Online businesses are the modern version of the American dream. You work from home and set your own hours, yet you’re raking in the dough left and right. You know that’s what you ultimately want, but how do you get there?
First things first: how do you start an online business? Before we take another step, let’s figure out exactly what that online company should be, because truthfully, the possibilities are endless.
How to Figure Out Your Online Business
Sometimes the most difficult part of launching a startup is nailing down what the company will be, what services or products it will provide, and how it will make money. Try these tips to define your business step by step.
1. Evaluate Your Skills
Everyone has skills that could translate into a business, you just have to figure out what they are. What do you have to offer the world?
Maybe you’re great at search engine optimization, so you could provide that as a service. For someone with strong administrative and organizational skills, an online store could be a great choice. It all comes down to where your talents lie and what your interests are.
2. Decide Your Business Format
There are essentially two directions your company could go: providing a time-based service or making passive income. For instance, online freelancers and businesses that sell products are generally time-based businesses because they require your time and energy for every dollar you make. An example of passive income, on the other hand, is an online course you’ve created. When more people buy the course, it doesn’t necessarily create more work for you.
Which path would you prefer to take? Passive income is easier to grow but there are more opportunities with traditional companies and services that require your time. Many entrepreneurs today opt for both: they begin with a product or service but add related sources of passive income later.
3. Figure Out the Monetization
With some business ideas, the most challenging part is finding a way to monetize the company. For example, many people want to start a blog based on their knowledge or their passions. Blogs have great potential but you must learn how to monetize them through options like affiliate marketing, selling ads, and selling sponsored social media posts.
In other business models, the way you make money is more clear-cut but the difficult part is crunching the numbers. Source your materials, find out how much of your time each product or service requires, research competitors, and work out your process accordingly.
Next Steps for Starting an Online Business
So you have a solid idea for your company and a way to make it profitable. What’s next? Follow these steps to have a successful launch.
1. Research the Legal Logistics
Many entrepreneurs have invested their time and money into a business idea they loved, only to discover that there were legal hurdles they didn’t expect and it all fell apart. That’s why it’s important to research any legalities early in the process.
For instance, find out if you’ll need a business license. Learn what types of insurance and legal documents you’ll need. Check out what types of taxes you might need to collect from customers. All this varies across each industry and location, so do careful and specific research. Or, hire a consultant or attorney to take you through all the specifics.
2. Fill in Your Skills
You chose a business plan based on your skills, but that doesn’t mean you have everything it takes to run a successful company. It takes knowledge and experience in marketing, sales, administration, and more.
There could be others depending on the type of business as well. For instance, maybe you’re a web design professional but learning web development would greatly help the startup expand.
Luckily, we live in a high-tech era, so check out online course offerings. Chances are there will be low-cost courses that teach whatever you need to know.
3. Make Planning Lists
The next step is determining what the company needs to move forward, from a financial perspective. Make three lists: must have, should have, and nice to have.
Think about anything that could help as you start a business, from software tools to equipment and inventory. If you’re not sure which tools are the best fit, try a free trial for as many as possible to experiment with them.
With those lists in hand, you can do a cost analysis to come up with the startup costs you’ll need to launch the business.
4. Create Your Business Plan
For any company, a business plan is critical. You’ll need it to secure funding but even for entrepreneurs that aren’t pursuing outside funding, it’s a great way to gain some direction for the company.
A formal business plan is an extensive plan detailing information like your business model and monetization strategies as well as growth and profit expectations. It can also define your target market segments and outline marketing strategies like social media and direct mail, detailing how you’d use them to reach the ideal potential customer.
5. Secure Funding
With that business plan in hand, funding your venture is the next step. There are plenty of options for business funding, from small business loans to investors to grants. Some entrepreneurs prefer to raise the money themselves by earning extra income or asking for community support.
Regardless, there are pros and cons to all these options. Weigh the benefits and choose the best path for your company’s needs.
Now, Get Going!
Finally, it’s time to launch! Even for businesses still looking for essential funding, there are steps you can take to start establishing and building the business. Don’t let anyone stop you from making that dream a reality, one step at a time.