avoid buying customer lists. People on those lists haven’t signed up to receive emails from you, so they’re likely to mark you as spam. If that happens, you could end up paying fines up to $16,000, not to mention dealing with a damaged reputation.

Instead, use tools like behavioral targeting to personalize messaging for your existing customers and lookalike audience finders to find new customers based on what they’ve bought before.

Create marketing campaigns

Think of your marketing not as a series of one-time callouts, but as sequences of messages that reach customers where they are. The best campaigns are multichannel, meaning that they send a consistent message across multiple forms of media—paid ads, emails, social posts, and so on. These campaigns outperform single-channel efforts by up to 300%.

As always, you’ll want to personalize your campaigns as much as possible. Enhance your email campaigns with product recommendations, which can increase sales per opened email by as much as 150% for Mailchimp users. Abandoned cart emails drive results for Mailchimp users as well, prompting one order for every 44 messages of this kind sent.

Automation tools make the process of campaign design much easier. With automation, you can program emails to be sent automatically based on how the customer has been interacting with your content. You don’t have to manually match the customer with the product recommendation or email type, which means you can personalize at scale as your business grows.

What to avoid

Avoid over-communicating. When you send too many emails, you’re more likely to get unsubscribes. You don’t want your customers to get tired of hearing from you, so take some time to carefully design and schedule your email campaigns. This email marketing guide is a helpful roadmap for striking the right balance.

Use customer insights

As your business grows and you conduct more marketing campaigns, you’ll learn more about what your customers want. You can keep all of this information easily accessible on a single platform by using Mailchimp for building your website, conducting marketing campaigns, and engaging in customer relationship management (CRM).

Mailchimp collects customer activities from your website and all related campaigns. Each user gets an audience dashboard that presents all that data, up to date and aggregated, in an easy-to-digest format. Each section on the dashboard is clickable, allowing you to launch custom campaigns based on analytics.

Interpreting analytics

Mailchimp’s predicted demographics function lets you create and refine audience segments based on what the system infers about your shoppers. With this system, Mailchimp can predict an audience member’s gender and age even if they haven’t engaged with your content before. This helps you to deepen your personalization and create more relevant content.

Customer analytics also power retargeting and lookalike audience search. Retargeting helps you to convert consumers who have visited your site and interacted with your content but haven’t purchased. Through social media and display ads, Mailchimp’s retargeting function will remind those users of what they saw and liked.

The lookalike audience finder targets people who haven’t found you yet. Using data gleaned from your best customers, Mailchimp will market your company to people who have similar interests.

All of these techniques can help you turn casual browsers into paying customers.

What to avoid

Avoid not collecting data. The advantage you’ll gain from personalization is too good to miss out on. Set up all of your marketing programs so that you routinely measure the success of your campaigns and your website content.

Also, consider setting up Google Analytics. It’s free and can provide you with additional insight into your data, thanks to Google’s advanced machine learning technology.

Prepare to take your next steps

As you think about how to start a small business online, be careful not to get stuck in a rut. You’ve done your preliminary research, and you know that your product or service can sell, so it’s not too soon to get moving. It’s important to have a plan, but don’t overthink it.

When you get started with Mailchimp, you can start marketing your product at whatever pace feels right for your company. For e-commerce businesses, consider starting with the Standard plan. With Standard, you'll get the marketing features you need to drive growth and reach more customers, all at an affordable price.

Whatever subscription level you choose, you can start building your website immediately. Mailchimp’s website builder is user-friendly and fully customizable, so you can have a professional site without any coding experience. You also get unlimited landing pages so that you can create shoppable pages right away.