Starting an online business

Consumer habits have changed dramatically. By 2020, some experts predict that 90% of transactions will take place online or be internet-influenced.

Many businesses have long used their websites to generate additional revenue, yet in recent years there has also been significant growth in businesses that start up exclusively online, which can involve less risk, cost and effort.

As with any small business, the first steps to starting to trade online involves conducting market research to identify your target market, assess demand, competition and reaction to your prices from potential customers. You also need to produce a business plan.

If sales are likely to exceed the annual threshold (£81,000 in 2014/15), you must become VAT-registered. You'll also need to pay tax, in accordance with your status as a sole trader, limited company, etc. Online traders must also observe data protection legislation.

Marketing will largely determine your business website's success and search engine optimisation is crucial to this.