Setting up an online business

Building a website will allow you to reach your customers 24 hours a day, 365 days a year. This guide takes you through the first practical steps you need to take to put your business online.

From a simple idea… a website can grow

Michael Parker thought up the idea for his website during a conversation in his local pub. What started out as a trip down memory lane about sweets he and his friends had eaten as children became a challenge to find those lost, but not forgotten sweets of the 70s and 80s.

Further investigation revealed that although the sweets could still be bought from a wholesaler most of the local sweetshops had closed down. Online confectionery sites only sold present day chocolates and sweets. Spotting a gap in the market Michael decided to create an online sweetshop, offering 21st century access to a range of retro sweets.

Michael wanted his online store to be quirky and reminiscent of 70s and 80s childhoods, and what better way to portray this than with a comic book theme. Michael enlisted the help of a cartoonist to design his website, and A Quarter Of was born.

The website aims to be fun and allows customers to interact with “suggest a sweet” links and a poll to find the “favourite sweet ever”. Customers can select their sweets and buy them online through the site’s virtual shopping cart.

Starting A Quarter Of cost Michael £2,500, including website design and his initial stock, and within two months the business was in profit. During his first year Michael had a record day where he sent out one and a quarter tonnes of sweets.

Do you have an idea like Michael’s?

Becoming an e-trader and selling products solely online requires more than a website, your business idea will still benefit from a well researched plan.

Writing a business plan…

You should consider all the elements from a traditional business plan, but in addition think about the following:

• Can your product be sold online? It is easier to sell a tangible product like a book online than a service such as a taxi booking.
• Are delivery costs low? Your customers will consider delivery charges as part of the overall product cost, if the charge is too high they may prefer to buy from a bricks and mortar store instead.
• Are the features and benefits easy to understand? If your product requires a conversation with the customer then it may not be suitable to sell it via your website.
• Is your product in digital form? Electronic products such as software, music or e-books can be downloaded directly from your website eliminating the need for delivery charges.

Working from home…

If you plan to trade solely through your website you may be able to work from home. You will need to check with the planning office of your local council to see if planning permission is required. You must also advise your mortgage company, and check the terms of your lease if you live in a leasehold property.

Registering for VAT…

Your online sales may also be subject to VAT, although you don’t need to register until your turnover reaches a certain level. You can check the current turnover limits at the HM Revenue and Customs website.

Choosing a name…

An important part of the planning stage is to choose a name for your business. It is often beneficial to use your business name as your web address (domain name), so keep it short and memorable. You can check to see if your domain name is taken by using a search engine to look for the name, or a domain register. Purchase several types of domain, including .com and .co.uk, to make it easier for people to find your website, this will also stop other people trading on a similar web address.

You can find out more about writing a business plan in our business guide:
Business plans – the benefits of having one, the key elements, and how to prepare a great one.

How do I build a website?

Websites come in many guises, and the type of site you need depends entirely on your business:

• Information page – in the first instance you may want to use your website to advertise your business. In this case the only information you need to display are your contact details and some basic information about your business; this could be in a very similar format to a Yellow Pages advert for example.
• Brochureware site – the next step would be to display your product information and prices on your website. You can give your customers a choice of purchase options, such as a telephone number to ring, the address of your shop, or a form that they could print out and post/fax to you.
• E-commerce website – if you want your customers to be able to buy online then you will need to add a transaction service to your site. This is usually in the form of a virtual shopping basket and an online payment service.

Once you have decided on the level of website you need for your business you will need to think about designing and building the site.

Do it yourself…

If you are starting with an information page, or even a brochureware site you may feel confident enough to build the page yourself; there are many programmes available; titles include Microsoft FrontPage, Dreamweaver and Coffee Cup but there are many more to choose from. Most packages offer templates or automated wizards to help you get started.

Ask an expert…

If you would like to build an e-commerce site, but do not feel confident enough to build a site on your own you can employ the services of a web designer to do the job for you. You will need to create a detailed brief to help the designer create a website that meets your needs. Don’t forget that you will want to make ongoing changes to your website, such as amending prices or adding new products. Your site designer may do this for you for a fee, but it might be cheaper to buy your own copy of the software used to edit the content.

Using a database…

If you are planning to sell a number of products on your site, will need to make constant updates, or you would like to build in a blog or a discussion forum then you may need to implement a database. You can either buy an off-the-shelf database-driven website package, or ask a web designer to build the site for you.

You can find out more about designing and building a website in our business guide: Setting up a website.

How do I get my website online?

Before you start building your site you should think about signing up with an Internet Service Provider (ISP) who will host your website for you. There are many ISPs in the market that cater for business customers and the support and services offered are likely to be more comprehensive than a consumer-orientated provider.

Consider the following when making your selection:

• Will they host your chosen domain name?
• Do they offer a number of email addresses for you to use?
• Do they have templates and site building tools?
• Can they offer integrated shopping cart facilities?
• How easy is it to switch providers in the future?
• Do they charge monthly or annual fees? Is there a minimum contract?

Planning your site content

When planning your content a good place to start is your competitor’s websites. Ask yourself the following questions:

• What information and services do they have available?
• What do they look like?
• How easy is it to find the information you need?

The take a look at the websites you visit regularly and ask yourself the same questions. Take the good bits from the websites you have visited and then improve on them when building your own website.

Keep it simple…

Your content should be relevant, up-to-date and written in short sections to make it easy to read and understand. Pay attention to grammar and punctuation, and ask someone else to check your writing in case you have missed any typos or used too much jargon.

Build a profile of a prospective customer and look at your site from their point of view, or better still ask a real customer to review the content for you.

Make it easy for people to move around the website by using consistent navigation, and avoid using too many graphics as this increases the time it takes for your pages to load. If you need to use images to enhance your product descriptions make sure they are clear but keep the file sizes low.

Make it accessible…

By law your website must comply with the Disability Discrimination Act (DDA 1995), which requires you to ensure your site can be accessed by anyone with a disability. The RNIB website has detailed information to help you make sure your website is accessible.

Include important information…

If you are trading online then you should add the following:

• Your contact details, including address and telephone number, and VAT details if relevant
• A privacy policy explaining how personal data is protected and how financial transactions are carried out
• Your terms and conditions of sale
• A clear exchange/refund policy
• Delivery costs and timescales

How do I collect payments from my customers?

If you wish to collect payments from your customers through your website then you will need to include a virtual shopping cart and a secure way for them to pay.

Shopping with a virtual cart…

As your customers browse your site they can select items to put in their shopping cart. When they are ready to pay they visit your check out page, where they can supply you with their delivery address details and the details of their credit or debit card for payment.

The shopping cart must be easy for your customers to use; otherwise they may drop out during an important part of the transaction. You should also consider how simple the shopping cart is for you to manage, especially if you wish to use it to run special offer promotions on your site, or to send newsletters to your customers.

You can purchase shopping cart software and integrate it into your website, or you can use a third party provider who will host the cart for you. Many providers can sell you the full package including the shopping cart and the payment gateway you need to collect the card payment details. The downside is they are usually a standard design and cannot be customised.

Collecting the payment…

In order to collect the payment from the customer you will also need a merchant account. You can use a provider like WorldPay or PayPal, or you can approach a bank. You will need to check the service charges with the providers but you will usually be charged a percentage of each transaction charge, and in some cases there may also be a set-up fee and/or monthly service fee.

Our merchant service provider Cardnet® may be able to help you collect online payments from your customers. Find out more about Cardnet.

You can find out more about setting up a shopping cart in our business guide: Building a virtual shopping cart.

How do I get people to visit my website?

Once you have designed and built your site you need to make sure that your customers know where to find it. This promotion should be part of your overall marketing plan. If you already sell to customers through offline methods you should integrate you website into your traditional advertising and promotions.

Your target market is unlikely to be changed by your web presence, but you will be able to reach more of that target market as you are not confined to a specific geographical area.

Here are some ways that you can promote your website:

• URL – your website will need a URL (domain name). Choose a short and simple name that is easy to remember, quote this URL on all of your correspondence; put it on your business cards, your letter head, your packaging, and your adverts. Your URL is just as important as your business name.
• Offline marketing – place a small advert in your local newspaper, or write a press release about your new site and submit it you your local paper or trade magazine.
• Email marketing – collect email addresses from your customers, or buy a mailing list and send out an email about your website and your latest promotions. You will need to adhere to the Privacy and Electronic Communications Regulations which means you must have the person’s permission to send them an email, and you must also give them the option to un-subscribe from your list and avoid future mailings.
• Search engine marketing – you can use a service like Google Adwords to pay for a short advert and a link to your site to appear on the Google search page. You are charged on a cost per click basis, so that you only pay when someone clicks on your advertised link.
• Search Engine Optimisation – it is possible to optimise the content on your site so that it appears in the natural listings on a search engine when someone searches for a related topic.

You can find out more about promoting your website in our business guide: Promoting your business on the web.

If I trade online, how can I make the most of my banking?

Online traders have different needs to bricks and mortar businesses. If you are trading online then you are more likely to be using automated payment methods than cheques and cash. With this in mind we have created the Electronic Business Tariff, where payments such as direct debits, debit card payments and Internet banking transactions are free of charge when your account is in credit. There is a monthly fee for this tariff.

You can use our Internet banking service, Online for Business to access your business account from any PC at a time to suit you 20 hours a day, 365 days a year. You can also receive up-to-date balance information via our free Text Alerts service.

To make the most of the Electronic Business Tariff, or make online transactions yourself, you may also be interested in our range of plastic cards including, the Company Payment Card (Visa debit), or Business Charge Card.

All of these services can be used with our Business Extra Account.