Starting an Online Business
Starting an online business can be a great way to make money and gain financial stability.
However, it can be difficult to know where to start or which type of online business is right for you.
In this article, we take an honest look at how to start an online business that’s tailored to meet your goals and needs.
Most beginners to online marketing often find themselves overwhelmed when it comes to choosing a profitable business model.
If they get on multiple marketers’ email lists, their inboxes will be swamped with money making opportunities… and it all sounds good!
The newbie is left thinking, “What will I even choose?!!”
With so many business models to choose from, it can be confusing to pick one… and tempting to want to try many different opportunities at the same time.
This is the root cause of ‘shiny object syndrome’.
When newbies see profits in so many different business models, they’re eager to stick their finger in many marketing pies.
The end result is that they choose business models that aren’t right for them… or they never make progress because they lack focus.
A lion that chases two rabbits catches neither.
Know Your Limitations
The key to starting an online business is to choose a PROVEN business model that’s in alignment with your natural talents, budget and time constraints.
Where do you stand?
Before even asking yourself which business model to pick… there are 3 pertinent questions you MUST answer:
- How much time do I have to dedicate to my business?
- What’s my budget like?
- Do I have any skills I could monetize online?
The more time you have for your business, the faster you’ll see progress.
If you only have an hour or two a day, it’ll take much longer for your business to gain traction.
There’s no such thing as fast profits online.
If you have enough funds to hire freelancers, you could accelerate the progress of your business even if you have no time – since you’ll be leveraging other people’s time.
However, most people who come online hoping to build a business, are often on a very tight budget. For them, the types of business models they can choose are limited… for the time being.
Having transferable skills can be a godsend when starting a business.
For example, if you used to work as a journalist, your writing skills could either be used in a freelance writing business or you could publish books on Kindle.
Similarly, if you were/are in occupations/niches such as real estate, stock trading, medicine, etc. you’ll have expert knowledge that you can use to create products that will sell.
A fitness trainer with lots of clients will have no problem creating a fitness course or offering meal plans for a fee, like Joey Swoll and Greg O’Gallagher (Kinobody).
Once you answer these 3 questions, you’ll not only know how much time and money you have… but also where your natural talents and experience lie.
Armed with this knowledge, you can wisely choose a business model which has the highest chances of success for you.
Choose A Business Model
Avoid this cardinal error!
The most common mistake newbies make when starting off is that they can’t differentiate a proven business model from a ‘get-rich-quick’ scheme that has been hastily cobbled together by a dodgy marketer eager to make a quick buck.
The 7 business models you’ll see below are proven to work. The litmus test here is that many other marketers are generating an income from them.
You’ll often see YouTube videos, products and other tutorials geared towards explaining these models.
On the other hand, when you come across a questionable product with names like, ‘Easy Profit Alchemy’ or ‘Fire Your Bozz’… or some other ridiculous name, your marketing Spidey senses should tingle.
You’ll hardly see any instructional videos about these courses. The only videos you might stumble across are ‘review videos’ where you see people praising the course because they’re affiliates for it.
Very often, the sales copy used to promote these products can be highly persuasive and convincing.
Fake income shots, fake testimonials, bold claims and other subterfuges are used to tempt newbies into buying the product and parting with their hard-earned money.
They’re often told that they can generate quick profits with just a push of a button or 20 minutes a day… None of these claims are true, and are only designed to lure you in and get you to buy.
In most cases, the products are unadulterated hype and the info does not work in the real world… The vendor is a serial product creator who makes money by conning newbies repeatedly.
You’ll want to steer clear of these products at all cost… Half the battle is won by avoiding rubbish schemes and choosing a legitimate product that works.
This point has been covered in detail here because it’s a serious problem that trips up thousands of beginners and makes them jaded, disappointed, and in some cases, broke and in debt… You have been warned.
Now let’s look closely at the different online business models that you can choose from…
If you’re on a tight budget, but you have skills and time, freelancing has your name written all over it.
Offer your writing or graphic design services – and if you’re good, you’ll have a steady stream of repeat clients.
In fact, there are many digital nomads who travel the world while making a 6-figure income as a freelancer.
Visit sites like Fiverr and see which services are in demand.
It’s easy to tell – just look at the number of reviews, orders in the queue, and the prices of the gigs… You’ll discover just how profitable some services can be.
Generally, skills and services related to digital marketing will be the most sought-after.
If you lack the skills, don’t panic… You can always learn a skill and offer it when you’re competent.
It’ll take you some time, but with 1 month of daily practice, you’ll probably be good enough to start taking orders.
For example, if you purchased the Thrive Themes, you could offer website building services.
In the image above, we can see that the vendor is charging $85 just to set up a functional 1-page website. This is extremely easy to do.
Over and above that, he has 60 reviews, which means he received at least about 120-180 orders so far, since only about 30% of customers leave reviews.
He also has 2 orders in the queue which means the service is in demand.
By now you should know just what a goldmine freelancing can be, if you have the skills.
All too often, marketers make it look like you’re shortchanging yourself by working for others rather than building your own business.
In reality, many freelancers have a lot more freedom and make more coin than the marketers who claim to have ‘their own business’ and don’t trade hours for dollars.
If you’re on a tight budget but you have time (especially seniors, retirees, students, etc.), freelancing can make you a substantial income.
Once you’re making the money, you can start building a secondary income stream based on one of the 6 business models below.
Affiliate marketing is a highly popular business model among marketers.
Here are a few reasons why so many newbies flock to this business model:
- Start-up costs are low
- There’s a wide range of products you can promote (with attractive commissions)
- You don’t need to deal with customer support or product fulfilment
- The business model is scalable and flexible
All these points are true and paint a rosy picture of affiliate marketing… But it has its downsides too.
For starters, while you may have flexibility, but you don’t have control. Vendors can reduce commission rates, change their affiliate terms, boot you out of their program and much more.
You never really build a brand name/authority because you’re always promoting other people’s products… Promotion usually needs to be ongoing or your commissions will dry up.
While a product vendor may have 20 affiliates making money for him round the clock, you don’t have a team working for you.
Should a newbie start off with affiliate marketing?
If you have time and a budget of about $200, affiliate marketing can be a good business model to embark on.
The concept of affiliate marketing is simple: you pick a method of driving traffic, send them to a landing page to build your list… and use email marketing to promote affiliate offers.
Alternatively, you can just skip the list building part and point them straight to your affiliate products.
You’ll need to learn how to drive traffic. This is the MOST IMPORTANT skill you’ll need.
Whether you do it with YouTube marketing, niche sites or paid ads, you must be able to send traffic that converts… Do note that if you’re using paid traffic, you’ll need a much higher budget.
Now let’s look at niche sites…
Niche sites are another popular business model… and extremely lucrative, if you know what you’re doing.
The major downside to niche sites is that they take ages to gain traction… You’re looking at anywhere from 1 to 2 years.
People who are looking to make quick money online will NOT want to start off with niche sites.
This business model can be expensive, if you’re hiring freelancers to do your content creation for you.
It’s also a labor intensive model because you’ll need to do keyword research, post content, build internal and external links and much more – and you’ll have to do it consistently for months on end.
Initially, you’ll see a trickle of traffic… and over time, the traffic will snowball.
Here’s where the fun begins. If you’re using display ads on your site, you’ll earn a revenue from that… Or you may have affiliate links and have a side income there.
The most profitable tactic will be to flip the site for 20-30 times the monthly profit… So, if the site is generating $3k a month, you can charge 60-90k for it.
Niche sites can be highly profitable if you’re willing to be patient until it’s profitable.
You need time, quite a few skills and a content budget, if you wish to ramp up the content creation process and accelerate your site’s progress.
Product creation can make you thousands of dollars within a short time if you do it well. It’s actually one of the easier business models.
That said, you’ll need to be able to create an outstanding product – which means you need skills and must have spent time in the trenches so you know what works.
It’s very easy to go down the wrong path here and create products that don’t deliver, which is what the unethical vendors do.
If you have a loyal group of experienced affiliates who keep promoting you (regardless of the abysmal quality of your product), you’ll still make sales and profits… but at the expense of your reputation.
To prevent this from happening, you must spend time honing your skills until your marketing WORKS… Once what you’re doing works, you can teach it.
For example, if you’ve built a successful freelancing business by selling on Fiverr and you have the stats and experience to back you up, now you can create a Fiverr training course and sell it for $47-$97… or more.
Since you’re living proof that what you’re doing works and you’re walking the talk, potential buyers will be easily convinced to purchase from you.
To make the product creation business model work, you must have marketing skills.
You also need to be able to create a sales page, funnel, accept payments, recruit affiliates and drive your own traffic… It goes without saying that you need to build your list too.
While it may seem like there’s a lot to learn, you’ll be able to learn most of it in a month or two… and the good news is that you only need to learn it once.
For example, after building your first sales page, every other one after that will be easier.
You may need to pay for a domain, page builder, graphics and an autoresponder software.
If you’re willing to do most of the work yourself, you could create your first product for less than $100 and earn 4-5 figures in profit, if you have sufficient support from affiliates. This is definitely doable.
All in all, if you want ‘faster’ profits, product creation can work for you.
The start-up costs are relatively low… It’s a lot quicker than niche sites or the next business model we’ll look at below.
This is a tricky business model… Most of the people who get into it fail miserably because it requires passion and patience.
If you love writing, you’ll have no issues creating books on fiction and/or non-fiction.
Most beginners will require at least 25-30 books before they see a substantial income from Kindle publishing.
Some may see success sooner… others later.
But one thing’s a given – you need to keep writing and publishing consistently… That’s just the first step.
If you don’t have the passion for writing, you could hire freelancers to write books for you. This is legal and an easy way to build a business. However, it’ll cost you quite a bit of money.
The good writers cost more. If you want your books to sell well, they must be well-written… and you’ll have to pay for that.
Don’t even think of using ChatGPT here… Nothing beats a human writer.
Over and above that, whether you’re writing the book yourself or hiring the job out, you’ll still need to pay for a book cover.
It’s best to get a professional graphic designer to do your cover for you because – people usually judge a book by its cover… Sites like 99designs are great for covers.
If you wish to get sales faster, it’ll help to pay for ads with Amazon Advertising or use Facebook ads.
To sum up this business model, you need writing skills (or a budget to hire writers) and money for advertising.
This is NOT a business model that will make you ‘fast’ money.
It’s less predictable than niche sites and requires you to have a very specific skill set to succeed with it.
If you don’t have a passion for writing or books, this is not the business model for you.
For this article, ecommerce will refer to several business models such as dropshipping, fulfilment by Amazon (FBA), print-on-demand (POD), selling on Etsy and other marketplaces.
Ecommerce has made more young adults millionaires than any other business model online.
Finding cheap products on AliExpress and selling them on a Shopify store for 5X the cost price used to be very profitable… It still is, but not as much now.
Depending on the type of ecommerce you’re doing, the skills required may vary.
If you’re dropshipping, you’ll need to know how to find products, set up an ecommerce store (with Shopify, Woocommerce, etc.) and run paid ads to your store.
If you’re using Etsy, you may need graphic design skills to create t-shirt designs, mug designs and so on. You’ll also need a small budget to list your items on the marketplace.
Fulfilment by Amazon (FBA) requires a much higher budget because you’ll be storing inventory in Amazon’s warehouses and so on.
This business can get you fast profits if you already have the necessary skills.
However, if you’re still learning, it can be costly and you could spend thousands and still be in the red.
It’s the riskiest business model of the lot, but also the one with the highest profit potential because of its scalability.
If you’re on a tight budget, Etsy may work for you – but it’ll take a while to get sales.
You’ll also need a couple of hundred to thousands of products to make a stable monthly income from it.
If you’re doing dropshipping or FBA, you must have a couple of thousand dollars in your budget to run ads, maintain inventory and so on.
This business model is best for people who have experience with paid ads and have a budget.
The last business model we’ll look at is a relatively laidback one… On the surface, it looks simple, but it requires a sharp eye and some experience.
You’ll be snapping up domains that have expired or you might even buy a new domain and wait to sell it… It goes without saying that you need a budget here to keep buying domains.
However, this is the easy part… What’s difficult is trying to find a buyer for your domains.
There are several ways you can increase exposure to your domains such as listing them on Sedo, using domain brokers, proactively networking and reaching out to potential buyers and so on.
Currently, a domain costs about $10 or so. When you’re selling your domain to someone else, the price you can charge is mostly dependent on what the buyer is willing to pay.
You must have negotiation skills and an implicit understanding of what a domain is worth. A knack for buying domains that will sell is also crucial.
It’ll take you time, money, and experience to make domaining work consistently… This is a simple business model, but is one that’s best used as a secondary income stream.
For example, if you’re already a successful freelancer, you may start domaining. You could recommend your domains to clients and might get sales. Since domains are valid for a year, you have time to find a buyer.
A marketer who is in a rush to make money will be sabotaging himself by getting into domaining because there are too many variables at play… They’ll be better off with the other business models which are more predictable.
Conclusion: Get Started Now
You should have a good idea of how to start an online business by now. And you should be aware that regardless of the business model you choose, there will be a learning curve and it will take time to see a sizable profit.
While starting an online business has much lower fixed and variable costs than a traditional brick-and-mortar business, there are still costs involved.
From buying a domain to paying from an autoresponder – there are payments and fees you’ll need to cover.
Do not be too hasty to quit your day job because you’re expecting to make ‘quick profits online’… You’ll get a nasty shock when you see the amount of work and time required at the beginning.
You’re better off working at your day job while you work on your business (on the side).
If you’ve picked a business model that’s a good fit for you, and you assiduously and consistently work on your business, it’s inevitable to see success with it.
Your efforts will snowball, and your knowledge and experience will open new possibilities for you… In time to come, you’ll earn more in your business than you do at your day job.
From here on, you can decide what you wish to do. For now, pick a proven business model that works for you and stick with it until you succeed. 🙂