How to Start an Online Business
With more and more people choosing to go remote than ever before, it’s no surprise that many have chosen to ditch the nine-to-five altogether and start a business of their own.
With location independence, flexibility and financial freedom, the choice to start an online business seems to be the obvious choice for those looking to take a different path. What’s better, is that there are many types of online businesses aspiring entrepreneurs can start based on their unique interests.
Want to go remote and start making money online? Follow along with this 12-step guide on how to become an online business owner.
Why Start an Online Business?
There are many reasons why people may choose to start an online business. One of the most common reasons is the appeal of having a location-dependent small business—one that can operate online as long as you have a computer and an internet connection.
Here are the most common perks of starting a small business online:
- The ability to set your own hours
- The freedom to work from anywhere
- Financial freedom and flexibility
- Low overhead and high margins
- Infinite scaling potential
- Limitless online (and offline) networking opportunities
- Access to a worldwide market
Best Online Business Ideas for 2020
Online businesses cover a wide range of industries—from fashion e-commerce to consulting to software companies. The good news is that you can turn nearly any idea into a lucrative small business as long as there’s a demand and you have a solid business plan.
That said, here’s a shortlist of some of the best business ideas for 2020 to either help you jumpstart your small business or inspire your own unique business idea:
- Start an affiliate website: Affiliate marketing takes blogging a step further by promoting affiliate products rather than relying on revenue from display ads. With an affiliate business, you are able to sign up for affiliate programs—typically through Amazon or ShareASale—and get a commission when you sell another brand’s products. That way, you don’t need to hold inventory or rely on high traffic numbers.
- Set up an e-commerce store: E-commerce businesses either hold inventory and sell their own products or fulfill orders via a third-party manufacturer/distributor. With an online store, you can sell anything—from graphic T-shirts and makeup to gadgets and travel gear. The key is to find a profitable market, choose the product(s) you want to sell, and then get set up on an e-commerce platform like Shopify to start promoting your products.
- Launch an online course: The market for information products and online courses is hot right now, as more people are looking online to learn new skills. If you have knowledge to share, you can turn that know-how into a course to sell in an online store. The most common online courses have to do with marketing, starting a business, learning a skill (like photography), or improving one’s health, but you’re likely to find courses on nearly any topic.
- Coaching or consulting: Again, if you have a marketable skill set, people will be willing to pay you to learn how to do what you do. This could be a consulting role where you get paid a set rate to share your expertise, or a coaching role where you work one-on-one for an extended period of time.
- Copywriting: Copywriters are needed by businesses large and small to help them increase their sales. If you have a knack for writing compelling content, you might want to try your hand at copywriting. As you get better results for your clients, the sky’s the limit in terms of how much you can charge.
12 Steps to Starting an Online Business
Every business is unique, so your journey to success is likely to be, too. While we have outlined 12 steps to guide you, know that sometimes you’ll have to veer off the beaten path to find the right approach for your business.
If you’re starting from scratch, these steps will help you get from the idea stage to running your own successful business online.
1. Fulfill a Need
One of the biggest mistakes new business owners make is having an idea and taking it to market without considering whether it’s something people are willing to buy. You may think you have a million-dollar idea, but if no one is interested in what you have to offer, you’ll struggle to find a way to make money.
Your best bet is to find a product or service that fulfills a need consumers may have. For example, Nike provides clothes and shoes to consumers looking for high-quality athletic wear and software companies like Salesforce help businesses that need a reliable customer management system.
Do you have an idea for a product or service? Consider whether it will fulfill consumers’ needs in some way, and if it does, what that need might be.
Then, go on to research your target market to make sure that consumers are actively looking for goods or services like yours.
2. Research Your Target Market
Before going all-in on your business, you will want to make sure you have a tested concept that consumers actually want to buy. The best way to gauge interest in your offer is to survey your target audience.
Here are the steps to conducting market research for your online brand:
- Define your target audience: Who do you think would be most interested in your products or services? What does this target audience look like in terms of interests, pain points and demographics?
- Make a market research survey: You can use free survey tools like Google Forms to create a quick survey to send to your target audience. It’s recommended that you reach out to at least 10 people who may be interested in your product or service (again, focus on those who are in your target audience).
- What is your biggest struggle when it comes to [e.g., “marketing your business,” “finding clothes online,” “creating business invoices”, etc.]?
- What methods have you tried to overcome these struggles?
- What is your number one goal when it comes to [e.g. “marketing your business effectively,” “finding clothes online,” “sending professional invoices”, etc.]?
- On a scale of one to ten, how interested are you in [your service/product]?
- How much would you be willing to pay for [your service/product]?
- Where would you go to find [services or products] like this?
- Tally up your results: Examine the responses to your market survey to identify any trends or outliers. Is it clear that there is an interest in your service or product? If so, you can move forward confidently, knowing that you can make a product or release a service people are willing to pay for.
You should conduct market research every time you want to take a new service or product to market. It may seem tedious, but it will help you avoid putting time and energy into promoting an offer that won’t sell.
3. Define and Refine Your Offer
The responses to your market research survey will also help you define and refine your offer. While you may have thought you had a rock solid idea, feedback from real people may encourage you to go back to the drawing board or make changes to your existing offer.
For example, maybe you have the idea of starting an online lead generation agency to help other businesses get more clients. If your target audience said they are more interested in increasing website traffic than boosting social media engagement to generate leads, then your may agency may want to start focusing on traffic generation over marketing to get clients.
Another step to this is researching which products or services are already out there. While having competitors is a good sign (there’s a clear market for your services or products), you will need to find a way to have your offer stand out from the crowd.
Ask yourself: How can I make my offer unique and compelling enough so that it’s the obvious choice for my prospective customers?
4. Write Your Unique Selling Proposition
Your unique selling proposition (USP) is a statement that explains who you serve and what you offer. It also explains how your product or service works to fulfill a need for your customers.
An example of a clear and concise USP is:
“[Brand name] helps small businesses get more high-quality leads with data-driven website marketing services.”
This statement makes it crystal clear who you help and how you help them. Writing your USP will help you get laser-focused on who your target is and then launch marketing campaigns that speak directly to their needs.
Record your USP internally and save it for your reference so you always have a clear focus for your business. Later on, you will use this same messaging in your website copy and marketing content to draw in potential customers.
5. Launch Your Website
Not every online business needs a website, but it’s usually the first place to start when it comes to attracting customers via search engines. The good news is that website platforms like WordPress and Squarespace offer plenty of easy-to-use, low-cost templates to get your website up in no time.
There are a few things your website will need to have in order to start attracting new customers. These include:
- An eye-catching, professional-looking design
- Home page content to hook in new visitors
- An ‘about’ page describing the business to potential customers
- Service or product pages for each of your offers
- Compelling website copy to keep visitors interested in what you have to offer
- Clear calls-to-action to entice visitors to buy from you
- A contact page or customer service center to assist customers
- High-quality images to make your website look professional
- E-commerce capabilities, to sell products online (if applicable)
- A blog to drive traffic to your website (preferred)
As your business grows, you can invest more in creating a custom website design with professional sales copy. But when you are first getting started, it is OK for your website to serve as a simple portfolio site or landing page to which you send potential customers.
6. Publish Audience-Focused Content
Remember the USP you wrote for Step 4? Here’s where that comes into play.
If you’ve already noticed competition in your market, then you’ll need a way to set yourself apart from “the other guys.” With your market research and USP in hand, you will now write content that speaks directly to the needs of your potential customers.
Using the previous example again, perhaps you found that your target audience of small business owners really needs help generating website traffic. While other lead generation agencies may be focused on social media or paid ads, you can highlight your skills (like search engine optimization, or SEO) in helping businesses grow their website traffic.
Your goal? To create content that outshines that of your competitors and communicates to potential customers that you have exactly what they are looking for.
7. Drive Traffic to Your Website
Now that you have a rock-solid offer and amazing content, it’s time to direct users to your website. There are a few methods you can use to drive paid and organic traffic, including:
- Social media marketing: Posting on Facebook, Instagram, Twitter and the like to get more followers and direct them to your website
- SEO: Optimizing your website for the keywords potential customers are using to find businesses like yours in search engines such as Google and Bing
- Paid ads: Also known as pay-per-click (PPC) advertisements, run ads on Facebook, Instagram, Google or similar platforms to drive more clicks through to your website
- Referral: Form partnerships with other brands and websites that will direct traffic to your site via guest posts, a referral network or an online directory
8. Establish a Social Media Marketing Plan
Again, you want to keep your USP in mind when it comes to creating social media content that speaks to your target audience. How can you position your brand against the competition with content that appeals to the unique needs of your potential customers?
It’s best to start with one channel until you have a tried-and-tested marketing strategy. Then, extend to other platforms to increase your traffic-generating potential.
Some content ideas that work well on social media are:
- “How-to” posts
- Live videos
- Catchy graphics
- Blog posts
9. Keep Your Customers Happy
The success of your online business depends on you being able to provide amazing services or products to your customers. If you make your customers or clients happy, they are likely to buy from you again and send new business your way.
Do your best to respond to customer service inquiries in a timely manner and do all you can to keep your customers satisfied with your services. Then you can ask for glowing reviews to entice other customers to buy from you.
10. Grow Your Referral Network
Your goal should be to turn existing customers into loyal brand advocates. By going above and beyond, you’re likely to earn referral business from your customers and brand partners.
Connect with other businesses who can see the value in sending business your way. With a mutually beneficial referral partnership, you can generate a consistent stream of new customers and even earn referral bonuses.
11. Manage Your Business Finances
Depending on your business structure, you may take payment upfront, in installments or upon completion of a project. In any case, you will need a straightforward process for billing your customers and managing your business finances.
While many e-commerce platforms allow you to sell products and take payment online, you’ll need invoicing software to bill clients for services if you are an online service provider. This software will allow you to process credit card payments and direct transfer payments online, track expenses, send automated reminders and keep your business finances in check.
12. Measure Online Success
Last but not least, you’ll want to measure the success of your business so you’re prepared to scale. Track website traffic (with tools like Google Analytics), revenue growth (with accounting software), sales and new client leads to monitor your business’s success.
With this information, you can set new goals and aim for new milestones. You’ll be able to scale sustainably—increasing your online revenue and minimizing your expenses for maximum profit.
Start and Grow Your Own Online Business
Have a business idea? If so, you’ve already got the ball rolling when it comes to becoming a business owner. Now’s your chance to put thoughts into action by taking the above steps to establish your own online business.
There are many paths to success, so don’t be afraid to pave your own way. At least with our guide, you’ll have some actionable steps for how to start an online business in no time.