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The United Kingdom is the second best destination for startups in Europe, given the ease of doing business, favourable corporate tax regime, incentives and grants.
If you are starting an online business, then there is no better place than the UK.
A market of over 60 million potential customers! A thriving centre of finance! And a strategic geographic location as the central zone between Asian countries and the United States! What more does a successful startup need?
This blog is for anyone who wants a clear idea of how to start a business online.
Here we take you through the entire process, starting from the inception of a business idea to its fruition as a fully-fledged company.
Keep reading to get a better picture of the challenges you may face when you start an online business and how to overcome them.
Whatever the business, always start with the market you plan to conquer.
A market is not just a place of economic activity but also a place of social exchange.
So understanding the market where you want to start an online business is important.
But getting to know a market is not an easy task. You need to know where to start.
For example, you should know what the people in the location prefer, what they find as the right social behaviour, what they disapprove of, what pleases them and what offends them. However, we can break down market-research as a sum of the following pieces:
The local culture, festivals, pass time activities, greetings - all form an important part of your market study. And never under-estimate time. Time changes people and culture. In this respect, the world is split into two eras today, i.e pre-COVID and post-COVID era.
After Brexit, the post-COVID UK was hit by the Russia - Ukraine war crisis. Food and energy has become costlier than before.
According to Foxintelligence, consumers have adapted to the ongoing situation with a change in spending behaviour.
As a prospective entrepreneur you would benefit from knowing the two important behaviour of UK customers:
People in the UK today prefer online purchases and are cutting back on non-essential spending owing to inflation.
Secondly, the refurbished goods market is now picking-up in the UK as inflation has forced people to look for the best in second-sales.
Starting up an online business is therefore, an intelligent move.
The next step is to be in tune with the ongoing market trends in the UK.
For example, the latest research from the Data and Marketing Association shows the following emergent trends:
51% of UK customers responded to email. It beats banner ads by 200%. So, email marketing is among the most convertible strategies in the UK.
62% of buyers highlighted brand loyalty as an emerging trait. People are ready to pay more for their favourite brands, even under tough economic conditions.
63% of buyers saw loyalty programs as the prime reason to stick on to a brand.
73% of consumers are very pessimistic as cost-of-living is on a rise.
Which means you cannot expect any impulsive purchases from your UK customers anytime soon.
Besides these, you need to regularly follow the latest market research statistics, investment ecosystem and local news to innovate your marketing strategy with the tides of change.
This stage can often become the first step in starting an online business if you are already familiar with the market. The best business ideas are often the ones that lie close to your passion. Scan through the various industries and see what really appeals to you.
A business plan is the first step in structuring your business idea. For starters, you can find many business templates online. Select a template depending on the type of business you plan to launch.
Every entrepreneur is free to choose the type of business plan she or he wants to pen down. But a good business plan will have the following elements, no matter how you structure it:
A brief description about your whole plan. It can be written only after considering the length and breadth of your business idea.
This section must spell out the team arrangements, strategies, long and short-term objectives and so on.
Your mission statement should lead the way in such a document.
Market study involves extensive research on the market, including the customers, their spending patterns, the current favorable market situation, and future perspectives.
It should also include the competitive analysis of your possible opponents in the market, their strengths, weaknesses and blind areas.
What you are selling and the main features of your service or product is presented here under this head.
If your product is something new and you want to claim intellectual property rights for it then spell it out in this section.
You can also add future product development plans here.
Here, mention your marketing intentions.
Strategies you have in mind, a brief about your potential customers in the UK, the pricing strategy, sales plans, parameters of success, demographics and so on.
All you need to get your raw materials processed into the ultimate product or service is to be penned down here.
Describe your financial outlook in this section. Your revenues, capitals, expenses and profit management plans.
It should contain three key statements: the income statement, a balance sheet and the cash-flow statement.
Capital accumulation plans can also be added here.
Whether it is an online business or an offline one, you are taking a risk.
The risk of not being successful or a chance to go wrong is always there.
Business feasibility studies reduce the chance of failures to bare minimum.
Feasibility studies employ logical tools to review your current business plan.
It gives you a bird’s eye view of the existing market conditions.
Outlining the pros and cons of entering a market with your current strategy, it helps you to make informed choices.
Another advantage of a feasibility study is that they tell you the best market segment for marketing.
It is indeed a crucial step in charting out your marketing plan as well.
You can start a business online as a pilot project. Depending on the outcomes of this pilot project, you can modify and reorient your project parameters.
But before starting off, you need to carry out feasibility analysis on the following areas: technology, finances and operations.
Technical feasibility will tell you whether you have the technical resources to power your project. The equipment, technical competence, knowledge, and skill are analysed here.
Financial feasibility looks for viable fiscal sources and vulnerability. A detailed cost/benefit analysis with a forecast on the expected ROI and other financial risks.
Operational feasibility evaluates your company's capability to complete the project . Staffing, enterprise structure, legal hurdles and other essential competence to complete the project are assessed in detail.
A business model is “the story that explains how the enterprise works.” It defines the various interpersonal relationships within an organization, its power structure and dynamics.
You can read about a number of business models on the internet. But in this guide to starting an online business, we focus on empowering you. Widening your awareness will help you make better choices and even create new models. So , let’s get down to the fundamental question of choosing the right model.
Peter Drucker, one of the leading management thinkers of the 21st century has a thing or two to say about choosing the right business model.
Drucker considers clarity of business as the basis for selecting the right model.
Now, you can have clarity about your business, if you ask yourself three basic questions:
There is no definition of a successful business model. Because the success or failure of your business model depends on how it interacts with other players in the industry. This is where the market study really pays off.
Remember, most companies spin off models without considering the competition in the market. The secret behind creating a successful business model lies in creating an effective virtuous cycle.
Now, what is a virtuous cycle?
A virtuous cycle is a cycle of positive events that motivate your customers to engage with your brand repetitively. The engagement escalates over time so that it gives you a competitive advantage over others.
Let us now consider an example in the UK context. The current market conditions in the United Kingdom is such that people are looking for online products and mostly refurbished ones. So if you create a business model where you can sell first-quality refurbished products at cheap rates to UK consumers, then you are creating a virtuous cycle. You may even opt for web development services to create a website to quickly launch the business.
So design your business model with these principles in mind.
Every country has a set of laws to protect its market from external threats and invasions. These laws balance the game for everyone.
Local laws, state laws, and national laws have to be well understood. You should always keep your online business on the right side of the law. Here we provide a comprehensive overview of some important laws that you need to know when starting a business online in the United Kingdom.
B2B businesses do not need to undergo any registration in the UK.
However, the obligations under the following laws apply to all B2B businesses:
These laws apply to mobile apps as well. So when you hire professional app developers, ensure that they are aware of these digital laws.
The rules for B2C businesses do not ask for any registration for e-commerce in the UK.
However, you need to keep the following rules in mind:
It is handy to know who watches over your business in the UK.
There are more than one regulatory body in UK, let’s take a look at them:
Running an online business needs clear channels of sale.
A sales channel is that pathway to the customer which gets your product in front of them.
Today, a startup or an online business has a great number of sales channels to choose from.
Depending on the type of product or service you are offering online in the UK, you can select from the following sales channels:
Any transaction that is fulfilled online is counted as ecommerce.
Ordering food through an app, and shopping on your favourite online store all come under ecommerce.
The main advantage of ecommerce is that it is budget-friendly. Imagine paying for a physical storefront in London today.
E-commerce saves you that cost and not only that it is going to sell for you day and night.
Another advantage is that it can help you collect valuable customer data which you can later work on to deliver better customer experience.
The traditional marketplace spans Amazon, eBay, Walmart, Google shopping and all those ecommerce giants.
Offering a wide variety of products, these brands are a perfect place to drive your sales.
You can leverage the fame and reach of these brands by listing your products here.
The traditional websites will have a customer base and you can relax while the onus is on them to improve customer experience, service and competence.
However, there is another side to the benefits of ecommerce business.
Similar product competition and lack of freedom and control over your product’s representation are drawbacks.
Further, if you are willing to shed a part of profit as commission then this channel of sales is the right one for your business.
Social media is an ideal place for emerging businesses to sell services and products.
If you have used Instagram, Facebook or other social media apps you will be aware of their in-built marketing metrics.
They allow you to fine-tune your product using a business account. Combining with influencers and other brands you can drive sales via social media.
The challenge in using this channel is that it requires you to make regular content updates.
The quality of your content is decisive in making conversions and a good knowledge of algorithms and digital marketing is a prerequisite.
A white label product is a finished product without any brand logo or name.
You might have seen similar looking bags with different brand names. These are white label goods.
If you analyse the current market trend in the UK, you will see that people prefer economic products that do not compromise on quality.
According to McKinsey, about 70% of UK customers are ready to switch to cheaper brands.
Whitelabeling hence is a viable sales channel if you are not planning on branding.
A direct to consumer (D2C) channel allows customers to approach you directly.
You can create a website or mobile app to make yourself visible.
Ooni a Scotland-based pizza maker brand grew 300% through a direct to consumer sales channel.
In the UK, high inflation and increasing living costs are pushing people to look for cheaper brands.
So if you offer quality and perks, your new business is sure to take off with flying colours.
You can also explore the freedom to present yourself on your website. And earn all the profits, unlike traditional market channels.
There are other sales channels too but, for the sake of relevance we have restricted them to the above-mentioned.
However, we have saved a special channel of sales i.e. mobile apps and websites for an entire section.
This is because it is more than a sales channel.
It is a marketing device, a symbol of brand identity and a means of delivering excellent customer experience.
So without further ado, let’s jump into it.
No one embarks on a business venture to be mediocre. Success is every entrepreneur’s prime motive. And a personalised space on the internet is the best start you can have.
Yes, developing a website for your website is the very first step to many things.
It is the first step towards visibility. It is also the first step towards marketing and reaching out towards your customers.
You might be wondering how much does a website cost in the UK. Right?
There is no need, you can always outsource them to cheaper destinations.
Indonesia, India, Bangladesh, Vietnam, etc., are ideal destinations for budget-friendly app development.
The ideal choice for your new brand is a website.
Create a website and then work on the digital marketing aspects, build a customer base and win loyalty.
Once you are established, start your mobile app to engage them more.
However, you need not go by the book always. If you have enough capital then you can start with a mobile app.
But it is always safe to develop a website first and work your way upwards.
Here are several reasons to make a website your priority over mobile apps:
A website is easy to search. Often people refrain from downloading new mobile apps.
Instead, they Google it on their phone. Also, a website is always a click away.
Compared to mobile applications, websites are very customizable.
Basic HTML and CSS along with content management systems like WordPress offer unique and simple customizations.
Theme application, design change, etc. is easy with a website.
Websites are the best tool to convert a potential visitor into a customer.
Clicking through the web pages is more pleasing if the designs are attractive.
But the chances of a new user downloading an app without good incentive are very less.
Easy to operate with any browser and on any smartphone.
The compatibility issues are almost non-existent when it comes to a website.
Apps however need regular updation and the user has to go through the installation process.
Hence, it can be a turn-off in some cases.
Websites are cheaper and ideal for low-capital startups. The cost of a website is usually the cost of hosting and it is inexpensive.
Mobile application development costs surpass web development costs.
Mobile app aspects like the design, interface and testing processes require more dedicated hours of work.
Websites can be created in hours, however, a good mobile app takes about three to four months to launch.
Wireframes, UI-UX designs, intensive testing, app registration and audits all take up considerable time.
With websites, you can start working on your visibility from the very first day.
Mobile apps however take time. And often versioning is needed to bring out the best in a mobile app.
And optimising a website is much easier than working on an app.
The next step is to nurture your brand. In the UK, the ecommerce market is quite robust, especially after the COVID-19 pandemic.
People are counting on their favourite brands to give them the best of things at the best price.
Hence, brand equity becomes pivotal.
Now, what’s brand equity?
Brand equity is a measure of how your customer views your business.
If brand equity is positive, then they want to engage more with your brand. And, if it is negative, they want to see less of you in the market.
Brand equity is important because it brings loyal customers to your business.
As we saw before, in the UK, winning loyal customers is the key to success.
So brand equity is the driving factor for sales and profits.
Further, if your brand equity is high, customers won’t mind you raising the prices over time.
Building your brand needs time and dedication.
Here are some important tips to build your brand equity in a short period:
Start by engaging your customers. Send out newsletters via email.
In UK, emails can work wonders for you. Keep them crisp and amicable.
Show your customers that you value them. Try to create personalized emails.
You can also send questionnaires, feedback forms, feedback-implemented newsletters and so on.
You need to provide the best of your services and products to your first-timers.
Creating memorable experiences, and serving them when they need it the most are all pathways to great relationships.
Be genuine about your flaws if any are identified. Replace items or apologize and compensate without a second thought.
Your customers are human, they know that to err is human.
Your genuineness in treating them is the best way to win your customer’s trust.
Move out of your business zone to meet them and socialize with them online.
Instagram posters, greeting videos, texts, etc. are great ways of creating brand awareness.
Meet your customers in ways they least expect it and make sure that it ends positively.
Other ways to grow brand awareness are to offer free content, freemium services, event sponsoring, podcasts and vlogs.
Categorise your audience and develop specific approaches to each of the target groups.
Yes, we know it sounds like a lot of hard work. But be assured, this is what every big brand started off with.
Humans have a strange liking for stories.
They are all ears for it. So tell them about your journey.
Tell them your beginnings, your path to glory, your challenging times.
Keep it real, believable and show how they changed your fortunes.
Deliver the messages rightly and your brand will find a place in their hearts.
Make your customer’s life easy. Make your website mobile-optimized and compatible with all devices.
If you have a mobile app, keep it updated and bug-free. Regularly release new versions to upgrade from previous shortcomings.
Your customer should feel that you are growing and that in associating with you they made a great choice.
Review app design and workflows with customers at their epicentre.
Digital marketing is crucial for online businesses.
Unlike storefronts, the very presence of online businesses is digital. And in a sea of brands, it is essential to be noticed first.
So your first priority should be to work on SEO i.e. Search Engine Optimization. Write attractive and well-researched keyword-based content.
Create proper backlinks and keep your ranking pages maintained. Focus on PPC advertising, email marketing along with SEO.
If you are planning to do it all yourself, try to hire some reputed SEO services. A good SEO agency can take your business to the next level.
Create buyer personas. Identify the traits of your ideal buyer. Use solid data for creating personas and stick to them.
Combine demographic, psychological and quantitative data to bring the best user persona for your business.
Post content, run campaigns, and share stories of success and satisfied customers.
Your digital marketing strategy will depend on the type of your business. So choose the one that suits you the best.
Now once your revenue starts flowing, it's time to manage them rightly.
Proper management of your business's finances stabilises your brand and saves it from failure.
An important part of managing your income is to pay yourself.
You may be tempted to put everything into capital but it is important to recognize your role in the business and compensate for it accordingly.
Secondly, keep aside finances to invest in growth. Always look out for opportunities where your business can thrive.
A small business which is innovative and growth-oriented will put a part of its investment in the future.
Keep your credit ratings high. Pay off all the debt funding as soon as you can, and clear credit cards and other liabilities that can tarnish your credit score. Keep the interest on debts manageable and make repayments on time.
Try new approaches with customers who are late on payments. We all have that list of late invoices.
Instead of badgering them, it's best you try a new approach. Offer them incentives for early payments, so that they are prompted to process bills faster.
These small tips can go a long way in running your online business in the UK successfully.
The market is now ripe for new entrants in the UK.
The aftereffects of COVID-19 and the Russian-Ukraine crisis have shifted the consumer mood in favour of new online brands.
Take your first step today, and get the early bird advantage of winning loyal customers and a good business.
We at Intellivita, can help you make the right start with our expertise in web and mobile application development.
Partner with us to create engaging websites, mobile and web apps with the right user experience.
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