Hello future business owner!
Have you considered starting your very own online business? Whether you’re looking for a side hustle or planning to build something big, the online world offers endless opportunities. And the best part? You don’t need to be a tech genius or have a big budget to get started.
We like to think of the journey of starting an online business as being similar to developing your dream property—you need a strong foundation, the right tools, and a well-thought-out plan to make it all come together. The great news is that starting an online business is more accessible than ever, and this guide will walk you through every step, from finding your niche to scaling your business.
Types of Online Business Models
Before we dive into the steps, it’s important to know what kind of online business fits your goals and skills. Each offers their own unique opportunities, challenges and trade-offs. Here are a few popular models you should know if you are looking into getting to online business for yourself:
E-commerce
E-commerce is nothing new, and chances are you’ve heard about it before. You might even remember when Ebay, Facebook marketplace or Etsy first became a thing. E-commerce is the term we use anytime you sell physical products online, often using popular platforms like Shopify or Amazon. Whether you’re selling homemade jewelry or sourcing products from manufacturers, the beauty of e-commerce is that it allows you to reach customers globally. Example: If you love fashion, you could sell your own clothing line or curated fashion pieces. Advertising is usually a necessary part of e-commerce online business, but some people drive traffic using social media and content marketing.
Service-Based Business
If you have a specific skill set—like writing, designing, or consulting—you can offer your services online. The range of services that can be offered online are nearly limitless. Some popular examples can include freelance graphic design, virtual assistance, or online coaching. Some people start out on platforms like Fiver or UpWork, while others reach their target audience using social media platforms like X (Twitter) or even Instagram.
Digital Products
This involves selling products that can be delivered digitally, like e-books, printables, or courses. For instance, if you’re knowledgeable about photography, you could create a beginner’s guide and sell it as an e-book. You usually need to have built an audience if you want to sell digital products. Whether its selling your self-published book on Amazon or a course you developed in your particular niches, some popular ways to drive traffic include social media marketing and content creation platforms like YouTube.
Affiliate Marketing
In this model, you earn commissions by promoting other people’s products. If you run a blog or social media account, you can recommend products or services and earn money when people make a purchase through your unique referral link. This works well if you have a specific niche and high traffic to convert to sales. Partnerships can range from referral fess to commission percentages. Generally digital products like SAAS (Software As A Service) models pay more than physical products and figures can range from 1%-2% for electronics to 25%-50% on some digital offerings.
Dropshipping
This is where you sell products, but instead of holding inventory, a third-party supplier ships the product directly to the customer. You act as the middleman without the hassle of managing inventory. For example, you could start a home décor store without ever storing or shipping the products yourself. Social media marketing on Pinterest or TikTok can be good ways to generate interest in your dropshipping store. Think of it as Ecommerce lite.
Subscription Model
Offering access to exclusive content, a product, or a service via subscriptions is another great online business model. Think of apps like Netflix or a membership-based community. To find yourself in the unique position where you can make decent money off this type of offering you will need to build a dedicated and loyal audience who loves what you do and can afford to pay you for it. Some examples of people who have made this work include content creators who have sailed around the world and been supported by patrons on platforms like Patreon. The more unique your offering, the better you will stand out in this niche!
Content Creation
Monetizing blogs, YouTube channels, or social media accounts through ads, sponsorships, or product placement is another route to starting and online business and making money online. For instance, starting up a travel blog or YouTube channel where you share your experiences and get paid through affiliate links and ads.
You might not know exactly which of these online business models you want to try your hand at, and that’s okay. Just keep them in mind while you think about the next step in starting an online business: how to actually get going in a specific direction by finding your own unique online business offering, or “niche”.
1. Finding Your Niche
Finding your online business niche is a lot like choosing the perfect neighborhood for your home. Your niche should be something you’re passionate about, but it also needs to have market demand. In other words, it should strike that perfect balance between what you love and what people are willing to pay for. Here are three steps to get you closer to identifying your own unique and most profitable niche.
Three Steps to Identify Your Niche
Step One: Passion + Profitability
This is the easy part. Think about what excites you or what you enjoy. What are your hobbies, passions, or skills? Create a list and then work on refining it into more general categories. Next, combine your hobby or passion with something that solves a problem for others. If you’re passionate about fitness, for instance, maybe your niche could be at-home workout plans. If you love cooking, fashion, fitness, or technology, these could be potential niches.
Perhaps you have an idea for how to do something better than how its been done before, or you have a problem of your own that you would like to solve. These are all great ideas for combining your passion with a future audience and future customers. The next step is to do some research to determine just how many people might be interested in your offering.
Step Two: Research Competitors
After you’ve identified some key niches that you think you could work with, it’s time to scout the competition. You will need to examine trends or keyword research to find out if people are searching for the products or services you’re thinking of offering. This can help validate whether your idea has demand. Take an online search drive through the “neighborhood” of your niche by researching what competitors are doing. Then consider what makes you different. How can you add value?
Your idea might hold a lot of weight and have genuine value, but you also need to know who you’re competing with for the attention of your audience, end users or customers. If you can identify gaps in the current offerings available from your future competitors, you might be able to capture a corner of the market. This step is crucial to determine your chances of success, so make sure that you’re thorough.
Step Three: Identify Your Target Audience
Now comes the fun part. Picture your ideal customer. What are their needs? What problems can you solve for them? Your future ideal customer for your online business might be someone a lot like you. What do you understand about the problem you are solving that you can bring to the table as a possible solution? What motivates
Tip: Use tools like Google Trends or Ubersuggest to identify profitable niches and see what’s trending in the market. The goal is to carve out a space where you can shine.
2. Developing a Business Plan
Once you’ve chosen your niche, it’s time to create a simple business plan. This plan will be your roadmap, outlining how you’ll grow and monetize your online business.
Your business plan is the blueprint for your online business. Without a solid plan, building a successful business can feel like assembling IKEA furniture without instructions—it’s frustrating, and you’re likely to end up with missing pieces.
Your Business Plan Should Include
- Executive Summary: A brief overview of what your business is all about.
- Objectives and Goals: What do you hope to achieve? Set realistic and measurable goals.
- Target Market: Who are your customers? Are they young professionals, stay-at-home parents, or retirees?
- Competitor Analysis: Know what your competitors are offering and how you can compete.
- Products or Services: What are you going to sell? Will it be physical products, digital courses, or consulting services?
- Revenue Model: How will you make money? Will it be through product sales, subscriptions, or affiliate commissions?
- Marketing Strategy: How will you attract customers? Will you use social media, SEO, email marketing, or paid ads?
Having a plan gives you a clear direction and helps you stay focused on your goals.
Tip: Start small with a one-page business plan. You can expand on it later, but getting the basics down on paper will help guide you in the early stages.
Step 3: Set Up Your Online Presence
Setting Up Your Website
To start an online business, you’ll need to establish your digital presence. The most important step here is setting up your website. Thankfully, you don’t need to be a web developer to do this.
Your website is the front door to your online business, and just like a well-designed home, it should be inviting, easy to navigate, and reflect your brand.
Choosing a Domain Name and Hosting:
- Your domain name is like your address—it should be easy to remember and relevant to your business. Choose a reliable hosting provider like Bluehost or SiteGround to get your site live.
Selecting a Website Builder:
- Platforms like WordPress, Shopify, or Wix are your construction tools. Choose a builder based on ease of use, customization, and your specific needs. For example, Shopify is great for e-commerce, while WordPress is a solid choice for blogging.
Essential Pages for Your Website:
- Home Page: The welcome mat—make a strong first impression.
- About Page: Tell your story and why customers should trust you.
- Product/Service Pages: Showcase what you offer.
- Contact Page: Make it easy for visitors to reach you.
- Blog: Optional, but a blog can attract organic traffic and establish your expertise.
Tip: Start with a clean, simple design. Your website should load quickly and look great on mobile devices since many customers will be browsing on their phones.
Step 4: Legal and Administrative Steps
Starting an online business is exciting, but you’ll need to take care of some paperwork before opening the (virtual) doors. It’s like getting permits for your dream home—necessary, but not as fun as picking out furniture.
Registering Your Business:
- Depending on where you live, you’ll need to register your business. Choose the right structure (sole proprietor, LLC, etc.) to protect yourself legally.
Getting a Business License:
- Some businesses need specific licenses or permits. Check local regulations to make sure you’re compliant.
Setting Up Business Finances:
- Open a business bank account, separate from your personal finances. Use tools like QuickBooks or Wave to track income and expenses.
Tip: Keeping your business and personal finances separate is key for tax purposes and staying organized.
Step 5: Building Your Brand
Your brand is more than just a logo—it’s the personality of your business. Think of it as the style of your home. Do you want your brand to feel modern and sleek, or cozy and welcoming? Building a strong brand is crucial for connecting with your target audience.
Defining Your Brand Identity:
- Choose colors, fonts, and a logo that represent your business. Tools like Canva can help you create professional-looking designs.
Creating a Consistent Visual Identity:
- Consistency is key. Use the same colors, fonts, and style across all platforms—your website, social media, and marketing materials.
Tip: Your brand is the first thing customers notice. Make sure it reflects the values and message of your business to build trust and recognition.
Step 6: Marketing Your Online Business
Marketing is like throwing a housewarming party—you want to invite the right people and make sure they know how to find you. Without good marketing, your online business will be hard to discover.
Creating a Marketing Strategy:
- Free vs. Paid Marketing: Start with free methods like social media and SEO, then expand into paid advertising once you’ve got the basics down.
Core Digital Marketing Channels:
- SEO: Search Engine Optimization helps people find you on Google. Use tools like Ubersuggest to research keywords and make sure your website content is optimized.
- Social Media Marketing: Platforms like Instagram, Facebook, and Pinterest are great for showcasing your products and building a following.
- Email Marketing: Build an email list to communicate directly with your audience. Services like MailChimp and ConvertKit are beginner-friendly and effective.
- Paid Advertising: Once you’re ready, Facebook Ads or Google Ads can help drive traffic to your website.
Tip: Start small with your marketing. Experiment with different channels, see what works, and focus your energy there.
Step 7: Monetize Your Business
Monetizing your online business is where the magic happens! How you make money will depend on your business model.
Ways to Make Money Online
- Selling Products: If you’re running an e-commerce store, you’ll generate revenue by selling products directly to customers.
- Affiliate Marketing: If you’re blogging or using social media, you can recommend products or services and earn a commission from sales through your referral links.
- Offer Services: If you have a service-based business, such as coaching or freelance writing, you’ll make money by charging clients for your expertise.
Make sure you have a clear pricing structure and understand the costs associated with running your business, such as website hosting fees or product inventory.
Setting Up Payment Processing
You wouldn’t open a physical store without a cash register—similarly, you need to set up payment processing for your online business. Make it as easy as possible for customers to pay you.
Choosing a Payment Gateway:
- Popular options include PayPal, Stripe, and Square. Choose one that integrates seamlessly with your website.
Setting Up Payment Systems:
- Ensure that the checkout process is quick and secure. Avoid long forms or too many steps to prevent cart abandonment.
Pricing Strategy:
- Be competitive, but don’t undervalue yourself. Consider offering discounts for first-time buyers to attract initial customers.
Tip: A smooth checkout experience is key to converting visitors into paying customers. Test your payment system regularly to avoid hiccups.
Step 8: Scaling and Growing Your Online Business
Once your online business is up and running, it’s time to think about growth. Scaling is like adding rooms to your house—you want to do it strategically and make sure everything flows.
Tracking Metrics and KPIs:
- Use tools like Google Analytics to track website traffic, conversions, and sales. These metrics will tell you what’s working and what needs improvement.
Customer Retention Strategies:
- Keep your customers coming back by offering excellent customer service and loyalty programs. Repeat customers are the backbone of a successful business.
Expanding Your Product Line:
- Once you’ve established a steady flow of sales, consider adding new products or services to your lineup. But be cautious—don’t overwhelm yourself with too much too soon.
Tip: Focus on sustainable growth. It’s better to grow steadily and maintain quality than to scale too fast and lose control.
Bonus: Starting an Online Business with No Money
What if you’re starting with little or no money? No problem! Many online business models don’t require a big upfront investment. Here’s how:
- Start Small: Use free website builders like WordPress or Wix to build a simple site. You can always upgrade as your business grows.
- Use Free Marketing Channels: Focus on organic traffic from SEO, social media, and email marketing to attract customers without paying for ads.
- Dropshipping: You can start an e-commerce store without holding inventory, which means you won’t need to invest in stock upfront.
- Freelance Services: If you have a skill, such as writing or graphic design, you can offer your services without needing any capital to start.
Step 9: Common Mistakes to Avoid
Starting an online business can be a learning curve, and it’s normal to make mistakes along the way. The key is to avoid the big ones that can slow down your progress.
Pitfalls for Beginners:
- Not having a clear plan or niche (it’s like building without a blueprint).
- Ignoring branding and marketing.
- Trying to do too much at once.
Advice for Success:
- Stay focused on your niche, keep your marketing consistent, and don’t be afraid to make adjustments as you go.
Tip: Every mistake is an opportunity to learn and refine your approach. Embrace the process!
Conclusion
Starting an online business may seem overwhelming at first, but with the right foundation, the right tools, and a clear plan, success is within your reach. Remember, this is a journey, and every step you take brings you closer to your goal. Take that first step—whether it’s researching your niche or setting up your website—and get started today!
Ready to launch your online business? Start by building your website or researching your niche. Let’s get your online business off the ground!