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How to Set Up an Online Business 

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Business Advice
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By Kailyn Beatty

September 07, 2022

According to the office of National Statistics, internet sales in the UK have risen by 5.3% between February 2020 and April 2022. This can be an indication that online business has impressive financial potential. This article explains how to set up an online business in the UK and take advantage of the growing e-commerce world.

A Detailed Guide For Setting Up Your Online Business 

Setting up an online business can be a lengthy process, but with the proper knowledge, you can get your business up and running in a short time. To set up an online business:

#1. Research the Market

Adequate research into the market you’re about to go into helps you know your success potential in that particular market.

Carry out an in-depth competitor analysis to know your competitors and their selling points. Define your target audience and seek their opinions about your idea. You can use questionnaires to achieve good feedback from your target audience.

#2. Choose an Online Business Model

Your business model is your plan for profit generation; how you will deliver value to your customers. Some standard online business models include

  • Traditional store: You own physical products but advertise and sell them online.
  • Dropshipping: you partner with a wholesaler to advertise their products on your website. When a customer orders and pays for the product, the supplier processes the order and ships the product to them.
  • Affiliate: promote and sell a company’s product on your channels and receive a commission for each sale.
  • White Labeling: you partner with a manufacturer, get supplies from them, add your brand name and logo, and then sell.
  • Private Labeling: you buy products from a manufacturer or wholesaler and sell them.
  • Subscription: your customers register to get access to your online services.
  • Premium: you give your products or services a certain level for free. Your customer pays to get advanced features of your product.
  • Brokerage: your business acts as a middleman to connect buyers and sellers.

#3. Register Your Business 


Here are the steps to register your online business:

  • Decide the Type of Business Entity

There are two popular business entities in the UK: limited company and limited liability partnership (LLP). The two types of business entities differ in the method of taxation. A limited company pays a corporate tax rate, while an LLP uses a pass-through taxation system where owners pay tax based on their tax situation.

  • Choose a Company Name

Your company name should be unique, not be too long, and should give an insight into what your business is about.

  • Register Your Business With an Online Incorporation Service 

The service provider will ask for your business’s information and necessary documents relating to your business. Once you provide the requirements, the service provider files your application and sends it to the Companies House. 

Once the registration process is complete – which usually takes between 1-3 working days, the Companies House sends you a certificate of incorporation.

#4. Build Your Website

To build your website, you can either use a do-it-yourself website builder like Wix or contract a developer. Whichever option works for you, your website should be catchy and have a friendly interface to create a seamless buyer journey for your potential customers.

#5. Start Marketing 

Marketing is getting your products and services to the right audience. You could use different marketing strategies to promote your business; online advertising, email marketing, affiliate marketing, and Search Engine Optimization (SEO).


The United Kingdom offers a business-friendly environment, so it’s not surprising that online business is becoming more popular. However, get acquainted with the processes before setting up your online business. Every stage of the process is essential.


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