Starting your own business doesn't have to mean spending thousands of dollars on setup costs before you ever open your doors. Don't get suckered into spending loads of money on services that you don't need or that have far cheaper alternatives. Seriously: Here's how to do it. FIRST what is an online business
What is an Online Business?
An online business works like any other business. It doesn’t change just because it’s online.You still need to create something people want to pay for in the form of products, services, courses, workshops, or even books.
You need to find the intersection between what you’re passionate about, what you’re good at (or what you want to become good at), and what people want.
It’s not enough to just do what you love.
That’s the first step, but if you want to build a business, there has to be a demand for what you have to offer.
Now, there are many different types of online business models.
The business model I focus on, and that I teach, is often called an information business, where you sell your knowledge and expertise.
You don’t have to be an expert to do this. You just have to know more than the people you’re teaching.
Why Start an Online Business?
The reason I started an online business was because I felt compelled to do so.I don’t recommend you build a business if your heart isn’t in it. It takes a lot of hard work to build a profitable and solid business.
If you do it right, the rewards are fantastic. You can live anywhere, have more control of your time and do more of what you enjoy in life.
And if you build a business around something you enjoy, it’s even better.
This is more evident in my life now than ever before, because I just had a baby boy with my girlfriend in December 2011.
I get to see him grow up. I don’t have to miss a second of his youth because I work from home.
The setbacks of Running an Online Business
Building and running an online business takes a lot of hard work, time and dedication.That’s why I recommend you don’t quit your day job right away. Instead, work on your online business on the side and when it takes off, you can reconsider.
You will be your own boss, which means you have to take responsibility for your results. You have to find ways to solve your own problems, and you have to know when to ask for help.
Most people are still in the mindset of relying on others, but if you want to succeed, you have to take full responsibility.
You have to constantly improve what you do, and take massive action despite your fears. To me, this isn’t a drawback, but I realize that for some it is, so I included it.
Running an online business has helped me grow in many ways, because I have to constantly figure out new problems and face my fears if I want to keep moving forward.
Not always fun, but I love it.
How Much Does it really Cost to Start an Online Business?
I get this question a lot, so let’s put it to rest.The below costs are for an information business. If you want to start an e-commerce store, you’re in the wrong place, because that’s not what I do.
The start-up costs for an online business that focuses on selling information are very low. I have left out tax or legal costs, because those differ from country to country, so you’ll need to talk to someone about that.
I’ve organized the following costs by priority, since they are not all needed when starting out.
1. Hosting (Cost: ~$7-19/mo): You need a website, and you need somewhere to put that website, which naturally means you need a webhost. There are two options. You can go with a self-hosted solution like HostGator, or a service that helps you with the tech stuff, like WP Unboxed, which I use for this site.
2. Email Marketing Service (Cost: $19/mo): If you want to make money online, you absolutely need to build an email list. It may not make sense right now, but it’s essential. If you skip it, you’ll be sorry, so make sure you build your list, and pick the best service provider.
3. Payment Processor (Cost: None Upfront): The standard payment processor that I use is PayPal. But you also have other solutions, such as FastSpring, which help you get set-up and deal with customer support. Payment processors don’t cost anything upfront, but they charge a fee out of each transaction you make, which is usually between 4-12% depending on who you use.
4. Shopping Cart (Cost $5/mo): A simple shopping cart for your products and services that I recommend is E-Junkie. If you decided to go with FastSpring as your payment processor, they also have a shopping cart, so you wouldn’t need E-Junkie.
5. Design (Cost: Depends): I never recommend my clients start with a fancy design. You can get a very good looking website for cheap if you go for simplicity. The price depends on who you work with, what you need, and so on. In the beginning, a premium WordPress theme and a nice logo is more than enough.
As you can see, the cost varies depending on how you want to do things and what you want to start with, but you often don’t have to spend more than $50 to get started.
The two most important parts are hosting and an high-quality email marketing service, the rest can come later.
What You Need to Have in Place Before You Start
Before you do anything, you have to find the intersection between your passion and what people are willing to pay for.To do this, look for markets where there already is competition. Don’t search for untapped niches, because there’s often a reason why they are untapped.
Don’t run away from competition, because competition equals customers.
What I see most people do is make excuses because they don’t have original ideas and whatever else they may come up with.
However, most of the reasons you think you can’t start a business are probably lies. You can learn how to start an online business if you want to.
You just need to get a few things right before you do.
You have to find the intersection, and then you have to learn to stand out, because when there’s competition, you have to do something to get attention.
I go into all of this in more depth in my Find Your Niche Workshop.
How Does an Online Business Make Money?
When you’re building an online business, what you’re really doing is building a platform (more on that below).When you have a platform, you get opportunities to make money, so if you’re patient and build a big platform, you’ll be saying no more than yes.
With all that said, there are a few standard ways to make money with an information business, here’s a brief overview of the most popular ones:
1. Digital Products & Courses: Ebooks, guides, online courses, membership sites and audio books are all great ways to create value for people. Once created, they don’t require much maintenance on your part, and the profit margins are excellent, because there’s no storage, shipping and so on.
2. Affiliate Marketing: Affiliate marketing means selling other people’s products for a commission. You can get anywhere between 5-100% for a sale you refer. It’s an easy way to start making money with your business, and it’s an excellent way to complement your products and services.
3. Services: Coaching, consulting and group coaching packages are popular in some markets. It all depends on what your customers and clients want. Services usually mean you have to trade dollars for hours, but they give you valuable insight into your customers’ struggles.
4. Books: Self-publishing is becoming more and more popular these days, but I look at it as a complement rather than sole source of income. It’s hard to make a living selling $2.99-$4.99 Kindle books. Nonetheless, it’s a great way to introduce new people to your work.
5. Other: When you have a solid platform, you’ll come up with many other ways of making money. You can hold workshops, do public speaking, partner with others, and the list goes on and on. That’s the beauty of having an online business; when you do things right, good stuff happens, but not overnight.
Mistakes You Should Avoid
I see a lot of people make the same mistakes over and over again, and it’s no fun to watch.But sometimes you just have to make mistakes in order to learn, so don’t freak out if you make mistake after mistake.
It took me about two years of failing until things started to click. Forget about becoming an overnight success and focus on the process of building your business one brick at a time.
Here are the mistakes you should avoid:
1. Spreading Yourself Too Thin. Do not start more than one business or website at a time. It may seem like you can handle it, but you can’t. The workload grows the deeper you get into the process, so you’ll burn out if you try. I know you have many ideas, but pick one and focus. Focus on one thing, and stop trying to do everything.
2. Rushing Things. There’s no rush. Yes, you want to make money as soon as possible. I understand that, but trying to go faster will just slow you down. It sounds counter-intuitive, but it’s true. Relax, let things take the time they take, and keep moving forward one step at a time.
3. Obstacles. You will be scared, worried and come up against obstacles that will make you want to throw in the towel. That’s normal, and to be expected. Whether you succeed or not is determined during your toughest moments. Will you give up, or will you keep going? This is not about talent as much as it is about your determination.
4. Get-Rich Quick. You’ll find plenty of marketers selling magical courses and pixie dust. Don’t fall for them. I say this from experience, because I’ve spent thousands buying these courses, and they do not work. What works is good old hard work and a relentless focus on business fundamentals.
5. Expectations. Beware of your expectations, because they can suck all energy out of you if things don’t go the way you expect them to. If you expect to launch your first product and make millions, you will be disappointed (in most cases). Keep your mind open and focus on small successes.
Advantages and disadvantages of online business
Benefits of doing business online may include:- cost savings in rent and staffing
- greater flexibility and efficiency in product and service delivery
- 24/7 accessibility to customers all over Australia (or worldwide).
- some technical or web knowledge may be necessary
- software and hardware expenses
- risk of online scams and fraud.
