As technology improves, it is becoming easier than ever to launch an online business from your home. You can set up your own website, sell on the Internet and even take payments directly from your site. Here are the basics of setting up an online business.

Types of Online Businesses
Almost anything can be sold over the Internet. Many home-based online businesses provide services to other businesses, such as web design or bookkeeping. A service-based business allows you to get started quickly without investing in inventory. If you want to sell items, there are easy ways to do so without having your own shipping department. Companies like Amazon and Commission Junction allow you to advertise their products on your website and pay you a commission when they sell. Some sites, such as eBay and Etsy, allow you to set up a virtual store and they handle payments on your behalf.

SEE: Shopping Online: Convenience, Bargains And A Few Scams

Types of Revenue
Your online business can earn several different types of revenues, depending on its purpose. If you sell your services, you may charge customers by the hour or by the service. For example, you may advertise a basic web design package for $99 or you may charge $25 per hour to work on a design. If you sell products, your revenue will come from the purchase price or, in the case of affiliate businesses, from commissions. Commissions are usually calculated based on a percentage of the sales price of the item. Some commission structures allow for a higher percentage on monthly sales over a certain benchmark.

There are several ways to get paid with your online business. Large companies set up a payment portal on their own sites and register with the major credit card companies to be able to take online payments. Smaller businesses often use a service, such as PayPal or Intuit, to process payments. These payment facilitators charge a percentage of the transaction for their services.

Advantages and Disadvantages
The largest advantage of running an online business is the flexibility. You can run it from your home at your convenience, without having to rent an office, purchase signs and pay for all of the other business expenses that go along with having a brick and mortar store front. It also gives you portability to be able to run the business from your laptop anywhere in the world where there is Internet access. If you are not a naturally self-disciplined and organized person, running an online business carries dangers. It is easy to put off work until later and lose focus on building the business. Successful online businesses formalize work schedules and goals to ensure the business continues to grow profitably.

SEE: 6 Common Pitfalls Of Brick-And-Mortar Shopping

Start-up Costs
The amount of money you will need to start your online business depends on the type of business. All online businesses need some type of web presence. This requires that you set up a domain name and a website. Some providers, such as Blogger and Weebly, allow you to set up a site for free. This is a good option when you are first starting out. As your business grows, you may need the services of a web designer or programmer to expand your site. You may have to upgrade your computer or office equipment if your current ones are old or non-functional. At a minimum, you will need a desktop or laptop with Internet access and a printer to be able to print invoices and other documents.

The Bottom Line
An online business can be easy to set up and it can also be profitable. Like any other business, an online company must focus on the basics of dealing with customers and sales in order to succeed.

Related Articles
  1. Entrepreneurship

    How an Internet Sales Tax Will Affect Your Small Business

    Learn about how the Marketplace Fairness Act may impact small business owners should it pass in the House and what the act requires from business owners.
  2. Entrepreneurship

    Preparing Your Kids to Take Over Your Business

    Most family businesses do not survive in successive generations, but these steps can help ensure that yours will.
  3. Entrepreneurship

    How Gross Margin Can Make or Break Your Startup

    Find out how your startup's gross margin can impact your business, including why a mediocre margin may spell disaster for a budding business.
  4. Entrepreneurship

    Top 10 Features Of A Profitable Rental Property

    Find out which factors you should weigh when searching for income-producing real estate.
  5. Investing Basics

    Internet Sales Tax's Effect on Interstate Commerce

    Find out how a national Internet sales tax could affect interstate commerce, and why some bigger online retailers are lobbying for such a tax.
  6. Wealth Management

    The Net Worth of the Shark Tank Cast

    Discover how the richest "Sharks" on the hit TV show amassed their vast fortunes, and learn how much they have to offer eager entrepreneurs.
  7. Entrepreneurship

    3 Ways You Can Support Small Business Growth

    Discover a number of different options available to support small business growth, including crowdfunding campaigns and shopping locally.
  8. Investing News

    SEP vs. Keogh Plans: Which is Right for You?

    SEP and Keogh plans each have their pros and cons. Here's how to choose which one is right for you.
  9. Stock Analysis

    Does TripAdvisor Offer Upside Potential? (TRIP)

    Will TripAdvisor's downside risk outweigh upside potential in 2016? It's most recent SEC filing offers some strong clues.
  10. Entrepreneurship

    How to Start a Business While working a Full-time Job

    Do you have an idea for a business, but are struggling to find the time to launch it? Here's how you can start a business when working a full-time job.
  1. Does QVC charge sales tax?

    QVC, an American TV network, is registered with states to collect sales or use tax on taxable items. QVC is also required ... Read Full Answer >>
  2. Does Walmart take international credit cards?

    Foreign visitors to Walmart locations in the United States can use their credit cards issued by banks outside of the U.S. ... Read Full Answer >>
  3. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  4. How does escheatment impact a company?

    In recent years, state governments have become increasingly aggressive in enforcing escheatment laws. As a result, many businesses ... Read Full Answer >>
  5. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  6. Is QVC publicly traded?

    QVC, Inc., is a wholly owned subsidiary of Liberty Interactive Corporation. It is attributed to the QVC Group tracking stock, ... Read Full Answer >>

You May Also Like

Trading Center