The invention of the internet has made our world borderless. Thanks to the development of the internet and technology now we can go shopping, run a business worldwide, etc. directly from our home. Nowadays, people are showing more interest in online business, and thanks to the internet you can now do online business in the USA without going to the USA.
If you want to run an online business in the USA then you will need a business idea that is profitable and has demand in the USA. Moreover, you will require an actionable business plan, domain name, and hosting plan, to start your online business in the USA. Moreover, you have to make a professional website and do search engine marketing to drive potential customers to your website.
What Is Online Business?
Online business is also known as e-business and it is a type of business where everything is done online including selling products, services, and receiving payment. An online business conducts its entire operation online and generates revenue from online sales. For an online business, an internet connection and website are mandatory. Here, the website acts as the point of interaction between the customer and the business. Some of the key tools/methods you will require to succeed in this platform are SEO, content marketing, social media marketing, paid ads, etc. Remember, online business is quite similar to offline business so you don’t have to do anything extravagant for the online business.
Advantages Of Online Business
The popularity of the online business is increasing day by day because it is more convenient and has lots of advantages compared to traditional offline business. Some of the key advantages of online business are –
1. Online business provides global access and you can keep your business open 24 hours a day, 7 days a week
2. Online business provides better flexibility so that you can improve your customer service
3. Online business is cost-saving so you can save lots of money from your investment
4. If your business sells niche products then the online business will be the right choice for you because people looking for a certain product or service can easily find your business
5. Setting up and running an online business is very simple and convenient
6. The availability of the internet and digital devices have made the online business demandable and customers find it more convenient for shopping for goods and services
7. It is very easy to do marketing for online businesses because there are various methods available including social media, email, online ads, and many more
8. Online business allows you to run and manage your business from anywhere in the world
How To Do An Online Business In The USA Without Going To The USA
You can easily do an online business in the USA because there are no restrictions on foreign citizens running an online business without living in the USA. It means you can run and manage your online business from the country where you live in. There are few important steps that you have to follow if you want your business a successful one in the USA. They are –
1. Identify the Niche and Business Idea
2. Develop a Business Plan
3. Conduct Product Research
4. Learn About Online Business Laws
5. Conduct Market Research
6. Choose a Business Name and Buy Domain
7. Define Your Brand and Image
8. Design and Build your Website
9. Define Your Target Audience
10. Source Products to Sell Online
11. Evaluate Product Viability
12. Grow the Brand Value of Your Business
13. Open an LLC in the USA with a virtual address and start doing business.
Identify The Niche And Business Idea
This is the very first step of an online business and it is a very important one. It’s like the foundation of your online business and if you won’t pick the right niche and business idea then your business will be a failed project. Usually, a business niche means a market segment and target audience for your business. Moreover, you have to justify the feasibility of your business idea because sometimes the most brilliant business idea can be unsuccessful. So before starting your business you have to analyze the market and see if your product or service has market demand or not. Therefore, you should evaluate your idea and the following questions will help you with that –
1. Does your product or service have enough potential customers?
2. Does your product or service provide a cost-effective solution?
3. Are people willing to solve the problem by spending money?
Develop A Business Plan
Once you are completely sure that your idea is feasible then your next step is to develop a business plan. Many people think that online businesses don’t require a business plan but they are completely wrong. Businesses just don’t require a business plan for obtaining funds, but they need it to identify potential problems as well as plan for future growth and profitability. The proper business plan will give you a good base for your business from where you can strongly build your business. A business plan will provide you a marketing road map, a clear idea of your audience and market, and help you make the right decision at the right time for your online business. There are many online tools available that will help you create a perfect business plan, or you can develop your business plan by yourself. Follow the steps below –
1. First, start your business plan with an eye-catchy summary
2. Now describe your business idea, its purpose, goals, objectives, etc.
3. Next, analyze and describe your market and your marketing strategy
4. Then describe your products/service and how they can be produced or solve the problem of the customer
5. Provide a summary of your management organization
6. Summarize your financial needs
7. Provide an outline of your future plan regarding the business
Conduct Product Research
This is also a very important part of an online business. Conducting product research will give you a clear idea about the product, its demand, market value, production cost, etc. There are three types of products you can sell online. They are –
1. Physical Goods
2. Digital Downloads
Physical goods are those products that require the manufacturing of the product. Usually, these types of products require a warehouse to store them, and finally, you have to ship the product to the customer. Selling physical products can yield you great profit if you can manage your operational costs.
You can also sell digital products because over the years the demands for digital products have increased rapidly. Digital products include everything that a customer can download to their device like eBooks, audio courses, online courses, movies, songs, etc. Digital products have a higher profit margin compared to physical products. However, the pricing of digital products is low compared to physical products.
You can sell all types of services that can be served remotely. Selling service is the fastest way to establish an online business and create brand value. But one of the problems with selling services online is your earning potential is limited because you are selling your time and you have a finite amount of hours each day.
Learn About Online Business Laws
It is very important to know the USA laws about an online business before starting the business. Many people think as they are running or going to open an online business, traditional laws don’t apply to their business. However, this is a completely wrong assumption. An online business might require fewer licenses and permits but still, the business owner needs to sort out several important legal details. For example –
1. Are there any permits that you require to take to open an online business in the USA?
2. Are there any rules about operating an online business without going to the USA?
3. Are there any inspections for an online business?
4. What types of products are allowed to sell online in the USA?
5. What types of services are allowed to sell online in the USA?
6. Do you require a sales tax license for an online business in the USA?
Moreover, every state has its own rules and laws. So don’t forget to check them before you start your online business.
Conduct Market Research
Proper market research will tell you what the customer wants and their opinion about the products/services that you are offering to them. It’s a very important part of an online business because it provides the depth, competitiveness, and profitability of the selected business vertical. For example, you don’t want to launch a product, service, or offer that no one cares about. Moreover, market research will give you an idea about the product price, and how the competitors are doing their business. If you are wondering how to do market research for online businesses then check the below steps –
Check the search engine results of your products/service to find out keywords related to those products
Check what type of website, content is ranking in the SERPs and who are your competitors
What type of business is doing paid ads to remain top of organic search results?
What type of digital marketing or SEO strategies the competitors are applying?
Check when the demand is high for your product or service, check if the product is seasonal or it has been demanded all year round.
Choose A Business Name And Buy Domain
Picking the right business name is very important for a startup’s online business. Your business is an online business so when you are picking a business name you must ensure that the exact domain name is also available for that specific business name. So if you find an appropriate business name with an available domain then try to register that domain name as soon as possible. Try to register a domain name that exactly matches the brand name of your business. If your domain name doesn’t match your business name then try to find a new name for your business with the domain. Moreover, you must check whether your preferred business name and domain are impinging on any registered trademarks or not.
Define Your Brand And Image
Brand value plays an important role in the future progress of an online business. So you want everything of your business including the name, logo, website, color, etc. brandable. So when you are working with the brand identity of your online business make sure you pay attention to your –
2. Color scheme
3. Page layouts
5. Graphics and photos
Design And Build Your Website
The next step is to design and build your website. Once you have got your domain name, brand, image, logo, color; now it’s time to design and build a website for your online business. When building your website, try to make the website as simple as possible. Moreover, it should have easy to use UI design so that the visitors can easily find what they are looking for. So when making a website tries to –
1. Choose one or two professional fonts on a white background
2. Make the navigation clear and simple for every page
3. Use videos or animation only if it increases the user engagement
4. You can include a pop-up offer box to collect the email addresses of the visitors
5. Make the buying process easy for the customer so there should not be more than two clicks between potential customer and checkout
Define Your Target Audience
You should also research your target audience as it will help you solicit sales and then scale your business. You have to understand who your targeted customer is and what their preferences are. So if you want to learn the needs of your customers then you have to do demographics and psychographics data research. Usually, the demographic data includes basic socio-economic characteristics like age, gender, ethnicity, income, job title, etc. of a customer. On the other hand, psychographic data include different information like values, beliefs, interests, opinions, etc. All these data will provide you an idea of the exact buyer’s need, preferences, and purchase triggers.
Source Products To Sell Online
The next step is to source products that you want to sell online. It’s a very important step because it can make or break your business. If you are sourcing products with high value then your profit will be low. You always have to try and find a source from where you can collect quality products at a low price. It will generate more profit for your business. So you should spend extra time outsourcing your products. If you are planning to sell digital products then you can make your own products.
For physical products, you can manufacture your own products but it will be time-consuming and you will need more investment. However, producing your own products will generate more revenue from your online business. You can also find a manufacturer that allows you to dropship their products. You can make deals with manufacturers to offset the business costs. Moreover, you can also make a deal with the wholesaler to provide you the required products for your online business.
Evaluate Product Viability
You must evaluate product viability before you make a big purchase or give a big manufacturing order. There are a few questions that can help you evaluate product viability. They are –
1. Is there any online business available that is already selling products like that?
2. Is the demand for this product permanent or is it temporary?
3. Does the buying/manufacturing price reasonable? Can you make a profit from selling this product?
Grow The Brand Value Of Your Business
Once you have launched your online business, now it’s time to grow the brand value of your business. There are many ways you can increase the brand value of your business and drive traffic to your website. For example –
1. You can do paid ads on different social media platforms and in search results. This is one of the quickest ways to increase the brand value for an online business.
2. You can also partner with social media influencers to promote your business and products/services.
3. You can do social media marketing to bring more organic traffic to your business.
4. Make sure your website is SEO optimized as it will give you better visibility in SERPs.
5. Email marketing is a very effective way of increasing brand value for your business. You can collect emails from your website and send promotional emails to potential customers.
How To Form A US LLC Without Living In The USA
If you want to start an online business then you have to form a US LLC. Having a US-based LLC will provide you lots of advantages regardless of whether you are an American or foreign entrepreneur. The best part of a US LLC is you don’t have to live in the US to open it. So if you are planning to open an online business in the USA without going to the USA then the below information will help you conveniently open a US LLC. Let’s check them out!
Select A State
The first step of forming an LLC in the USA is to select a state. Most business experts said that you should select a state that has no state tax. So, you only have to handle the US Federal Taxes. Basically, for an online business, you can open an LLC in any state. However, there are 2 most common states available when it comes to opening LLC for online business. They are:
Both Delaware and Wyoming have low taxes, maintenance fees, and rigid corporate law. If you are looking for a state with strong privacy laws then Wyoming is the best option for you. Other key advantages of Wyoming are –
1. Foreigner-friendly laws
2. Lower filing and annual fees
3. No state, personal, corporate, or capital gains taxes
Name Your LLC
Every state has its own law for naming an LLC. So when you are opening an LLC in a particular state you must follow the rules of that state. However, some common LLC naming rules are –
1. The name must include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.)
2. The name must not contain words that could confuse the LLC with a government agency like FBI, Treasury, State Department, etc.
3. There are restricted words like Bank, Attorney, University, etc. and they will require additional paperwork to be a part of the LLC
Hire A Registered Agent Service
When you are opening an online business in the USA and you don’t live in the USA; you will require hiring a registered agent service to form the US LLC. It’s a must requirement to form an LLC in most US States and is designated when forming your LLC. The registered agent must be a resident of that state where you are trying to open the LLC. So when you are trying to hire a registered agent service for your non-resident-owned online business in the USA, make sure you hire an agent that has a physical address in your business’s state. The main task of a registered agent is to send and receive legal papers on your behalf. Usually, the legal papers include official correspondence like legal summons and document filings, etc.
File Your LLC With The State
Once you have hired a registered agent, now it’s time to file the LLC with the state. The file you submit to form the LLC is also known as Articles of Organization. So if you want to run an online business in the USA then you have to file the “Articles of Organization” with a state entity. To form an Article of Organization you have to provide information including:
1. Business name
2. US business address
3. The nature of the business
4. Name, address, and percentage of ownership of all members
Create An LLC Operating Agreement
Though most of the states don’t require creating an LLC operation agreement it’s a best practice to open one to avoid any problem in the future. Many people become confused and think that both “Articles of Organization” and “LLC Operating Agreement” are the same thing, but they don’t! An LLC operating agreement is a basic outline of the ownership and operating procedures of an LLC. This type of operating agreement is important because it ensures that all the business owners are in the same legal document and it reduces the risk of future conflict.
Get An EIN
If you want to form an LLC in any state of the USA then you have to obtain an EIN. Here, EIN stands for Employer Identification Number and it is the tax ID for your LLC. The best part is; you don’t require a Social Security Number (SSN) or an Individual Tax Identification Number (ITIN), or a US mailing address to get the EIN. So you can easily get the EIN for your business without living in the USA. As a non-resident entrepreneur, you can follow the IRS’s online application process and apply by fax or mail. If you want to submit the form via fax or email then the fastest option is filling the IRS Form SS-4 Application for Employee Identification Number and then sending it.
Get A Physical US Mailing Address
Next, you will need a physical US mailing address in the state you choose to open the LLC. Though you are operating an online business as a foreigner in the USA you will need that physical mailing address to open a bank account in that state where your LLC is. You can easily get a physical mailing address by opening a physical office in the US. But if you don’t want to open a physical address then you can hire third-party services like Earth Class Mail to help you set up a real US Mailing address.
10 Best Virtual Mailbox Services
1. Earth Class Mail
2. PostScan Mail
3. Anytime Mailbox
4. Traveling Mailbox
6. Virtual Post Mail
7. US Global Mail
9. PO Box Zone
10. GRM Digital Mailroom
Open A US Bank Account
Though it’s not mandatory to open a Bank account to get a US LLC but having a US bank account can benefit your online business in many ways. However, opening a bank account is the most difficult part because most US bank requires the physical presence of the client when opening the bank account. So when you are operating an online business without living in the USA then it is quite impossible to appear physically during the time of opening a bank account. So in this type of situation, there are many 3rd part service providers available to provide all the services that you can receive from a bank. The two best options are –
1. Mercury: It’s best for eCommerce, SaaS, and service businesses
2. Wise: It’s best for affiliate marketing and content sites that earn ad revenue
List Of Best LLC Formation Service Provider/ 3rd Party LLC Creator
There are so many 3rd part LLC creators available that it’s very difficult to choose the best LLC formation, service provider. Different LLC formation service provider offers different services and their price range also vary so it’s very difficult to figure out which is the best fit for your company’s unique needs. To help you find the right 3rd part LLC creator our experts have researched some of the best service providers and created the comparison table. Let’s check them out!
|ZenBusiness||Great prices and features Outstanding customer reviews Registered agent included||Fairly new company|
|Incfile||Outstanding customer feedback Superior ease of use Wide variety of other services available||Quite a few upsells and third-party offers|
|Northwest Registered Agent||Included registered agent service Industry-best customer support||Not many customer reviews High price points|
|Rocket Lawyer||Tons of experience Strong customer feedback Solid customer support||Online incorporation service is overpriced No advanced features included|
|LegalZoom||High client volume Extended customer support hours||High prices Mediocre customer feedback No registered agent included with the incorporation|
|BizFilings||6 months registered agent included Plenty of experience Extended customer support hours||Mediocre pricing Vague turnaround times Very few customer reviews|
|Nationwide Incorporators||Attorney review on all documents The company president has 25+ years of business law experience||Prices are higher than many competitors Not all services available online Some services (like a registered agent) have variable pricing|
|MyCompanyWorks||Reasonable overall pricing Fantastic customer reviews Same-day filing||No registered agent included except with the most expensive package There are cheaper options available|
|MyCorporation||Great customer feedback Lots of experience||Excessive additional fees Poor overall value in LLC formation packages|
FAQS About Starting Online Business In The USA
1. What Is The Best Type Of Online Business To Start In The USA?
In the USA, you can start a product-based online business or service-based online business. For service-based online businesses, you can offer graphic design service, web development service, digital marketing service, accounting service, and all other services that you can offer remotely. Moreover, you can open product-based online businesses like online stores, etc.
2. What Is The Best Online Business To Start From Home?
There are many online businesses that you can start from home. Some of the best businesses are –
1. Launch a Dropshipping store
2. Become a freelance writer, designer, or developer
3. Affiliate Marketing
4. Start a blog
5. Become a virtual assistant
6. Set up an eCommerce store
7. Start an online SaaS business
8. 3D printing service
9. Start a YouTube channel
10. Buy and sell domain names
11. Become a copywriter
12. Offer online HR consultancy
13. Trade on the stock market
14. Buy and sell on eBay
15. Online project management consultant
3. What Kind Of Online Business Is Most Profitable?
E-commerce business is the most profitable online business. E-commerce business provides you limitless opportunities for scaling. Initially, you can start a small niche-based online store and then expand it gradually to establish a full e-commerce business.
4. Can You Start An Online Business With No Money?
Yes, technically you can start an online business without any capital investment. However, there are still some startup costs available like domain registration fee, website building fee, hosting fee, etc.
5. Can I Get A Green Card If I Start An Online Business In The USA?
The answer to this question is “yes” as well as “no”. You won’t get a green card if you start an online business in the USA unless you invest at least $1 million. If you start your business in a rural area then you have to invest as low as $500,000 to become eligible for the green card.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.