Do I need to register my online business? Does my business need a website? Will I have to pay taxes and SSNIT? How do I find customers online? How much will it cost to start my online business?
These are only a few of the questions you need answered if you want to start an online business in Ghana.
Covid-19 led many businesses online and many more are still coming online even now because it has become obvious that there is a lot more Internet in our future.
And that’s why we’ve created this guide for you, whether you want to start or grow your online business, you’ll get many of the answers you need here.
What’s an online business?
An online business is any business that provides its products and services via the Internet. They are usually contrasted with offline businesses where products and services are provided via face-to-face transactions.
Currently though, an online business seems to encompass almost every business that doesn’t have a physical shop or presence from where customers can patronise the goods and services offered.
For example, if a customer wants to buy a pair of shoes from an online business, they’ll usually go to that business’ website, select the shoes they want, make the payment and their shoes will be delivered within a day or so.
On the flip side, if that customer decided rather to buy a pair of shoes from an offline business, they’d get out of their house, drive to that business’ shop or store, find the shoes they want, have a feel of them and even try them on before paying for the shoes and driving home with their new purchase.
Because you’re considering starting an online business in Ghana, this article will lay out some of the pros and cons of having an online business.
Why should I start an online business?
There are a number of great reasons to start an online business. Perhaps you want the freedom to work from anywhere in the world.
Or you want to make sure that you’re able to build an asset you can hand over to your kids. Maybe you just don’t want your earning ability to be capped.
You’ll find below a few good reasons to start an online business in Ghana if you’ve got an idea you want to try out.
Starting an online business isn’t expensive
Of all the business in the world to start, probably the cheapest is an online business. You don’t have to worry about office space and physical store signage and furniture for customers and all that.
You can literally launch your online business in 24 hours or less without spending too much money.
You can have a flexible work schedule
An online business can allow you to work on your own terms. You get to be your own boss and work as long and as hard as you like, whilst also being able to carve out important time for your family.
If your kid has an important event you need to be at, no worries. You can rearrange your schedule to be there.
You can work from almost anywhere in the world
Many online businesses can be run from almost any location on earth. As long as you have a stable Internet connection and a laptop, you can log in and manage your business and be on top of all that’s going on.
You can make a lot of money and grow the business
One of the goals of every business is to turn a profit. If you’re able to serve people with what they need at a great price, the profit potential of your online business can be incredible.
An online business can be a major investment and asset
Everyone is always looking for what they can invest their money in and fads come and go. Today it’s treasury bills, tomorrow it’s cryptocurrencies. The next day it’s stocks and the day after it’s a well polished ponzi scheme.
Investing in your own business can be one of the best investments ever, if you do it right. There is risk with every single investment in the world including a business, that’s why starting one online can sometimes limit your risk and financial exposure.
But if successful, you will have a true asset on your hands.
It can work for you 24/7
Online businesses don’t have to go to bed. Your business systems can be running for you all day and all night without requiring a break.
Jeff Bezos, currently the richest man in the world owns Amazon.com. This is a gigantic online business that makes money for him day and night, when he’s awake or asleep, whether he’s happy or sad.
If you earned $180,000 every day from the day Jesus Christ was born, you would still not be as rich as Jeff Bezos.
Having an online business that does a little bit of that for you can greatly improve the quality of your life.
The future is online
It is quite an indisputable fact that the future is more and more online. Who knew that a worldwide pandemic in Covid-19 would lead to most companies adopting a remote work policy.
If even the largest companies in the world are finding a way to have their employees work online, then you can best believe that more and more of what we do offline is going to continue moving online.
Access to a worldwide market
Depending on who your business appeals to, your online business can grow to be something truly global with customers from China to Canada.
By simply tapping into international payment systems and platforms, anyone anywhere in the world with a Visa or MasterCard would be able to patronize your products or services.
Potential for passive income
One of the greatest benefits of an online business is that it can enable you earn passive income. Passive income is basically income that comes in without you having to do much work.
The way a stock provides you a dividend, or a treasury bill provides you with interest, so an online business can provide you with sales and revenue that you didn’t have to work hard for, as long as you built your business with the right systems in place.
Online business ideas and models in Ghana
Probably the very first thing you need to do when you want to start an online business in Ghana (or any business at all for that matter) is to have an idea of what your business will do.
Actually, most successful people in business didn’t have just one idea, they probably had several. They had several ideas, even tested some of those ideas and at least one succeeded.
It’s a bit impossible for us to provide you with guidance on what will make for a successful or profitable business idea in Ghana though. That’s because everyone considers success differently.
You might not be satisfied with a business that makes you GHc500,000 a year whereas someone else will be over the moon with that same business making them only GHc50,000 a year.
Similarly, you may not have the skills, talent, know-how, marketing chops or contacts to make a particular business idea work whereas for someone else, it’ll be a walk in the park.
But most importantly, almost every innovative company you see today was likely written off somewhere in their history by others thinking that it would never work.
So whilst your business is not guaranteed to succeed, being nimble and starting small is always a good idea to test the waters and eventually scale.
And remember, your online business doesn’t have to do something brand new that has never been done before. You only have to serve a group of people better.
If you’re starting an online shop or ecommerce business in Ghana, we recently did a study on the most popular ecommerce categories which you might want to take a look at.
So whether you’re selling a hard-to-find but effective skincare product, or providing online training on a subject that appeals to your target audience, just make sure you’re serving your customers faster, cheaper or better. The latter is one reason why Amazon succeeded.
Not only do you need to have an idea of what you want your business to do, you’re also going to need to think about how it’s going to make money, or its business model.
For example, let’s take the media and entertainment industry. That’s one big industry with lots of players.
Some people have an entertainment business that:
- creates entertaining video content
- sells equipment needed to create video content
- trains people in how to create entertaining content
- connects advertisers to businesses that need sponsorship for their content
- provides actors, props, locations for recording videos and skits
- provides editing, animation, sound and video effects for movies and videos
- provides cinematography and recording services
- helps with distribution of entertainment content locally and internationally
As you can see, having a business in entertainment can mean many, many different things. And that’s before we come to the business model and how the money would be made.
Whether through advertising, sponsorship, donations, investor funding, sales of merchandise, income from streaming, royalties, sales of DVDs, sale of the company itself and a whole lot more.
If you want a list of online business ideas you can study on and think through, you’ll find a few below:
- Blogging
- Affiliate marketing
- Freelancing services
- Starting a YouTube channel
- Ecommerce
- Selling courses, ebooks, audio tracks, music, photos, digital downloads, etc
- Sell a service like coaching, consulting, training, etc
- Software-as-a-service business
- Buying and selling websites or domain names
Want more? Here’s an article on 106 Online business ideas you can start today
How much does it cost to start an online business in Ghana?
Depending on the type of online business you’re starting, it could cost you absolutely nothing to get started. Alternatively, if your business model is complex or has major barriers to entry, it could easily cost you upwards of GHc100,000 or even much more.
The variables impacting the cost of starting your online business in Ghana include:
What type of business entity will you be registering as?
If you’re running your business in your own name, you might not need to register at all. If as a sole proprietor, it’ll cost you approximately GHc60. As a limited liability, you’ll incur approximately GHc280 in filing fees.
How much capital will you be starting up with?
If you’re starting your online business as a limited liability company, you’re required to pay 0.5% of your stated capital as part of the registration fee when registering with the Registrar General’s Department.
Some businesses with foreign participation in the trading industry for example, will end up paying at least GHc29,000 in stated capital fees alone.
What’s the business model of your online business?
If you’re starting small, you might be able to bootstrap your business, needing little capital. Other businesses need to grow fast and furious and capture a significant share of the market to have any chance of survival.
Such companies might need to raise capital just to start.
Will you require a simple or a complex website?
Some online businesses require a GHc100,000 website, others can make do with a GHc1,000 website. Some choose to skip the website requirement entirely.
There are various factors that influence the cost of a website, including:
- Website Type and Function
- Creation Method
- Design
- Domain Name
- Hosting and Security
- SSL
- SEO
- Meetings
- Revisions
- Payment Terms
- Delivery Time
- Website Maintenance
- Others
We have a terrific article breaking down the cost of website creation in Ghana. We do recommend you give it a read.
Do you need any special licences or permits?
You may be starting a business in an industry that requires a special permit or licence. A few examples include food manufacturing, health, oil and gas, accounting, law, architecture, construction, etc.
Acquiring these permits or licences and staying in compliance with their requirements is another cost to factor in when starting your online business.
Do you need any special technology, software or equipment?
If you’re planning on starting a software-as-a-service company, or a Ghanaian search engine for example, you might need some special or proprietary technology, software, equipment or inventions to help make that happen.
Are you starting alone or do you require employees?
Different businesses have different requirements when it comes to labour. If you’re a solopreneur, you can get things done yourself. But if your startup needs a team of 50, you’ll have to factor in the cost of employees, salaries, taxes and SSNIT contributions.
Do you need to stock inventory?
If you’re starting up an ecommerce business, you may need to stock up on the various products you sell in order to deliver the moment you open your doors. If you’re into dropshipping though, you might not need inventory.
Are you boostrapping the company or do you need investors to start?
Some people like to build their companies slowly. Others need to move really, really fast and so they need to raise capital or have investors.
Other expenses
This list could probably go on a bit longer but these are a few of the things to consider, aside initial marketing costs, payment processing fees, legal fees, professional fees, office space, etc.
Not all of these will apply to your business, but you should certainly look into the ones that do.
Do I need to register my online business?
We get asked this question by quite a few people when we’re creating websites for them.
“Do I need to register my online business?”
In the vast majority of cases, the answer is yes. Whether you’re doing business online or offline, you most likely must register your business.
The only situation under which you do not have to register your business, is if you do business in your own name. This is stated in the Registration of Business Names Act, 1962 (ACT 151)
(1) Subject to subsection (2), there shall be registered in accordance with this Act,
(a) an individual having a place of business in the Republic, who
(i) carries on business under a business name which does not consist of the true surname of that individual without an addition other than the first names or the initials…Registration of Business Names Act, 1962 (ACT 151)
So if you do business in your own name as a freelancer, blogger, author, etc, you most likely do not have to register a separate business name. Disclaimer: you would still have to pay personal income tax on all income that you make.
Let’s look at 3 scenarios quickly.
In the first scenario, you are doing business or a side hustle as an individual. For example, let’s say you’re a teacher by profession and want to help other school children around the country with Math.
You decide to provide online tuition sessions via Zoom. You have a few students, parents start paying you and there you go, you’ve got a small business going on right there. Congrats!
Your business does not have a legal name though because it’s just you doing business as you. You accept any payments either in cash or to your Mobile Money wallet or bank account that’s all in your name, no problems.
If this works for you, that’s fine. You just have to make sure you file and pay your personal income tax to the GRA (Ghana Revenue Authority) each year and that you don’t go parading yourself as a business under any other name but your personal name.
Now to the second scenario. Business is booming, you’re getting more and more students to teach but you can’t handle them all. So you’re expanding your business a little.
You’re hiring two other people to help with teaching students one-on-one. But you’re also building a website where students can watch and playback the various lessons you’ve taught and get access to an array of other content.
The kids (or their parents) just have to sign up on the website, make the needed payment and that’s it.
Expanding your business and having employees now necessitates some changes. You now have to pay employees, make sure they’re paying taxes, pay their SSNIT contributions and also have a name for your business that is more brandable to appeal to a much wider array of students.
For that to happen, you have to move up from doing business as an individual to doing business as a sole proprietor (or enterprise).
At this level, you get to register a business name, let’s say, “MaxMath Education Ent.” You get to register a bank account or mobile money wallet in that name so that people making payments to you are more confident in your business.
You also are able to capture more attention for your business with your branding, logo, website, radio slots, flyers and every other marketing method you can fund.
MaxMath Education is going places!!
In the third scenario, you decide it’s time to get help in running and growing this business. Maybe you add some very important people to the company who are willing to invest significant money to help the business grow.
Or a leading educator wants to help take your business international and so they’ll be getting a share of the company in return.
Maybe for stability and company succession reasons, you want to grow this business and leave it to your children. You don’t want it to be the type of one-man business that dies the minute the founder passes on.
At this level, it’s time you level-up again and register the company as a limited liability company, now calling it MaxMath Education Ltd.
If your business has reached the point that you want to register it as a sole proprietorship or as a limited liability company, you’ll have to swing over to the Registrar Generals Department office or to their website in order to register your business.
Whilst registering a sole proprietorship does not require much paperwork and is relatively cheap, registering as a limited liability company is much more complex and a bit more expensive.
For example, if you register as a limited liability company, you also have to register and have a chartered tax auditor audit your accounts every single year.
You need to submit audited accounts every year to both the GRA (Ghana Revenue Authority) and the RGD (Registrar General’s Department).
And depending on the amount of business you do and the choice of auditor, they’ll charge you a pretty penny each year. Make sure you get your money’s worth by getting all the advice they can give you to structure your business properly when it comes to finances and taxes.
How do I register a domain name for my business?
As an online business, your domain name is one of the most important assets you might purchase.
A domain name is simply the name via which your website can be found online. We for example have chinaitechpay.com as our domain nam
When thinking about a name for your business, you should also be thinking about a domain name for your business. And ideally, you should register the two hand-in-hand if you can.
The reason for that is because you need to make sure that both are available before you go ahead with your registration.
If you want to find out whether your domain name is available, you can check that below:
And if you want, you can confirm here that the name you want to register with the RGD is available.
There are 2 main reasons why we think it’s useful to purchase your domain name BEFORE you register your business though.
Firstly, you will notice when filling forms to register your business that the Registrar General asks for your email address and also your website.
Whilst you can certainly enter a generic email address at Yahoo or Gmail, these are the official registration documents for your business and bearing your business email account and business domain name or website name can be important.
You at least won’t have to pay to change or update that information later on in your business’ life.
Secondly, it can be very disheartening to customers to register a name for their business only to find out that the domain name they desire so deeply has already been bought up and used by someone else.
In actual fact, there is a whole industry of “squatters” and all they do is to purchase the domain name of other businesses in order to either sell them at a higher price, or to try and inflict some damage on the new business.
We mentioned this in our article on the 25 Most Common Website Problems and Solutions where Jumia went and bought up 10 domains of Konga, their competitor in various countries in order to block their expansion plans.
Don’t let that happen to you! Make sure you purchase the domain name for your business as soon as you confirm its availability. Wait too long and someone else might purchase it.
The cost to purchase a domain name varies a lot though. Whilst you can usually secure a standard .com domain for between GHc60 and GHc200, there are a lot of other factors that can influence the cost.
If you want more information on that, we’ve covered it in the Domain section of our article on How much does a website cost in Ghana.
Once you’ve secured your website’s domain name, another thing you can do is to consider whether you’ll be doing any marketing via social media.
If you will, securing the usernames on those platforms will also help prevent other businesses or competitors from taking those handles for themselves.
You can simply sign up on Facebook, Instagram, Twitter, TikTok or the social networks you choose, to claim the usernames for those pages.
Do I need a website for my online business?
As mentioned previously, there are many different types of online businesses you can start and whilst a website will enhance every single one of them, some lend themselves to having a website more than others.
For example, in the not too distant past, it would have been almost unthinkable to be a blogger without having a website (a blog is a type of website that shows the latest posts and articles in reverse-chronological order, or the newest information first.)
Nowadays though, you can win national blogging awards with only an Instagram account!
One might say, “But you won’t be able to monetize your content with banner ads if you don’t have a website.”
Whilst true, there are Instagram influencers who gather an enormous following, dishing out the latest gossip, news and entertainment and by posting sponsored content from brands and businesses, they make tons of money.
You may want to debate the difference between bloggers and Instagrammers some more, but the world is rapidly changing, making new things possible.
That being said, there are very, very valid reasons to have a website for your online business. We list 8 of them below:
- Make your customers happy
- Free advertising and exposure
- Business emails
- Gain International customers
- Professional branding
- Automation and systems
- Effective advertising and analytics
- Maintain permanent access to your customers
We expound on each of these in this article: Do I need a website for my business in Ghana?
Should my business accept payments online?
So, bit by bit, your online business is moving along nicely. People are interested in what you have to offer.
When it comes to accepting payment for your product or services, this is likely going to depend on how you make your money or your specific business model.
If you run a blog or you’re a YouTuber and you make money from Google placing ads on your content, then you’re going to be paid via any of their options that work for you. Be that cheque, Western Union Quick Cash, Wire Transfer, etc.
Most businesses in Ghana though accept payments via cash (sometimes on delivery), mobile money, bank transfer or cheque.
These are all manual payment methods, meaning that in most situations, a whole conversation must be had back and forth between the buyer and the seller before the money is transferred or paid.
Once done also, there’s sometimes another back and forth with regards to the business verifying that the payment has been received and then proceeding to fulfill the order.
For some online businesses, starting out this way works for them. But for many other businesses, they need to accept payments automatically, with no human intervention.
The best online businesses in the world need to have the most secure, fastest and widest reaching payment systems possible. That’s why they usually accept payments online.
If you’ve ever shopped on Amazon or Kikuu, or subscribed to Netflix or run advertising on Facebook or Instagram, you’ll notice that there was absolutely no human intervention in the payment process.
You selected what you wanted to pay for, you put in some details, your payment went through and that was it.
Nobody asked you, “Please, have you paid?” nor did you ask them, “Please, what is your momo number?”
Depending on the type of online business you have and who your target market is, you might be losing some of your customers to other businesses that provide such seamless and stress-free online payments.
So why do some businesses choose to accept payments online? Here are a few reasons:
- No human intervention reduces the risk of errors
- No possibility of being paid with fake notes or currencies
- Ability to accept payments from around the world
- Automatic currency conversions
- Seamless experience for customers where everything happens online
- Fastest payment option possible
- Ability to set up recurring billing options
- Instant validation of payment
- Scalability. Enables 100 or even 1,000+ people make payments to the business all at the same time.
- Multiple payment methods automatically available
- Can help small businesses look more professional
Whilst people have different experiences, generally speaking, one issue to look out for with online payments has to do with technical issues. Depending on the payment processor who helps you accept payments, you may run into a few of those.
At the end of the day, we do recommend that your online business definitely have the option to allow customers and clients pay for your goods and services online.
If you want more information on this, we’ve got a great article on the Best Gateways to Accept Online Payments in Ghana. In it, you’ll discover:
- Who the top 10 best payment gateways in Ghana are
- The fees they charge
- Which ones provide for international payments and multiple currencies
- Their registration requirements
- How to integrate them into your website
and a whole lot more. Alternatively, if you’re targeting an international audience, then being able to accept payments via PayPal even without a PayPal account might be a priority for you.
Accounting and record keeping
And now we’ve reached the most exciting topic of all when it comes to business. Okay, I guess probably not the most exciting but important nonetheless.
If your business is to succeed, you’re going to absolutely have to be on top of your money issues. At all times, you need to know how much money is coming in and how much money is going out.
We discovered a while back that many profitable businesses collapse and shutdown forever for the simple reason that they were not carefully watching what was happening to their money.
These businesses experienced a problem with something called cashflow. It means that at a point in time, for whatever reason, the business needed to pay out more money than it currently had.
And with no way to get access to that money (maybe they’d already maxed out family and friends and business loans), they had to shut down the business. That’s even aside the possibility of people inside the business embezzling money.
