How to start an online business in six steps

Starting an online business at a glance

• Choose how you’ll sell (online store or over the phone payments)

• Integrate and test your payment provider

• Reconcile transactions weekly to track cash flow

• Keep a buffer for refunds and chargebacks

• Set aside tax money from every payout

• Review processing fees and subscriptions regularly

• Use a dedicated business account to keep finances organised.

Step 1: Validate your business idea

Before you invest in a brand, website or ads, make sure real customers are willing to pay. Validation reduces risk, saves time and ensures you’re building something people actually want when you’re looking to start an online business.

Market research into competitors – what type of ads are they running?

Review competing products and services across websites, social channels and ads. Note positioning, pricing, messaging and ad frequency (for example, Facebook, Google, Instagram). Strong, consistent activity often signals demand and reveals any gaps you can fill.

Paid discovery calls or upfront deposits

Offer paid discovery calls or secure a small deposit. Willingness to pay early is a strong signal of intent and gives you direct feedback to refine your offer.

Pre‑orders for a product or service

Run a pre-order to test demand and fund early production or build. This not only validates demand but also helps you refine your service based on direct feedback. If customers are willing to pay before the full product or service is launched, it’s a strong sign your idea is viable.

A simple landing page with a clear offer and payment option

Publish a focused landing page with a clear value proposition and a “Buy now” or “Sign up” call-to-action. Add a payment option or email capture and track conversions to validate interest with real data. This cost-effective method provides real-world data on customer interest and purchasing behaviour, helping you decide whether to move forward or adjust.

For inspiration on business ideas, check out our article on the top 50 easy side hustle ideas.

Step 2: Choose a business model

Choose a business model that matches your timeline and complexity and how you’ll get paid.

Services or freelancing

Freelancing lets you earn quickly by using the skills you already have. It requires almost no upfront cost beyond promoting yourself, and you can start by contacting your network or using platforms like Upwork. Setup is simple, and you can adjust your services as you learn what clients want. It’s a great option if you want to validate your expertise quickly or earn income while building a larger business idea.

Digital products

Digital products like eBooks, courses, templates or software can scale easily because there’s no inventory or shipping involved. The challenge is that customers need to trust your brand or expertise before buying, especially at the beginning. Sharing valuable content, collecting testimonials and building credibility helps overcome this. Once established, digital products can generate passive, global income but gaining early trust is the key hurdle.

Physical products

Selling physical products takes more preparation than services or digital items. You’ll need to manage sourcing, inventory, packaging, shipping and customer support, along with risks like returns, refunds and lost or damaged orders. Demand is strong, but these operational complexities affect cash flow and customer satisfaction, so they’re important to plan for.

Subscriptions

Subscriptions offer predictable, recurring revenue through memberships, subscription boxes or ongoing services. But setting up recurring billing, managing churn and consistently delivering value require more effort. Done well, the model can be highly profitable, but it needs careful setup and ongoing management.

At this stage, focus on anything that affects payments and cash flow.

Learn more about starting a business.

Step 3: Open a business bank account

Set up a business transaction account as early as possible, even while you’re still validating your idea.

Clear tracking of customer payments, fees and settlements

A dedicated business bank account keeps all income and expenses in one place, making cash flow much easier to monitor. You can clearly see customer payments, provider fees and settlement timing, giving you a clean picture of your financial performance.

Easier tax and GST management

Separating business and personal finances keeps your records clean and makes tax time far simpler. With all business income and expenses in one account, calculating tax, claiming deductions and managing GST is far more accurate and less stressful.

Fewer issues with refunds and chargebacks

When business transactions are isolated, refunds and chargebacks are easier to verify and track. You can quickly confirm payments, provide accurate records for disputes and protect your personal funds from business-related refunds or chargebacks.

A more professional setup for customers and suppliers

Using a business transaction account lets you send and receive money under your business name, which builds trust and credibility. It presents your business as established and reliable, strengthening relationships with customers and suppliers.

See why you should open a separate business bank account.

Explore our Business Everyday Account ($0 monthly fee)

Step 4: How to get paid online

Online payments follow a simple flow: the customer pays at checkout, the transaction is authorised, then funds are settled to your business account. Settlement usually happens within hours to a few business days. Understanding authorisation, fees and settlement timing helps you manage cash flow from day one.

When choosing a payment provider, prioritise:

Clear and predictable fees

Look for providers that clearly outline their fee structure, including transaction fees, monthly charges and any additional costs for refunds, chargebacks or international payments. Predictable fees make it easier to budget and avoid unexpected expenses.

Settlement speed and reporting

Faster access to funds plus clear reporting for payments, settlements and deductions makes reconciliation easier.

Fraud and chargeback support

Robust fraud tools and clear dispute processes reduce risk and protect revenue. This can help protect your business from unauthorised transactions and disputes, reducing financial risk.

Ability to scale without rebuilding your setup

Choose a solution that grows with you, including new products, channels and payment methods, without rebuilding payments later.

NAB offers options such as NAB Gateway, designed for growing online businesses.

Learn more about online payment gateways.

Step 5: Set up payments and test everything

Keep setup simple and test end-to-end before you launch.

Decide how you’ll sell

Choose the sales channel that fits your offer and how your customers prefer to buy, for example, online storefronts for multiple products or taking payments over the phone for services or custom orders. Each option has its own setup requirements and advantages, so select the one that best supports your business model and customer experience.

Connect your payment provider

Connect your chosen payment provider to your sales platform by installing the required plugins or apps and following the provider’s setup steps. Make sure all payment methods you want to offer are enabled. Proper integration streamlines checkout for customers and helps prevent transaction issues.

Link it to your business account

Set up your payment provider so that funds are deposited directly into your business bank account. Double-check account details to avoid delays or misdirected payments. Linking your accounts securely also helps you monitor incoming funds and ensures you’re ready for reconciliation and reporting.

Run a test transaction

Before launching, process a test payment to make sure everything works as expected. This includes checking the customer experience during checkout, confirming payment approvals and verifying notifications or receipts. Testing allows you to spot and fix technical issues before real customers encounter them.

Confirm when and how funds settle

Review your payment provider’s settlement schedule, i.e. how quickly funds from sales are deposited into your account and familiarise yourself with reporting tools. Knowing the settlement timing helps you manage cash flow and plan for expenses. Many providers offer dashboards where you can track incoming payments and settlement periods.

You can check settlements in NAB Gateway.

Step 6: Launch, get paid and stay in control

Start small and improve as you go

Soft launch to validate the customer experience and payment flows. This approach allows you to identify and fix any friction fast. Collect feedback from your first customers and use it to refine your processes, ensuring your system is reliable and user-friendly before scaling up traffic.

Publish your offering

Ensure products, pricing and payment methods are accurate and active.

Announce it to your network

Share your launch with your friends, family, professional networks and social media followers to generate early traffic, feedback and word-of-mouth promotion. Consider using email campaigns, social posts or direct messaging to spread the word and drive traffic to your offering.

Run a small introductory offer

Incentivise first purchases and collect reviews. Make sure the offer is easy to redeem and clearly communicated to avoid confusion or missed opportunities.

Fix friction before increasing traffic

Resolve checkout issues and payment failures before scaling marketing. Look for issues like abandoned checkouts or payment failures. By resolving friction early, you ensure that when you scale up marketing and traffic, your systems are ready to handle increased demand without disruptions.

Early things to monitor

Checkout completion

Track conversion through checkout to identify friction points.

Failed payments or refunds

Investigate declines, errors and refund reasons to improve clarity and fulfilment.

Settlement timing

Verify payout timing so you can plan expenses and inventory.

Customer questions

Use FAQs and clear product pages to reduce repeat enquiries.

Stay in control as you grow

Reconcile payouts weekly

Reconciling your payment deposits with your sales records each week keeps your financial data accurate and up to date. This habit helps you quickly spot discrepancies, unexpected fees or missing payments before they become bigger issues. Weekly reconciliation also protects you from fraud and gives you a reliable view of your cash flow, making it easier to plan expenses, pay suppliers and monitor overall business performance.

Keep a buffer for refunds and chargebacks

Refunds and chargebacks are a normal part of selling online, so maintaining a financial buffer helps you manage them without disrupting your cash flow. A set-aside reserve ensures you can handle returns, cancellations or disputed charges promptly. This protects your operations and helps you maintain customer trust by resolving issues quickly and professionally.

Set aside money for tax purposes early

Allocating part of each payout toward taxes helps you avoid yearend stress and unexpected liabilities. By setting money aside regularly, you’ll be better prepared to cover income tax, GST (if registered) and other business obligations. This proactive approach supports compliance, reduces the risk of errors and ensures you can take advantage of eligible deductions.

Review fees and subscriptions regularly

Payment processing fees and digital subscriptions can accumulate over time and reduce your margins. Regularly reviewing these costs allows you to spot unnecessary expenses, negotiate better rates or switch to more cost‑effective providers. Staying on top of your operating costs ensures you protect your profitability and keep your business running efficiently.

Your business account is the financial control centre that helps make all of this easier to manage.

Common mistakes

Launching before you can accept payments

Many new businesses go live without fully testing or completing their payment setup. This leads to failed transactions, lost sales and a poor first impression. Before launch, ensure your payment gateway is installed, integrated correctly and able to accept secure payments.

Mixing personal and business money

Combining personal and business funds makes bookkeeping messy and complicates tax reporting. It also makes it harder to understand how your business is performing. Always use a dedicated business account for all business income and expenses to maintain clarity and professionalism.

Ignoring settlement delays

Payment processors often take several days to transfer funds to your account. If you don’t factor in these settlement delays, you may face cash flow gaps when paying bills or suppliers. Understanding your payout schedule helps you plan ahead and avoid shortfalls.

Under-pricing and losing margin to fees

Pricing products too low without accounting for transaction fees, shipping and other costs can quickly erode profitability. Always calculate your full cost per sale and price accordingly to protect your margins.

Scaling traffic before fixing checkout issues

Driving traffic to your website won’t help if customers abandon their carts due to a slow, confusing or unreliable checkout process. Before investing in marketing, thoroughly test your checkout for speed, clarity and security to maximise conversions.